Finlay Fine Jewelry Corporation
8 3/8% Senior Notes 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 Fine Jewelry Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to you as the several Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of $150,000,000 principal amount of the Company's
8 3/8% Senior Notes due May 1, 2008 (the "Securities").
1. Each of the Company and Finlay Enterprises, Inc., a Delaware corporation and
the parent of the Company ("Parent"), represents and warrants to, and agrees
with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-48563), as amended by
Amendments Nos. 1 and 2 thereto (the "Initial Registration Statement"), in
respect of the Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered to
you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such form;
other than a registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing, no other document with respect to such
Initial Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission to the
Company or its counsel (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a)
of the rules and regulations of the Commission under the Act is hereinafter
called a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if any,
including all exhibits thereto but excluding Form T-1 and including the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of
the Initial Registration Statement at the time it was declared effective or
such part of the Rule 462(b) Registration Statement, if any, that became or
hereafter becomes effective, each as amended at the time such part of the
registration statement became effective, are hereinafter collectively
called the
"Registration Statement"; such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Act, is hereinafter called the "Prospectus";
(b) No order preventing or suspending the use of any Preliminary Prospectus has
been issued by the Commission, and each Preliminary Prospectus, at the time
of filing thereof, conformed in all material respects to the requirements
of the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; and the statements made therein within the
coverage of Rule 175(b) under the Act were made by the Company with a
reasonable basis and in good faith; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus
will conform, in all material respects to the requirements of the Act and
the Trust Indenture Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto, and as of the
applicable filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and the statements made therein within
the coverage of Rule 175(b) under the Act were made by the Company with a
reasonable basis and in good faith; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Xxxxxxx, Sachs & Co.
expressly for use therein;
(d) Neither Parent nor the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock or long-term debt of Parent or the Company or any of its
subsidiaries, except for borrowings and repayments under the Revolving
Credit Agreement and the Gold Consignment Agreement (each as defined in the
Prospectus and as amended as described in the Prospectus) or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the business, operations, management, financial
position or condition, current assets, merchandise inventories,
stockholders' equity or results of operations of Parent and the Company and
its subsidiaries taken as a whole (a "Material Adverse Effect"), otherwise
than as set forth or contemplated in the Prospectus;
(e) Parent and the Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
material personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by Parent and the Company and its subsidiaries; and any material
real property and buildings held under lease by Parent and the Company and
its subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with
the use
made and proposed to be made of such property and buildings by Parent and
the Company and its subsidiaries;
(f) Each of the Company and Parent has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; the
Company's indirect subsidiary, Societe Nouvelle d'Achat de Bijouterie -
S.O.N.A.B. ("Sonab") is duly organized and validly existing as a societe en
nom collectif in France; each other direct or indirect subsidiary of the
Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction;
(g) Parent has an authorized capitalization as set forth under the caption
"Description of Capital Stock" in the Prospectus, and all of the issued
shares of capital stock of Parent have been duly authorized and validly
issued, are fully paid and non-assessable and conform to the description of
such capital stock contained in the Prospectus; and all of the issued
shares of capital stock of the Company and each subsidiary of the Company
have been duly authorized and validly issued, are fully paid and
non-assessable and (except for directors' qualifying shares, if any, and
except as set forth in the Prospectus) are owned directly or indirectly by
Parent, free and clear of all liens, encumbrances, equities or claims;
(h) The Securities have been duly authorized by the Company and, on the Closing
Date, will have been duly executed, issued and delivered by the Company,
and when the Securities, in accordance with the provisions of the Indenture
(the "Indenture"), substantially in the form filed as an exhibit to the
Registration Statement, to be entered into by the Company and Marine
Midland Bank, as Trustee (the "Trustee"), have been authenticated by the
Trustee and delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement, the Securities will be entitled to the
benefits of the Indenture and will constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance
with their terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles (regardless of whether enforcement is
sought in a proceeding in equity or at law); the Indenture has been duly
authorized by the Company and qualified under the Trust Indenture Act and
when duly executed and delivered by the Company and the Trustee, will
constitute a valid and legally binding instrument, enforceable against the
Company in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless of whether
