Finlay Enterprises, Inc.
Common Stock, par value $.01 per share
_________________
Underwriting Agreement
April 20, 1998
Xxxxxxx, Xxxxx & Co.,
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation,
SBC Warburg Dillon Read Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Finlay Enterprises, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
567,310 shares of the Company's Common Stock, par value $.01 per share (the
"Stock"), and the stockholders of the Company named in Schedule II hereto (the
"Selling Stockholders") propose, subject to the terms and conditions stated
herein, to sell to the Underwriters an aggregate of 1,232,690 shares of Stock.
Certain of the Selling Stockholders as indicated on Schedule II hereto are
granting an option to the Underwriters to purchase up to an additional 270,000
shares of Stock. The aggregate of 1,800,000 shares of Stock to be sold by the
Company and the Selling Stockholders is herein called the "Firm Shares" and the
aggregate of up to 270,000 additional shares to be sold by certain of the
Selling Stockholders is herein called the "Optional Shares". The Firm Shares and
the Optional Shares that the Underwriters elect to purchase pursuant to Section
2 hereof are herein collectively called the "Shares".
1. (a) Each of the Company and Finlay Fine Jewelry Corporation, a Delaware
corporation and a wholly owned subsidiary of the Company ("Finlay Jewelry"),
jointly and severally represents and warrants to, and agrees with, each of the
Underwriters and the Selling Stockholders that:
(i) A registration statement on Form S-3 (File No. 333-48567), as amended by
Amendments Nos. 1 and 2 thereto (the "Initial Registration Statement"), in
respect of the Shares has been filed with the Securities and Exchange
Commission (the "Commission"); such Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered to
you, and, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, to you for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration State-
ment"), filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), which became effective upon filing, no other doc-
ument with respect to such Initial Registration Statement or any such doc-
ument the incorporated by reference therein has heretofore been filed with
the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission to the
Company or its counsel (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a)
of the rules and regulations of the Commission under the Act is hereinafter
called a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if any,
including all exhibits thereto but excluding Form T-1 and including (i) the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of
the Initial Registration Statement at the time it was declared effective or
such part of the Rule 462(b) Registration Statement, if any, that became or
hereafter becomes effective and (ii) the documents incorporated by
reference in the pro- spectus contained in the registration statement at
the time such part of the registration statement became effective, each as
amended at the time such part of the registration statement became
effective, are herein- after collectively called the "Registration
Statement"; such final prospectus, in the form first filed pursuant to Rule
424(b) under the Act, is hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference to
any amendment or sup- plement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by re- xxxxxxx in the Registration
Statement);
(ii) No order preventing or suspending the use of any Preliminary Prospectus has
been issued by the Commission, and each Preliminary Prospectus, at the time
of filing thereof, conformed in all material respects to the requirements
of the Act and the rules and regulations of the Commission thereunder, and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and the statements made therein within the coverage
of Rule 175(b) under the Act were made by the Company with a reasonable
basis and in good faith; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein or
by the Selling Stockholders expressly for use in the preparation of the
answers therein to Item 7 of Form S- 3;
(iii)The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed or incorporated by reference
in the Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
statements made therein within the coverage of Rule 175(b) under the Act
were made by the Company with a reasonable basis and in good faith;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Xxxxx & Co. expressly for use therein or by the Selling
Stockholders expressly for use in the preparation of the answers therein to
item 7 of Form S- 3;
(iv) The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus
will conform, in all material respects to the requirements of the Act and
the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement
and any amendment thereto, and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; and the statements made therein within the coverage of Rule
175(b) under the Act were made by the Company with a reasonable basis and
in good faith; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein or by
the Selling Stockholders expressly for use in the preparation of the
answers therein to Item 7 of Form S-3;
(v) Neither the Company nor any of its subsidiaries has sustained since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any change in the capital stock or long-term debt of the Company or any of
its subsidiaries, except for borrowings and repayments under the Revolving
Credit Agreement and the Gold Consignment Agreement (each as defined in the
Prospectus and as amended as described in the Prospectus) or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the business, operations, management, financial
position or condition, current assets, merchandise inventories,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"), otherwise than
as set forth or contemplated in the Prospectus;
(vi) The Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all material
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any material real property and buildings
held under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries;
(vii)Each of the Company and Finlay Jewelry has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; the
Company's indirect subsidiary, Societe Nouvelle d'Achat de Bijouterie -
S.O.N.A.B. ("Sonab") is duly organized and validly existing as a societe en
nom collectif in France; each other direct or indirect subsidiary of the
Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction;
(viii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and
non-assessable and conform to the description of the Stock contained in the
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued, are
fully paid and non-assessable and (except for directors' qualifying shares,
if any, and except as set forth in the Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(ix) The Shares to be issued and sold by the Company to the Underwriters
hereunder were previously unissued, have been duly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid and non-assessable and will conform
to the description of the Stock contained in the Prospectus and the
issuance of such shares will not be subject to any preemptive or similar
rights which have not been waived in a valid and binding writing duly
executed and delivered to the Company by or on behalf of the party granting
such waiver;
(x) The issue and sale of the Shares to be sold by the Company and the
compliance by each of the Company and Finlay Jewelry with all of the
provisions of this Agreement applicable to it and the consummation of the
transactions herein contemplated (i) will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement,
lease, license or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except any such conflict,
breach, violation or default which has been consented to or waived in a
valid and binding writing duly executed and delivered to the Company by or
on behalf of the party granting such consent or waiver; (ii) will not
