Finlay Enterprises, Inc.
9% Senior Debentures due 2008
_________________
Underwriting Agreement
April 20, 1998
Xxxxxxx, Xxxxx & Co.,
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation,
NationsBanc Xxxxxxxxxx Securities LLC
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Finlay Enterprises, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to you as
the several Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of $75,000,000 principal amount of the Company's 9% Senior Debentures
due May 1, 2008 (the "Securities").
1. Each of the Company and Finlay Fine Jewelry Corporation, a Delaware
corporation and a wholly owned subsidiary of the Company ("Finlay Jewelry"),
jointly and severally represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-48567), as amended by
Amendments Nos. 1 and 2 thereto (the "Initial Registration Statement"), in
respect of the 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 but including all documents
incorporated by reference in the prospectus contained therein, to you for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
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 or any such
document incorporated by reference therein has heretofore been filed with
the Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission to the Company or its counsel (any preliminary prospectus
included in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the Act is hereinafter called a "Preliminary Prospectus"; the various
parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto but
excluding Form T-1 and including (i) the information contained in the form
of final prospectus filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule
430A under the Act to be part of the Initial Registration Statement at the
time it was declared effective or such part of the Rule 462(b) Registration
Statement, if any, that became or hereafter becomes effective and (ii) the
documents incorporated by reference in the prospectus contained
in the registration statement at the time such part of the registration
statement became effective, each as amended at the time such part of the
registration statement became effective, are 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"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement);
(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 Xxxxxxx, Xxxxx & Co.
expressly for use therein;
(c) The documents incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be, conformed
in all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed or incorporated by reference in the Prospectus
or any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
statements made therein within the coverage of Rule 175(b) under the Act
were made by the Company with a reasonable basis and in good faith;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Sachs & Co. expressly for use therein;
(d) 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 Xxxxxxx, Xxxxx & Co.
expressly for use therein or by the Selling Stockholders (as defined in the
Prospectus) expressly for use in the preparation of answers therein to Item
7 of Form S-3;
(e) Neither the Company nor any of its subsidiaries has sustained since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any change in the capital stock or long-term debt of the Company or any of
its subsidiaries, except for borrowings and repayments under the Revolving
Credit Agreement and the Gold Consignment Agreement (each as defined in the
Prospectus and as amended as described in the Prospectus) or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the business, operations, management, financial
position or condition, current assets, merchandise inventories,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"), otherwise than
as set forth or contemplated in the Prospectus;
(f) The Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all material
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any material real property and buildings
held under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries;
(g) Each of the Company and Finlay Jewelry has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; the
Company's indirect subsidiary, Societe Nouvelle d'Achat de Bijouterie -
S.O.N.A.B. ("Sonab") is duly organized and validly existing as a societe en
nom collectif in France; each other direct or indirect subsidiary of the
Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction;
(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and
non-assessable and conform to the description of such capital stock
contained in the Prospectus; and all of the issued shares of capital stock
of each subsidiary of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and (except for directors'
qualifying shares, if any, and except as set forth in the Prospectus) are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(i) 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); the Security
and Pledge Agreement (the "Security and Pledge Agreement") to be entered
into between the Company and Marine Midland Bank, as Collateral Agent (the
"Collateral Agent"), substantially in the form filed as an exhibit to the
Registration Statement, when duly executed and delivered by the Company and
the Collateral Agent, 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, the Indenture and the
Security and Pledge Agreement will conform in all material respects to the
descriptions thereof in the Prospectus;
(j) The issue and sale of the Securities and the compliance by each of the
Company and Finlay Jewelry with all of the provisions of the Securities,
the Indenture, the Security and Pledge Agreement 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 the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, except any such conflict, breach, violation or
default which has been consented to or waived in a valid and binding
writing duly executed and delivered to the Company by or on behalf of the
party granting such consent or waiver; (ii) will not result in any
violation of the provisions of the Company's or any of its subsidiaries'
