AGREEMENT TO POSTPONE JANUARY 19 SPECIAL MEETING OF STOCKHOLDERS
AGREEMENT TO POSTPONE JANUARY 19 SPECIAL MEETING OF STOCKHOLDERS (this
"Agreement"), dated as of January 17, 2006, between Whitehall Jewellers, Inc., a
Delaware corporation (the "Company") and Prentice Capital Management, L.P.
("Prentice") and, together with the Company, "Prentice" and, together with the
Company, the "Parties").
Whereas, the Company is a party to a Securities Purchase Agreement, dated
as of October 3, 2005 (the "Securities Purchase Agreement"), with affiliates of
Prentice and Xxxxxxxx Opportunity Fund, L.P. pursuant to which a Special Meeting
of the Company's Stockholders (the "Special Meeting") has been called to approve
two proposals (to issue shares and engage in a reverse stock split), and to
elect five persons to the Company's Board of Directors (the "Board of
Directors") (capitalized terms used herein and not otherwise defined are used as
defined in the Securities Purchase Agreement); and
Whereas, the Company previously had scheduled the Special Meeting for
January 19, 2006, at which the Company's stockholders are to consider the two
proposals and the election of five directors; and
Whereas, the Parties have agreed to postpone the Special Meeting until
Wednesday, January 25, 2006 (the "Postponement").
Now, therefore, in consideration of the promises, covenants and releases
set forth below, the parties do hereby promise, covenant and agree as follows:
1. AGREEMENT WITH RESPECT TO POSTPONEMENT OF MEETING. Prentice agrees, on behalf
of itself and its Affiliates (as defined below), with the Company that the
Special Meeting shall be postponed to Wednesday, January 25, 2006, at 10:00 a.m.
(local time) at a location in Chicago, Illinois to be determined by the Company
and publicly announced on or about January 18, 2006. The Company shall use its
reasonable best efforts to hold the Special Meeting on such date, subject to the
terms and conditions of the Securities Purchase Agreement. "Affiliates" shall
have the meaning set forth in the Securities Exchange Act of 1934, as amended.
2. NO INCONSISTENT ACTION.
(a) Prentice agrees, on behalf of itself and its Affiliates, that it will
not take any action that would restrict, limit or interfere with the
Postponement, including without limitation (i) challenging or asserting a claim
in a lawsuit directly challenging the Postponement, this Agreement or the
decision of the Company to postpone the Special Meeting or enter into this
Agreement, including any breach of fiduciary duty or similar claims with respect
thereto; or (ii) publicly disparaging or criticizing the Postponement, this
Agreement or the decision to postpone the Special Meeting or to enter into this
Agreement. This Agreement is not and shall not in any way be construed as or
deemed to be evidence of the merits of the matters scheduled to be presented at
the Special Meeting or the expected outcome.
(b) The Company agrees that it will take no action to cause the Special
Meeting to be held prior to January 25, 2006.
3. PUBLIC ANNOUNCEMENT. Each of the parties acknowledges that the Company will
issue a press release announcing this Agreement and the Postponement, in the
form attached as Exhibit A hereto.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants as follows:
(a) The Company has the requisite corporate power and authority to execute,
deliver and carry out this Agreement, and has taken all necessary corporate
action to authorize the execution, delivery and performance of this Agreement
and the matters contemplated hereby.
(b) This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation,
enforceable against the Company in accordance with its terms.
(c) Concurrently herewith, the Company is executing a substantially similar
agreement with Newcastle Partners, L.P.
5. REPRESENTATIONS AND WARRANTIES OF PRENTICE. Prentice represents and warrants
as follows:
(a) Prentice (i) has the requisite legal power and authority to execute,
deliver and carry out this Agreement on behalf of itself and its Affiliates and,
as the "Majority Buyer" under the Securities Purchase Agreement, on behalf of
the Buyers hereunder pursuant to the provisions of Section 10(o)(ii) thereof and
(ii) has taken all necessary legal action to authorize the execution, delivery
and performance of this Agreement and the matters contemplated hereby.
(b) This Agreement has been duly and validly authorized, executed and
delivered by Prentice, and constitutes a valid and binding obligation,
enforceable against Prentice, the Buyers under the Securities Purchase Agreement
and their respective Affiliates in accordance with its terms.
(c) Prentice, on behalf of itself, the Buyers and their respective
Affiliates, and as the Majority Buyer, hereby consents to the Postponement and
waives any defaults resulting from the Postponement under the Securities
Purchase Agreement or under any other agreement with the Company.
6. MISCELLANEOUS.
(a) SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective heirs, successors and
assigns, and upon any corporation or other entity into or with which any Party
hereto may merge, combine or consolidate (provided that the Party is the
survivor in such merger, combination or consolidation).
(b) GOVERNING LAW. This Agreement and all disputes arising out of or
relating to it shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware, without reference to the conflict of
laws principles thereof.
(c) AMENDMENTS. Any provision in this Agreement may be amended or waived by
an instrument in writing signed by each of the Company and Prentice, and any
such amendment or waiver shall be binding on all such Parties (and the Buyers
under the Securities Purchase Agreement). No amendment to or waiver of any
provision hereof shall be effective as against any Party unless such Party
agrees to such amendment or waiver in writing.