result in any violation of the provisions of the Company's or any of its
subsidiaries' respective certificate or restated certificate of
incorporation or by-laws or restated by-laws or comparable documents and
(iii) will not result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties; and
no consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for
the issue and sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except the registration under
the Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under foreign or state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(xi) Neither the Company nor any of its subsidiaries is in violation of its
respective certificate or restated certificate of incorporation or by-laws
or restated by-laws or comparable documents, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease, license or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound which default
could reasonably be expected to result in, individually or in the
aggregate, a Material Adverse Effect;
(xii)The statements set forth in the Prospectus under the caption "Description
of Certain Indebtedness", insofar as they purport to describe the
provisions of the documents referred to therein, under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock and under the caption "Underwriting"s
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate and fair in all material
respects;
(xiii) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, could individually or in the aggregate
reasonably be expected to have a Material Adverse Effect; and, to the
Company's and Finlay Jewelry's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(xiv)Each of the Company and Finlay Jewelry is not and, after giving effect to
the offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(xv) Xxxxxx Xxxxxxxx LLP, who have certified certain consolidated financial
statements of the Company, are independent public accountants as required
by the Act and the rules and regulations of the Commission thereunder;
(xvi)The Company and its subsidiaries directly or through host store groups are
subject to consent decrees, injunctions or comparable governmental orders
or decrees regarding the discount pricing and advertising of jewelry from
"regular" or "original" prices only in the states of California, Colorado,
Georgia, Oregon and Wisconsin, and the Company and its subsidiaries are in
compliance therewith and with applicable federal and state laws with
respect to such pricing and advertising practices, except for such
noncompliance previously identified in writing by the Company to the
Representatives which could not individually or in the aggregate reasonably
be expected to have a Material Adverse Effect;
(xvii) Neither the Company nor any of its subsidiaries has received any notice
that any default by the Company or any of its subsidiaries has occurred and
is continuing under any of the license agreements with host store groups
described or identified in the Prospectus to which the Company or any of
its subsidiaries are a party and no condition exists which could
individually or in the aggregate reasonably be expected to result in the
termination or nonrenewal of any such license agreement; each such license
agreement has been duly authorized (and, in the case of written license
agreements, duly and validly executed and delivered) by and on behalf of
the Company and its subsidiaries, as the case may be, and, assuming the due
authorization (and, in the case of written license agreements, the due and
valid execution and delivery) thereof by the other party or parties
thereto, is the valid and binding obligation of the Company, its
subsidiaries and such other party or parties, as the case may be,
enforceable in accordance with its respective terms against the respective
parties thereto subject to the effect of any applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium
and similar laws affecting creditors' rights generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law); and neither the Company nor any of its
subsidiaries has received any notice (whether actual or constructive) that
the licensor thereunder is considering limiting, suspending, revoking or
non-renewing any such license; except that no representation is made with
respect to the Company's license agreement with Liberty House as to the
effect on such license agreement of the filing of a voluntary petition by
Liberty House under the Bankruptcy Code (as defined in the Prospectus);
(xviii) Each of the Company and Finlay Jewelry has duly authorized the amendment
to the Revolving Credit Agreement that is described in the Prospectus.
Substantially contemporaneously with the First Time of Delivery (as defined
in Section 4 hereof), the Company and Finlay Jewelry will duly execute and
deliver such amendment to the Revolving Credit Agreement. Finlay Jewelry
has duly authorized the amendment to the Gold Consignment Agreement that is
described in the Prospectus. Substantially contemporaneously with the First
Time of Delivery, Finlay Jewelry will duly execute and deliver such
amendment to the Gold Consignment Agreement. Assuming the due
authorization, execution and delivery thereof by the other parties thereto,
(a) the Revolving Credit Agreement, as amended as described above, will
constitute the legal, valid and binding agreement of the Company and Finlay
Jewelry and (b) the Gold Consignment Agreement, as amended as described
above, will constitute the legal, valid and binding agreement of Finlay
Jewelry, in each case, enforceable against the Company and/or Finlay
Jewelry, as the case may be, subject to the effect of any applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium and similar laws affecting creditors' rights generally and to
general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law); and
(xix)Neither the Company nor Finlay Jewelry nor any of their respective
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075, Florida
Statutes.
(b) Each of the Selling Stockholders represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for the
execution and delivery by such Selling Stockholder of this Agreement and
the Power of Attorney and the Custody Agreement hereinafter referred to,
and for the sale and delivery of the Shares to be sold by such Selling
Stockholder hereunder, have been obtained; and such Selling Stockholder has
full right, power and authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement and to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholder hereunder, except
for any such consents, approvals, authorizations and orders as may be
required under the Act and state securities or Blue Sky laws in connection
with the sale and delivery of such Shares;
(ii) The sale of the Shares to be sold by such Selling Stockholder hereunder and
the compliance by such Selling Stockholder with all of the provisions of
this Agreement, the Power of Attorney and the Custody Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of such
Selling Stockholder is subject, nor will such action result in any
violation of the provisions of any partnership agreement (or other
comparable organizational document) of such Selling Stockholder or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over such Selling Stockholder or the
property of such Selling Stockholder; provided, however, that such Selling
Stockholder makes no representation or warranty hereunder with respect to
the federal securities laws of the United States or securities or Blue Sky
laws of any state or other jurisdiction;
(iii)Such Selling Stockholder has, and immediately prior to the First Time of
Delivery (as defined in Section 4 hereof), such Selling Stockholder will
have, good and valid title to the Shares to be sold by such Selling
Stockholder hereunder, free and clear of all liens, encumbrances, equities
or claims (except, in the case of Xx. Xxxxxx, that the Shares being sold by
him hereunder (the "Encumbered Shares") are held on behalf of the Company
as security for his repayment obligations under a promissory note in favor
