OMNIBUS AMENDMENT TO REGISTRATION RIGHTS
AND STOCKHOLDERS' AGREEMENTS
This Omnibus Amendment to Registration Rights and Stockholders' Agreements
(the "Omnibus Amendment") is made and entered into as of October 15, 1997, by
and among Finlay Enterprises, Inc., a Delaware corporation (the "Company") and
each of the parties who have accepted and agreed to this First Amendment by
signing a signature page of this Omnibus Amendment (the "Amending
Stockholders").
This Omnibus Amendment is an amendment to the Registration Rights Agreement
by and among the Company, the Amending Stockholders and the other parties
thereto dated as of May 26, 1993 (the "Original Registration Rights Agreement")
and the Amended and Restated Stockholders' Agreement by and among the Company,
the Amending Stockholders and the other parties thereto dated as of March 6,
1995 (the "Restated Stockholders' Agreement"). For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Amending Stockholders hereby agree as follows:
1. Amendment to Original Registration Rights Agreement. Upon the sale or
other disposition by Equity-Linked Investors, L.P. of all of its shares of
Common Stock, par value $.01 per share, of the Company, Section 5 of the
Original Registration Rights Agreement shall automatically be amended as
follows:
"(e) Notwithstanding any other provision of this Agreement, for purposes of
any Demand Registration under Sections 2, 3 or 4 above and any Piggyback
Registration under this Section 5, until the Catch-Up Point the Xxx Holders may
at their option sell Registrable Securities held by the Xxx Holders in place of
Registrable Securities held by the XXX Holders, (but only to the extent required
to reach the Catch-Up Point), regardless of whether the XXX Holders desire to
sell any Registrable Securities in connection with such Registration. The
Catch-Up Point shall occur at such time as the Xxx Holders have sold a
percentage of the Registrable Securities of the Xxx Holders (based on the
aggregate number of Registrable Securities held by the Xxx Holders immediately
prior to the effectiveness of the Registration Statement, as defined below)
equal to the percentage of the Registrable Securities sold by the XXX Holders
pursuant to the Company's Registration Statement on Form S-1 dated September 23,
1997, Registration No. 333 - 34949 (the "Registration Statement")."
2. Amendment to Restated Stockholders' Agreement. Pursuant to Section
2.3(c) of the Restated Stockholders' Agreement, upon the sale or other
disposition by the Applicable XXX Holders of more than fifty percent (50%) of
the Shares held by them on March 6, 1995, Section 2.3 of the Restated
Stockholder's Agreement shall automatically be amended and restated in its
entirety as follows:
"2.3 Corporate Governance. Until the tenth anniversary of the date hereof,
the Company and Stockholders shall take all action, including but not limited to
(i) the Stockholders instructing their director designees provided herein to
take such actions and (ii) the Stockholders voting, or executing written
consents with respect to, their Shares, so that:
(a) Election of Directors. Subject to Sections 2.3(c) and 2.3(d) below, the
Company's and the Operating Company's Boards of Directors shall be fixed at
eight (8) members, of which one member shall be designated by Xxxxxx X. Xxxxxx
(which member shall be Xx. Xxxxxx himself) (the "Xxxxxx Nominee"), two members
(one of which members shall be either Xx. Xxxxxxxxx himself, or if Xx. Xxxxxxxxx
is no longer an employee of the Company, a management employee of the Company)
shall be designated by Xxxxx X. Xxxxxxxxx (the "Cornstein Nominees"), one member
shall be designated by the Applicable XXX Holders (the "XXX Nominees"), and two
members shall be designated by the Applicable Xxx Holders (the "Xxx Nominees").