respective certificate or restated certificate of incorporation or by-laws
or restated by-laws or comparable documents and (iii) will not result in
any violation of any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Indenture and the Security and Pledge
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 foreign or state securities or
Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters;
(k) Neither the Company nor any of its subsidiaries is in violation of its
respective certificate or restated certificate of incorporation or by-laws
or restated by-laws or comparable documents, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease, license or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound which default
could reasonably be expected to result in, individually or in the
aggregate, a Material Adverse Effect;
(l) 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 Debentures", 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;
(m) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, could individually or in the aggregate
reasonably be expected to have a Material Adverse Effect; and, to the
Company's and Finlay Jewelry's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(n) Each of the Company and Finlay Jewelry 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");
(o) Xxxxxx Xxxxxxxx LLP, who have certified certain consolidated financial
statements of the Company and Finlay Jewelry, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(p) The Company and its subsidiaries directly or through host store groups are
subject to consent decrees, injunctions or comparable governmental orders
or decrees regarding the discount pricing and advertising of jewelry from
"regular" or "original" prices only in the states of California, Colorado,
Georgia, Oregon and Wisconsin, and the Company and its subsidiaries are in
compliance therewith and with applicable federal and state laws with
respect to such pricing and advertising practices, except for such
noncompliance previously identified in writing by the Company to the
Underwriters which could not individually or in the aggregate reasonably be
expected to have a Material Adverse Effect;
(q) Neither the Company nor any of its subsidiaries has received any notice
that any default by the Company or any of its subsidiaries has occurred and
is continuing under any of the license agreements with host store groups
described or identified in the Prospectus to which the Company or any of
its subsidiaries are a party and no condition exists which could
individually or in the aggregate reasonably be expected to result in the
termination or nonrenewal of any such license agreement; each such license
agreement has been duly authorized (and, in the case of written license
agreements, duly and validly executed and delivered) by and on behalf of
the Company and its subsidiaries, as the case may be, and, assuming the due
authorization (and, in the case of written license agreements, the due and
valid execution and delivery) thereof by the other party or parties
thereto, is the valid and binding obligation of the Company, its
subsidiaries and such other party or parties, as the case may be,
enforceable in accordance with its respective terms against the respective
parties thereto subject to the effect of any applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium
and similar laws affecting creditors' rights generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law); and neither the Company nor any of its
subsidiaries has received any notice (whether actual or constructive) that
the licensor thereunder is considering limiting, suspending, revoking or
non-renewing any such license; except that no representation is made with
respect to the Company's license agreement with Liberty House as to the
effect on such license agreement of the filing of a voluntary petition by
Liberty House under the Bankruptcy Code (as defined in the Prospectus);
(r) Each of the Company and Finlay Jewelry has duly authorized the amendment to
the Revolving Credit Agreement that is described in the Prospectus.
Substantially contemporaneously with the Time of Delivery (as defined in
Section 4 hereof), the Company and Finlay Jewelry will duly execute and
deliver such amendment to the Revolving Credit Agreement. Finlay Jewelry
has duly authorized the amendment to the Gold Consignment Agreement that is
described in the Prospectus. Substantially contemporaneously with the Time
of Delivery, Finlay Jewelry will duly execute and deliver such amendment to
the Gold Consignment Agreement. Assuming the due authorization, execution
and delivery thereof by the other parties thereto, (a) the Revolving Credit
Agreement, as amended as described above, will constitute the legal, valid
and binding agreement of the Company and Finlay Jewelry and (b) the Gold
Consignment Agreement, as amended as described above, will constitute the
legal, valid and binding agreement of Finlay Jewelry, in each case,
enforceable against the Company and/or Finlay Jewelry, as the case may be,
subject, 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
(s) Neither the Company nor Finlay Jewelry nor any of their respective
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075, Florida
Statutes.
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
97.148% of the principal amount thereof, plus accrued interest, if any, from May
1, 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 Xxxxxxx, Xxxxx 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 Xxxxxxx, Sachs & 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 Xxxxxxx, Xxxxx & Co. at least forty-eight hours in advance, by
causing DTC to credit the Securities to the account of Xxxxxxx, Sachs & Co. at
DTC. The Company will cause the certificates representing the Securities to be
made available to Xxxxxxx, Xxxxx & 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 24, 1998
or such other time and date as Xxxxxxx, Sachs & 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".