of the Company); and, upon delivery of such Shares and payment therefor
pursuant hereto (including, in the case of the Encumbered Shares, payment
to the Company in satisfaction of Xx. Xxxxxx'x repayment obligations under
such promissory note, which payment will extinguish the encumbrance on the
Encumbered Shares), such Selling Stockholder will convey to the several
Underwriters who have purchased such Shares in good faith and without
notice of any such lien, encumbrance, equity or claim or any adverse claim
within the meaning of the Uniform Commercial Code (other than the
encumbrance on the Encumbered Shares which will have been extinguished)
good and valid title to such Shares, free and clear of all liens,
encumbrances, equities or claims;
(iv) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, such Selling
Stockholder will not offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any shares of Stock or any securities of the
Company that are substantially similar to the Shares, including but not
limited to any securities that are convertible into or exchangeable for, or
that represent the right to receive, Stock or any such substantially
similar securities (other than the Shares to be sold by such Selling
Stockholder to the Underwriters hereunder), without the prior written
consent of Xxxxxxx, Xxxxx & Co. on behalf of the Representatives on behalf
of the Underwriters; provided, however, that such Selling Stockholder may,
without your consent, transfer stock in a private transaction to an
"affiliate" (as such term is defined in the Act) provided that such
affiliate agrees in writing to be bound by the provisions hereof to the
same extent as such Selling Stockholder is bound hereunder;
(v) Such Selling Stockholder has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto are made in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder expressly
for use therein, such Preliminary Prospectus and the Registration Statement
did, and the Prospectus and any further amendments or supplements to the
Registration Statement and the Prospectus, when they become effective or
are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading;
(vii)In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, such Selling
Stockholder will deliver to you prior to or at the First Time of Delivery
(as defined in Section 4 hereof) a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof);
(vii)Certificates in negotiable form representing all of the Shares to be sold
by such Selling Stockholder hereunder have been placed in custody under a
Custody Agreement, in the form heretofore furnished to you (the "Custody
Agreement"), duly executed and delivered by such Selling Stockholder to
Marine Midland Bank, as custodian (the "Custodian"), and such Selling
Stockholder has duly executed and delivered a Power of Attorney, in the
form heretofore furnished to you (the "Power of Attorney"), appointing the
persons indicated in Schedule II hereto, and each of them, as such Selling
Stockholder's attorneys-in-fact (the "Attorneys-in-Fact") with authority to
execute and deliver this Agreement on behalf of such Selling Stockholder,
to determine the purchase price to be paid by the Underwriters to such
Selling Stockholder as provided in Section 2 hereof, to authorize the
delivery of the Shares to be sold by such Selling Stockholder hereunder and
otherwise to act on behalf of such Selling Stockholder in connection with
the transactions contemplated by this Agreement and the Custody Agreement;
and
(ix) The Shares represented by the certificates held in custody for such Selling
Stockholder under the Custody Agreement are subject to the interests of the
Underwriters hereunder; the arrangements made by such Selling Stockholder
for such custody, and the appointment by such Selling Stockholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable;
the obligations of such Selling Stockholder hereunder shall not be
terminated, except as provided in this Agreement or in the Power of
Attorney, by operation of law, whether by the death or incapacity of any
Selling Stockholder that is a natural person or, in the case of an estate
or trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by
the occurrence of any other event; if any Selling Stockholder that is a
natural person or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be terminated, or if
any such partnership or corporation should be dissolved, or if any other
such event should occur, before the delivery of the Shares hereunder,
certificates representing the Shares shall be delivered by or on behalf of
such Selling Stockholder in accordance with the terms and conditions of
this Agreement and of the Custody Agreements; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as
if such death, incapacity, termination, dissolution or other event had not
occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the Company
and the Selling Stockholders agree, severally and not jointly, to sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company and the Selling Stockholders, at a
purchase price per share of $26.125, the number of Firm Shares (to be adjusted
by you so as to eliminate fractional shares) determined by multiplying the
aggregate number of Firm Shares to be sold by the Company and the Selling
Stockholders as set forth opposite their respective names in Schedule II hereto
by a fraction, the numerator of which is the aggregate number of Firm Shares to
be purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the aggregate
number of Firm Shares to be purchased by all of the Underwriters from the
Company and the Selling Stockholders hereunder and (b) in the event and to the
extent that the Underwriters shall exercise the election to purchase Optional
Shares as provided below, each of the Selling Stockholders as designated on
Schedule II hereto agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company and each of such Selling Stockholders, at the purchase
price per share set forth in clause (a) of this Section 2, that portion of the
number of Optional Shares as to which such election shall have been exercised
(to be adjusted by you so as to eliminate fractional shares) determined by
multiplying such number of Optional Shares by a fraction the numerator of which
is the maximum number of Optional Shares which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule I hereto
and the denominator of which is the maximum number of Optional Shares that all
of the Underwriters are entitled to purchase hereunder.
Certain of the Selling Stockholders, as and to the extent indicated in
Schedule II hereto, hereby grant, severally and not jointly, to the Underwriters
the right to purchase at their election up to an aggregate of 270,000 Optional
Shares, at the purchase price per share set forth in the paragraph above, for
the sole purpose of covering overallotments in the sale of the Firm Shares, if
any. Any such election to purchase Optional Shares shall be made in proportion
to the maximum number of Optional Shares to be sold by each Selling Stockholder
as set forth in Schedule II hereto. Any such election to purchase Optional
Shares may be exercised only by written notice from Xxxxxxx, Xxxxx & Co., on
behalf of the Representatives on behalf of the Underwriters, to the Company and
the Attorneys-in-Fact, given within a period of 30 calendar days after the date
of this Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by Xxxxxxx, Sachs & Co. but in no event earlier than the First Time
of Delivery (as defined in Section 4 hereof) or, unless Xxxxxxx, Xxxxx & Co.,
the Company and the Attorneys-in-Fact otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by Xxxxxxx, Sachs & Co., on behalf of the
Representatives on behalf of the Underwriters, of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
4 (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
written notice to the Company and the Selling Stockholders shall be delivered by
or on behalf of the Company and the Selling Stockholders to Xxxxxxx, Sachs &
Co., for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of immediately
