-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GLVNRL3CgFQbbOjlBFPajCfW+XRggzhZoGo6tOZ9T50Dg9UvIZfi7+VpLjzn2fRZ BD1Xh9pRbjXiEF3lMvo23g== 0000902664-06-000148.txt : 20060125 0000902664-06-000148.hdr.sgml : 20060125 20060125161135 ACCESSION NUMBER: 0000902664-06-000148 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20060125 DATE AS OF CHANGE: 20060125 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WHITEHALL JEWELLERS INC CENTRAL INDEX KEY: 0000868984 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-JEWELRY STORES [5944] IRS NUMBER: 361433610 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-46037 FILM NUMBER: 06549821 BUSINESS ADDRESS: STREET 1: 155 N WACKER DR STREET 2: SUITE 500 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3127826800 MAIL ADDRESS: STREET 1: 155 NORTH WACKER STREET 2: SUITE 500 CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: MARKS BROS JEWELERS INC DATE OF NAME CHANGE: 19960301 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Prentice Capital Management, LP CENTRAL INDEX KEY: 0001326150 IRS NUMBER: 731728931 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 900 THIRD AVENUE, 11TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: (212) 756-8040 MAIL ADDRESS: STREET 1: 900 THIRD AVENUE, 11TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D/A 1 sc13da.txt WHITEHALL JEWELLERS, INC. - -------------------------------------------------------------------------------- SEC POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF 1746 (11-02) INFORMATION CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER. - -------------------------------------------------------------------------------- -------------------------- UNITED STATES OMB APPROVAL -------------------------- SECURITIES AND EXCHANGE COMMISSION OMB Number: 3235-0145 -------------------------- WASHINGTON, D.C. 20549 Expires: January 31, 2006 -------------------------- Estimated average burden hours per response . . . . . 11 -------------------------- SCHEDULE 13D/A Under the Securities Exchange Act of 1934 (AMENDMENT NO. 7) Whitehall Jewellers, Inc. --------------------------------------------------------------------- (Name of Company) Common Stock, $.001 par value --------------------------------------------------------------------- (Title of Class of Securities) 965063100 --------------------------------------------------------------------- (CUSIP Number of Class of Securities) Marc Weingarten, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, NY 10022 (212) 756-2280 --------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 24, 2006 --------------------------------------------------------------------- (Date of Event which Requires Filing of this Schedule) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss.240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D/A - ----------------------- -------------------- CUSIP NO. 965063100 PAGE 2 OF 9 PAGES - ----------------------- -------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Prentice Capital Management, LP I.R.S. ID: 73-1728931 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 --------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 71,248,894 shares (including 68,020,815 shares OWNED BY issuable upon conversion of notes and payable as EACH shares of interest under the notes) (see Item 5) REPORTING --------------------------------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 0 --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 71,248,894 shares (including 68,020,815 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 71,248,894 shares (including 68,020,815 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 66.31% (see Item 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- SCHEDULE 13D - ----------------------- -------------------- CUSIP NO. 965063100 PAGE 3 OF 9 PAGES - ----------------------- -------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PWJ Lending LLC I.R.S. ID: 02-0751960 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 --------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 2,094,346 shares of common stock (see Item 5) OWNED BY --------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 2,094,346 shares of common stock (see Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 2,094,346 shares of common stock (see Item 5) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.95% (assuming issuance of the notes and 12.49% otherwise) (see Item 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- SCHEDULE 13D - ----------------------- -------------------- CUSIP NO. 965063100 PAGE 4 OF 9 PAGES - ----------------------- -------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PWJ Funding LLC I.R.S. ID: 61-149-4137 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 --------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 69,154,548 shares issuable upon conversion of notes OWNED BY and payable as shares of interest under the notes EACH (see Item 5) REPORTING --------------------------------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 0 --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 69,154,548 shares issuable upon conversion of notes and payable as shares of interest under the notes (see Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 69,154,548 shares issuable upon conversion of notes and payable as shares of interest under the notes (see Item 5) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 64.36% (see Item 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- SCHEDULE 13D/A - ----------------------- -------------------- CUSIP NO. 965063100 PAGE 5 OF 9 PAGES - ----------------------- -------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Michael Zimmerman - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 --------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 71,248,894 shares (including 68,020,815 shares OWNED BY issuable upon conversion of notes and payable as EACH shares of interest under the notes) (see Item 5) REPORTING --------------------------------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 0 --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 71,248,894 shares (including 68,020,815 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 71,248,894 shares (including 68,020,815 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 66.31% (see Item 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- Pursuant to Rule 13d-2 promulgated under the Act, this Schedule 13D/A (this "AMENDMENT NO. 7", as previously amended by Amendment No. 1 filed on October 31, 2005, Amendment No. 2 filed on December 12, 2005, Amendment No. 3 filed on December 13, 2005, Amendment No. 