Exhibit 1.1
Finlay Fine Jewelry Corporation
__% Senior Notes due 2008
-----------------
Underwriting Agreement
April __, 1998
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation,
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
c/o Goldman, ▇▇▇▇▇ & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Finlay Fine Jewelry Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to you as the several Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of $150,000,000 principal amount of the Company's
__% Senior Notes due , 2008 (the "Securities").
1. Each of the Company and Finlay Enterprises, Inc., a Delaware corporation
and the parent of the Company ("Parent"), represents and warrants to, and
agrees with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File No.
333-48563), as amended by Amendments Nos. 1 and 2 thereto (the
"Initial Registration Statement"), in respect of the Securities 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, 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
Statement"), filed pursuant to Rule 462(b) under the Securities Act
of 1933, as amended (the "Act"), which became effective upon filing,
no other document with respect to such Initial Registration Statement
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 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, each as amended at the time such part
of the registration statement became effective, are hereinafter
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";
(b) 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, the Trust
Indenture Act of 1939, as amended (the "Trust Indenture 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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein;
(c) 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 Trust Indenture 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
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein;
(d) Neither Parent nor the Company nor any of its
subsidiaries has sustained since the date of the latest audited
financial statements included 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 Parent or 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 Parent and the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect"), otherwise than as set
forth or contemplated in the Prospectus;
(e) Parent and 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 Parent
and the Company and its subsidiaries; and any material real property
and buildings held under lease by Parent and 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 Parent and the Company and its subsidiaries;
(f) Each of the Company and Parent 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
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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;
(g) Parent has an authorized capitalization as set forth under
the caption "Description of Capital Stock" in the Prospectus, and all
of the issued shares of capital stock of Parent have been duly
authorized and validly issued, are fully paid and non-assessable and
conform to the description of such capital stock contained in the
Prospectus; and all of the issued shares of capital stock of the
Company and 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 Parent, free and clear
of all liens, encumbrances, equities or claims;
(h) The Securities have been duly authorized by the Company
and, on the Closing Date, will have been duly executed, issued and
delivered by the Company, and when the Securities, in accordance with
the provisions of the Indenture (the "Indenture"), substantially in
the form filed as an exhibit to the Registration Statement, to be
entered into by the Company and Marine Midland Bank, as Trustee (the
"Trustee"), have been authenticated by the Trustee and delivered to
and paid for by the Underwriters in accordance with the terms of this
Agreement, the Securities will be entitled to the benefits of the
Indenture and will constitute valid and legally binding obligations
of the Company, enforceable against the Company in accordance with
their terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless of
whether enforcement is sought in a proceeding in equity or at law);
the Indenture has been duly authorized by the Company and qualified
under the Trust Indenture Act and when duly executed and delivered by
the Company and the Trustee, will constitute a valid and legally
binding instrument, enforceable against the Company in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless of
whether enforcement is sought in a proceeding in equity or at law);
and the Securities and the Indenture will conform in all material
respects to the descriptions thereof in the Prospectus;
(i) The issue and sale of the Securities and the compliance
by each of the Company and Parent with all of the provisions of the
Securities, the Indenture and this Agreement applicable to it and the
consummation of the transactions herein and therein 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 Parent or the Company or any
of its subsidiaries is a party or by which Parent, the Company or any
of its subsidiaries is bound or to which any of the property or
assets of Parent or 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 Parent or 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 Parent's or 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 Parent or 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 Securities or the consummation by Parent
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or the Company of the transactions contemplated by this Agreement and
the Indenture, except such as have been obtained under the Act and
the Trust Indenture Act 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 Securities by the Underwriters;
(j) Neither Parent nor 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;
(k) 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 Senior Notes", insofar as
they purport to constitute a summary of the terms of the Securities
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;
(l) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which Parent or the
Company or any of its subsidiaries is a party or of which any
property of Parent or the Company or any of its subsidiaries is the
subject which, if determined adversely to Parent or 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 Parent's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;
(m) Each of the Company and Parent is not and, after giving
effect to the offering and sale of the Securities, 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");
(n) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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;
(o) Parent and 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 Parent 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
Underwriters which could not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect;
(p) Neither Parent nor the Company nor any of its
subsidiaries has received any notice that any default by Parent or
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 Parent or 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 Parent or 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
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valid execution and delivery) thereof by the other party or parties
thereto, is the valid and binding obligation of Parent and 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 Parent nor 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);
(q) Each of the Company and Parent has duly authorized the
amendment to the Revolving Credit Agreement that is described in the
Prospectus. Substantially contemporaneously with the Time of Delivery
(as defined in Section 4 hereof), the Company and Parent will duly
execute and deliver such amendment to the Revolving Credit Agreement.
