<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 29, 2000
REGISTRATION NO. 333-95465
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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WHITEHALL JEWELLERS, INC.
(Exact name of the Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 36-1433610
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
155 NORTH WACKER DRIVE
SUITE 500
CHICAGO, IL 60606
(312) 782-6800
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
JOHN R. DESJARDINS
EXECUTIVE VICE PRESIDENT, FINANCE & ADMINISTRATION
155 NORTH WACKER DRIVE
SUITE 500
CHICAGO, IL 60606
(312) 782-6800
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
<TABLE>
<S> <C>
CHRISTINE A. LEAHY, ESQ. VALERIE FORD JACOB, ESQ.
SIDLEY & AUSTIN FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
BANK ONE PLAZA ONE NEW YORK PLAZA
10 SOUTH DEARBORN NEW YORK, NEW YORK 10004
CHICAGO, ILLINOIS 60603
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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<CAPTION>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common stock, $0.001 par value(1) 3,363,750 shares(2) $25.125(3) $84,514,219 $22,312(4)
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</TABLE>
(1) Includes associated preferred stock purchase rights to purchase 1/150 of a
share of Series A Junior Participating Preferred Stock, par value $.001 per
share. Rights initially are attached to and trade with the common stock of
the Registrant. The value attributable to such rights, if any is reflected
in the market price for common stock.
(2) Includes an aggregate of 438,750 shares of Common Stock which the
Underwriters have the option to purchase from the Registrant and the selling
stockholders to cover over-allotments, if any. See "Underwriting."
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933. Based upon the
average high and low sale prices of the common stock on the Nasdaq National
Market System on January 24, 2000.
(4) Previously paid.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 2 to the Registration Statement on Form S-3
(Registration No. 333-95465) of Whitehall Jewellers, Inc. is being filed solely
for the purposes of filing Exhibits to such Registration Statement and updating
certain information included in Part II (Information Not Required in Prospectus)
of such Registration Statement. The Prospectus which was previously filed with
such Registration Statement is incorporated herein by reference and has been
intentionally omitted from this Amendment No. 2.
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth expenses and costs payable by Whitehall
Jewellers (other than underwriting discounts and commissions) expected to be
incurred in connection with the issuance and distribution of the securities
described in this registration statement. All amounts are estimated except for
the Securities and Exchange Commission's registration fee and the National
Association of Securities Dealers' filing fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 22,312
NASD filing fee............................................. 8,952
The New York Stock Exchange fee............................. 11,773
Legal fees and expenses..................................... 150,000
Accounting fees and expenses................................ 75,000
Printing and engraving expenses............................. 135,000
Blue Sky fees............................................... 5,000
Miscellaneous............................................... 100,000
--------
Total............................................. $496,264
========
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Registrant's Restated Certificate of Incorporation and Amended and
Restated By-laws provide for indemnification of the Registrant's officers and
directors to the fullest extent permitted by applicable law. Section 145 of the
Delaware General Corporation Law (the "DGCL") empowers a Delaware corporation to
indemnify any persons who are, or are threatened to be made, parties to any
threatened, pending or completed legal action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of such corporation), by reason of the fact that such person was an
officer or director of such corporation, or is or was serving at the request of
such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's best
interests, and, for criminal proceedings, had no reasonable cause to believe his
conduct was illegal. A Delaware corporation may indemnify officers and directors
in an action by or in the right of the corporation under the same conditions,
except that no indemnification is permitted without judicial approval if the
officer or director is adjudged to be liable to the corporation in the
performance of his duty. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred.
In accordance with the DGCL, the Registrant's Restated Certificate of
Incorporation contains a provision to limit the personal liability of the
Registrant's directors for violations of their fiduciary duty. This provision
eliminates each director's liability to the Registrant or its stockholders for
monetary damages except to the extent provided by the DGCL (i) for any breach of
the director's duty of loyalty to the Registrant or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under section 174 of the DGCL providing for
liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions, or (iv) for any transactions from which a director
derived an improper personal benefit. The effect of this provision is to
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<PAGE> 4
eliminate the personal liability of directors for monetary damages for actions
involving a breach of their fiduciary duty of care, including any such actions
involving gross negligence.
In addition, the Registrant maintains insurance policies which provide
coverage for its officers and directors in certain situations where the
Registrant cannot directly indemnify such officers or directors.
Additionally, reference is made to the underwriting agreement filed as
Exhibit 1.1 to this registration statement, with provides for indemnification by
the underwriters of Whitehall Jewellers, its directors and officers who sign the
registration statement and persons who control Whitehall Jewellers, under
specified circumstances.
ITEM 16. EXHIBITS
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
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<C> <S>
1.1 -- Form of Underwriting Agreement
3.1 -- Restated Certificate of Incorporation of the Registrant,
is incorporated herein by reference to Exhibit 3.1 filed
with the Registrant's Statement on Form S-1, as amended
(Registration No. 333-1794)
3.2 -- Amended and Restated By-Laws of the Registrant are
incorporated herein by reference to Exhibit 3.2 filed
with the Registrant's Form 10-K for the fiscal year ended
January 31, 1999
3.3 -- Amended and Restated Stockholders Rights Plan,
incorporated by reference to Exhibit 99.3 filed with the
Registrant's Registration Statement, as amended, on Form
8-A (File No. 001-15615)
5.1 -- Opinion of Sidley & Austin
10.1 -- Whitehall Jewellers, Inc. 1996 Long-Term Incentive Plan
(modified as of January 26, 2000)
10.2 -- Whitehall Jewellers, Inc. 1997 Long-Term Incentive Plan
(modified as of January 26, 2000)
10.3 -- Form of Severance Agreement with Executive Officers (as
amended)
23.1 -- Consent of Sidley & Austin (included in Exhibit 5.1
hereto)
23.2 -- Consent of PricewaterhouseCoopers LLP
24.1 -- Powers of Attorney (included on signature page)
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities
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<PAGE> 5
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on February 29, 2000.
WHITEHALL JEWELLERS, INC.
By: /s/ JOHN R. DESJARDINS
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John R. Desjardins
Executive Vice President,
Finance and Administration
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
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* Chairman, Chief Dated: February 29, 2000
- ----------------------------------------------------- Executive Officer
Hugh M. Patinkin and President and
Director (Principal
Executive Officer)
/s/ JOHN R. DESJARDINS Executive Vice Dated: February 29, 2000
- ----------------------------------------------------- President, Finance
John R. Desjardins & Administration
and Director
(Principal
Financial and
Accounting Officer)
* Director Dated: February 29, 2000
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Matthew M. Patinkin
* Director Dated: February 29, 2000
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Norman J. Patinkin
* Director Dated: February 29, 2000
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Jack A. Smith
* Director Dated: February 29, 2000
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Daniel H. Levy
* Director Dated: February 29, 2000
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Richard K. Berkowitz
/s/ JOHN R. DESJARDINS
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* By: John R. Desjardins,
Attorney-in-fact
</TABLE>
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<PAGE> 7
EXHIBIT INDEX
TO REGISTRATION STATEMENT
ON FORM S-3
WHITEHALL JEWELLERS, INC.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
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<C> <S>
1.1* -- Form of Underwriting Agreement
3.1 -- Restated Certificate of Incorporation of the Registrant,
is incorporated herein by reference to Exhibit 3.1 filed
with the Registrant's Statement on Form S-1, as amended
(Registration No. 333-1794)
3.2 -- Amended and Restated By-Laws of the Registrant are
incorporated herein by reference to Exhibit 3.2 filed
with the Registrant's Form 10-K for the fiscal year ended
January 31, 1999
3.3 -- Amended and Restated Stockholders Rights Plan,
incorporated by reference to Exhibit 99.3 filed with the
Registrant's Registration Statement, as amended, on Form
8-A (File No. 001-15615)
5.1 -- Opinion of Sidley & Austin
10.1 -- Whitehall Jewellers, Inc. 1996 Long-Term Incentive Plan
(modified as of January 26, 2000)
10.2 -- Whitehall Jewellers, Inc. 1997 Long-Term Incentive Plan
(modified as of January 26, 2000)
10.3 -- Form of Severance Agreement with Executive Officers (as
amended)
23.1 -- Consent of Sidley & Austin (included in Exhibit 5.1
hereto)
23.2 -- Consent of PricewaterhouseCoopers LLP
24.1 -- Powers of Attorney (included on signature page)
</TABLE>
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* Filed herewith.
<PAGE> 1
EXHIBIT 1.1
WHITEHALL JEWELLERS, INC.
2,925,000 SHARES
COMMON STOCK
UNDERWRITING AGREEMENT
February ___, 2000
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
WILLIAM BLAIR & COMPANY, L.L.C.
c/o Banc of America Securities LLC
9 West 57th Street
New York, New York 10019
Dear Sirs:
SECTION 1. Introductory. Whitehall Jewellers, Inc., a Delaware
corporation (the "Company"), proposes to issue and sell 2,300,000 shares of its
authorized but unissued Common Stock (the "Common Stock") and certain
stockholders of the Company named in Schedule B annexed hereto (the "Selling
Stockholders") propose to sell an aggregate of 625,000 shares of the Company's
issued and outstanding Common Stock to the underwriters named in Schedule A (the
"Underwriters"). Said aggregate of 2,925,000 shares are herein called the "Firm
Common Shares." In addition, the Company proposes to grant to the Underwriters
an option to purchase up to 345,000 additional shares of Common Stock and the
Selling Stockholders propose to grant to the Underwriters an option to purchase
up to 93,750 additional shares of Common Stock, as provided in Section 5 hereof
(collectively, the "Optional Common Shares"). The Firm Common Shares and, to the
extent such option is exercised, the Optional Common Shares are hereinafter
collectively referred to as the "Common Shares."
You have advised the Company and the Selling Stockholders that the
Underwriters propose to make a public offering of their respective portions of
the Common Shares on the effective date of the registration statement
hereinafter referred to, or as soon thereafter as in your judgment is advisable.
The Company and each of the Selling Stockholders hereby confirm their respective
agreements with respect to the purchase of the Common Shares by the Underwriters
as follows:
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the several Underwriters that:
(a) A Registration Statement (as defined below) on Form S-3 (File No.