enforcement is sought in a proceeding in equity or at law); and the
Securities and the Indenture will conform in all material respects to the
descriptions thereof in the Prospectus;
(i) The issue and sale of the Securities and the compliance by each of the
Company and Parent with all of the provisions of the Securities, the
Indenture and this Agreement applicable to it and the consummation of the
transactions herein and therein contemplated (i) will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, lease, license or other agreement or instrument to which Parent
or the Company or any of its subsidiaries is a party or by
which Parent, the Company or any of its subsidiaries is bound or to which
and of the property or assets of Parent or the Company or any of its sub-
sidiaries is subject,except any such conflict, breach, violation or default
which has been consented to or waived in a valid and binding writing duly
executed and delivered to Parent or the Company by or on behalf of the
party granting such consent or waiver; (ii) will not result in any
violation of the provisions of Parent's or the Company's or any of its
subsidiaries' respective certificate or restated certificate of
incorporation or by-laws or restated by-laws or comparable documents and
(iii) will not result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over Parent or the Company or any of its subsidiaries or any of their
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
Parent or the Company of the transactions contemplated by this Agreement
and the Indenture, except such as have been obtained under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under foreign or state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(j) Neither Parent nor the Company nor any of its subsidiaries is in violation
of its respective certificate or restated certificate of incorporation or
by-laws or restated by-laws or comparable documents, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease, license or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound which default
could reasonably be expected to result in, individually or in the
aggregate, a Material Adverse Effect;
(k) The statements set forth in the Prospectus under the caption "Description
of Certain Indebtedness", insofar as they purport to describe the
provisions of the documents referred to therein, under the caption
"Description of Senior Notes", insofar as they purport to constitute a
summary of the terms of the Securities and under the caption
"Underwriting", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate and fair in all
material respects;
(l) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which Parent or the Company or any of
its subsidiaries is a party or of which any property of Parent or the
Company or any of its subsidiaries is the subject which, if determined
adversely to Parent or the Company or any of its subsidiaries, could
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect; and, to the Company's and Parent's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(m) Each of the Company and Parent is not and, after giving effect to the
offering and sale of the Securities, will not be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(n) Xxxxxx Xxxxxxxx LLP, who have certified certain consolidated financial
statements of the Company, are independent public accountants as required
by the Act and the rules and regulations of the Commission thereunder;
(o) Parent and the Company and its subsidiaries directly or through host store
groups are subject to consent decrees, injunctions or comparable
governmental orders or decrees regarding the discount pricing and
advertising of jewelry from "regular" or "original" prices only in the
states of California, Colorado, Georgia, Oregon and Wisconsin, and Parent
and the Company and its subsidiaries are in compliance therewith and with
applicable federal and state laws with
respect to such pricing and advertising practices, except for such non-
compliance previously identified in writing by the Company to the Under-
writers which could not individually or in the aggregate reasonably be
expected to have a Material Adverse Effect;
(p) Neither Parent nor the Company nor any of its subsidiaries has received any
notice that any default by Parent or the Company or any of its subsidiaries
has occurred and is continuing under any of the license agreements with
host store groups described or identified in the Prospectus to which Parent
or the Company or any of its subsidiaries are a party and no condition
exists which could individually or in the aggregate reasonably be expected
to result in the termination or nonrenewal of any such license agreement;
each such license agreement has been duly authorized (and, in the case of
written license agreements, duly and validly executed and delivered) by and
on behalf of Parent or the Company and its subsidiaries, as the case may
be, and, assuming the due authorization (and, in the case of written
license agreements, the due and valid execution and delivery) thereof by
the other party or parties thereto, is the valid and binding obligation of
Parent and the Company, its subsidiaries and such other party or parties,
as the case may be, enforceable in accordance with its respective terms
against the respective parties thereto subject to the effect of any
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium and similar laws affecting creditors' rights generally
and to general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law); and neither Parent nor the
Company nor any of its subsidiaries has received any notice (whether actual
or constructive) that the licensor thereunder is considering limiting,
suspending, revoking or non-renewing any such license; except that no
representation is made with respect to the Company's license agreement with
Liberty House as to the effect on such license agreement of the filing of a
voluntary petition by Liberty House under the Bankruptcy Code (as defined
in the Prospectus);
(q) Each of the Company and Parent has duly authorized the amendment to the
Revolving Credit Agreement that is described in the Prospectus.