The Company has duly authorized the amendment to the Gold Consignment
Agreement that is described in the Prospectus. Substantially
contemporaneously with the Time of Delivery, the Company 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 Parent and (b) the Gold Consignment
Agreement, as amended as described above, will constitute the legal,
valid and binding agreement of the Company, in each case, enforceable
against the Company and/or Parent, as the case may be, subject, as to
enforcement, to insolvency, reorganization, fraudulent conveyance or
transfer, moratorium and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles
(regardless of whether enforcement is sought in a proceeding in
equity or at law); and
(r) Neither the Company nor Parent 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.
2. Subject to the terms and conditions herein set forth, the Company
agrees to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of ___% of the principal amount thereof, plus accrued interest, if any,
from April __, 1998 to the Time of Delivery hereunder, the principal amount of
Securities set forth opposite the name of such Underwriter in Schedule I
hereto.
3. Upon the authorization by ▇▇▇▇▇▇▇, ▇▇▇▇▇ and Co., on behalf of the
Underwriters, of the release of the Securities, the several Underwriters
propose to offer the Securities for sale upon the terms and conditions set
forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global Securities in book-entry
form which will be deposited by or on behalf of the Company with The
Depository Trust Company ("DTC") or its designated custodian. The Company will
deliver the Securities to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., for the account of each
Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. at least forty-eight
hours in advance, by causing DTC to credit the Securities to the account of
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. for
checking at least twenty-four hours prior to the Time of Delivery (as defined
below) at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m.,
New York City time, on April __, 1998 or such other time and date as ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. and the Company may agree upon in writing. Such time and date for
delivery of the Securities is herein called the "Time of Delivery".
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(b) The documents to be delivered at the Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(k) hereof, will be delivered at the offices
of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
York 10022 (the "Closing Location"), and the Securities will be delivered at
the Designated Office, all at the 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 the 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 Time of Delivery
which shall be disapproved by the Underwriters 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 Securities; 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 Securities 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 Securities 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 Securities,
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 Securities in each jurisdiction
in which the Securities 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 Securities 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 in
order to
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comply with the Act or the Trust Indenture 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 Securities 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 (and to cause each of its subsidiaries not to)
register for sale, offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder, any Securities or any securities
that are substantially similar to the Securities (other than the
Senior Debentures (as defined in the Prospectus) of Parent in an
aggregate principal amount of $75.0 million), or any securities of
the Company or any such subsidiary of the Company convertible into or
exchangeable for securities of the Company or any such subsidiary of
the Company substantially similar to the Securities;
(f) Within the time limits prescribed by the Exchange Act, to
furnish to the holders of the Securities 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, 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 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 Parent as you may
from time to time reasonably request;
(h) To use the net proceeds received by it from the sale of
the Securities pursuant to this Agreement in the manner specified in
the Prospectus under the caption "Use of Proceeds";
(i) 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 Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary
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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, the Indenture, 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 Securities;
(iii) all expenses in connection with the qualification of the Securities 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 and legal investment surveys, if any; (iv) all fees charged by
securities rating services for rating the Securities; (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
Securities; (vi) the cost of preparing certificates representing the
Securities; (vii) the fees and expenses of the Trustee and the Collateral
Agent and any agent of the Trustee and the Collateral Agent and the fees and
disbursements of counsel for the Trustee and the Collateral Agent in
connection with the Indenture and the Securities; (viii) all other costs and
expenses incident to the performance of the Company's obligations hereunder
which are not otherwise specifically provided for in this Section. It is
understood, however, 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 and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company and Parent herein are, at and as of the Time
of Delivery, true and correct, the condition that each of the Company and
Parent shall have performed all of its 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) Jones, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the
Underwriters, shall have furnished to you such opinion or opinions (a draft of
each such opinion is attached as ▇▇▇▇▇ ▇▇(a) hereto), dated the Time of
Delivery, with respect to the matters covered in paragraphs (i), (ii), (v),
(vi), (vii), (x) and (xii) 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) ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for
the Company, shall have furnished to you their written opinion (a draft of
such opinion is attached as ▇▇▇▇▇ ▇▇(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 the Time of Delivery, in form and
substance as attached, to the effect that:
(i) Each of the Company and Parent 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;
8
(ii) Parent has an authorized capitalization as set forth
under the caption "Description of Capital Stock" in the Prospectus, and