333-95465) with respect to the Common Shares has been prepared by the Company in
conformity in all
<PAGE> 2
material respects with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, and has
been filed with the Commission. The Company has prepared and has filed an
amendment or amendments to such Registration Statement, which amendment or
amendments have been or will be similarly prepared. There have been delivered to
you two signed copies of such Registration Statement and amendments, together
with two copies of each exhibit filed therewith. Conformed copies of such
Registration Statement and amendments (but without exhibits) and of the related
preliminary prospectus have been delivered to you in such reasonable quantities
as you have requested for each of the Underwriters. The Company will next file
with the Commission one of the following: (i) a final prospectus in accordance
with Rules 430A and 424(b) of the Rules and Regulations or (ii) a term sheet
(the "Term Sheet") as described in and in accordance with Rules 434 and 424(b)
of the Rules and Regulations. As filed, the final prospectus, if one is used, or
the Term Sheet and Preliminary Prospectus, if a final prospectus is not used,
shall include all Rule 430A Information and, except to the extent that you shall
agree in writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the date and time that this Agreement was
executed and delivered by the parties hereto, or, to the extent not completed at
such date and time, shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary Prospectus) as
the Company shall have previously advised you in writing would be included or
made therein.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement at the time such registration statement becomes
effective, including the financial statements, exhibits and schedules thereto
and all documents incorporated by reference or deemed to be incorporated by
reference therein, and, in the event any post-effective amendment thereto
becomes effective prior to the First Closing Date (as hereinafter defined),
shall also mean such registration statement as so amended; provided, however,
that such term shall also include (i) all Rule 430A Information deemed to be
included in such registration statement at the time such registration statement
becomes effective as provided by Rule 430A of the Rules and Regulations and (ii)
any registration statement filed pursuant to 462(b) of the Rules and Regulations
relating to the Common Shares. The term "Preliminary Prospectus" shall mean any
preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean either (i) the prospectus relating to the
Common Shares in the form in which it is first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations or (ii) if a Term Sheet is
not used and no filing pursuant to Rule 424(b) of the Rules and Regulations is
required, shall mean the form of final prospectus included in the Registration
Statement at the time such registration statement becomes effective or (iii) if
a Term Sheet is used, the Term Sheet in the form in which it is first filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations, together
with the Preliminary Prospectus included in the Registration Statement at the
time it becomes effective. The term "Rule 430A Information" means information
with respect to the Common Shares and the offering thereof permitted to be
omitted from the Registration Statement when it becomes effective pursuant to
Rule 430A of the Rules and Regulations. All references in this Agreement to the
Registration Statement, a Preliminary Prospectus, the Prospectus or a Term
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Sheet, or any amendments or supplements to any of the foregoing, shall include
any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder (collectively, the "Exchange Act") which
is or is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.
(b) The Company is qualified and eligible under the requirements of
Form S-3 and the Securities Act to file the Registration Statement on Form S-3.
The Registration Statement and any related registration statement filed pursuant
to Rule 462(b) have been declared effective by the Commission under the
Securities Act. The Company has complied with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any registration statement filed
pursuant to Rule 462(b) is in effect and no proceedings for such purpose have
been instituted or are pending or, to the best knowledge of the Company, are
contemplated or threatened by the Commission.
The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus, and each Preliminary Prospectus has conformed
in all material respects to the requirements of the Act and the Rules and
Regulations and, as of its date, has not included any 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; and at the time the Registration Statement becomes
effective, and at all times subsequent thereto up to and including each Closing
Date hereinafter mentioned, the Registration Statement and the Prospectus, and
any amendments or supplements thereto, will contain all material statements and
information required to be included therein by the Act and the Rules and
Regulations and will in all material respects conform to the requirements of the
Act and the Rules and Regulations, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, will include any 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;
provided, however, no representation or warranty contained in this subsection
2(b) shall be applicable to information contained in or omitted from any
Preliminary Prospectus, the Registration Statement, the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of either Underwriter or
any Selling Stockholder, specifically for use in the preparation thereof.
The documents incorporated or deemed to be incorporated by reference in
the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all
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material respects with the requirements of the Exchange Act and, when read
together with the other information in the Prospectus, at the time the
Registration Statement and any amendments thereto become effective and at the
First Closing Date and any Subsequent Closing Date, as the case may be, 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, in
the light of the circumstances under which they were made, not misleading.
(c) The Company does not have any direct or indirect equity or other
ownership interest in any other corporation, partnership, joint venture or other
business organization.
(d) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with corporate power
and authority to own and lease its properties and conduct its business as
described in the Prospectus; the Company is in possession of and operating in
compliance with all authorizations, licenses, permits, consents, certificates
and orders material to the conduct of its business, all of which are valid and
in full force and effect, except for such failure to possess or noncompliance
which would not have a material adverse effect on the Company; the Company is
duly qualified to do business and in good standing as a foreign corporation in
each jurisdiction in which the ownership or leasing of properties or the conduct
of its business requires such qualification, except for jurisdictions in which
the failure to so qualify would not have a material adverse effect upon the
Company; and no proceeding has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
(e) The Company has an authorized and outstanding capital stock as set
forth under the heading "Capitalization" in the Prospectus; the issued and
outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities,
and conform to the description thereof contained in the Prospectus. Except as
disclosed in or contemplated by the Prospectus and the financial statements of
the Company, and the related notes thereto, included in the Prospectus, the
Company does not have outstanding any options to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible securities
or obligations. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted and
exercised thereunder, set forth in the Prospectus accurately and fairly present
in all material respects the information required to be shown with respect to
such plans, arrangements, options and rights.
(f) The Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set forth in
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in the
Prospectus. No preemptive rights or other rights to subscribe for or purchase
exist with respect to the issuance and sale of the Common Shares by the Company
pursuant to this Agreement. No stockholder of the Company has any right which
has not been
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<PAGE> 5
waived to require the Company to register the sale of any shares owned by such
stockholder under the Act in the public offering contemplated by this Agreement.
No further approval or authority of the stockholders or the Board of Directors
of the Company will be required for the transfer and sale of the Common Shares
to be sold by the Selling Stockholders or the issuance and sale of the Common
Shares to be sold by the Company as contemplated herein.
(g) The Company has full legal right, power and authority to enter into
this Agreement and perform the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by the Company and constitutes
a valid and binding obligation of the Company in accordance with its terms,
except as enforceability may be limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and except that no representation or warranty is
made relating to indemnity or contribution. The execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions herein contemplated will not violate any provisions of the
certificate of incorporation or bylaws, or other organizational documents, of
the Company, and will not conflict with, result in the breach or violation of,
or constitute, either by itself or upon notice or the passage of time or both, a
default under any agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which the Company is a party or by
which the Company or its properties may be bound or affected, any statute or any
authorization, judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental body applicable to
the Company or any of its properties, except in each case for such violations,
conflicts or defaults which would not have a material adverse effect on the
Company. No consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body is required
for the execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement, except for compliance with the Act,
the Blue Sky laws applicable to the public offering of the Common Shares by the
several Underwriters and the clearance of such offering with the National
Association of Securities Dealers, Inc. (the "NASD"), except for such consent
the failure to have would have not have a material adverse effect on the
Company.
(h) PriceWaterhouseCoopers LLP, who have expressed their opinion with
respect to the financial statements and schedule filed with the Commission as a
part of the Registration Statement and included or incorporated by reference in
the Prospectus and in the Registration Statement, are independent accountants as
required by the Act and the Rules and Regulations.
(i) The financial statements and schedule of the Company, and the
related notes thereto, included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the financial position of the
Company as of the respective dates of such financial statements and schedule,
and the results of operations and changes in financial position of the Company
for the respective periods covered thereby. Such statements, schedule and
related notes have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis as certified by the
independent accountants named in subsection 2(h), except as disclosed in such
financial statements, and except that the financial statements for interim
periods are not certified and have been prepared in accordance with generally
accepted accounting
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<PAGE> 6
principles for interim financial information. No other financial statements or
schedules are required to be included or incorporated by reference in the
Registration Statement. The selected financial data set forth in the Prospectus
under the captions "Capitalization" and "Selected Financial Data" fairly present
the information set forth therein on the basis stated in the Registration
Statement. The as adjusted information included in the Prospectus present fairly
the information shown therein, have been properly compiled on the basis
described therein, and, in the opinion of the Company, the assumptions used in
the preparation thereof are reasonable and the adjustments used therein are
appropriate under the circumstances based on such assumptions.
(j) Except as disclosed in the Prospectus, and except as to defaults
which individually or in the aggregate would not have a material adverse effect
on the Company, the Company is not in violation or default of any provision of
its certificate of incorporation or bylaws, or other organizational documents,
and is not in breach of or default with respect to any provision of any
agreement, judgment, decree, order, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which it is a party or by
which it or any of its properties are bound; and there does not exist any state
of facts which constitutes an event of default on the part of the Company as
defined in such documents or which, with notice or lapse of time or both, would
constitute such an event of default.
(k) There are no material contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which have not
been described or filed as required.
(l) There are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge, threatened to which the
Company is or may be a party or of which property owned or leased by the Company
is or may be the subject, or related to environmental or discrimination matters,
which actions, suits or proceedings might, individually or in the aggregate,
prevent or materially and adversely affect the transactions contemplated by this
Agreement or result in a material adverse change in the condition (financial or
otherwise), properties, business, results of operations or prospects of the
Company; and no labor disturbance by the employees of the Company exists or is
imminent which might be expected to materially and adversely affect such
condition, properties, business, results of operations or prospects. The Company
is not a party or subject to the provisions of any injunction, judgment, decree
or order of any court, regulatory body, administrative agency or other
governmental body which materially and adversely affects the Company.
(m) The Company has good and marketable title to all the properties and
assets reflected as owned in the financial statements hereinabove described (or
elsewhere in the Prospectus), subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (i) those, if any, reflected in such financial
statements (or elsewhere in the Prospectus), or (ii) those which are not
material in amount and do not materially and adversely affect the use made and
proposed to be made of such property by the Company. The Company holds its
leased properties under valid and binding leases, with such exceptions as are
not materially significant in relation to the business of the Company. Except as
disclosed in the Prospectus, the Company
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<PAGE> 7
owns or leases all such properties as are necessary to its operations as now
conducted or as proposed to be conducted, in each case in all material respects.
(n) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) the Company has not incurred
any material liabilities or obligations, indirect, direct or contingent, or
entered into any material verbal or written agreement or other transaction which
is not in the ordinary course of business; (ii) the Company has not sustained
any material loss or interference with its business or properties from fire,
flood, windstorm, accident or other calamity, whether or not covered by
insurance; (iii) the Company has not paid or declared any dividends or other
distributions with respect to its capital stock, and the Company is not in
default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any change in the capital stock (other than
upon the sale of the Common Shares hereunder and upon the exercise of options
and warrants described in the Registration Statement) or indebtedness material
to the Company (other than in the ordinary course of business); and (v) there
has not been any material adverse change in the condition (financial or
otherwise), business, properties, results of operations or prospects of the
Company and its subsidiaries.
(o) Except as disclosed in or specifically contemplated by the
Prospectus, the Company has sufficient trademarks, trade names, patent rights,
mask works, copyrights, licenses, approvals and governmental authorizations to
conduct its business as now conducted; the expiration of any trademarks, trade
names, patent rights, mask works, copyrights, licenses, approvals or
governmental authorizations would not have a material adverse effect on the
condition (financial or otherwise), business, results of operations or prospects
of the Company; and the Company has no knowledge of any material infringement by
it or its subsidiaries of trademark, trade name rights, patent rights, mask
works, copyrights, licenses, trade secret or other similar rights of others, and
there is no claim being made against the Company regarding trademark, trade
name, patent, mask work, copyright, license, trade secret or other infringement
which could have a material adverse effect on the condition (financial or
otherwise), business, results of operations or prospects of the Company.