The directors shall be divided into classes. The initial term of the Xxxxx
Nominee and one Xxx Nominee shall expire in 1999; the initial term of the Xxxxxx
Nominee and the Cornstein Nominees shall expire in 2000; and the initial term of
the other Xxx Nominee shall expire in 2001. At the option of the Applicable Xxx
Holders and the Applicable XXX Holders, respectively, the Xxx Nominee(s) or the
XXX Nominee, respectively, shall be reduced by one or by two, and such Xxx
Nominee(s) or XXX Nominee, as the case may be, shall be removed from the Board
of Directors and, during such time as the Applicable Xxx Holders and the
Applicable XXX Holders, respectively, would otherwise have had the right to
designate a Director hereunder, a representative of the Applicable Xxx Holders
or the Applicable XXX Holders, as the case may be, shall continue to have the
right to attend meetings of the Board of Directors of the Company and the
Operating Company as an observer without a vote or other rights as a director
(except the right to receive sufficient notice to enable such attendance and the
right to receive all other communications, information and materials furnished,
from time to time, to Directors of the Company and the Operating Company and the
right to receive reimbursement for travel expenses to the same extent as
Directors of the Company and the Operating Company). In addition to any other
rights under this Agreement, (x) any transferee of any of the Xxx Holders, the
XXX Holders and Xxxxx X. Xxxxxxxxx, who is an Institutional Investor and who
holds pursuant to one or more Transfers Shares constituting at least ten percent
(10%) of the Shares then outstanding and (y) a representative of the Cornstein
Beneficiaries, so long as they hold, collectively, at least five percent (5%) of
the issued and outstanding shares of Common Stock of the Company (and have not
designated a director pursuant to this Section 2.3(a)), shall have the right to
attend meetings of the Boards of Directors of the Company and its Subsidiaries,
and, in the case of the Cornstein Beneficiaries, the Executive Committee, as an
observer without a vote or other rights as a director (except the right to
receive sufficient notice to enable such attendance and the right to receive all
other communications, information and materials furnished, from time to time, to
Directors of the Company and its Subsidiaries, and the Executive Committee, as
the case may be, and the right to receive reimbursement for travel expenses to
the same extent as Directors of the Company and its Subsidiaries).
(b) Designation of Director Nominees. One of the Xxx Nominees shall be
designated by the vote or consent of a majority of the then outstanding Shares
owned by Xxx Equity Partners and its transferees who are Applicable Xxx Holders
and one of the Xxx Nominees shall be designated by the vote or consent of a
majority of the then outstanding Shares owned by the Applicable Xxx Holders
other than Xxx Equity Partners. The Cornstein Nominees shall be designated by
the vote or consent of a majority of the then outstanding Shares owned by Xxxxx
X. Xxxxxxxxx and his Permitted Transferees. The XXX Nominee shall be designated
by the vote or consent of a majority of the then outstanding Shares owned by the
Applicable XXX Holders. Any group of Stockholders entitled to designate
directors hereunder shall also be entitled to require that the director
designated by that group pursuant to this Section 2.3 be removed or replaced by
another designee of such group.
(c) Termination of Right to Elect Directors. The number of directors which
Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxxxx, the Applicable XXX Holders, and the
Applicable Xxx Holders shall have the right to designate to the Board of
Directors of the Company and its Subsidiaries shall be reduced as follows: Xx.
Xxxxxx'x right to designate a director shall terminate on the date that Xx.
Xxxxxx is no longer an employee of the Company. Xx. Xxxxxxxxx'x right to
designate one director shall terminate when Xx. Xxxxxxxxx and his Permitted
Transferees own less than fifty percent (50%) of the Shares held by him on the
date hereof, and his right to designate the other director shall terminate when
he owns less than five percent (5%) of the Common Stock of the Company then
outstanding. The Applicable Xxx Holders' right to designate one director shall
terminate when the Applicable Xxx Holders collectively own less than fifty
percent (50%) of the Shares held by them on the date hereof, and their right to
designate the other director (which shall be the director designated by Xxx
Equity Partners in accordance with Section 2.3(b)) shall terminate when the
Applicable Xxx Holders collectively own less than five percent (5%) of the
Common Stock of the Company then outstanding. The Applicable XXX Holders' right
to designate a director shall terminate when the Applicable XXX Holders
collectively own less than five percent (5%) of the Common Stock of the Company
then outstanding.