all of the issued shares of capital stock of Parent and the Company
have been duly authorized and validly issued, fully paid and
non-assessable;
(iii) Each subsidiary of the Company (other than Sonab) 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 Parent or the Company or any of its subsidiaries is
a party or of which any property of Parent or the Company or any of
its subsidiaries is the subject which, if determined adversely to
Parent or 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 Parent;
(vi) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits provided
by the Indenture; and the Securities and the Indenture conform in all
material respects to the descriptions thereof in the Prospectus;
(vii) The Indenture has been duly authorized, executed and
delivered by the Company and, when duly authorized, executed and
delivered by the other parties thereto, will constitute a valid and
legally binding instrument, enforceable in accordance with its terms;
the Indenture has been qualified under the Trust Indenture Act;
(viii) The issue and sale of the Securities being delivered
at the Time of Delivery by the Company and the compliance by the
Company and Parent with the applicable provisions of the Securities,
the Indenture and this Agreement and the consummation of the
transactions herein and therein contemplated (a) 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 Parent or the
Company or any of its subsidiaries is a party or by which Parent or
the Company or any of its subsidiaries is bound or to which any of
the property or assets of Parent or 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 Parent, (ii)
any statute, rule or regulation known to such counsel of any
governmental agency or body having jurisdiction over Parent or the
Company or any of its subsidiaries or any of their respective
properties or (iii) any order applicable to Parent or 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);
(ix) 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
Securities or the consummation by the Company of the transactions
contemplated by the Indenture and this Agreement, except such as have
been obtained under the Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications
as may be required under
9
foreign or state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(x) 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 Senior Notes", insofar as
they purport to constitute a summary of the terms of the Securities,
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;
(xi) Each of the Company and Parent is not an "investment
company" or an entity "controlled" by an "investment company", as
such terms are defined in the Investment Company Act; and
(xii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior
to the Time of Delivery (other than the financial statements and
related schedules and other financial data included 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 (ix) 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 the Time of Delivery (other than the financial statements and
related schedules and other financial data included therein or
omitted therefrom, as to which such counsel need express no opinion)
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 or that, as of its date, the
Prospectus or any further amendment or supplement thereto made by the
Company prior to the Time of Delivery (other than the financial
statements and related schedules and other financial data included
therein or omitted therefrom, as to which such counsel need express
no opinion) contained 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 the Time of Delivery, either the
Registration Statement or the Prospectus or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules and other
financial data included therein or omitted therefrom, as to which
such counsel need express no opinion) contains 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;
(d) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Company, shall
have furnished to you their written opinion (a draft of such opinion is
attached as ▇▇▇▇▇ ▇▇(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 the Time of Delivery, in form and substance
as attached, to the effect that:
(i) To such counsel's knowledge, neither Parent nor the
Company nor any of its subsidiaries is in violation of its respective
certificate or restated certificate of incorporation or by-
10
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) ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President, General Counsel and
Secretary of the Company, shall have furnished to you her written opinion (a
draft of such opinion is attached as ▇▇▇▇▇ ▇▇(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 ▇▇. ▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇'▇ opinion), dated the Time of Delivery, in form and
substance as attached, with respect to the matters covered in paragraphs (iv)
and (viii) 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; each
of Parent and 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) Parent and 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 Parent
and the Company and its subsidiaries; to such counsel's knowledge
neither Parent nor the Company nor any of its subsidiaries is in
default under any lease for real property or buildings held under
lease by Parent or 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 Parent and
the Company and its subsidiaries; and the leases listed on Schedule
III hereto are the only real property leases to which Parent and the
Company and its subsidiaries are a party and are valid, subsisting
and enforceable as against Parent and the Company and 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 Parent and the Company and its
subsidiaries and except that the enforceability of such leases is
subject to the effect of any applicable , insolvency, reorganization,
fraudulent conveyance or transfer, moratorium and similar laws
affecting creditors' rights generally and general equity principles
(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 Parent and 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 Parent or 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 Parent or the Company or its subsidiaries;
(iii) To such counsel's knowledge (a) neither Parent nor the
Company nor any of its subsidiaries has received any notice that any
default by Parent or 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
Parent or the Company or any of its subsidiaries are a party and (b)
no condition exists which could individually or in the aggregate
11
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 Parent or 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 & ▇▇▇▇▇▇, French counsel to the Company,
shall have furnished to you their written opinion (a draft of such opinion is