(p) The Company has not been advised, and has no reason to believe,
that it is not conducting business in compliance with all applicable laws, rules
and regulations of the jurisdictions in which it is conducting business,
including, without limitation, all applicable local, state and federal
environmental laws and regulations, except where failure to be so in compliance
would not materially adversely affect the condition (financial or otherwise),
business, results of operations or prospects of the Company.
(q) The Company has filed all necessary federal, state and foreign
income and franchise tax returns and has paid all taxes shown as due thereon,
and the Company has no knowledge of any tax deficiency which has been or might
be asserted or threatened against the Company, except in each case for any
failure to file, failure to pay or tax deficiency which would not materially and
adversely affect the business, operations or properties of the Company.
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<PAGE> 8
(r) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(s) The Company has not distributed and will not distribute prior to
the First Closing Date any offering material in connection with the offering and
sale of the Common Shares other than the Prospectus, the Registration Statement
and the other materials permitted by the Act.
(t) The Company maintains insurance of the types and in the amounts
customarily maintained by similarly situated companies, including, but not
limited to, insurance covering real and personal property owned or leased by the
Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full force and
effect.
(u) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Shares.
(v) The Common Stock (including the Common Shares) is registered
pursuant to Section 12(b) of the Exchange Act and is listed on the New York
Stock Exchange, and the Company has taken no action designed to, or reasonably
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or delisting the Common Stock from the New York Stock
Exchange.
(w) The Company is in compliance, in all material respects, with
Section 13(b)(2) of the Exchange Act.
(x) There are no business relationships or related party transactions
involving the Company or any director, officer or shareholder of the Company
that is required to be described in the Prospectus which have not been described
as required.
SECTION 3. Representations, Warranties and Covenants of the Selling
Stockholders.
(a) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, the several Underwriters that:
(i) Such Selling Stockholder has, and on the First Closing Date and
any Subsequent Closing Date hereinafter mentioned will have,
good and marketable title to the Common Shares proposed to be
sold by such Selling Stockholder hereunder on such Closing Date
(except that the Common Shares to be sold by Manny Brown are to
be issued pursuant to currently outstanding and exercisable
options immediately prior to the First Closing Date or
Subsequent Closing Date, as the case may be, so that such
Selling Stockholder does not have good and marketable title to
the Common Shares on the date hereof but will have such good
and marketable title to the Common Shares to be sold by him on
the Closing Date on which such Common Shares are to be
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<PAGE> 9
delivered) and full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver such
Common Shares hereunder, free and clear of all voting trust
arrangements, liens, encumbrances, equities, security
interests, restrictions and claims whatsoever; and upon
delivery of and payment for such Common Shares hereunder, the
Underwriters will acquire good and marketable title thereto,
free and clear of all liens, encumbrances, equities, claims,
restrictions, security interests, voting trusts or other
defects of title whatsoever.
(ii) Such Selling Stockholder has authorized, executed and
delivered a Custody Agreement and Power of Attorney
(hereinafter collectively referred to as the "Stockholders
Agreement") and in connection herewith such Selling
Stockholder further represents, warrants and agrees that such
Selling Stockholder has deposited in custody, under the
Stockholders Agreement, with the agent named therein (the
"Agent") as custodian, certificates in negotiable form for
the Common Shares to be sold hereunder by such Selling
Stockholder, for the purpose of further delivery pursuant to
this Agreement. Such Selling Stockholder agrees that the
Common Shares to be sold by such Selling Stockholder on
deposit with the Agent are subject to the interests of the
Company and the Underwriters, that the arrangements made for
such custody are to that extent irrevocable, and that the
obligations of such Selling Stockholder hereunder shall not
be terminated, except as provided in this Agreement or in the
Stockholders Agreement, by any act of such Selling
Stockholder, by operation of law, by the death or incapacity
of such Selling Stockholder or by the occurrence of any other
event. If such Selling Stockholder should die or become
incapacitated, or if any other event should occur, before the
delivery of the Common Shares hereunder, the documents
evidencing Common Shares then on deposit with the Agent shall
be delivered by the Agent in accordance with the terms and
conditions of this Agreement as if such death, incapacity or
other event had not occurred, regardless of whether or not
the Agent shall have received notice thereof. This Agreement
and the Stockholders Agreement have each been duly
authorized, executed and delivered by or on behalf of such
Selling Stockholder and the form of such Stockholders
Agreement has been delivered to you. Such Selling Stockholder
has obtained all authorizations and approvals required by law
and, with respect to any entity, under its charter, bylaws,
trust agreement or other organizational documents, to enter
into this Agreement and its Stockholders Agreement, to sell,
transfer and deliver all of the Common Shares which may be
sold by such Selling Stockholder pursuant to this Agreement
and to comply with its other obligations hereunder and
thereunder.
(iii) The performance of this Agreement and the Stockholders
Agreement and the consummation of the transactions
contemplated hereby and by the Stockholders Agreement will
not result in a breach or violation by such Selling
Stockholder of any of the terms or provisions of, or
constitute a default
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<PAGE> 10
by such Selling Stockholder under, any indenture, mortgage,
deed of trust, trust (constructive or other), loan agreement,
lease, franchise, license or other agreement or instrument to
which such Selling Stockholder is a party or by which such
Selling Stockholder or any of its properties is bound, any
statute, or any judgment, decree, order, rule or regulation
of any court or governmental agency or body applicable to
such Selling Stockholder or any of its properties. No
consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental
authority or agency, is required for the consummation by such
Selling Stockholder of the transactions contemplated in this
Agreement, except such as have been obtained or made and are
in full force and effect under the Securities Act, applicable
state securities or blue sky laws and from the NASD. No
consent, approval or waiver is required under any instrument
or agreement to which such Selling Stockholder is a party or
by which it is bound or under which it is entitled to any
right or benefit, in connection with the offering, sale or
purchase by the Underwriters of any of the Common Shares
which may be sold by such Selling Stockholder under this
Agreement except such as have been obtained and are in full
force and effect.
(iv) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of
the Common Shares.
(v) Each Preliminary Prospectus and the Prospectus, insofar as it
has related to such Selling Stockholder, has conformed in all
material respects to the requirements of the Act and the
Rules and Regulations and has not included any untrue
statement of a material fact or omitted to state a material
fact necessary to make the statements therein not misleading
in light of the circumstances under which they were made; and
neither the Registration Statement nor the Prospectus, nor
any amendment or supplement thereto, as it relates to such
Selling Stockholder, will include any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading.
(b) Each of the Selling Stockholders agrees with the Company and the
Underwriters not to, directly or indirectly, sell, offer, contract or grant any
option to sell (including without limitation any short sale), pledge, transfer,
establish an open "put equivalent position" within the meaning of Rule 16a-1(h)
under the Exchange Act, or otherwise dispose of any shares of Common Stock,
options or warrants to acquire shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock
currently or hereafter owned either of record or beneficially by the
undersigned, or enter into any swap or any other agreement or transaction that
transfers, in whole or in part, directly or indirectly, the eoncomic consequence
of ownership of the Common Stock, whether any such swap or
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<PAGE> 11
transaction is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, or publicly announce the undersigned's intention to do any of
the foregoing, for a period of 90 days after the first date that any of the
Common Shares are released by you for sale to the public, without the prior
written consent of Banc of America Securities LLC, which consent may be withheld
at the sole discretion of Banc of America Securities LLC, provided, that this
subsection (b) shall not restrict (i) any bona fide gift by any Selling
Stockholder that is a natural person or any distribution by any other Selling
Stockholder to any equityholder of such Selling Stockholder in each case so long
as the donee or transferee agrees to comply with this subsection (b) for any
remaining portion of such 90-day period or (ii) any distribution by U.S. Trust
Company, N.A., as trustee of the Whitehall Jewellers, Inc. Employee Stock
Ownership Trust, to participants in such plan pursuant to the terms of such
plan.
SECTION 4. Representations and Warranties of the Underwriters. The
Underwriters represent and warrant to the Company and to the Selling
Stockholders that the information set forth in the first three paragraphs
(including the table identifying the underwriters) and the last paragraph under
"Underwriting" in the Prospectus was furnished to the Company by and on behalf
of the Underwriters for use in connection with the preparation of the
Registration Statement and the Prospectus and is correct in all material
respects.
SECTION 5. Purchase, Sale and Delivery of Common Shares. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, (i) the Company agrees to issue
and sell to the Underwriters 2,300,000 of the Firm Common Shares, and (ii) the
Selling Stockholders agree, severally and not jointly, to sell to the
Underwriters in the respective amounts set forth in Schedule B hereto, an
aggregate of 625,000 of the Firm Common Shares. The Underwriters agree,
severally and not jointly, to purchase from the Company and the Selling
Stockholders, respectively, the number of Firm Common Shares described below.
The purchase price per share to be paid by the Underwriters to the Company and
to the Selling Stockholders, respectively, shall be $_____ per share, the
underwriting discount shall be $_____ per share and the initial price to the
public shall be $______ per share.
The obligation of each Underwriter to the Company shall be to purchase
from the Company that number of full shares which (as nearly as practicable, as
determined by you) bears to 2,300,000 the same proportion as the number of
shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Common Shares. The obligation of each
Underwriter to the Selling Stockholders shall be to purchase from the Selling
Stockholders that number of full shares which (as nearly as practicable, as
determined by you) bears to 625,000 the same proportion as the number of shares
set forth opposite the name of such Underwriter in Schedule A hereto bears to
the total number of Firm Common Shares.
Delivery of certificates for the Firm Common Shares to be purchased by
the Underwriters and payment therefor shall be made at the offices of Sidley &
Austin, counsel for the Company, Bank One Plaza, Chicago, IL 60603 (or such
other place as may be agreed upon by the Company and the Underwriters) at such
time and date, not later than the third (or, if the Firm Common Shares are
priced, as contemplated by Rule 15c6-1(c) under the Securities Exchange Act of
1934,
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<PAGE> 12
after 4:30 P.M. Washington D.C. time, the fourth) full business day following
the first date that any of the Common Shares are released by you for sale to the
public, as you shall designate by at least 48 hours prior notice to the Company
(or at such other time and date, not later than one week after such third or
fourth, as the case may be, full business day as may be agreed upon by the
Company and the Underwriters) (the "First Closing Date"); provided, however,
that if the Prospectus is at any time prior to the First Closing Date
recirculated to the public, the First Closing Date shall occur upon the later of
the third or fourth, as the case may be, full business day following the first
date that any of the Common Shares are released by you for sale to the public or
the date that is 48 hours after the date that the Prospectus has been so
recirculated.
