Xxxxxx X. Xxx Capital, LLC
Xxxxxx X. Xxx Equity Partners, L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
October 22, 1997
Equity-Linked Investors-II
c/o Desai Capital Management, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Finlay Enterprises, Inc. (the "Company")
Ladies and Gentlemen:
This letter agreement is entered into in connection with the Company's
registration statement on form S-1 dated September 23, 1997, registration number
333-34949 (the "Registration Statement"). Terms used herein as defined terms
shall have the meanings assigned to them in the Registration Rights Agreement
among the Company and certain stockholders thereof dated as of May 26, 1993, as
amended to date (the "Registration Rights Agreement").
For good and valuable consideration, the receipt and sufficiency which
are hereby acknowledged, the undersigned hereby agree as follows:
1. Until the earlier of October [23], 1999 or the Catch-Up Point (the
"Restricted Period"), neither the XXX Holders nor the Xxx Holders, respectively,
will sell in any one calendar quarter Registrable Securities constituting more
than 10% of the shares of common stock of the Company traded on NASDAQ in the
immediately preceding quarter, provided that the foregoing limitation shall not
apply to Registrable Securities sold in any Block Sale (as defined below).
Notwithstanding the foregoing, nothing contained in this letter agreement shall
prevent or restrict the XXX Holders or the Xxx Holders from exercising any of
their respective registration rights under and as provided in the Registration
Rights Agreement.
2. During the Restricted Period, the XXX Holders and the Xxx Holders,
respectively, each hereby agree to give the other no less than two business days
advance written notice at the above address of any sale of Registrable
Securities in any calendar quarter, which notice shall specify the number of
Registrable Securities to be sold. In addition, each of the XXX Holders and the
Xxx Holders, respectively, will provide a written statement to the other within
10 business days after the end of each calendar quarter listing the number of
Registrable Securities sold by such party during the previous calendar quarter.
Equity-Linked Investors-II
October 22, 1997
Page 2
3. For the purposes of this letter agreement, the term "Block Sale"
shall mean either (a) a sale through a broker/dealer to a purchaser who has
already been identified or (b) a sale of Registrable Securities directly to a
purchaser, or (c) a private transfer of Registrable Securities to affiliates or
partners of the XXX Holders and Xxx Holders, in each case where such purchaser
is not a market maker.
4. The XXX Holders and the Xxx Holders hereby agree that, for a period
of 180 days after the date of the final prospectus relating to the Registration
Statement, (a) neither the XXX Holders nor the Xxx Holders shall exercise any
registration rights which have been waived pursuant to the letter agreements
executed by the XXX Holders and the Xxx Holders, respectively, in favor of
Xxxxxxx, Xxxxx & Co., Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and
SBC Warburg Dillon Read Inc. (the "Underwriters") unless the Underwriters have
agreed in writing to permit the XXX Holders and the Xxx Holders to exercise such
rights on the same terms, and (b) both the XXX Holders and the Xxx Holders shall
remain subject to the restrictions on the sale, offer or other disposition of
Registrable Securities set forth in the letter agreements executed by the XXX
Holders and the Xxx Holders, respectively, in favor of the Underwriters unless
the Underwriters have agreed in writing to release both the XXX Holders and the
Xxx Holders from such restrictions, which release shall be on the same terms.
[The Rest of This Page Intentionally Left Blank]
Equity-Linked Investors-II
October 22, 1997
Page 3
Please indicate your agreement with the foregoing by signing and
returning to us a copy of this letter.
Very truly yours,
Xxxxxx X. Xxx Equity Partners, L.P.
By: THL Equity Advisers Limited Partnership
By: THL Equity Trust
By:____________________________
Xxxxxx X. Xxx Company
By: __________________________
AGREED TO AND ACCEPTED BY:
By: Equity-Linked Investors-II
By: Xxxxx X. Xxxxx Associates-II
General Partner
By: ________________________