(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 Xxxxx, Day,
Xxxxxx & Xxxxx, 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (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 or to
file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Trust Indenture Act or the
Exchange Act, to notify you and upon your request to file such document and
to prepare and furnish without charge to each Underwriter and to any dealer
in securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which
will correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus in connection with
sales of any of the 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 direct and indirect 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 Notes (as defined in the
Prospectus) of Finlay Jewelry in an aggregate principal amount of $150.0
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 or
Finlay Jewelry is listed or quoted (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission); and (ii) such additional information
concerning the business and financial condition of the Company or Finlay
Jewelry as you may from time to time reasonably request;
(h) To use the net proceeds received by it from the sale of the 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 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, the Security and Pledge
Agreement, any Blue Sky Memorandum, closing documents (including any reasonable
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the 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, the Security and Pledge Agreement, 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 Finlay Jewelry herein are, at and as of the Time
of Delivery, true and correct, the condition that each of the Company and Finlay
Jewelry 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) Xxxxx, Day, Xxxxxx & Xxxxx, counsel for the Underwriters, shall have
furnished to you such opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated the Time of Delivery, with respect
to the matters covered in paragraphs (i), (ii), (v), (vi), (vii), (x) and
(xiii) of subsection (c) below as well as such other related matters as you
may reasonably request, and such counsel shall have received such documents
and information as they may reasonably request to enable them to pass upon
such matters;
(c) Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel for the Company, shall
have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(b) hereto) (which opinion may be limited to the
federal laws of the United States, the laws of the State of New York and
the General Corporation Law of the State of Delaware and in giving such
opinion such counsel may state that, insofar as any opinions involve
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company or its subsidiaries and
certificates of responsible public officials, copies of which certificates
will be provided to you upon delivery of such counsel's opinion), dated the
Time of Delivery, in form and substance as attached, to the effect that:
(i) Each of the Company and Finlay Jewelry has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly authorized and validly issued, fully paid and
non-assessable;
(iii)Each subsidiary of the Company (other than Sonab and Finlay Jewelry) has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation; and all of
the issued shares of capital stock of each subsidiary of the Company (other
than Sonab) have been duly authorized and validly issued, are fully paid
and non-assessable, and (except for directors' qualifying shares, if any,
and except as otherwise set forth in the Prospectus) are owned of record
directly or indirectly by the Company, to the knowledge of such counsel,
free and clear of all liens, encumbrances and defects;
(iv) To such counsel's knowledge and other than as set forth in the Prospectus,
there are no legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, could individually or
in the aggregate reasonably be expected to have a Material Adverse Effect;
and, to such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(v) This Agreement has been duly authorized, executed and delivered by the
Company and Finlay Jewelry;
(vi) 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)Each of the Indenture and the Security and Pledge Agreement 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; after giving effect to the issuance of the Securities at the
First Time of Delivery, the Security and Pledge Agreement creates a valid
security interest in all of the issued and outstanding shares of capital
stock of Finlay Jewelry for the benefit of the Collateral Agent and to the
extent that security interests in such shares may be perfected by filing
under the Uniform Commercial Code in effect in the State of New York, the
Collateral Agent's security interest in all of the issued and outstanding
shares of capital stock of Finlay Jewelry has been perfected, and upon
release of the existing pledge of such shares and the repledge and delivery
of such shares in accordance with the Security and Pledge Agreement, and
assuming no issuance by Finlay Jewelry of any additional shares of its
capital stock and that the Collateral Agent entered into the Security and
Pledge Agreement in good faith without notice of any adverse claims on such
shares (other than the existing pledge of such shares), the Collateral
Agent will have a perfected security interest in all of the issued and
outstanding shares of capital stock of Finlay Jewelry;
(viii) The issue and sale of the Securities being delivered at the Time of
Delivery by the Company and the compliance by each of the Company and
Finlay Jewelry with the applicable provisions of the Securities, the
Indenture, the Security and Pledge Agreement 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 the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor (b) will such action
result in any violation of the provisions of (i) the respective certificate
or restated certificate of incorporation, or respective by-Laws or restated
by-laws, as the case may be, of the Company or Finlay Jewelry, (ii) any
statute, rule or regulation known to such counsel of any governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or (iii) any order
applicable to the Company, any of its subsidiaries or any of their
respective properties of any court, governmental agency or body known to
such counsel based upon an officer's certificate listing any such orders
(which officer's certificate shall be delivered with such opinion);
(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, the Security and Pledge
Agreement 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
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 Debentures", 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 Finlay Jewelry is not an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined
in the Investment Company Act;
(xii)The documents incorporated by reference in 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
therein, as to which such counsel need express no opinion), when they