available (same day) funds to a bank account designated by the Company or the
Selling Stockholder, as the case may be (and, in the case of Xx. Xxxxxx, to a
bank account of the Company designated by the Company). The Company and the
Selling Stockholders severally will cause the certificates representing the
Shares to be made available for checking and packaging at least twenty-four
hours prior to the respective Time of Delivery (as defined below) with respect
thereto at the office of Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 9:30 a.m., New York City
time, on April 24, 1998 or such other time and date as Xxxxxxx, Xxxxx & Co., the
Company and the Attorneys-in-Fact may agree upon in writing, and, with respect
to the Optional Shares, 9:30 a.m., New York time, on the date specified by
Xxxxxxx, Sachs & Co. in the written notice given by Xxxxxxx, Xxxxx & Co. of the
Underwriters' election to purchase such Optional Shares, or such other time and
date as Xxxxxxx, Sachs & Co., and the Attorneys-in-Fact may agree upon in
writing. Such time and date for delivery of the Firm Shares is herein called the
"First Time of Delivery", such time and date for delivery of the Optional
Shares, if not the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called a "Time of
Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(n) hereof, will be delivered at the offices of Xxxxx, Day,
Xxxxxx & Xxxxx, 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Closing Location"), and the Shares will be delivered at the Designated Office,
all at such Time of Delivery. A meeting will be held at the Closing Location at
2:00 p.m., New York City time, on the New York Business Day next preceding such
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus prior to the last Time of Delivery which shall be disapproved by
you promptly after reasonable notice thereof; to advise you, promptly after
it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish you with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary Prospectus or
Prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities
laws of such jurisdictions as you may reasonably request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction or to take
any other action which would subject it to the service of process in suits
or to taxation, other than as to matters and transactions relating to the
offer and sale of the Shares in each jurisdiction in which the Shares have
been qualified as provided above;
(c) Prior to 12:00 noon, New York City time, on the New York Business Day next
succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering
or sale of the Shares and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange Act, to notify
you and upon your request to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Shares at any time nine months or more after the time of issue
of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as
you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as practicable,
but in any event not later than eighteen months after the effective date of
the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and
regulations thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to
register for sale, offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any shares of Stock or any securities that
are substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that represent
the right to receive, Stock or any such substantially similar securities
(other than pursuant to employee or director stock option plans,
arrangements or agreements existing on the date of this Agreement and the
Shares to be sold by the Company to the Underwriters hereunder), without
the prior written consent of Xxxxxxx, Sachs & Co. on behalf of the
Representatives on behalf of the Underwriters;
(f) For each of the first five fiscal years ending after the effective date of
the Registration Statement or such longer period as may be required by law
or by the rule of any stock exchange on which the Stock is listed or any
quotation system in which the Stock is included, to furnish to its
stockholders, within the time limits prescribed under the Exchange Act,
after the end of each fiscal year an annual report (including a balance
sheet and statements of operations, changes in stockholders' equity and
cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, within the time limits prescribed
under the Exchange Act, after the end of each of the first three quarters
of each fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary
financial information of the Company and its subsidiaries for such quarter
in reasonable detail;
(g) During a period of five years from the effective date of the Registration
Statement, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders, and to deliver to you (i)
as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company or
Finlay Jewelry is listed or quoted (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission); and (ii) such additional information
concerning the business and financial condition of the Company or Finlay
Jewelry as you may from time to time reasonably request;
(h) To use the net proceeds received by it from the sale of the Shares pursuant
to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";
(i) To use its best efforts to list for quotation the Shares on the Nasdaq
National Market ("NASDAQ"); and
(j) If the Company elects to rely upon Rule 462(b), the Company shall file a
Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement Among
Underwriters, this Agreement, any Blue Sky Memorandum, closing documents
(including any reasonable compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with any
Blue Sky survey; (iv) all fees and expenses in connection with listing the
Shares on the NASDAQ; (v) the filing fees incident to, and the reasonable fees
and disbursements of counsel for the Underwriters in connection with, securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Shares; (vi) the cost of preparing stock
certificates; (vii) the cost and charges of any transfer agent or registrar;
(viii) all costs and expenses incident to the performance of the Selling
Stockholders' obligations hereunder, including (A) any fees and expenses of
counsel for the Selling Stockholders, (B) the fees and expenses of the
Attorneys-in-Fact and the Custodian, if any, and (C) all expenses and taxes
incident to the sale and delivery of the Shares to be sold by the Selling
Stockholders to the Underwriters hereunder; and (ix) all other costs and
expenses incident to the performance of the Company's or the Selling
Stockholders' obligations hereunder which are not otherwise specifically
provided for in this Section. In connection with the preceding sentence,
Xxxxxxx, Xxxxx & Co. agrees to pay New York State stock transfer tax, and each
of the Company and the Selling Stockholders, severally and not jointly, agree to
reimburse Xxxxxxx, Sachs & Co. for its pro rata share of any associated carrying
costs if such tax payment is not rebated on the day of payment and for any
portion of such tax payment not rebated. It is understood, however, that the
Company shall bear, and the Selling Stockholders shall not be required to pay or
to reimburse the Company for, the cost of any matters relating to the sale and
purchase of the Shares pursuant to this Agreement, other than the underwriting
discount applicable to the Shares to be sold by it, and that, except as provided
in this Section, and Sections 8 and 11 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees and disbursements of their
counsel, stock transfer taxes on resale of any of the Shares by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company, Finlay Jewelry and each of the Selling Stockholders herein are, at
and as of such Time of Delivery, true and correct, the condition that the
Company, Finlay Jewelry and each of the Selling Stockholders shall have
performed all of their respective obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxx, Day, Xxxxxx & Xxxxx, counsel for the Underwriters, shall have