Substantially contemporaneously with the Time of Delivery (as defined in
Section 4 hereof), the Company and Parent will duly execute and deliver
such amendment to the Revolving Credit Agreement. The Company has duly
authorized the amendment to the Gold Consignment Agreement that is
described in the Prospectus. Substantially contemporaneously with the Time
of Delivery, the Company will duly execute and deliver such amendment to
the Gold Consignment Agreement. Assuming the due authorization, execution
and delivery thereof by the other parties thereto, (a) the Revolving Credit
Agreement, as amended as described above, will constitute the legal, valid
and binding agreement of the Company and Parent and (b) the Gold
Consignment Agreement, as amended as described above, will constitute the
legal, valid and binding agreement of the Company, in each case,
enforceable against the Company and/or Parent, as the case may be, subject,
as to enforcement, to insolvency, reorganization, fraudulent conveyance or
transfer, moratorium and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles (regardless of
whether enforcement is sought in a proceeding in equity or at law); and
(r) Neither the Company nor Parent nor any of their respective affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes.
2. Subject to the terms and conditions herein set forth, the Company agrees
to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
97.646% 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, Sachs 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, Xxxxx & 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, Sachs & Co. at least forty-eight hours in advance, by
causing DTC to credit the Securities to the account of Xxxxxxx, Xxxxx & Co. at
DTC. The Company will cause the certificates representing the Securities to be
made available to Xxxxxxx, Sachs & 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, Xxxxx & 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 in order
to comply with the Act or the Trust Indenture Act, to notify you and upon
your request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies
as you may from time to time reasonably request of an amended Prospectus or
a supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the Securities
at any time nine months or more after the time of issue of the Prospectus,
upon your request but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as you may request of an amended
or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as practicable,
but in any event not later than eighteen months after the effective date of
the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and
regulations thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to (and
to cause each of its subsidiaries not to) register for sale, offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder, any
Securities or any securities that are substantially similar to the
Securities (other than the Senior Debentures (as defined in the Prospectus)
of Parent in an aggregate principal amount of $75.0 million), or any
securities of the Company or any such subsidiary of the Company convertible
into or exchangeable for securities of the Company or any such subsidiary
of the Company substantially similar to the Securities;
(f) Within the time limits prescribed by the Exchange Act, to furnish to the
holders of the Securities after the end of each fiscal year an annual
report (including a balance sheet and statements of operations, changes in
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, after the
end of each of the first three quarters of each fiscal year (beginning with
the fiscal quarter ending after the effective date of the Registration
Statement), consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the Registration
Statement, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders, and to deliver to you (i)
as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is
listed or quoted (such financial statements to be on a consolidated basis
to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission); and (ii) such additional information concerning the business
and financial condition of the Company or Parent as you may from time to
time reasonably request;
(h) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Prospectus under
the caption "Use of Proceeds";
(i) If the Company elects to rely upon Rule 462(b), the Company shall file a
Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
Among Underwriters, this Agreement, the Indenture, any Blue Sky Memorandum,
closing documents (including any reasonable compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the reasonable fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with any Blue Sky and legal investment surveys, if any; (iv) all fees charged by
securities rating services for rating the Securities; (v) the filing fees
incident to, and the reasonable fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vi) the cost of preparing certificates representing the Securities;
(vii) the fees and expenses of the Trustee and the Collateral Agent and any
agent of the Trustee and the Collateral Agent and the fees and disbursements of
counsel for the Trustee and the Collateral Agent in connection with the
Indenture and the Securities; (viii) all other costs and expenses incident to
the performance of the Company's obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees
and disbursements of their counsel and any advertising expenses connected with
any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company and Parent herein are, at and as of the Time of
Delivery, true and correct, the condition that each of the Company and Parent
shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to your reasonable satisfaction;
(b) 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 (xii) of
subsection (c) below as well as such other related matters as you may reasonably
request, and such counsel shall have received such documents and information as
they may reasonably request to enable them to pass upon such matters;
(c) 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 Parent has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) Parent has an authorized capitalization as set forth under the caption
"Description of Capital Stock" in the Prospectus, and all of the issued
shares of capital stock of Parent and the Company have been duly authorized