became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder; and
(xiii) 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 or incorporated by reference therein or omitted
therefrom, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Act and the
rules and regulations thereunder; although they do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (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 or incorporated by
reference therein or omitted therefrom, as to which such counsel need
express no opinion) contained or incorporated by reference an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus or any further amendment
or supplement thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which such counsel need express no opinion) contained or
incorporated by reference an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading or
that, as of 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 or incorporated by
reference therein or omitted therefrom, as to which such counsel need
express no opinion) contains or incorporates by reference an untrue
statement of a material fact or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; and they do not know of any amendment to
the Registration Statement required to be filed or of any contracts or
other documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement or the Prospectus which are not filed or described as required or
of any filing required to be incorporated by reference into the Prospectus
which is not so incorporated by reference therein;
(d) Xxxxxx Xxxxxxxxxx LLP, counsel for the Company, shall have furnished to you
their written opinion (a draft of such opinion is attached as Annex II(c)
hereto) (which opinion may be limited to the federal laws of the United
States, the laws of the State of New York and the General Corporation Law
of the State of Delaware and in giving such opinion such counsel may state
that, insofar as any opinions involve factual matters, they have relied, to
the extent they deem proper, upon certificates of officers of the Company
or its subsidiaries and certificates of responsible public officials,
copies of which certificates will be provided to you upon delivery of such
counsel's opinion), dated the Time of Delivery, in form and substance as
attached, to the effect that:
(i) To such counsel's knowledge, neither the Company nor any of its
subsidiaries is in violation of its respective certificate or restated
certificate of incorporation or by-laws or restated by-laws, or comparable
documents, or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties
may be bound which default, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect;
(e) Xxxxx X. Xxxxx, Vice President, General Counsel and Secretary of Finlay
Jewelry, shall have furnished to you her written opinion (a draft of such
opinion is attached as Annex II(d) hereto) (which opinion may be limited to
the federal laws of the United States, the laws of the State of New York
and the General Corporation Law of the State of Delaware and in giving such
opinion Xx. Xxxxx may state that, insofar as any opinions involve factual
matters, she has relied, to the extent she deems proper, upon certificates
of officers of the Company or its subsidiaries and certificates of
responsible public officials, copies of which certificates will be provided
to you upon delivery of Xx. Xxxxx'x opinion), dated 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; the Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
each jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification or is subject to no material
liability or disability by reason of its failure to be so qualified in any
such jurisdiction;
(ii) The Company and its subsidiaries have good and marketable title in fee
simple to all real property owned by them in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; to such counsel's knowledge
neither the Company nor any of its subsidiaries is in default under any
lease for real property or buildings held under lease by the Company or its
subsidiaries except for such defaults that are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries; and the leases listed on
Schedule III hereto are the only real property leases to which the Company
and its subsidiaries are a party and are valid, subsisting and enforceable
as against the Company or its subsidiaries (as the case may be) with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
subsidiaries and except that the enforceability of such leases is subject
to the effect of any applicable , 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 the Company and its
subsidiaries, upon opinions of local counsel and abstracts, reports and
policies of title companies rendered or issued at or subsequent to the time
of acquisition of such property by the Company or its subsidiaries, upon
opinions of counsel to the lessors of such property and, in respect of
matters of fact, upon certificates of officers of the Company or its
subsidiaries;
(iii)To such counsel's knowledge (a) neither the Company nor any of its
subsidiaries has received any notice that any default by the Company or any
of its subsidiaries has occurred and is continuing under any of the license
agreements with host store groups described or identified in the Prospectus
to which the Company or any of its subsidiaries are a party and (b) no
condition exists which could individually or in the aggregate reasonably be
expected to result in the termination or nonrenewal of any such license
agreement, except that no opinion need be given with respect to the
Company's license agreement with Liberty House as to the effect on such
license agreement of the filing of a voluntary petition by Liberty House
under the Bankruptcy Code (as defined in the Prospectus); and
(iv) To such counsel's knowledge, no legal proceedings are pending or have been
threatened against the Company or any of its subsidiaries that are of a
nature required to be disclosed in the Prospectus which are not so
disclosed therein;
(f) Dechert Price & Xxxxxx, French counsel to the Company, shall have furnished
to you their written opinion (a draft of such opinion is attached as Annex
II(e) hereto) (which opinion may be limited to the laws of France and in
giving such opinion French counsel may state that, insofar as any opinions
involve factual matters, it has relied, to the extent such counsel deems
proper, upon certificates of officers of the Company or its subsidiaries
and certificates of responsible public officials, copies of which
certificates will be provided to you upon delivery of such counsel's
opinion), dated 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 Finlay Jewelry's Revolving Credit Agreement;
With respect to all opinions provided for above in paragraphs (b) through (f) of
this Section 7 as to validity, binding effect and/or enforceability, any such
counsel may state that any such opinion as to enforceability is subject to the