furnished to you such opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated such Time of Delivery, with respect to
the matters covered in paragraphs (i), (ii), (v), (viii) and (xi) of subsection
(c) below as well as such other related matters as you may reasonably request,
and such counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters;
(c) Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel for the Company,
shall have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(b) hereto) (which opinion may be limited to the federal
laws of the United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware and in giving such opinion such counsel
may state that, insofar as any opinions involve factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company or its subsidiaries and certificates of responsible public officials,
copies of which certificates will be provided to you upon delivery of such
counsel's opinion), dated such Time of Delivery, in form and substance as
attached, to the effect that:
(i) Each of the Company and Finlay Jewelry has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
(including the Shares being delivered at such Time of Delivery) have been
duly authorized and, upon payment for the Shares in accordance with the
terms of this Agreement, will be validly issued, fully paid and
non-assessable; and the Shares conform in all material respects as to legal
matters to the description of the Stock contained in the Prospectus;
(iii)Each subsidiary of the Company (other than Sonab and Finlay Jewelry) has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation; and all of
the issued shares of capital stock of each subsidiary of the Company (other
than Sonab) have been duly authorized and validly issued, are fully paid
and non-assessable, and (except for directors' qualifying shares, if any,
and except as otherwise set forth in the Prospectus) are owned of record
directly or indirectly by the Company, to the knowledge of such counsel,
free and clear of all liens, encumbrances and defects;
(iv) To such counsel's knowledge and other than as set forth in the Prospectus,
there are no legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, could individually or
in the aggregate reasonably be expected to have a Material Adverse Effect;
and, to such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(v) This Agreement has been duly authorized, executed and delivered by the
Company and Finlay Jewelry;
(vi) (a) The issue and sale of the Shares being delivered at such Time of
Delivery by the Company and the compliance by each of the Company and
Finlay Jewelry with the applicable provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, real property lease, license or other material agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, nor (b) will such action result in any
violation of the provisions of (i) the respective certificate or restated
certificate of incorporation, or respective by-laws or restated by-laws, as
the case may be, of the Company or Finlay Jewelry, (ii) any statute, rule
or regulation known to such counsel of any governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or (iii) any order applicable to the Company,
any of its subsidiaries or any of their respective properties of any court,
governmental agency or body known to such counsel based upon an officer's
certificate listing any such orders (which officer's certificate shall be
delivered with such opinion);
(vii)No consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for
the issue and sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except the registration under
the Act of the Shares, and such consents, approvals, authorizations,
registrations or qualifications as may be required under foreign or state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(viii) The statements set forth in the Prospectus under the caption "Description
of Certain Indebtedness", insofar as they purport to describe the
provisions of the documents referred to therein, under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock, and under the caption "Underwriting",
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate and fair in all material
respects;
(ix) Each of the Company and Finlay Jewelry is not an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined
in the Investment Company Act;
(x) The documents incorporated by reference in the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion), when they
became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder; and
(xi) The Registration Statement and the Prospectus and any further amendments
and supplements thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Act and the
rules and regulations thereunder; although they do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (viii) of this Section 7(c), such
counsel may state that such counsel has participated in conferences at
which the contents of the Registration Statement and the Prospectus and
related matters were discussed, and, on the basis of such participation,
they have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (other than the financial statements and
related schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which such counsel need
express no opinion) contained or incorporated by reference an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus or any further amendment
or supplement thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which such counsel need express no opinion) contained or
incorporated by reference an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading or
that, as of such Time of Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial statements
and related schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which such counsel need
express no opinion) contains or incorporates by reference an untrue
statement of a material fact or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; and they do not know of any amendment to
the Registration Statement required to be filed or of any contracts or
other documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement or the Prospectus which are not filed or described as required or
of any filing required to be incorporated by reference into the Prospectus
which is not so incorporated by reference therein;
(d) Tdenzer Xxxxxxxxxx LLP, counsel for the Company, shall have furnished
to you their written opinion (a draft of such opinion is attached as Annex II(c)
hereto) (which opinion may be limited to the federal laws of the United States,
the laws of the State of New York and the General Corporation Law of the State
of Delaware and in giving such opinion such counsel may state that, insofar as
any opinions involve factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company or its subsidiaries and
certificates of responsible public officials, copies of which certificates will
be provided to you upon delivery of such counsel's opinion), dated such Time of
Delivery, in form and substance as attached, to the effect that:
(i) To such counsel's knowledge, neither the Company nor any of its
subsidiaries is in violation of its respective certificate or restated
certificate of incorporation or by-laws or restated by-laws, or comparable
documents, or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties
may be bound which default, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect;
(e) Xxxxx X. Xxxxx, Vice President, General Counsel and Secretary of Finlay
Jewelry, shall have furnished to you her written opinion (a draft of such
opinion is attached as Annex II(d) hereto) (which opinion may be limited to the
federal laws of the United States, the laws of the State of New York and the
General Corporation Law of the State of Delaware and in giving such opinion Xx.
Xxxxx may state that, insofar as any opinions involve factual matters, she has
relied, to the extent she deems proper, upon certificates of officers of the
Company or its subsidiaries and certificates of responsible public officials,
copies of which certificates will be provided to you upon delivery of Xx.