Delivery of certificates for the Firm Common Shares shall be made by or
on behalf of the Company and the Selling Stockholders to you, for the respective
accounts of the Underwriters with respect to the Firm Common Shares to be sold
by the Company and by the Selling Stockholders against payment by you, for the
accounts of the several Underwriters, of the purchase price therefor by a wire
transfer of immediately available funds to an account designated by the Company
and by the Agent in proportion to the number of Firm Common Shares to be sold by
the Company and the Selling Stockholders, respectively. The certificates for the
Firm Common Shares shall be registered in such names and denominations as you
shall have requested at least two full business days prior to the First Closing
Date, and shall be made available for checking and packaging on the business day
preceding the First Closing Date at a location in New York, New York, as may be
designated by you. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations of
the Underwriters.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 345,000 Optional
Common Shares at the purchase price per share to be paid for the Firm Common
Shares, and the Selling Stockholders identified in Schedule B hereby grant an
option to the several Underwriters to purchase, severally and not jointly, up to
an aggregate of 93,750 Optional Common Shares at the purchase price per share to
be paid for the Firm Common Shares, in each case for use solely in covering any
over-allotments made by you for the account of the Underwriters in the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time from time to time on one or more occasions within 30 days
after the first date that any of the Common Shares are released by you for sale
to the public, upon notice by you to the Company and the Agent on behalf of the
Selling Stockholders setting forth the aggregate number of Optional Common
Shares as to which the Underwriters are exercising the option, the names and
denominations in which the certificates for such shares are to be registered and
the time and place at which such certificates will be delivered. Each such time
of delivery (which may not be earlier than the First Closing Date), being herein
referred to as a "Subsequent Closing Date," shall be determined by you, but if
at any time other than the First Closing Date shall not be earlier than three
nor later than five full business days after delivery of such notice of exercise
unless otherwise agreed by the parties hereto. The number of Optional Common
Shares to be purchased by each Underwriter shall be determined by multiplying
the aggregate number of Optional Common Shares to be sold by the Company and
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<PAGE> 13
such Selling Stockholders pursuant to such notice of exercise by a fraction, the
numerator of which is the number of Firm Common Shares to be purchased by such
Underwriter as set forth opposite its name in Schedule A and the denominator of
which is 2,925,000 (subject to such adjustments to eliminate any fractional
share purchases as you in your discretion may make). Certificates for the
Optional Common Shares will be made available for checking and packaging on the
business day preceding such Subsequent Closing Date at a location in New York,
New York, as may be designated by you. The manner of payment for and delivery of
the Optional Common Shares shall be the same as for the Firm Common Shares
purchased from the Company and such Selling Stockholders as specified in the two
preceding paragraphs. At any time before lapse of the option, you may cancel
such option by giving written notice of such cancellation to the Company and
such Selling Stockholders. If the option is cancelled or expires unexercised in
whole or in part, the Company will deregister under the Act the number of Option
Shares as to which the option has not been exercised.
You have advised the Company and the Selling Stockholders that each
Underwriter has authorized you to accept delivery of its Common Shares, to make
payment and to acknowledge receipt therefor.
Subject to the terms and conditions hereof, the Underwriters propose to
make a public offering of their respective portions of the Common Shares as soon
after the effective date of the Registration Statement as in the judgment of the
Underwriters is advisable and at the public offering price set forth on the
cover page of and on the terms set forth in the final prospectus, if one is
used, or on the first page of the Term Sheet, if one is used. Not later than
5:00 p.m. on the first business day following the date the Common Shares are
first released by the Underwriters for sale to the public, the Company shall
deliver, or cause to be delivered, copies of the Prospectus in such quantities
and at such places as the Representatives shall request.
SECTION 6. Covenants of the Company. The Company covenants and agrees
that:
(a) If the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Rules and Regulations, or the filing of the
Prospectus is otherwise required under Rule 424(b) of the Rules and Regulations,
the Company will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to you of such timely
filing. The Company will promptly advise you in writing (i) of the receipt of
any comments of the Commission, (ii) of any request of the Commission for
amendment of or supplement to the Registration Statement (either before or after
it becomes effective), any Preliminary Prospectus or the Prospectus or for
additional information, (iii) when the Registration Statement shall have become
effective, (iv) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (v) of the time and date that any
post-effective amendment to the Registration Statement becomes effective, and
(vi) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of any
proceedings for that purpose. If the Commission shall enter any such stop order
at any time, the Company will use its best efforts to obtain the lifting of such
order at the earliest possible
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<PAGE> 14
moment. Additionally, the Company agrees that it shall comply with the
provisions of Rules 424(b), 430A, 434 and 462(b), as applicable, under the
Securities Act. The Company will file an amendment or supplement to the
Registration Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus only if (1) you have been furnished
with a copy a reasonable time prior to such filing, (2) you do not reasonably
object to such amendment or supplement and (3) such amendment or supplement is
in compliance with the Act and the Rules and Regulations.
(b) If at any time within the nine-month period referred to in Section
10(a)(3) of the Act during which a prospectus relating to the Common Shares is
required to be delivered under the Act any event occurs, as a result of which
the Prospectus, including any amendments or supplements, would include an untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or if
it is necessary in the reasonable view of the Company or counsel to the Company,
or in the reasonable view of the Underwriters after consultation with counsel,
at any time to amend the Prospectus, including any amendments or supplements, to
comply with the Act or the Rules and Regulations, the Company will promptly
advise you thereof and will promptly prepare and file with the Commission, at
its own expense, an amendment or supplement which will correct such statement or
omission or an amendment or supplement which will effect such compliance and
will use its best efforts to cause the same to become effective as soon as
possible; and, in case any Underwriter is required to deliver a prospectus after
such nine-month period, the Company upon request, but at the expense of such
Underwriter, will promptly prepare such amendment or amendments to the
Registration Statement and such Prospectus or Prospectuses as may be necessary
to permit compliance with the requirements of Section 10(a)(3) of the Act.
(c) As soon as practicable, but not later than 45 days after the end of
the first quarter ending after one year following the "effective date of the
Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of 12
consecutive months beginning after the effective date of the Registration
Statement which will satisfy the provisions of the last paragraph of Section
11(a) of the Act.
(d) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the Company, at
its expense, but only for the nine-month period referred to in Section 10(a)(3)
of the Act, will furnish to you and the Selling Stockholders or mail to your
order copies of the Registration Statement, the Prospectus, the Preliminary
Prospectus and all amendments and supplements to any such documents in each case
as soon as available and in such quantities as you and the Selling Stockholders
may request, for the purposes contemplated by the Act. During such period the
Company shall use its best efforts to file, on a timely basis (taking into
account any extension periods permitted by applicable law), with the Commission
and the New York Stock Exchange all reports and documents required to be filed
under the Exchange Act.
(e) The Company shall cooperate with you and your counsel in order to
qualify or register the Common Shares for sale under (or obtain exemptions from
the application of) the
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<PAGE> 15
Blue Sky laws of such jurisdictions as you designate, will comply with such laws
and will continue such qualifications, registrations and exemptions in effect so
long as reasonably required for the distribution of the Common Shares. The
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such jurisdiction where it is not
presently qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise you promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the Common
Shares for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the issuance
of any order suspending such qualification, registration or exemption, the
Company, with your cooperation, will use its best efforts to obtain the
withdrawal thereof.
(f) During the period of five years hereafter, the Company will furnish
to the Underwriters: (i) as soon as practicable after the end of each fiscal
year, copies of the Annual Report of the Company containing the balance sheet of
the Company as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the opinion
thereon of the Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Report on Form 8-K or other
report filed by the Company with the Commission, the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or communication
of the Company mailed generally to holders of its Common Stock.
(g) During the period of 90 days after the first date that any of the
Common Shares are released by you for sale to the public, without the prior
written consent of Banc of America Securities LLC (which consent may be withheld
at the sole discretion of Banc of America Securities LLC), the Company will not,
directly or indirectly, sell, offer, contract or grant any option to sell,
pledge, transfer or establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement under
the Securities Act in respect of, any shares of Common Stock, options or
warrants to acquire shares of Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock, other than pursuant
to outstanding stock options disclosed in the Prospectus and except for options
granted pursuant to the Company's employee stock option plan that are not
exercisable during such 90 day period.
(h) The Company will apply the net proceeds of the sale of the Common
Shares sold by it substantially in accordance with its statements under the
caption "Use of Proceeds" in the Prospectus.
You, on behalf of the Underwriters, may, in your sole discretion, waive
in writing the performance by the Company of any one or more of the foregoing
covenants or extend the time for their performance.
SECTION 7. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective or is
terminated, the Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its
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obligations hereunder and in connection with the transactions contemplated
hereby (except as provided in the following sentence), including without
limiting the generality of the foregoing, (i) all expenses incident to the
issuance and delivery of the Common Shares (including all printing and engraving
costs), (ii) all fees and expenses of the registrar and transfer agent of the
Common Stock, (iii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Common Shares to the Underwriters,
(iv) all fees and expenses of the Company's counsel and the Company's
independent accountants, (v) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution of the Registration
Statement, each Preliminary Prospectus and the Prospectus (including all
exhibits and financial statements) and all amendments and supplements provided
for herein, this Agreement, the Agreement Among Underwriters, the Selected
Dealers Agreement, the Underwriters' Questionnaire, the Underwriters' Power of
Attorney and the Blue Sky memorandum, (vi) all filing fees, attorneys' fees and
expenses reasonably incurred by the Company or the Underwriters not exceeding
$5,000 in connection with qualifying or registering (or obtaining exemptions
from the qualification or registration of) all or any part of the Common Shares
for offer and sale under the Blue Sky laws, and all filings fees, attorneys'
fees and expenses reasonably incurred by the Company or the Underwriters not
exceeding $4,000 in connection with qualifying or registering all or any part of
the Common Shares for offer and sale in Canada, (vii) the filing fee of the
National Association of Securities Dealers, Inc. and attorneys' fees and
expenses reasonably incurred by the Company or the Underwriters not exceeding
$4,000 in connection with the NASD's review of the offering of the Common
Shares, (viii) any fees and expenses of counsel for the Selling Stockholders
generally, (ix) any fees and expenses of the Agent and (x) all other fees, costs
and expenses referred to in Item 13 of the Registration Statement. Except as
provided in this Section 7, Section 9 and Section 11 hereof, the Underwriters
shall pay all of their own expenses, including the fees and disbursements of
their counsel (excluding those relating to qualification, registration or
exemption under the Blue Sky laws and the Blue Sky memorandum referred to above,
qualification and registration of the Common Stock in Canada and counsel fees
and expenses related to the NASD's review of the offering) and the travel and
other expenses for the "road show" presentations.