attached as ▇▇▇▇▇ ▇▇(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 the 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 the Company'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 affecting creditors' rights and to general equity principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(g) 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, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇ ▇(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);
(h) (i) Neither Parent nor the Company nor any of its
subsidiaries shall have sustained since the date of the latest audited
financial statements included 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 Parent or 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
Parent and 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 ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. on behalf of the Underwriters so material and adverse as to make
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities on the terms and in the manner contemplated in the
Prospectus;
(i) On or after the date hereof (i) no downgrading shall
have occurred in the rating accorded the Company's or Parent'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 Parent's debt securities;
12
(j) 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 Parent's securities on
NASDAQ or in the Company's securities if then listed or quoted; (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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. on
behalf of the Underwriters makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities being delivered at
the Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(k) The Company shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of the
Company and Parent, respectively, reasonably satisfactory to you as to the
accuracy of the representations and warranties of the Company and Parent,
respectively, herein at and as of the Time of Delivery, as to the performance
by each of the Company and Parent, of all of their respective obligations
hereunder to be performed at or prior to the Time of Delivery, and as to such
other matters as you may reasonably request, and the Company and Parent shall
have furnished or caused to be furnished certificates as to the matters set
forth in subsections (a) and (h) of this Section; and
(l) 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 Parent, 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 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, 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 Parent 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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein.
(b) Each Underwriter severally will indemnify and hold
harmless the Company and Parent against any losses, claims, damages or
liabilities to which the Company or Parent 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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
expressly for use therein; and will reimburse the Company and Parent for any
legal or other expenses reasonably incurred by the Company and Parent in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to
13
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.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) 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 and Parent on the one
hand and the Underwriters on the other from the offering of the Securities.
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 (c) 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 and Parent 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 and Parent 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 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 and Parent 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, Parent and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this subsection (d) 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 (d). 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 (d) 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 (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities 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 (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
14
(e) The obligations of the Company and Parent under this
Section 8 shall be in addition to any liability which the Company and Parent
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 Parent and to each person, if any, who controls
the Company and Parent within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Securities 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 Securities 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 Securities, then the Company 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 Securities on such terms.
In the event that, within the respective prescribed periods, you notify the
Company that you have so arranged for the purchase of such Securities, or the
Company notify you that they have so arranged for the purchase of such
Securities, you or the Company shall have the right to postpone the 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 Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or Underwriters by you
and the Company as provided in subsection (a) above, the aggregate number of
such Securities which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Securities to be purchased at the Time of
Delivery, then the Company shall have the right to require each non-defaulting
Underwriter to purchase the number of shares which such Underwriter agreed to
purchase hereunder at the Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Securities which such Underwriter agreed to purchase hereunder) of the
Securities 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 Securities of a defaulting Underwriter or Underwriters by you
and the Company as provided in subsection (a) above, the aggregate number of
such Securities which remains unpurchased exceeds one-eleventh of the
aggregate number of all the Securities to be purchased at the Time of
Delivery, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Securities of a defaulting Underwriter or Underwriters, then this Agreement
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or Parent, except for the expenses to be borne by
the Company 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, Parent 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 or Parent or any officer or director or
controlling person of the Company or Parent, and shall survive delivery of and
payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof and Parent shall not then be
under any liability to any Underwriter except as provided in Section 8 hereof;
but, if for any
15
other reason, any Securities are not delivered by or on behalf of the Company
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 Securities not so
delivered, but the Company shall then be under no further liability to any
Underwriter except as provided in Sections 6 and 8 hereof and Parent shall
then be under no further liability to any Underwriter except as provided in
Section 8 hereof.