Xxxxx'x opinion), dated such Time of Delivery, in form and substance as
attached, with respect to the matters covered in paragraphs (iv) and (vi) of
subsection (c) above and paragraph (i) of subsection (d) above and, in addition,
to the effect that:
(i) Each subsidiary of the Company (other than Sonab for which no opinion need
be given) has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification or is subject to no material
liability or disability by reason of failure to be so qualified in any such
jurisdiction; the Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
each jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification or is subject to no material
liability or disability by reason of its failure to be so qualified in any
such jurisdiction;
(ii) The Company and its subsidiaries have good and marketable title in fee
simple to all real property owned by them in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; to such counsel's knowledge
neither the Company nor any of its subsidiaries is in default under any
lease for real property or buildings held under lease by the Company or its
subsidiaries except for such defaults that are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries; and the leases listed on
Schedule III hereto are the only real property leases to which the Company
and its subsidiaries are a party and are valid, subsisting and enforceable
as against the Company or its subsidiaries (as the case may be) with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
subsidiaries and except that the enforceability of such leases is subject
to the effect of any applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium and similar laws affecting
creditors' rights generally and to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law) (in
giving the opinion in this clause, such counsel may state that no
examination of record titles for the purpose of such opinion has been made,
and that they are relying upon a general review of the titles of the
Company and its subsidiaries, upon opinions of local counsel and abstracts,
reports and policies of title companies rendered or issued at or subsequent
to the time of acquisition of such property by the Company or its
subsidiaries, upon opinions of counsel to the lessors of such property and,
in respect of matters of fact, upon certificates of officers of the Company
or its subsidiaries;
(iii)To such counsel's knowledge (a) neither the Company nor any of its
subsidiaries has received any notice that any default by the Company or any
of its subsidiaries has occurred and is continuing under any of the license
agreements with host store groups described or identified in the Prospectus
to which the Company or any of its subsidiaries are a party and (b) no
condition exists which could individually or in the aggregate reasonably be
expected to result in the termination or nonrenewal of any such license
agreement, except that no opinion need be given with respect to the
Company's license agreement with Liberty House as to the effect on such
license agreement of the filing of a voluntary petition by Liberty House
under the Bankruptcy Code (as defined in the Prospectus); and
(iv) To such counsel's knowledge, no legal proceedings are pending or have been
threatened against the Company or any of its subsidiaries that are of a
nature required to be disclosed in the Prospectus which are not so
disclosed therein;
(f) Dechert Price & Xxxxxx, French counsel to the Company, shall have
furnished to you their written opinion (a draft of such opinion is attached as
Annex II(e) hereto) (which opinion may be limited to the laws of France and in
giving such opinion French counsel may state that, insofar as any opinions
involve factual matters, it has relied, to the extent such counsel deems proper,
upon certificates of officers of the Company or its subsidiaries and
certificates of responsible public officials, copies of which certificates will
be provided to you upon delivery of such counsel's opinion), dated such Time of
Delivery, in form and substance as attached, to the effect that:
(i) Sonab has been duly organized and is validly existing as a societe en nom
collectif in France; and
(ii) all of the issued equity interests of Sonab have been duly authorized and
validly created, are fully paid and non-assessable, and are validly held of
record directly or indirectly by the Company, to the knowledge of such
counsel, free of all liens, encumbrances and defects, other than the pledge
under Finlay Jewelry's Revolving Credit Agreement;
With respect to all opinions provided for above in paragraphs (b) through (f) of
this Section 7 as to validity, binding effect and/or enforceability, any such
counsel may state that any such opinion as to enforceability is subject to the
effect of any applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium and other laws of general applicability
relating to or effecting creditor rights and to general equity principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(g) Counsel for each of the Selling Stockholders, as indicated in Schedule
II hereto, shall have furnished to you their written opinion (drafts of such
opinions are attached as Annex II(f) hereto) (in giving such opinion such
counsel may state that, insofar as any opinions involve factual matters, such
counsel has relied, to the extent they deem proper, upon certificates of the
Selling Stockholder for whom they serve as counsel, and, if applicable, officers
of such Selling Stockholder and certificates of responsible public officials,
copies of which certificates will be provided to you upon delivery of such
opinion), dated such Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) A Power of Attorney and a Custody Agreement have been duly executed and
delivered by each Selling Stockholder and constitute valid and binding
agreements of such Selling Stockholder in accordance with their terms,
except as (a) rights to indemnity and contribution may be limited by
applicable law, (b) enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally and (c) the remedy of specific performance and injunctive
relief may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought;
(ii) This Agreement has been duly executed and delivered by or on behalf of such
Selling Stockholder; and the sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder with
all of the provisions of this Agreement, the Power of Attorney and the
Custody Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a default under, any
statute, or to the knowledge of such counsel, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder is
bound or to which any of the property or assets of such Selling Stockholder
is subject, nor will such action result in any violation of the provisions
of any partnership agreement (or comparable organizational document) of
such Selling Stockholder or, to the knowledge of such counsel, any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such holder;
(iii)No consent, approval, authorization or order of any court or governmental
agency or body is required to be obtained by such Selling Stockholder for
the consummation of the transactions contemplated by this Agreement in
connection with the Shares to be sold by such Selling Stockholder
hereunder, except for those which have been duly obtained and are in full
force and effect and such as may be required under the Act, state
securities or Blue Sky laws or under rules and regulations of the National
Association of Securities Dealers, Inc. in connection with the purchase and
distribution of such Shares by the Underwriters;
(iv) To such counsel's knowledge, immediately prior to the First Time of
Delivery, such Selling Stockholder had good and valid title to the Shares
to be sold at the First Time of Delivery by such Selling Stockholder under
this Agreement, free and clear of all liens, encumbrances, equities or
claims, and full right, power and authority to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholder hereunder; and
(v) Good and valid title to such Shares, free and clear of all liens,
encumbrances, equities or claims, has been conveyed by such Selling
Stockholder to each of the several Underwriters who have purchased such
Shares in good faith and without notice of any such lien, encumbrance,
equity or claim or any other adverse claim within the meaning of the
Uniform Commercial Code;
(h) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Xxxxxx Xxxxxxxx LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post- effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(i) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any strike, boycott or similar labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been any change in
the capital stock or long-term debt of the Company or any of its subsidiaries
except for borrowings and repayments under the Revolving Credit Agreement and
the Gold Consignment Agreement (each as defined in the Prospectus and as amended
as described in the Prospectus), or any change, or any development involving a
prospective change, in or affecting the business, operations, management,
financial position or condition, current assets, merchandise inventories,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the terms and
in the manner contemplated in the Prospectus;
(j) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's or Finlay Jewelry's debt securities by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
or Finlay Jewelry's debt securities;
(k) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on NASDAQ; (iii) a
general moratorium on commercial banking activities declared by either federal
or New York State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
clause (iv) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(l) The Shares to be sold at such Time of Delivery shall have been duly
listed for quotation on NASDAQ;
(m) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from the persons or firms listed on Schedule IV hereto,
substantially to the effect set forth in Section 5(e) hereof, in form and
substance satisfactory to you;
(n) The Company and the Selling Stockholders shall have furnished or caused
to be furnished to you at such Time of Delivery certificates of officers of the
Company and Finlay Jewelry and of the Selling Stockholders, respectively,
reasonably satisfactory to you as to the accuracy of the representations and
warranties of the Company and Finlay Jewelry and of the Selling Stockholders,
respectively, herein at and as of such Time of Delivery, as to the performance
by each of the Company and Finlay Jewelry and the Selling Stockholders,
respectively, of all of their respective obligations hereunder to be performed
at or prior to such Time of Delivery, and as to such other matters as you may
reasonably request, and the Company and Finlay Jewelry shall have furnished or
caused to be furnished certificates as to the matters set forth in subsections
(a) and (i) of this Section; and
(o) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement;
8. (a)The Company and Finlay Jewelry, jointly and severally, will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained or
incorporated by reference in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated or incorporated by reference therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company and
Finlay Jewelry shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Xxxxxxx, Xxxxx &
Co. expressly for use therein.