and validly issued, fully paid and non-assessable;
(iii)Each subsidiary of the Company (other than Sonab) has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; and all of the issued
shares of capital stock of each subsidiary of the Company (other than
Sonab) have been duly authorized and validly issued, are fully paid and
non-assessable, and (except for directors' qualifying shares, if any, and
except as otherwise set forth in the Prospectus) are owned of record
directly or indirectly by the Company, to the knowledge of such counsel,
free and clear of all liens, encumbrances and defects;
(iv) To such counsel's knowledge and other than as set forth in the Prospectus,
there are no legal or governmental proceedings pending to which Parent or
the Company or any of its subsidiaries is a party or of which any property
of Parent or the Company or any of its subsidiaries is the subject which,
if determined adversely to Parent or the Company or any of its
subsidiaries, could individually or in the aggregate reasonably be expected
to have a Material Adverse Effect; and, to such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(v) This Agreement has been duly authorized, executed and delivered by the
Company and Parent;
(vi) The Securities have been duly authorized, executed, authenticated, issued
and delivered and constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture; and the
Securities and the Indenture conform in all material respects to the
descriptions thereof in the Prospectus;
(vii)The Indenture has been duly authorized, executed and delivered by the
Company and, when duly authorized, executed and delivered by the other
parties thereto, will constitute a valid and legally binding instrument,
enforceable in accordance with its terms; the Indenture has been qualified
under the Trust Indenture Act;
(viii) The issue and sale of the Securities being delivered at the Time of
Delivery by the Company and the compliance by the Company and Parent with
the applicable provisions of the Securities, the Indenture and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, real property lease,
license or other material agreement or instrument known to such counsel to
which Parent or the Company or any of its subsidiaries is a party or by
which Parent or the Company or any of its subsidiaries is bound or to which
any of the property or assets of Parent or the Company or any of its
subsidiaries is subject, nor (b) will such action result in any violation
of the provisions of (i) the respective certificate or restated certificate
of incorporation, or respective by-laws or restated by-laws, as the case
may be, of the Company or Parent, (ii) any statute, rule or regulation
known to such counsel of any governmental agency or body having
jurisdiction over Parent or the Company or any of its subsidiaries or any
of their respective properties or (iii) any order applicable to Parent or
the Company, any of its subsidiaries or any of their respective properties
of any court, governmental agency or body known to such counsel based upon
an officer's certificate listing any such orders (which officer's
certificate shall be delivered with such opinion);
(ix) No consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for
the issue and sale of the Securities or the consummation by the Company of
the transactions contemplated by the Indenture and this Agreement, except
such as have been obtained under the Act and the Trust Indenture Act and
such consents, approvals, authorizations, registrations or qualifications
as may be required under foreign or state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Underwriters;
(x) The statements set forth in the Prospectus under the caption "Description
of Certain Indebtedness", insofar as they purport to describe the
provisions of the documents referred to therein, under the caption
"Description of Senior Notes", insofar as they purport to constitute a
summary of the terms of the Securities, and under the caption
"Underwriting", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate and fair in all
material respects;
(xi) Each of the Company and Parent is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act; and
(xii)The Registration Statement and the Prospectus and any further amendments
and supplements thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules and other
financial data included therein or omitted therefrom, as to which such
counsel need express no opinion) comply as to form in all material respects
with the requirements of the Act and the rules and regulations thereunder;
although they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, except for those referred to in the opinion in
subsection (ix) of this Section 7(c), such counsel may state that such
counsel has participated in conferences at which the contents of the
Registration Statement and the Prospectus and related matters were
discussed, and, on the basis of such participation, they have no reason to
believe that, as of its effective date, the Registration Statement or any
further amendment thereto made by the Company prior to the Time of Delivery
(other than the financial
statements and related schedules and other financial data included therein
or omitted therefrom, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the Prospectus
or any further amendment or supplement thereto made by the Company prior to
the Time of Delivery (other than the financial statements and related
schedules and other financial data included therein or omitted therefrom,
as to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading or that, as of the Time of Delivery,
either the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules and
other financial data included therein or omitted therefrom, as to which
such counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and they do not know of any amendment to the
Registration Statement required to be filed or of any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement or the Prospectus which are not filed or described as required;
(d) 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 Parent nor the Company nor any of its
subsidiaries is in violation of its respective certificate or restated
certificate of incorporation or by- laws or restated by-laws, or comparable