(d) Executive Committee. The Board of Directors of the Company and the
Operating Company shall have an Executive Committee empowered, to the fullest
extent possible by law, to take all actions which can be taken by the full Board
of Directors of the Company and the Operating Company. Each such Executive
Committee shall consist of five (5) directors, one of which will be designated
by Xxxxxx X. Xxx (so long as the Applicable Xxx Holders have a right to
designate a director pursuant to Section 2.3(a) above), one of which will be
designated by the Applicable XXX holders, (so long as the Applicable XXX Holders
have a right to designate one director pursuant to Section 2.3(a) above), two of
which (including one management employee of the Company) will be designated by
Xxxxx X. Xxxxxxxxx, so long as Xxxxx X. Xxxxxxxxx has the right to designate two
directors pursuant to Section 2.3(a) above, and thereafter only one of which
will be designated by Xxxxx X. Xxxxxxxxx (so long as Xxxxx X. Xxxxxxxxx has the
right to designate one director pursuant to Section 2.3(a) above), and one of
which will be an independent director designated by the Board of Directors of
the Company. If any Stockholder or group of Stockholders loses its right to
designate a member of the Executive Committee in accordance with the foregoing
provisions of this Section 2.3(d), such member shall be designated by the Board
of Directors of the Company. Notwithstanding any other provision of this
Agreement, if all of the members of the Executive Committee vote to remove a
director, each stockholder agrees to vote his or its Shares (whether at a
meeting or by written consent) to effectuate such removal.
(e) Restrictions on Other Agreements. No Stockholder shall grant any proxy
or enter into or agree to be bound by any voting trust with respect to the
Shares, nor shall any Stockholder enter into any stockholders agreements or
arrangements of any kind with any person with respect to the Shares on terms
which conflict with the provisions of this Agreement (whether or not such
agreements and arrangements are with other Stockholders or holders of Shares
that are not parties to this Agreement), including but not limited to,
agreements or arrangements with respect to the acquisition, disposition or
voting of Shares inconsistent herewith.
(f) Stockholder Action. Each Stockholder agrees that, in such Stockholder's
capacity as a stockholder of the Company, such Stockholder will vote, or grant
proxies relating to such shares to vote, all of such Stockholder's shares of
Common Stock in favor of any transaction pursuant to Section 2.2 hereof (other
than a transaction with an Affiliate) if, and to the extent that, approval of
the Company's stockholders is required in order to effect such transaction."
(g) Upon the sale or other disposition by Equity-Linked Investors, L.P.
("XXX- 1") of all of its Shares, it shall no longer be deemed a Stockholder
under the Restated Stockholder's Agreement and the terms and provisions of the
Restated Stockholder's Agreement shall automatically terminate with respect to,
and no longer be binding on or enforceable against, XXX-1.
3. Ratification. Except as explicitly amended hereby, the terms of the
Original Registration Rights Agreement and Restated Stockholders' Agreement are
hereby ratified and confirmed.
4. Counterparts. This Omnibus Agreement may be executed in two or more
counterparts each of which shall be deemed an original but all of which together
shall constitute one and the same instrument, and all signatures need not appear
on any one counterpart.
5. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED UNDER AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE
GOVERN UNDER APPLICABLE NEW YORK PRINCIPLES OF CONFLICTS OF LAWS).
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Omnibus Amendment under
seal as of the date written above.
FINLAY ENTERPRISES, INC. EQUITY-LINKED INVESTORS-II
By:/s/Xxxxx X. Xxxxxxxxx By: Xxxxx X. Xxxxx Associates-II
----------------------------- General Partner
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President
and Chief Financial Officer By: Xxxxx X. Xxxx
THE XXX REPRESENTATIVE
/s/Xxxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxx, Xx., individually and as Xxx /s/Xxxxx X. Xxxxxxxxx
Representative for Xxxxxx X. Xxx Equity Partners, --------------------------
L.P., 1989 Xxxxxx X. Xxx Nominee Trust, Xxxx X. Xxxxx X. Xxxxxxxxx
Childs, Xxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx, X.
Xxxxxx Xxxx, Xxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxx, /s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxx, Xxxxx X. --------------------------
Xxxxxx, Xxxxxxx Xxxxxx, SGS Family Limited Xxxxxx X. Xxxxxx
Partnership, Xxxxxxx X. XxXxxx, Xxxxxx X.
Xxxxxxx, Xxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx, /s/Xxxxxx X. Xxxxxxxx
Xxxxx Xxxxxx, Xxxx X. Xxxxxxxx, Xxxx X. Xxxxxx, --------------------------
Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx, Xxxxx X. Xxxxxx X. Xxxxxxxx
Xxxxxx, Xxxxxxxx X. Xxxxxxxx and Xxxxxxxx X.
Xxxxxx /s/Xxxxx Xxxxxx Xxxxxx
--------------------------
Xxxxx Xxxxxx Xxxxxx
/s/Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
EQUITY-LINKED INVESTORS, L.P.
By: Xxxxx X. Xxxxx Associates,
General Partner
By: Xxxxx X. Xxxx