(b) Each Selling Stockholder will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein; and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that such Selling
Stockholder shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Xxxxxxx, Sachs &
Co. expressly for use therein.
(c) Each Underwriter severally will indemnify and hold harmless the
Company, Finlay Jewelry and each of the Selling Stockholders against any losses,
claims, damages or liabilities to which the Company, Finlay Jewelry or any
Selling Stockholder may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein; and will reimburse the
Company, Finlay Jewelry and each Selling Stockholder for any legal or other
expenses reasonably incurred by the Company, Finlay Jewelry and such Selling
Stockholder in connection with investigating or defending any such action or
claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, which consent shall not be
unreasonably withheld, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(e) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company, Finlay Jewelry and the Selling Stockholders on the one
hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, Finlay Jewelry and the Selling Stockholders
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company, Finlay
Jewelry and the Selling Stockholders on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, Finlay Jewelry or the Selling
Stockholders on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, Finlay Jewelry, the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (e). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (e),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint. Notwithstanding the foregoing, the
liability of each Selling Stockholder under the indemnity and contribution
provisions of this Section 8 shall be limited to the aggregate offering price of
the Shares sold by each such Selling Stockholder to the Underwriters.
(f) The obligations of the Company, Finlay Jewelry and the Selling
Stockholders under this Section 8 shall be in addition to any liability which
the Company, Finlay Jewelry and the Selling Stockholders may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and
Finlay Jewelry and to each person, if any, who controls the Company, Finlay
Jewelry or any Selling Stockholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company and the Selling Stockholders shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company and the
Selling Stockholders that you have so arranged for the purchase of such Shares,
or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all the Shares to be purchased at such Time of Delivery, or
if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Selling Stockholders to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter, the Company, Finlay Jewelry or the Selling
Stockholders, except for the expenses to be borne by the Company and the Selling
Stockholders and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company, Finlay Jewelry, the Selling Stockholders and
the several Underwriters, as set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, Finlay Jewelry or any Selling Stockholder or
any officer or director or controlling person of the Company, Finlay Jewelry or
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor any Selling Stockholder shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof and
Finlay Jewelry shall not then be under any liability to any Underwriter except
as provided in Section 8 hereof; but, if for any other reason, any Shares are
not delivered by or on behalf of the Company and the Selling Stockholders as
provided herein, the Company will reimburse the Underwriters through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Shares not so delivered,
but the Company and the Selling Stockholders shall then be under no further
liability to any Underwriter except as provided in Sections 6 and 8 hereof and
Finlay Jewelry shall then be under no further liability to any Underwriter
except as provided in Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder (in accordance with
the Power of Attorney and Custody Agreement) made or given by any or all of the
Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company or to Finlay Jewelry shall be delivered or
sent by mail to the address of the Company set forth in the Registration
Statement, Attention: Secretary; and if to a Selling Stockholder, shall be
delivered or sent by mail to its counsel at such counsel's address set forth in
Schedule II hereto; provided, however, that any notice to an Underwriter
pursuant to Section 8(d) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company and the Selling Stockholders by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company, Finlay Jewelry and the Selling Stockholders
and, to the extent provided in Sections 8 and 10 hereof, the officers, directors
and controlling persons of the Company, Finlay Jewelry and each Selling
Stockholder and each person who controls any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Shares from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us ten counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters and the Company,
Finlay Jewelry and the Selling Stockholders. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in a form of Agreement Among Underwriters, the form of
which shall be submitted to the Company and the Selling Stockholders for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
Finlay Enterprises, Inc.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
Finlay Fine Jewelry Corporation
By: /s/ Xxxxx Xxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
On behalf of the Selling Stockholders (other
than Messrs. Xxxxxx and Xxxxxxxxx) named
on Schedule II hereto
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Attorney-in-Fact
On behalf of Messrs. Xxxxxx and Xxxxxxxxx as
Selling Stockholders
By: /s/ Xxxxx Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx Xxxxxx
Title: Attorney-in-Fact
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
SBC Warburg Dillon Read Inc.
By: /s/ Xxxxxxx, Xxxxx & Co.