The Selling Stockholders will pay (directly or by reimbursement) all
fees and expenses incident to the performance of their obligations under this
Agreement which are not otherwise specifically provided for herein, including
but not limited to all expenses and taxes incident to the sale and delivery of
the Common Shares to be sold by such Selling Stockholders to the Underwriters
hereunder.
This Section 7 shall not affect any agreements relating to the payment
of expenses between the Company and the Selling Stockholders.
SECTION 8. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm Common
Shares on the First Closing Date and the Optional Common Shares on any
Subsequent Closing Date shall be subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Stockholders herein
set forth as of the date hereof and as of the First Closing Date or a Subsequent
Closing Date, as the case may be, to the accuracy of the statements of Company
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<PAGE> 17
officers and the Selling Stockholders made pursuant to the provisions hereof, to
the performance by the Company and the Selling Stockholders of its or their
respective obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M. (or, in the case of a registration statement filed pursuant to
Rule 462(b) of the Rules and Regulations relating to the Common Shares, not
later than 10 P.M.), Washington, D.C. Time, on the date of this Agreement, or at
such later time as shall have been consented to by you; if the filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b) of
the Rules and Regulations, the Prospectus shall have been filed in the manner
and within the time period required by Rule 424(b) of the Rules and Regulations;
prior to such Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or shall be pending or, to the knowledge of
the Company, the Selling Stockholders or you, shall be contemplated by the
Commission; any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall have been
complied with to your satisfaction; and the NASD shall have raised no objection
to the fairness and reasonableness of the underwriting terms and arrangements.
(b) You shall be satisfied that since the respective dates as of which
information is given in the Registration Statement and Prospectus, (i) there
shall not have been any change in the capital stock other than pursuant to the
exercise of outstanding options and warrants disclosed in the Prospectus of the
Company or any material increase in the indebtedness (other than in the ordinary
course of business) of the Company, (ii) except as set forth or contemplated by
the Registration Statement or the Prospectus, no material verbal or written
agreement or other transaction shall have been entered into by the Company,
which is not in the ordinary course of business, (iii) no loss or damage
(whether or not insured) to the property of the Company shall have been
sustained which materially and adversely affects the condition (financial or
otherwise), business, results of operations or prospects of the Company, (iv) no
legal or governmental action, suit or proceeding affecting the Company which is
material to the Company or which affects or might adversely affect the
transactions contemplated by this Agreement shall have been instituted or
threatened, and (v) there shall not have been any material change in the
condition (financial or otherwise), business, management, results of operations
or prospects of the Company which makes it impractical or inadvisable in the
judgment of the Underwriters to proceed with the public offering or purchase of
the Common Shares as contemplated hereby.
(c) There shall have been furnished to you on each Closing Date, in
form and substance satisfactory to you, except as otherwise expressly provided
below:
(i) An opinion of Sidley & Austin, counsel for the Company and
the Selling Stockholders (other than the U.S. Trust Company,
N.A., as trustee of the Whitehall Jewellers, Inc. Employee
Stock Ownership Trust), addressed to the Underwriters and
dated the First Closing Date, or a Subsequent Closing Date,
as the case may be, to the effect that:
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<PAGE> 18
(1) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
Delaware, is duly qualified to do business as a foreign
corporation and is in good standing in all other
jurisdictions where the ownership or leasing of properties or
the conduct of its business requires such qualification,
except for jurisdictions in which the failure to so qualify
would not have a material adverse effect on the Company, and
has the corporate power and authority to own its properties
and conduct its business as described in the Registration
Statement;
(2) The authorized capital stock of the Company conforms as to
legal matters in all material respects to the description
thereof in the Prospectus; all necessary corporate
proceedings have been taken in order to authorize validly
such authorized Common Stock; all outstanding shares of
Common Stock (including the Firm Common Shares and any
Optional Common Shares) have been duly and validly issued,
are fully paid and nonassessable;
(3) The certificates evidencing the Common Shares to be delivered
hereunder are in due and proper form under Delaware law, and
when duly countersigned by the Company's transfer agent and
registrar, and delivered to you or upon your order against
payment of the agreed consideration therefor in accordance
with the provisions of this Agreement, the Common Shares
represented thereby will be duly authorized and validly
issued, fully paid and nonassessable, will not have been
issued in violation of or subject to any preemptive rights
and will conform as to legal matters in all material respects
to the description thereof contained in the Prospectus;
(4) (a) The Registration Statement has become effective under the
Act, and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration
Statement or preventing the use of the Prospectus has been
issued and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission;
any required filing of the Prospectus and any supplement
thereto pursuant to Rule 424(b) of the Rules and Regulations
has been made in the manner and within the time period
required by such Rule 424(b);
(b) The Registration Statement, including any document
incorporated by reference therein, the Prospectus and
each amendment or supplement thereto, including any
documents incorporated by reference therein (except for
the financial statements and schedule and other financial
data included or incorporated by reference therein as to
which such counsel need express no opinion), comply
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<PAGE> 19
as to form in all material respects with the requirements
of the Act and the Rules and Regulations and the Exchange
Act and the rules and regulations thereunder;
(c) To such counsel's knowledge, there are no franchises,
leases, contracts, agreements or documents of a character
required to be disclosed in the Registration Statement or
Prospectus or to be filed as exhibits to or incorporated
by reference in the Registration Statement which are not
disclosed, filed or incorporated by reference, as
required; and
(d) To such counsel's knowledge, there are no legal or
governmental actions, suits or proceedings pending or
threatened against the Company which are required to be
described in the Prospectus which are not described as
required.
(5) This Agreement has been duly and validly authorized by all
necessary corporate action by the Company, has been duly and
validly executed and delivered by and on behalf of the
Company, and is a valid and binding agreement of the Company
in accordance with its terms, except as enforceability may be
limited by general equitable principles, bankruptcy,
insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and except as to those
provisions relating to indemnity or contribution as to which
no opinion need be expressed; and no approval, authorization,
order, consent, registration, filing, qualification, license
or permit of or with any court, regulatory, administrative or
other governmental body is required for the execution and
delivery of this Agreement by the Company or the consummation
of the transactions contemplated by this Agreement, except
such as have been obtained and are in full force and effect
under the Act and such as may be required under applicable
Blue Sky laws in connection with the purchase and
distribution of the Common Shares by the Underwriters and the
clearance of such offering with the NASD;
(6) The execution and performance of this Agreement and the
consummation of the transactions herein contemplated will not
(i) conflict with, result in the breach of, or constitute,
either by itself or upon notice or the passage of time or
both, a default under, any agreement, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other
instrument known to such counsel to which the Company is a
party or by which the Company or any of its property may be
bound or affected, including without limitation each of the
agreements filed as an exhibit to the Registration Statement
or to any document incorporated by reference into the
Registration Statement, or (ii) violate any of the provisions
of the certificate of incorporation or bylaws, or other
organizational documents,
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<PAGE> 20
of the Company or (iii) so far as is known to such counsel,
violate any statute, judgment, decree, order, rule or
regulation of any court or governmental body having
jurisdiction over the Company or any of its property, except
in the case of clauses (i) and (iii) for any such conflict,
breach, default or violation which could not reasonably be
expected to have a material adverse effect on the Company;
(7) To the best knowledge of such counsel, there are no persons
with registration or other similar rights to have any equity
or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by this
Agreement, other than (a) rights which have been waived and
(b) persons who have exercised registration rights and
included shares of Common Stock in the Registration
Statement;
(8) The Company is not an "investment company" within the meaning
of the Investment Company Act;
(9) Each document filed pursuant to the Exchange Act and
incorporated or deemed to be incorporated by reference in the
Prospectus complied when so filed as to form in all material
respects with the Exchange Act and the rules and regulations
thereunder (except for the financial statements and schedules
and other financial data included therein as to which such
counsel need express no opinion);
(10) The statements (i) in the Prospectus under the captions "Risk
Factors--Anti-takeover provisions in Delaware law and our
charter and by-laws could delay or defer a change in
control," "Description of Capital Stock," and "United States
Tax Consequences to Non-United States Holders" and (ii) in
Item 15 of the Registration Statement, insofar as such
statements constitute matters of law, summaries of legal
matters, the Company's charter and by-law provisions or
documents or legal conclusions, have been reviewed by such
counsel and fairly present and summarize, in all material
respects, the matters referred to therein;
(11) To such counsel's knowledge, this Agreement and the
Stockholders Agreement and Power of Attorney of each Selling
Stockholder has been duly authorized, executed and delivered
by or on behalf of each of the Selling Stockholders; and the
performance of this Agreement and the consummation of the
transactions herein contemplated by the Selling Stockholders
will not result in a breach of, or constitute a default
under, the charter or by-laws, partnership agreement, trust
agreement or other organizational documents, as the case may
be, of any Selling Stockholder which is an entity, or any
indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other
agreement or instrument to which any of the Selling
Stockholders is a
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<PAGE> 21
party or by which any of the Selling Stockholders or any of
their properties may be bound, or violate any statute,
judgment, decree, order, rule or regulation known to such
counsel of any court or governmental body having jurisdiction
over any of the Selling Stockholders or any of their
properties; and to such counsel's knowledge, no approval,
authorization, order or consent of any court, regulatory
body, administrative agency or other governmental body is
required for the execution and delivery of this Agreement or
the Stockholders Agreement or the consummation by the Selling
Stockholders of the transactions contemplated by this
Agreement, except such as have been obtained and are in full
force and effect under the Act and such as may be required
under the rules of the NASD and applicable Blue Sky laws;
(12) To such counsel's knowledge, the Selling Stockholders that
are not natural persons have corporate, partnership or trust
(as the case may be) power and authority, and all
authorizations and approvals required under its
organizational documents, if an entity, to enter into this
Agreement and its Stockholders Agreement and to sell,
transfer and deliver the Common Shares to be sold on such
Closing Date by such Selling Stockholders hereunder; upon
registration of the number of Common Shares being sold by all
the Selling Stockholders on the date hereof to the
Underwriters in the names of the Underwriters in the stock
records of the Company, such Underwriters will, assuming that
such Underwriters are purchasing such shares in good faith
and without notice of any adverse claim within the meaning of
the Uniform Commercial Code as currently in effect in the
State of New York, have acquired all rights of such Selling
Stockholder in such shares free and clear of any such adverse
claims; and
(13) To such counsel's knowledge, this Agreement is the valid and
binding agreement of each of the Selling Stockholders, and
each Selling Stockholders' Stockholders Agreement is the
valid and binding agreement of such Selling Stockholder, in
each case enforceable in accordance with its terms except as
enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights
generally and except with respect to those provisions
relating to indemnities or contributions for liabilities, as
to which no opinion need be expressed.