documents, or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease 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 the
Company, 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; each of Parent and the Company has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each jurisdiction in which it owns or leases properties
or conducts
any business so as to require such qualification or is subject to no
material liability or disability by reason of its failure to be so
qualified in any such jurisdiction;
(ii) Parent and the Company and its subsidiaries have good and marketable title
in fee simple to all real property owned by them in each case free and
clear of all liens, encumbrances and defects except such as are described
in the Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such property by Parent and the Company and its subsidiaries; to such
counsel's knowledge neither Parent nor the Company nor any of its
subsidiaries is in default under any lease for real property or buildings
held under lease by Parent or the Company or its subsidiaries except for
such defaults that are not material and do not interfere with the use made
and proposed to be made of such property and buildings by Parent and the
Company and its subsidiaries; and the leases listed on Schedule III hereto
are the only real property leases to which Parent and the Company and its
subsidiaries are a party and are valid, subsisting and enforceable as
against Parent and the Company and its subsidiaries (as the case may be)
with such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by Parent and
the Company and its subsidiaries and except that the enforceability of such
leases is subject to the effect of any applicable , insolvency,
reorganization, fraudulent conveyance or transfer, moratorium and similar
laws affecting creditors' rights generally and general equity principles
(regardless of whether enforcement is sought in a proceeding in equity or
at law) (in giving the opinion in this clause, such counsel may state that
no examination of record titles for the purpose of such opinion has been
made, and that they are relying upon a general review of the titles of
Parent and the Company and its subsidiaries, upon opinions of local counsel
and abstracts, reports and policies of title companies rendered or issued
at or subsequent to the time of acquisition of such property by Parent or
the Company or its subsidiaries, upon opinions of counsel to the lessors of
such property and, in respect of matters of fact, upon certificates of
officers of Parent or the Company or its subsidiaries;
(iii)To such counsel's knowledge (a) neither Parent nor the Company nor any of
its subsidiaries has received any notice that any default by Parent or the
Company or any of its subsidiaries has occurred and is continuing under any
of the license agreements with host store groups described or identified in
the Prospectus to which Parent or the Company or any of its subsidiaries
are a party and (b) no condition exists which could individually or in the
aggregate reasonably be expected to result in the termination or nonrenewal
of any such license agreement, except that no opinion need be given with
respect to the Company's license agreement with Liberty House as to the
effect on such license agreement of the filing of a voluntary petition by
Liberty House under the Bankruptcy Code (as defined in the Prospectus); and
(iv) To such counsel's knowledge, no legal proceedings are pending or have been
threatened against Parent or the Company or any of its subsidiaries that
are of a nature required to be disclosed in the Prospectus which are not so
disclosed therein;
(f) Dechert Price & 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 the Company's Revolving Credit Agreement;
With respect to all opinions provided for above in paragraphs (b) through (f) of
this Section 7 as to validity, binding effect and/or enforceability, any such
counsel may state that any such opinion as to enforceability is subject to the
effect of any applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium and other laws of general applicability
relating to or 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 Parent nor the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any strike, boycott or similar labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus,
and (ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt of Parent or the Company or any of its subsidiaries except for
borrowings and repayments under the Revolving Credit Agreement and the Gold
Consignment Agreement (each as defined in the Prospectus and as amended as
described in the Prospectus), or any change, or any development involving a
prospective change, in or affecting the business, operations, management,
financial position or condition, current assets, merchandise inventories,
stockholders' equity or results of operations of Parent and the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is in the judgment of 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 Parent's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
or Parent's debt securities;
(j) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on NASDAQ; (ii) a suspension or
material limitation in trading in Parent's securities on NASDAQ or in the
Company's securities if then listed or quoted; (iii) a general moratorium on
commercial banking activities declared by either federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this clause (iv) in the
judgment of 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 Parent,
respectively, reasonably satisfactory to you as to the accuracy of the
representations and warranties of the Company and Parent, respectively, herein
at and as of the Time of Delivery, as to the performance by each of the Company
and Parent, of all of their respective obligations hereunder to be performed at
or prior to the Time of Delivery, and as to such other matters as you may
reasonably request, and the Company and Parent shall have furnished or caused to
be furnished certificates as to the matters set forth in subsections (a) and (h)
of this Section; and
(l) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement;
8. (a) The Company and Parent, jointly and severally, will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company and Parent shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Xxxxxxx, Sachs &
Co. expressly for use therein.