(d) AUTHORITY. Each person executing this Agreement represents that he, she
or it has read and fully understands this Agreement and that he, she or it has
the authority to execute this Agreement in his, her or its individual capacity
or in the capacity identified on the signature page below.
(e) NOTICES. Any notice or communication required or permitted to be given
to any Party pursuant to this Agreement shall be delivered by hand, transmitted
by telecopier or sent by registered or certified mail to the address(es) set
forth below, or to such other address as any Party shall designate by notice in
compliance with this Section 6(e). Any notice sent in accordance with this
Section 6(e) shall be deemed received one day after transmission if telecopied
(and a confirmation obtained) or delivered by hand, and five business days after
deposit if mailed.
With a copy to:
Notice to Whitehall: Sidley Austin LLP
Whitehall Jewellers, Inc. 000 Xxxxxxx Xxxxxx
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000 Xxx Xxxx, XX 00000
Xxxxxxx, XX 00000 Telecopy: (000) 000-0000
Facsimile: (000) 000-0000 Attn: Xxxx Xxxx Xxxxxxx, Esq.
Attn: Xxxx XxxxXxxxx, Esq.
Notice to Prentice: With a copy to:
Prentice Capital Management, XX Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx 000 Xxxxx Xxxxxx
00xx Xxxxx Xxx Xxxx, XX 00000
Xxx Xxxx, XX 00000 Attn: Xxxxxx Xxxxxxxxx, Esq.
Attn: Xxxxxxx Xxxxxxxxx and Xxxxxxx Xxxxxxxx Facsimile: (000) 000-0000
Facsimile: (000) 000-0000
(f) SPECIFIC PERFORMANCE AND JURISDICTION. Each of the Parties acknowledges
and agrees that irreparable harm would occur if any provision of this Agreement
were not performed in accordance with the terms thereof, or were otherwise
breached, and that such harm could not be remedied by an award of money damages.
Accordingly, the Parties hereto agree that any non-breaching party shall be
entitled to an injunction to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof. More specifically, each of the
Parties hereto hereby agrees that any action or proceeding arising out of or
relating to this Agreement shall be commenced in any State or Federal Court
having subject matter jurisdiction in the State of Delaware, and each Party
consents to the personal jurisdiction of and venue in Delaware and agrees
further that service of process or notice in any such action or proceeding shall
be effective if given in the manner set forth in Section 6(e) of this Agreement.
(g) DISPUTES; ATTORNEYS' FEES. If a Party is required to arbitrate or seek
judicial enforcement of its rights under this Agreement, the substantially
prevailing Party in such proceeding shall be entitled to be reimbursed by the
other Party for all of the first Party's reasonable attorneys' fees and
expenses.
(h) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(i) SEVERABILITY. If this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable against any Party, such
holding shall in no way render the Agreement invalid, void or unenforceable
against the other such Party. Except as to the matters contemplated by this
Agreement, nothing herein shall be deemed to be a waiver of or consent under any
other terms of the Securities Purchase Agreement.
(j) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES; ASSIGNMENT. This
Agreement (i) constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the Parties with respect to the
subject matter hereof and is not intended to confer upon any person other than
the Parties hereto any rights or remedies hereunder and (ii) shall not be
assigned by operation of law or otherwise by any Party without the prior written
consent of the other Party. Any attempted assignment or transfer in violation of
this Section 6(j) shall be void and of no effect.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.
WHITEHALL JEWELLERS, INC.
By:/S/ XXXX X. XXXXXXXXX
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Name: Xxxx X. XxxxXxxxx
Title: General Counsel
PRENTICE CAPITAL MANAGEMENT,
L.P.
By:/S/ XXXXXXXX XXXXXX
------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Managing Director
EXHIBIT A
NEWS RELEASE
For: Whitehall Jewellers, Inc.
Contact: Xxxx X. Xxxxxxxxxx
Executive Vice President,
Chief Financial Officer
DRAFT - 1/17/06 312/762-9751
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WHITEHALL ANNOUNCES THAT THE JANUARY 19, 2006 SPECIAL MEETING OF
STOCKHOLDERS WILL BE POSTPONED UNTIL JANUARY 25, 2006
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Chicago, Illinois, January --, 2006 - The Board of Directors of Whitehall
Jewellers, Inc. (OTC: XXXX.XX; "Whitehall" or the "Company") announced today
that it has reached a definitive agreement with both Prentice Capital
Management, LP ("Prentice") and Newcastle Partners, LP ("Newcastle") to postpone
the Company Special Meeting of Stockholders originally scheduled for January 19,
2006 until January 25, 2006. The meeting will be held beginning at 10:00 AM, CDT
at [a location in Chicago, Illinois to be announced by the Company shortly].
WHITEHALL JEWELLERS
Whitehall Jewellers, Inc. is a national specialty retailer of fine jewelry,
operating 387 stores in 38 states. The Company has announced that it intends to
close a number of stores in the near term. The Company operates stores in
regional and super regional shopping malls under the names Whitehall Co.
Jewellers, Xxxxxxxxx Jewelers and Marks Bros. Jewelers.