In rendering such opinion, such counsel may rely (i), as to the
matters set forth in paragraphs (11), (12) and (13), on opinions of
other counsel retained by the Selling Stockholders, (ii) as to
matters of local law, on opinions of local counsel, and (iii) as to
matters of fact, on certificates of the Selling Stockholders and of
officers of the Company and of governmental officials, in which
case their opinion is to state that they are so doing and copies of
said opinions or certificates are to be attached to the opinion
unless opinions or
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<PAGE> 22
certificates (or, in the case of certificates, the information
therein) have been furnished to the Underwriters in other form.
Such counsel shall also include a statement to the effect that
nothing has come to such counsel's attention that would lead such
counsel to believe that either at the effective date of the
Registration Statement or at the applicable Closing Date the
Registration Statement or any amendment thereto 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 the Prospectus or any supplement
thereto, as of its date and at the applicable Closing Date,
contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need
express no belief as to the financial statements or schedules or
other financial data derived therefrom, included or incorporated by
reference in the Registration Statement or the Prospectus);
(ii) Such opinion or opinions of Gardner, Carton & Douglas, counsel for
U.S. Trust Company, N.A., as trustee of the Whitehall Jewellers,
Inc. Employee Stock Ownership Trust, addressed to the Underwriters
and dated the First Closing Date, or a Subsequent Closing Date, as
the case may be, to the effect that:
(1) To such counsel's knowledge, this Agreement and the
Stockholders Agreement and Power of Attorney of the Selling
Stockholder have been duly authorized, executed and delivered
by or on behalf of the Selling Stockholder; and the
performance of this Agreement and the consummation of the
transactions herein contemplated by the Selling Stockholder
will not result in a breach of, or constitute a default
under, the charter or by-laws, partnership agreement, trust
agreement or other organizational documents, as the case may
be, of the Selling Stockholder, or any indenture, mortgage,
deed of trust, trust (constructive or other), loan agreement,
lease, franchise, license or other agreement or instrument to
which the Selling Stockholder is a party or by which the
Selling Stockholder or any of its properties may be bound, or
violate any statute, judgment, decree, order, rule or
regulation known to such counsel of any court or governmental
body having jurisdiction over the Selling Stockholder or any
of its properties; and to such counsel's knowledge, no
approval, authorization, order or consent of any court,
regulatory body, administrative agency or other governmental
body is required for the execution and delivery of this
Agreement or the Stockholders Agreement or the consummation
by the Selling Stockholder of the transactions contemplated
by this Agreement, except such as have been obtained and are
in full force and effect under the Act and such as may be
required under the rules of the NASD and applicable Blue Sky
laws;
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<PAGE> 23
(2) To such counsel's knowledge, the Selling Stockholder has
corporate, partnership or trust (as the case may be) power
and authority, and all authorizations and approvals required
under its organizational documents, if an entity, to enter
into this Agreement and its Stockholders Agreement and to
sell, transfer and deliver the Common Shares to be sold on
such Closing Date by the Selling Stockholder hereunder; upon
registration of the number of Common Shares being sold by the
Selling Stockholder on the date hereof to the Underwriters in
the names of the Underwriters in the stock records of the
Company, such Underwriters will, assuming that such
Underwriters are purchasing such shares in good faith and
without notice of any adverse claim within the meaning of the
Uniform Commercial Code as currently in effect in the State
of New York, have acquired all rights of such Selling
Stockholder in such shares free and clear of any such adverse
claims; and
(3) To such counsel's knowledge, this Agreement is the valid and
binding agreement of the Selling Stockholder, and the Selling
Stockholder's Stockholders Agreement is the valid and binding
agreement of the Selling Stockholder, in each case
enforceable in accordance with its terms except as
enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights
generally and except with respect to those provisions
relating to indemnities or contributions for liabilities, as
to which no opinion need be expressed.
(iii) Such opinion or opinions of Fried, Frank, Harris, Shriver &
Jacobson, counsel for the Underwriters, dated the First
Closing Date or a Subsequent Closing Date, as the case may
be, with respect to the incorporation of the Company, the
sufficiency of all corporate proceedings and other legal
matters relating to this Agreement, the validity of the
Common Shares, the Registration Statement and the Prospectus
and other related matters as you may reasonably require, and
the Company and the Selling Stockholders shall have furnished
to such counsel such documents and shall have exhibited to
them such papers and records as they may reasonably request
for the purpose of enabling them to pass upon such matters.
In connection with such opinions, such counsel may rely on
representations or certificates of officers of the Company
and governmental officials.
(iv) A certificate of the Company executed on its behalf by the
Chairman of the Board or President and the chief financial or
accounting officer of the Company, dated the First Closing
Date or a Subsequent Closing Date, as the case may be, to the
effect that:
(1) The representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct
as of the date of this Agreement and
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<PAGE> 24
as of the First Closing Date or the Subsequent Closing
Date, as the case may be, and the Company has complied
with all the agreements and satisfied all the conditions
on its part to be performed or satisfied on or prior to
such Closing Date; and
(2) The Commission has not issued any order preventing or
suspending the use of the Prospectus or any Preliminary
Prospectus filed as a part of the Registration Statement
or any amendment thereto; no stop order suspending the
effectiveness of the Registration Statement has been
issued; and to the best of the knowledge of the
respective signers, no proceedings for that purpose have
been instituted or are pending or contemplated under the
Act.
(v) On the First Closing Date or a Subsequent Closing Date, as
the case may be, a certificate, dated such Closing Date and
addressed to you, signed by or on behalf of each of the
Selling Stockholders to the effect that the representations
and warranties of such Selling Stockholder in this Agreement
are true and correct, as if made at and as of the First
Closing Date or the Subsequent Closing Date, as the case may
be, and such Selling Stockholder has complied with all the
agreements and satisfied all the conditions on his part to be
performed or satisfied prior to the First Closing Date or the
Subsequent Closing Date, as the case may be.
(vi) On the date on which this Agreement is executed and also on
the First Closing Date and on any Subsequent Closing Date, a
letter addressed to the Underwriters, from
PriceWaterhouseCoopers LLP, independent accountants, the
first one to be dated the date of this Agreement, the second
one to be dated the First Closing Date and subsequent letters
to be dated as of any Subsequent Closing Date, in form and
substance satisfactory to you.
(vii) On or before the First Closing Date, letters from each other
holder of the Company's Common Stock identified in Schedule C
hereof, substantially in the form of Schedule D.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and to Fried, Frank, Harris, Shriver & Jacobson, counsel for the
Underwriters. The Company shall furnish you with such manually signed or
conformed copies of such opinions, certificates, letters and documents as you
reasonably request. Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to the Underwriters as to the
statements made therein.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification by you to the
Company and the Selling Stockholders without liability on the part of
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<PAGE> 25
any Underwriter or the Company or the Selling Stockholders except for the
expenses to be paid or reimbursed by the Company and by the Selling Stockholders
pursuant to Sections 7 and 9 hereof and except that Section 11 shall at all
times be effective and shall survive such termination.
SECTION 9. Reimbursement of Underwriters' Expenses. Notwithstanding any
other provisions hereof, if this Agreement shall be terminated by you pursuant
to Section 8, Section 13 or Section 14 (other than with respect to shares to be
sold by the U.S. Trust Company, N.A., as trustee of the Whitehall Jewellers,
Inc. Employee Stock Ownership Trust), or if the sale to the Underwriters of the
Common Shares at the First Closing is not consummated because of any refusal,
inability or failure on the part of the Company or the Selling Stockholders to
perform any agreement herein or to comply with any provision hereof, the Company
agrees to reimburse you and the other Underwriters upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by you and them
in connection with the proposed purchase and the sale of the Common Shares,
including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, telegraph charges and telephone charges
relating directly to the offering contemplated by the Prospectus. Any such
termination shall be without liability of any party to any other party except
that the provisions of this Section, Section 7 (with respect to expenses payable
by the Company) and Section 11 shall at all times be effective and shall apply.
SECTION 10. Effectiveness of this Agreement. This Agreement shall not
become effective until the later of (i) the execution of this Agreement by the
parties hereto and (ii) notification by the Commission to the Company and the
Representatives of the effectiveness of the Registration Statement under the
Securities Act. Prior to such effectiveness, this Agreement may be terminated by
any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company or the
Selling Stockholders to any Underwriter, except that the Company and the Selling
iStockholders shall be obligated to reimburse the expenses of the Underwriters
pursuant to Sections 7 and 9 hereof, (b) any Underwriter to the Company or any
Selling Stockholder, or (c) any party hereto to any other party except that the
provisions of Section 11 shall at all times be effective and shall survive such
termination.
SECTION 11. Indemnification. (a) The Company agrees to indemnify and hold
harmless, and Hugh M. Patinkin, Matthew M. Patinkin, John R. Desjardins, Lynn D.
Eisenheim, Manny A. Brown, MJSB Investment Partners, L.P., John R. Desjardins
1995 Family Trust, U/A/D 12/28/95 and Matthew Patinkin 1994 Family Trust, U/A/D
12/19/94 (each, an "Identified Selling Stockholder" and, collectively, the
"Identified Selling Stockholders") jointly and severally agree (subject in all
cases to the overall limitation on liability set forth in the second paragraph
of this subsection (a)) to indemnify and hold harmless, each Underwriter and
each person, if any, who controls any Underwriter within the meaning of the Act
against any losses, claims, damages, liabilities or expenses, joint or several,
to which such Underwriter or such controlling person may become subject, under
the Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company or such Identified Selling
Stockholder), insofar as such
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<PAGE> 26
losses, claims, damages, liabilities or expenses, joint or several, to which
such Underwriter or such controlling person may become subject, under the Act,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company or such Identified Selling Stockholder),
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state in any of them a material fact required to be
stated therein or necessary to make the statements in any of them not
misleading, and will reimburse each Underwriter and each such controlling person
for any legal and other expenses as such expenses are reasonably incurred by
such Underwriter or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that neither the Company nor
the Identified Selling Stockholders will be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises out of or
is based upon (i) an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with the information furnished to the Company pursuant to Section 4
hereof or (ii) any statement or omission contained or made in any preliminary
prospectus and corrected in the Prospectus if (x) such loss, claim, damage,
liability or expense suffered or incurred by any Underwriter (or any such
controlling person) resulted from any claim, action, investigation, inquiry or
other proceeding brought by any person who purchased Common Shares which are the
subject thereof from such Underwriter and (y) such Underwriter failed to deliver
or provide a copy of the Prospectus, as then amended or supplemented, to such
person at or prior to the confirmation of the sale of such Common Shares in any
case where such delivery is required. In addition to its other obligations under
this Section 11(a), the Company and the Identified Selling Stockholders agree
that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, as described in
this Section 11(a), it or he will reimburse each Underwriter on a quarterly
basis for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's or such Identified Selling
Stockholders' obligation to reimburse each Underwriter for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Underwriter shall
promptly return it to the Company or the Identified Selling Stockholder, as the
case may be. This indemnity agreement will be in addition to any liability which
the Company or an Identified Selling Stockholder may otherwise have.