effect of any applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium and other laws of general applicability
relating to or effecting creditor rights and to general equity principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(g) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to
the date of this Agreement and also at each Time of Delivery, Xxxxxx
Xxxxxxxx LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to
you, to the effect set forth in Annex I hereto (the executed copy of the
letter delivered prior to the execution of this Agreement is attached as
Annex I(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post- effective amendment to the Registration
Statement and as of each Time of Delivery is attached as Annex I(b)
hereto);
(h) (i) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any strike, boycott or similar labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective
dates as of which information is given in the Prospectus there shall not
have been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries except for borrowings and repayments under the
Revolving Credit Agreement and the Gold Consignment Agreement (each as
defined in the Prospectus and as amended as described in the Prospectus),
or any change, or any development involving a prospective change, in or
affecting the business, operations, management, financial position or
condition, current assets, merchandise inventories, stockholders' equity or
results of operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, the effect
of which, in any such case described in clause (i) or (ii), is in the
judgment of Xxxxxxx, Sachs & 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 Finlay Jewelry's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's or Finlay Jewelry's debt securities;
(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 the Company's securities on NASDAQ;
(iii) a general moratorium on commercial banking activities declared by
either federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this clause (iv) in the judgment of Xxxxxxx, Xxxxx & 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 Finlay
Jewelry, respectively, reasonably satisfactory to you as to the accuracy of
the representations and warranties of the Company and Finlay Jewelry,
respectively, herein at and as of the Time of Delivery, as to the
performance by each of the Company and Finlay Jewelry, respectively, 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 Finlay Jewelry 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 Finlay Jewelry, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained or
incorporated by reference in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated or incorporated by reference therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company and
Finlay Jewelry shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Xxxxxxx, Xxxxx &
Co. expressly for use therein.
(b) Each Underwriter severally will indemnify and hold harmless the Company
and Finlay Jewelry against any losses, claims, damages or liabilities to which
the Company or Finlay Jewelry may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein; and will
reimburse the Company and Finlay Jewelry for any legal or other expenses
reasonably incurred by the Company and Finlay Jewelry 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 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 Finlay Jewelry 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 Finlay Jewelry 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 Finlay Jewelry 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 Finlay Jewelry on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, Finlay Jewelry 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.
(e) The obligations of the Company and Finlay Jewelry under this Section 8
shall be in addition to any liability which the Company and Finlay Jewelry may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company and Finlay Jewelry and to each person, if any, who controls the Company
and Finlay Jewelry 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 Finlay Jewelry, 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, Finlay Jewelry 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 Finlay Jewelry or any officer or director or controlling person of
the Company or Finlay Jewelry, 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 Finlay Jewelry shall not then be under
any liability to any Underwriter except as provided in Section 8 hereof; but, if
for any other reason, any 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 Finlay Jewelry
shall then be under no further liability to any Underwriter except as provided
in Section 8 hereof.
12. In all dealings hereunder, Xxxxxxx, Xxxxx & 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 Xxxxxxx, Sachs & 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 Xxxxxxx, Xxxxx & Co., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and
if to the Company or to Finlay Jewelry shall be delivered or sent by mail to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; 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 Finlay Jewelry and, to the extent provided
in Sections 8 and 10 hereof, the officers, directors and controlling persons of
the Company and Finlay Jewelry 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.
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 Finlay Jewelry . 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 Enterprises, Inc.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
Finlay Fine Jewelry Corporation
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
NationsBanc Xxxxxxxxxx Securities LLC
By: /s/ Xxxxxxx, Xxxxx & Co.
------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
SCHEDULE I
Principal Amount
of Securities to be
Underwriter Purchased
----------- --------------------
Xxxxxxx, Xxxxx & Co................................. 30,000,000
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation............................ 30,000,000
NationsBanc Xxxxxxxxxx Securities LLC............... 15,000,000
-------------
Total................................. $75,000,000
=============
SCHEDULE III
New York Leases
Section 7(e)(ii)
1. Lease Agreement dated as of August 27, 1993 between F.H.E.A. Associates and
Finlay Jewelry
2. Lease Agreement dated as of August 19, 1993 between 529 Fifth Company and
Finlay Jewelry, as amended
3. Lease Agreement dated as of August 19, 1993 between 000 Xxxxx Xxxxxx
Associates and Finlay Jewelry, as amended
4. Lease Agreement dated as of June 17, 1986 between 000 Xxxxx Xxxxxx Associates
and S&L Acquisition Company L.P., as amended
5. Lease Agreement dated as of May 1, 1995 between Xxxxx Xxxxxxxx Realty and
Finlay Jewelry
6. Lease Agreement dated as of October 4, 1994 between Tanger Properties Limited
Partnership and Finlay Jewelry, as amended
7. Lease Agreement dated May 2, 1996 between Horizon/Xxxx Outlet Centers Limited
Partnership and Finlay Jewelry
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 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.