----------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
SCHEDULE I
Number of Optional
Total Number of Shares to be
Firm Shares Purchased if Maximum
to be Purchased Option Exercised
Underwriter -------------------- -----------------------
Xxxxxxx, Xxxxx & Co..................................... 442,334 66,350
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation................................ 442,333 66,350
SBC Warburg Dillon Read Inc............................. 442,333 66,350
Bear, Xxxxxxx & Co. Inc................................. 65,000 9,750
Xxxxxx Xxxx LLC......................................... 65,000 9,750
NationsBanc Xxxxxxxxxx Securities LLC................... 65,000 9,750
Xxxxx Xxxxxx Inc........................................ 65,000 9,750
Xxxxxx Xxxxxxx Incorporated............................. 65,000 9,750
Xxxxxx Gull Xxxxxxx & XxXxxxxx Inc...................... 37,000 5,550
Xxxxxx Xxxxxxxxxx Xxxxx Inc............................. 37,000 5,550
The Xxxxxxxx-Xxxxxxxx Company, LLC...................... 37,000 5,550
Sutro & Co. Incorporated................................ 37,000 5,550
--------- --------
Total.......................................... 1,800,000 270,000
========= ========
SCHEDULE II
Number of Optional
Shares to be Sold if
Total Number of Firm Maximum Option
Shares to be Sold Exercised
-------------------------- ---------------------------
The Company........................................... 567,310
The Selling Stockholders:
Xxxxxx X. Xxx Equity Partners, L.P............... 917,055 222,570
1989 Xxxxxx X. Xxx Nominee Trust................. 102,552 24,889
Xxxxxx X. Xxxxxx................................. 100,000 -
Xxxxx X. Xxxxxxxxx............................... 20,200 -
Xxxx X. Childs................................... 19,598 4,756
Xxxxx X. Xxxxxxx................................. 13,061 3,170
Xxxxxx X. Xxxxx, Xx.............................. 13,055 3,168
X. Xxxxxx Xxxx................................... 9,794 2,377
Xxxxx X. Xxxxxx.................................. 6,490 1,575
Xxxxxx X. Xxxxxxx................................ 5,874 1,426
Xxxxxxx X. Xxxxxx................................ 5,874 1,426
Xxxxxx X. Xxxxx.................................. 4,398 1,067
Xxxxxx X. Xxxxxxxx............................... 3,918 951
Xxxxxx X. Xxxxxxxxx.............................. 2,146 521
Xxxxx X. Xxxxxxx................................. 1,955 474
SGS Family Limited Partnership................... 1,475 000
Xxxxxxx X. Xxxxxx................................ 921 223
Xxxxx Xxxxxx..................................... 921 223
Xxxxxxxx X. Xxxxxx............................... 881 214
Xxxx X. Xxxxxx................................... 736 179
Xxxxxx X. Xxxxxxx................................ 458 111
Xxxxx X. Xxxxxx.................................. 428 104
Xxxxxxxx X. Xxxxx................................ 428 104
Xxxx X. Xxxxxxxx................................. 354 86
Xxxx X. Xxxxxx................................... 118 28
---------- ---------
Total................................................. 1,800,000 270,000
========== =========
Each of the Selling Stockholders listed above is represented by Xxxxxxxx,
Xxxxxxx & Xxxxxxx, a Professional Corporation, 000 Xxxxxxx Xxxxxx, Xxxxxx, XX
00000 and has appointed Xxxxxx X. Xxxxx, Xx. and Xxxx X. Xxxxxxxx, and each of
them, as Attorneys-in-Fact for such Selling Stockholder, except for Messrs.
Xxxxxx and Xxxxxxxxx, who are represented by Xxxxxx Xxxxxxxxxx LLP and who have
appointed Xxxxxxx XxXxxxxxx and Xxxxx Xxxxxx Xxxxxx, and each of them, as their
Attorneys-in-Fact.
SCHEDULE III
New York Leases
Section 7(e)(ii)
----------------
1. Lease Agreement dated as of August 27, 1993 between F.H.E.A. Associates and
Finlay Jewelry
2. Lease Agreement dated as of August 19, 1993 between 529 Fifth Company and
Finlay Jewelry, as amended
3. Lease Agreement dated as of August 19, 1993 between 000 Xxxxx Xxxxxx
Associates and Finlay Jewelry, as amended
4. Lease Agreement dated as of June 17, 1986 between 000 Xxxxx Xxxxxx Associates
and S&L Acquisition Company L.P., as amended
5. Lease Agreement dated as of May 1, 1995 between Xxxxx Xxxxxxxx Realty and
Finlay Jewelry
6. Lease Agreement dated as of October 4, 1994 between Tanger Properties Limited
Partnership and Finlay Jewelry, as amended
7. Lease Agreement dated May 2, 1996 between Horizon/Xxxx Outlet Centers Limited
Partnership and Finlay Jewelry
SCHEDULE IV
Persons or entities required to
execute Lock-Up Agreements
Pursuant to Section 7(m)
------------------------
Xxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx Xxxxx
Xxxxx X. Xxxxx
Xxxxx Xxxxxx Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxx Xxxxxxxx
Estate of Xxxxxx X. Xxxxxx
ANNEX I
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(h) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules examined by them (and, if applicable,
financial forecasts and/or pro forma financial information, on which they have
performed more limited procedures as specified in such letter, not constituting
an examination in accordance with generally accepted auditing standards) and
included in the Prospectus or the Registration Statement comply as to form in
all material respects (or, in the case of financial forecasts and/or pro forma
financial information, on the basis of such limited procedures, nothing came to
their attention that cause them to believe that such financial forecasts and/or
pro forma financial information do not comply as to form in all material
respects) with the applicable accounting requirements of the Act and the related
published rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim financial
statements, selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as indicated
in their reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives") and are attached
hereto;
(iii) If applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
unaudited condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the Prospectus as
indicated in their reports thereon, copies of which have been separately
furnished to the Representatives and are attached hereto, and on the basis of
specified procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that cause them
to believe that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years which were included
or incorporated by reference in the Company's Annual Reports on Form 10-K for
such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302 (if applicable), 402 and
503(d) (if applicable), respectively, of Regulation S-K;
(v) On the basis of limited procedures, not constituting an examination in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A)(i) the unaudited consolidated statements of operations, consolidated balance
sheets and consolidated statements of cash flows included in the Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations, or (ii) any material modifications should be made to the
unaudited condensed consolidated statements of operations, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus for them to be in conformity with generally accepted accounting
principles;
(B) any other unaudited statement of operations data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included in the
Prospectus;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived any unaudited condensed financial
statements referred to in Clause (A) and any unaudited statement of
operations data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial statements
included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial information
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma adjustments
have not been properly applied to the historical amounts in the compilation
of that information;
(E) as of a specified date not more than five days prior to the date of such
letter, there have been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest financial statements included in the Prospectus)
or any increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Representatives, or
any increases in any items specified by the Representatives, in each case
as compared with amounts shown in the latest balance sheet included in the
Prospectus, except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial statements included in
the Prospectus to the specified date referred to in Clause (E) there were
any decreases in consolidated net revenues or operating profit or the total
or per share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length specified
by the Representatives, except in each case for decreases or increases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii)In addition to the examination referred to in their report(s) included in
the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraphs (iii) and (vi)
above, they have carried out certain specified procedures, not constituting
an examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives, which are derived from the general
accounting records of the Company and its subsidiaries, which appear in the
Prospectus, or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives, and have compared
certain of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found them
to be in agreement.