Without limiting the full extent of (i) the Company's agreement to
indemnify each Underwriter (and controlling persons thereof, if any) as herein
provided, (ii) the liability of the Company with respect to the breach by the
Company of any representation, warranty or covenant contained in this Agreement
(or in any certificate of the Company delivered pursuant hereto) and (iii) the
liability of any Identified Selling Stockholder with respect to the breach by
such Identified Selling Stockholder of any representation, warranty or covenant
contained in Section 3 of this Agreement (or in any certificate of such
Identified Selling Stockholder delivered pursuant hereto relating thereto),
notwithstanding anything contained in this Agreement to the contrary,
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each Identified Selling Stockholder shall be liable under (A) the
indemnification agreements contained in the first paragraph of this Section
11(a) or (B) the contribution provisions contained in Section 11(e) of this
Agreement, only for an amount not exceeding, in the aggregate, the net proceeds
(pretax) received by such Identified Selling Stockholder from the sale of Common
Shares hereunder. The Company and the Identified Selling Stockholders may agree
or have agreed, as among themselves and without limiting the rights of the
Underwriters and controlling persons under this Agreement, as to the respective
amounts of such liability for which each of them shall be responsible.
Notwithstanding anything to the contrary under this Section 11(a), each
Underwriter and each person, if any, who controls any Underwriter agrees not to
assert its rights to indemnity against any Identified Selling Stockholder for
losses, claims, damages or liabilities (or actions in respect thereof) arising
out of or based upon any such untrue statement or alleged untrue statement
unless and until (i) such Underwriter or controlling person has requested
indemnification and reimbursement from the Company for such losses, claims,
damages or liabilities (including any legal or other expenses reasonably
incurred) and (ii) the Company does not within 30 days of such request (x) agree
to so indemnify such Underwriter or controlling person and (y) reimburse in full
such Underwriter or controlling person for any such losses, damages or
liabilities (including legal and other expenses) incurred. If, after having made
such demand on the Company for indemnification and reimbursement as herein
provided, any Underwriter and any person, if any, who controls any Underwriter
asserts its rights to indemnity against any Identified Selling Stockholder for
losses, claims, damages or liabilities (or actions in respect thereof) arising
out of or based upon any such untrue statement or alleged untrue statement, then
in such event such Underwriter and each person, if any, who controls such
Underwriter shall first request indemnification and reimbursement from all (and
not less than all) Identified Selling Stockholders for such losses, claims,
damages or liabilities (including legal and other expenses), with such request
for indemnification and reimbursement to be made to each Identified Selling
Stockholder in such proportion as the number of Firm Common Shares to be sold
hereunder by such Identified Selling Stockholder bears to the total number of
Firm Common Shares to be sold by all Identified Selling Stockholders.
(b) Each of the Selling Stockholders not constituting Identified Selling
Stockholders (the "Other Selling Stockholders") severally and not jointly agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Act against any losses,
claims, damages, liabilities or expenses, joint or several, to which such
Underwriter or such controlling person may become subject, under the Act, the
Exchange Act, or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Other Selling
Stockholders), insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state in any of them a material fact
required to be stated therein or necessary to make the statements in any of them
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 reliance upon and in conformity with written information furnished to
the Company by such Other Selling Stockholder specifically for use therein), and
will reimburse each Underwriter and each such controlling person for any legal
and other expenses as such expenses are reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the Other Selling Stockholders will
not be liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon (i) an untrue statement or
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alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with the
information furnished to the Company pursuant to Section 4 hereof or (ii) any
statement or omission contained or made in any preliminary prospectus and
corrected in the Prospectus if (x) such loss, claim, damage, liability or
expense suffered or incurred by any Underwriter (or any such controlling person)
resulted from any claim, action, investigation, inquiry or other proceeding
brought by any person who purchased Common Shares which are the subject thereof
from such Underwriter and (y) such Underwriter failed to deliver or provide a
copy of the Prospectus, as then amended or supplemented, to such person at or
prior to the confirmation of the sale of such Common Shares in any case where
such delivery is required. In addition to their other obligations under this
Section 11(b), the Other Selling Stockholders agree that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, as described in this Section 11(b), it will
reimburse each Underwriter on a quarterly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Other Selling Stockholders' obligation to reimburse each Underwriter for
such expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Other Selling Stockholders. This indemnity
agreement will be in addition to any liability which the Other Selling
Stockholders may otherwise have.
Without limiting the full extent of (i) the Company's agreement to
indemnify each Underwriter (and controlling persons thereof, if any) as herein
provided, (ii) the liability of the Company with respect to the breach by the
Company of any representation, warranty or covenant contained in this Agreement
(or in any certificate of the Company delivered pursuant hereto) and (iii) the
liability of any Other Selling Stockholder with respect to the breach by such
Other Selling Stockholder of any representation, warranty or covenant contained
in Section 3 of this Agreement (or in any certificate of such Other Selling
Stockholder delivered pursuant hereto relating thereto), notwithstanding
anything contained in this Agreement to the contrary, each Other Selling
Stockholder shall be liable under (A) the indemnification agreements contained
in the first paragraph of this Section 11(b) or (B) the contribution provisions
contained in Section 11(e) of this Agreement, only for an amount not exceeding,
in the aggregate, the net proceeds (pretax) received by such Other Selling
Stockholder from the sale of Common Shares hereunder. The Company and the Other
Selling Stockholders may agree, as among themselves and without
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limiting the rights of the Underwriters and controlling persons under this
Agreement, as to the respective amounts of such liability for which each of them
shall be responsible.
Notwithstanding anything to the contrary under this Section 11(b), each
Underwriter and each person, if any, who controls any Underwriter agrees not to
assert its rights to indemnity against any Other Selling Stockholder for losses,
claims, damages or liabilities (or actions in respect thereof) arising out of or
based upon any such untrue statement or alleged untrue statement or for breach
of representations and warranties set forth in Section 3 hereof, unless and
until (i) such Underwriter or controlling person has requested indemnification
and reimbursement from the Company for such losses, claims, damages or
liabilities (including any legal or other expenses reasonably incurred) and (ii)
the Company does not within 30 days of such request (x) agree to so indemnify
such Underwriter or controlling person and (y) reimburse in full such
Underwriter or controlling person for any such losses, damages or liabilities
(including legal and other expenses) incurred.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement, the Selling Stockholders and each person, if any, who
controls the Company or any Selling Stockholder within the meaning of the Act,
against any losses, claims, damages, liabilities or expenses to which the
Company, or any such director, officer, Selling Stockholder or controlling
person may become subject, under the Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, 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 the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with the information furnished to the Company pursuant to Section 4
hereof, and will reimburse the Company, or any such director, officer, Selling
Stockholder or controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer, Selling Stockholder or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. In addition to its other obligations under this Section 11(c), each
Underwriter severally agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 11(c) which relates to information furnished to the
Company pursuant to Section 4 hereof, it will reimburse the Company (and, to the
extent applicable, each officer, director, controlling person or Selling
Stockholder) on a quarterly basis for all reasonable legal or other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and
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and enforceability of the Underwriters' obligation to reimburse the Company
(and, to the extent applicable, each officer, director, controlling person or
Selling Stockholder) for such expenses and the possibility that such payments
might later be held to have been improper by a court of competent jurisdiction.
To the extent that any such interim reimbursement payment is so held to have
been improper, the Company (and, to the extent applicable, each officer,
director, controlling person or Selling Stockholder) shall promptly return it to
the Underwriters. This indemnity agreement will be in addition to any liability
which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party, except to the extent
it is prejudiced as a proximate result of such failure. In case any such action
is brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it may wish, jointly
with all other indemnifying parties similarly notified, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be a conflict between the positions of
the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Underwriters in the case of paragraph (a) or
paragraph (b), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, in
each of which cases the fees and expenses of counsel shall be at the expense of
the indemnifying party.
(e) If the indemnification provided for in this Section 11 is required
by its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under paragraphs (a), (b),
(c) or (d) in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then each applicable indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of any losses,
claims,
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damages, liabilities or expenses referred to herein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the
Selling Stockholders and the Underwriters from the offering of the Common Shares
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, the Selling Stockholders and the Underwriters in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The respective relative benefits received by the Company, the Selling
Stockholders and the Underwriters shall be deemed to be in the same proportion,
in the case of the Company and the Selling Stockholders as the total price paid
to the Company and to the Selling Stockholders, respectively, for the Common
Shares sold by them to the Underwriters (net of underwriting commissions but
before deducting expenses) bears to the total price to the public set forth on
the cover of the Prospectus, and in the case of the Underwriters as the
underwriting commissions received by them bears to the total price to the public
set forth on the cover of the Prospectus. The relative fault of the Company, the
Selling Stockholders and the Underwriters 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, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in subparagraph (d) of this Section 11, any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
subparagraph (d) of this Section 11 with respect to notice of commencement of
any action shall apply if a claim for contribution is to be made under this
subparagraph (e); provided, however, that no additional notice shall be required
with respect to any action for which notice has been given under subparagraph
(d) for purposes of indemnification. The Company, the Selling Stockholders and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 11 were determined solely 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 in the immediately preceding paragraph. Notwithstanding the
provisions of this Section 11, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price paid by the public
in connection with the Common Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such actual or alleged untrue statement or
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 to contribute pursuant to this Section 11 are several in proportion
to their respective underwriting commitments and not joint.
(f) An indemnifying party under this Section 11 shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified
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party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
11(d) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request (delivered in accordance with Section 16 hereof)
and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement; provided
that, if at any time an indemnified party requests an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, the
indemnifying party shall not be liable for any such settlement effected without
its consent if such indemnifying party in good faith (A) reimburses such
indemnified party in accordance with such request to the extent it considers
such fees and expenses to be reimbursable hereunder and reasonable and (B)
provides written notice to the indemnified party substantiating the unpaid
balance as not reimbursable hereunder or unreasonable, in each case prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (a) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and (b) 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.
SECTION 12. Default of Underwriters. It shall be a condition to this
Agreement and the obligation of the Company and the Selling Stockholders to sell
and deliver the Common Shares hereunder, and of each Underwriter to purchase the
Common Shares in the manner as described herein, that, except as hereinafter in
this paragraph provided, each of the Underwriters shall purchase and pay for all
the Common Shares agreed to be purchased by such Underwriter hereunder upon
tender to the Underwriters of all such shares in accordance with the terms
hereof. If any Underwriter or Underwriters default in their obligations to
purchase Common Shares hereunder on any Closing Date and the aggregate number of
Common Shares which such defaulting Underwriter or Underwriters agreed but
failed to purchase on such Closing Date does not exceed 10% of the total number
of Common Shares which the Underwriters are obligated to purchase on such
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Common
Shares which such defaulting Underwriters agreed but failed to purchase on such
Closing Date. If any Underwriter or Underwriters so default and the aggregate
number of Common Shares with respect to which such default occurs is more than
the above percentage and arrangements satisfactory to the Underwriters and the
Company for the purchase of such Common Shares by other persons are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company or the
Selling Stockholders except for the expenses to be paid by the Company and the
Selling Stockholders pursuant to Sections 7 and 9 hereof and except that Section
11 hereof shall at all times be effective and shall survive such termination.