12. In all dealings hereunder, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. 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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. on
behalf of you as the Underwriters.
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 the Underwriters in care of ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration
Department; and if to the Company or to Parent shall be delivered or sent by
mail to the address of the Company set forth in the Registration Statement,
Attention: Secretary; 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. 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 and Parent and, to the extent
provided in Sections 8 and 10 hereof, the officers, directors and controlling
persons of the Company and Parent 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 Securities 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.
16
If the foregoing is in accordance with your understanding, please
sign and return to us ten counterparts hereof, and upon the acceptance hereof
by the Underwriters, this letter and such acceptance hereof shall constitute a
binding agreement among each of the Underwriters and the Company and Parent.
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 for
examination upon request, but without warranty on your part as to the
authority of the signers thereof.
Very truly yours,
Finlay Fine Jewelry Corporation
By:
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
Finlay Enterprises, Inc.
By:
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
By:
------------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
On behalf of each of the Underwriters
17
SCHEDULE I
Principal Amount
of Securities to be
Underwriter Purchased
----------- --------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co............................................................
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation.......................................................
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC..........................................
-------------
Total............................................................ $150,000,000
=============
18
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 the Company
2. Lease Agreement dated as of August 19, 1993 between 529 Fifth Company and
the Company, as amended
3. Lease Agreement dated as of August 19, 1993 between 521 Fifth Avenue
Associates and the Company, as amended
4. Lease Agreement dated as of June 17, 1986 between 521 Fifth Avenue
Associates and S&L Acquisition Company L.P., as amended
5. Lease Agreement dated as of May 1, 1995 between ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Realty and
the Company
6. Lease Agreement dated as of October 4, 1994 between Tanger Properties
Limited Partnership and the Company, as amended
7. Lease Agreement dated May 2, 1996 between Horizon/▇▇▇▇ Outlet Centers
Limited Partnership and the Company
19
ANNEX I
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(g) 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 Underwriters 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 Underwriters 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;
(vi) They have -
(a) Inquired of certain officials of the
Company who have responsibility for financial and accounting
matters as to (i) whether all significant assumptions
regarding the business combinations and financing
transactions had been reflected in the pro forma
adjustments, and (ii) whether the unaudited pro forma
condensed consolidated financial statements referred to
(vi)(a) comply as to form, in all material respects, with
the applicable accounting requirements of rule 11-02 of
Regulation S-X; and that those officials stated, in response
to such inquiries, that all significant assumptions
regarding the business combinations and financing
transactions had been reflected in the pro forma adjustments
and that the unaudited pro forma condensed consolidated
financial statements referred to in (vi)(a) comply as to
form, in all material respects, with the applicable
accounting requirements of rule 11-02 of Regulation S-X.
(b) Compared and/or recomputed the historical
financial information for the Company included on pages [ ]
and [ ] in the Registration Statement with the applicable
historical financial information for the Company on pages
F-[ ] and F-[ ], respectively, and found them to be in
agreement.
(c) Proved the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the unaudited pro forma condensed consolidated
financial statements.
(vii) 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
I-2
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 Underwriters, or any increases in any items
specified by the Underwriters, 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 Underwriters, or any
increases in any items specified by the Underwriters, in
each case as compared with the comparable period of the
preceding year and with any other period of corresponding
length specified by the Underwriters, 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
(viii) 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 Underwriters, 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
Underwriters, 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.
I-3