(b) Each Underwriter severally will indemnify and hold harmless the Company
and Parent against any losses, claims, damages or liabilities to which the
Company or Parent may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein; and will reimburse the
Company and Parent for any legal or other expenses reasonably incurred by the
Company and Parent in connection with investigating or defending any such action
or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, which consent shall not be unreasonably withheld,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and Parent on the one hand and the Underwriters on the other from
the offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and Parent on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and Parent on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and Parent on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, Parent and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company and Parent under this Section 8 shall be
in addition to any liability which the Company and Parent may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to
each officer and director of the Company and Parent and to each person, if any,
who controls the Company and Parent within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Securities on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange for the purchase
of such Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Securities on such terms. In the event
that, within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Securities, or the Company notify you
that they have so arranged for the purchase of such Securities, you or the
Company shall have the right to postpone the Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Securities which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Securities to be purchased at the Time of Delivery, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the number
of shares which such Underwriter agreed to purchase hereunder at the Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Securities which such
Underwriter agreed to purchase hereunder) of the Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Securities which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Securities to be purchased at the Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Securities of a defaulting Underwriter or Underwriters,
then this Agreement shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company or Parent, except for the expenses
to be borne by the Company and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company, Parent and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company
or Parent or any officer or director or controlling person of the Company or
Parent, and shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof and Parent shall not then be under any
liability to any Underwriter except as provided in Section 8 hereof; but, if for
any other reason, any Securities are not delivered by or on behalf of the
Company as provided herein, the Company will reimburse the Underwriters through
you for all out-of-pocket expenses approved in writing
by you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities not so delivered, but the Company shall then be under no further
liability to any Underwriter except as provided in Sections 6 and 8 hereof and
Parent shall then be under no further liability to any Underwriter except as
provided in Section 8 hereof.
12. In all dealings hereunder, Xxxxxxx, Sachs & 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, Xxxxx & 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, Sachs & Co., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and
if to the Company or to Parent shall be delivered or sent by mail to the address
of the Company set forth in the Registration Statement, Attention: Secretary;
provided, however, that any notice to an Underwriter pursuant to Section 8(d)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and Parent and, to the extent provided in
Sections 8 and 10 hereof, the officers, directors and controlling persons of the
Company and Parent and each person who controls any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us ten counterparts hereof, and upon the acceptance hereof by the
Underwriters, this letter and such acceptance hereof shall constitute a binding
agreement among each of the Underwriters and the Company and Parent. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement Among
Underwriters, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
Finlay Fine Jewelry Corporation
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
Finlay Enterprises, Inc.
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.................................. 60,000,000
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation............................. 60,000,000
NationsBanc Xxxxxxxxxx Securities LLC................ 30,000,000
-------------
Total.................................. $150,000,000
=============
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
the Company
2. Lease Agreement dated as of August 19, 1993 between 529 Fifth Company and the
Company, as amended
3. Lease Agreement dated as of August 19, 1993 between 000 Xxxxx Xxxxxx
Associates and the Company, 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 the
Company
6. Lease Agreement dated as of October 4, 1994 between Tanger Properties Limited
Partnership and the Company, as amended
7. Lease Agreement dated May 2, 1996 between Horizon/Xxxx Outlet Centers Limited
Partnership and the Company
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.