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In the event that Common Shares to which a default relates are to be
purchased by the non-defaulting Underwriters or by another party or parties, the
non defaulting Underwriter or the Company shall have the right to postpone the
Closing Date, as the case may be, for not more than five business days in order
that the necessary changes in the Registration Statement, Prospectus and any
other documents, as well as any other arrangements, may be effected. As used in
this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
SECTION 13. Termination. Prior to the First Closing Date this Agreement may
be terminated by Banc of America Securities LLC on behalf of the Underwriters by
notice given to the Company and the Selling Stockholders if at any time (i)
trading or quotation in any of the Company's securities shall have been
suspended or limited by the Commission or by the New York Stock Exchange, or
trading in securities generally on either the Nasdaq Stock Market or the New
York Stock Exchange shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of federal or New York authorities; (iii) there shall have
occurred any outbreak or escalation of national or international hostilities or
any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States' or international political,
financial or economic conditions, as in the judgment of Banc of America
Securities LLC on behalf of the Underwriters is material and adverse and makes
it impracticable to market the Common Shares in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities;
(iv) in the reasonable judgment of the Underwriters there shall have occurred,
subsequent to the respective dates as of which information is given in the
Prospectus, any material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the Company's
condition, financial or otherwise, earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of business,
since the execution of this Agreement, which in the judgment of Banc of America
Securities on behalf of the Underwriters makes it impracticable to market the
Common Shares in the manner and on the terms described in the Prospectus or to
enforce contracts for the sale of securities; or (v) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as in the reasonable judgment of the Underwriters may
interfere materially with the conduct of the business and operations of the
Company regardless of whether or not such loss shall have been insured and in
the judgment of Banc of America on behalf of the Underwriters makes it
impracticable to market the Common Shares in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities.
Any termination pursuant to this Section 13 shall be without liability on the
part of (a) the Company or the Selling Stockholders to any Underwriter, except
that the Company and the Selling Stockholders shall be obligated to reimburse
the expenses of the Underwriters pursuant to Sections 7 and 9 hereof, (b) any
Underwriter to the Company or the Selling Stockholders, or (c) of any party
hereto to any other party except that the provisions of Section 11 shall at all
times be effective and shall survive such termination.
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SECTION 14. Failure of the Selling Stockholders to Sell and Deliver. If one
or more of the Selling Stockholders shall fail to sell and deliver to the
Underwriters the Common Shares to be sold and delivered by such Selling
Stockholders at the First Closing Date under the terms of this Agreement, then
the Underwriters may at their option, by written notice from you to the Company
and the Selling Stockholders, either (i) terminate this Agreement without any
liability on the part of any Underwriter or, except as provided in Sections 7, 9
and 11 hereof, the Company or the Selling Stockholders, or (ii) purchase the
shares which the Company and other Selling Stockholders have agreed to sell and
deliver in accordance with the terms hereof. In the event of a failure by one or
more of the Selling Stockholders to sell and deliver as referred to in this
Section, either you or the Company shall have the right to postpone the Closing
Date for a period not exceeding seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected.
SECTION 15. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or the Selling Stockholders, or any of
its or their partners, officers or directors or any controlling person, as the
case may be, and will survive delivery of and payment for the Common Shares sold
hereunder and any termination of this Agreement.
SECTION 16. Notices. All communications hereunder shall be in writing and,
if sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed c/o Banc of America Securities LLC, 9 West 57th Street, New York, New
York 10019, Attention: Lani Martin and Joe Kennedy, with a copy to Banc of
America Securities LLC, 600 Montgomery Street, San Francisco, California 94111,
Attention: Jeffrey Lapic, Esq., and to Fried, Frank, Harris, Shriver & Jacobson,
One New York Plaza, New York, New York 10004, attention: Valerie Ford Jacob,
Esq.; if sent to the Company or the Selling Stockholders shall be mailed,
delivered or telegraphed and confirmed to the Company at 155 North Wacker Drive,
Chicago, Illinois 60606, with a copy to Sidley & Austin, One First National
Plaza, Chicago, Illinois 60603, Attention: Christine Leahy, Esq.; and if sent to
the Whitehall Jewellers, Inc. Employee Stock Ownership Plan shall be mailed,
delivered or telegraphed and confirmed to the U.S. Trust Company, N.A., 600 14th
Street, N.W., Suite 400, Washington, D.C. 20005-3314, Attention: Lisa Pendley,
with a copy to Gardner, Carton & Douglas, Quaker Tower, 321 North Clark Street,
Suite 3400, Chicago, Illinois 60610-4795, Attention: Gregory K. Brown. The
Company, the Selling Stockholders or you may change the address for receipt of
communications hereunder by giving notice to the others.
SECTION 17. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 12 hereof, and to the benefit of the officers and directors and
controlling persons referred to in Section 11, and in each case their respective
successors, personal representatives and assigns, and no other person will have
any right or obligation hereunder. No such assignment shall relieve any party of
its
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obligations hereunder. The term "successors" shall not include any purchaser of
the Common Shares as such from any of the Underwriters merely by reason of such
purchase.
SECTION 18. Partial Unenforceability. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 19. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of the State of New York.
SECTION 20. General. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document. In this Agreement, the masculine, feminine
and neuter genders and the singular and the plural include one another. The
section headings in this Agreement are for the convenience of the parties only
and will not affect the construction or interpretation of this Agreement. This
Agreement may be amended or modified, and the observance of any term of this
Agreement may be waived, only by a writing signed by the Company, the Selling
Stockholders and you.
Any person executing and delivering this Agreement as Attorney-in-fact for
the Selling Stockholders represents by so doing that he has been duly appointed
as Attorney-in-fact by such Selling Stockholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-fact to take
such action. Any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on all the Selling Stockholders.
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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed copies hereof, whereupon it will
become a binding agreement among the Company, the Selling Stockholders and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
WHITEHALL JEWELLERS, INC.
By:
President
HUGH M. PATINKIN
MATTHEW M. PATINKIN
JOHN R. DESJARDINS
LYNN D. EISENHEIM
MANNY A. BROWN
MJSB INVESTMENT PARTNERS, L.P.
JOHN R. DESJARDINS 1995 FAMILY TRUST,
U/A/D 12/28/95
MATTHEW M. PATINKIN 1994 FAMILY
TRUST, U/A/D 12/19/94
U.S. TRUST COMPANY, N.A., AS TRUSTEE
OF THE WHITEHALL JEWELLERS, INC.
EMPLOYEE STOCK OWNERSHIP TRUST
By: -----------------------------------------
Attorney-in-Fact
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<PAGE> 37
The foregoing Underwriting Agreement is hereby confirmed and accepted by us as
of the date first above written.
BANC OF AMERICA SECURITIES LLC CREDIT SUISSE FIRST BOSTON CORPORATION WILLIAM
BLAIR & COMPANY, L.L.C.
By: Banc of America Securities LLC
By:
----------------------------------
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<PAGE> 38
SCHEDULE A
NUMBER OF FIRM COMMON
NAME OF UNDERWRITER SHARES TO BE PURCHASED
Banc of America Securities LLC
Credit Suisse First Boston Corporation
William Blair & Company, L.L.C.
Total 2,925,000
=========
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<PAGE> 39
SCHEDULE B
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
FIRM COMMON OPTIONAL COMMON
SHARES TO BE SOLD SHARES TO BE SOLD
<S> <C> <C>
Hugh M. Patinkin 150,000 22,500
Matthew M. Patinkin 100,000 15,000
John R. Desjardins 100,000 15,000
Lynn D. Eisenheim 35,000 5,250
Manny A. Brown 40,000 6,000
MJSB Investment Partners, L.P. 50,000 7,500
John R. Desjardins 1995 Family Trust, U/A/D 20,000 3,000
12/28/95
Matthew M. Patinkin 1994 Family Trust, U/A/D 30,000 4,500
12/19/94
U.S. Trust Company, N.A., as trustee of the 100,000 15,000
Whitehall Jewellers, Inc. Employee Stock Ownership
Trust
Total 625,000 93,750
</TABLE>
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SCHEDULE C
STOCKHOLDERS TO BE SUBJECT TO 90-DAY LOCK-UP AGREEMENTS
Hugh Patinkin
Matthew Patinkin
John Desjardins
Lynn Eisenheim
Manny Brown
Norman Patinkin
Jack Smith
Richard Berkowitz
Daniel Levy
MJSB Investment Partners, L.P.
John R. Desjardins 1995 Family Trust, U/A/D/ 12/28/95
Matthew Patinkin 1994 Family Trust, U/A/D 12/19/94
U.S. Trust Company, N.A., as trustee of the
Whitehall Jewellers, Inc. Employee Stock
Ownership Trust
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<PAGE> 41
SCHEDULE D
LOCK UP AGREEMENT
February ____, 2000
Banc of America Securities LLC
Credit Suisse First Boston Corporation
William Blair & Company, L.L.C.
c/o Banc of America Securities LLC
9 West 57th Street
New York, New York 10019
RE: Whitehall Jewellers, Inc. (the "Company")
-------------------------
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
Underwriters. The undersigned recognizes that the Offering will be of benefit to
the undersigned and will benefit the Company by, among other things, raising
additional capital for its operations. The undersigned acknowledges that you and
the other underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of Banc of America
Securities LLC (which consent may be withheld in its sole discretion), directly
or indirectly, sell, offer, contract or grant any option to sell (including
without limitation any short sale), pledge, transfer, establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the Securities
Exchange Act of 1934, or otherwise dispose of any shares of Common Stock,
options or warrants to acquire shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock
currently or hereafter owned either of record or beneficially (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the
undersigned, or enter into any swap or any other agreement or transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
or publicly announce the undersigned's intention to do any of the foregoing, for
a period commencing on the date hereof and continuing through the close of
trading on the date 90 days after the date of the Prospectus. The undersigned
also agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of shares of Common
Stock or securities convertible into or exchangeable or exercisable for Common
Stock held by the undersigned except in compliance with the foregoing
restrictions. This letter agreement shall not restrict any bona fide gift by the
undersigned or any distribution by the
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undersigned to any equityholder of the undersigned in each case so long as the
donee or transferee agrees in writing to comply with this agreement for any
remaining portion of such 90-day period.
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common Stock
owned either of record or beneficially by the undersigned, including any rights
to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
- ----------------------------------------
Printed Name of Holder
By:
-------------------------------------
Signature
- ----------------------------------------
Printed Name of Person Signing (and indicate capacity of person signing if
signing as custodian, trustee, or on behalf of an entity)
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