4 filed on January 6, 2006, Amendment No. 5 filed on January 17, 2006 and Amendment No. 6 filed on January 18, 2006) amends the Schedule 13D filed on October 13, 2005 (File Number 005-46037) ("SCHEDULE 13D"). This Amendment No. 7 is being filed by Prentice Capital Management, LP ("PRENTICE CAPITAL MANAGEMENT"), PWJ Lending LLC ("PWJ LENDING"), PWJ Funding LLC ("PWJ FUNDING") and Michael Zimmerman ("MR. ZIMMERMAN" and, together with Prentice Capital Management, PWJ Lending and PWJ Funding, the "REPORTING PERSONS") relating to the Common Stock, par value $.001 per share (the "Shares"), of Whitehall Jewellers, Inc., a Delaware corporation (the "COMPANY"). The Reporting Persons are making this single, joint filing because they may be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the Act. The agreement among the Reporting Persons to file jointly (the "JOINT FILING AGREEMENT") is incorporated herein by reference to Exhibit A of Schedule 13D. Each Reporting Person disclaims beneficial ownership of all shares of Common Stock, other than those reported herein as being owned by it. Prentice Capital Management serves as investment manager to a number of investment funds and manages investments for certain entities in managed accounts with respect to which it has voting and dispositive authority over the Shares reported in this Amendment No. 7. PWJ Lending and PWJ Funding are entities directly controlled by Prentice Capital Management, its manager. Mr. Zimmerman is the Managing Member of (a) Prentice Management GP, LLC the general partner of Prentice Capital Management and (b) Prentice Capital GP, LLC, the general partner of certain investment funds. As such, he may be deemed to control Prentice Capital Management and certain of the investment funds and therefore may be deemed to be the beneficial owner of the securities reported in this Amendment No. 7. Each of Mr. Zimmerman and Prentice Capital Management disclaims beneficial ownership of all of the Shares reported in this Amendment No. 7. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Item 3 is hereby amended and restated as follows: As of the date hereof, the following persons may be deemed to own the amount of Shares set forth below: PWJ Lending. 2,094,346 Shares, all of which were issued upon exercise of the Warrants. Certain of the Shares held by PWJ Lending are held by various investment funds including Prentice Capital Partners, LP, Prentice Capital Partners QP, LP, Prentice Capital Offshore, Ltd., PEC I LLC and managed accounts managed by Prentice Capital Management and Mr. Zimmerman, in each case, as nominee for PWJ Lending. For purposes of this Amendment No. 7, references to PWJ Lending shall be deemed to include such investment funds and managed accounts. PWJ Funding. 69,154,548 Shares of which 68,020,815 Shares would be issuable upon conversion of the Notes, including interest shares if interest is paid in Common Stock for the first three years of the Notes at a conversion price of $.75, and an aggregate of 1,133,733 Shares which were acquired in four separate privately negotiated transactions. Certain of the Shares held by PWJ Funding are held by various investment funds including Prentice Capital Partners, LP, Prentice Capital Partners QP, LP, Prentice Capital Offshore, Ltd., PEC I LLC and managed accounts managed by Prentice Capital Management and Mr. Zimmerman, in each case, as nominee for PWJ Funding. For purposes of this Amendment No. 7, references to PWJ Funding shall be deemed to include such investment funds and managed accounts. Each of PWJ Lending and PWJ Funding purchased the Warrants, the Notes and the Shares, as applicable, with investment capital. ITEM 4. PURPOSE OF TRANSACTION. Item 4 is hereby amended to add the following supplemental information: On January 24, 2006, PWJ Funding acquired in a privately negotiated transaction 308,400 Shares together with irrevocable proxies to vote such Shares at the Special Meeting, pursuant to a letter agreement which is being filed as Exhibit B hereto (the "FEARON LETTER AGREEMENT"). As of that date, such Shares had not been physically delivered to the Reporting Person. The foregoing description of the Fearon Letter Agreement is qualified in its entirety by reference to such Fearon Letter Agreement. PWJ Funding acquired these Shares to vote in favor of the proposals to (A) issue Shares pursuant to the terms of the Notes, (B) an amendment to the Company's certificate of incorporation providing for a 1-for-2 reverse stock split, and (C) the election of persons designated by the Investors to the Company's board of directors, and to vote against the nominees to the Company's board of directors proposed by Newcastle and its affiliates. The Reporting Persons currently intend to vote any Shares beneficially owned by them in favor of the proposals to be considered at the Special Meeting. In light of the public announcement by the Company on January 24, 2006 that it had determined that it had received a "Superior Proposal" (as defined in the Purchase Agreement) from Newcastle, the Reporting Persons, Holtzman and certain of their respective affiliates may, from time to time, engage in discussions with the Company, its shareholders, lenders and creditors regarding possible modifications to the terms and conditions of the Purchase Agreement, an alternative transaction structure or other transactions involving the Company. There can be no assurance that such discussions will result in any such modification or alternative transaction by the Reporting Persons or Holtzman. ITEM 5. INTEREST IN SECURITIES OF THE COMPANY. Item 5 is hereby amended and restated as follows: (a) The aggregate percentage of Shares reported to be beneficially owned by the Reporting Persons is based upon 16,763,215 Shares outstanding as of December 9, 2005. None of the foregoing share calculations takes into account the 1 for 2 reverse stock split contemplated by the Purchase Agreement. As described in Item 3, as of the date of this Amendment No. 7, (i) PWJ Lending beneficially owns 2,094,346 Shares, which were issued upon exercise of the Warrants representing approximately 1.95% of the Shares outstanding (assuming issuance of the Notes and 12.49% otherwise), (ii) PWJ Funding may be deemed to beneficially own 69,154,548 Shares, 68,020,815 Shares of which would be issuable upon conversion of the Notes, including interest shares if interest will be paid in Common Stock for the first three years of the Notes, at a conversion price of $.75, and an aggregate of 1,133,733 Shares of which were acquired in four separately privately negotiated transactions, which shall represent approximately 64.36% of the Shares then outstanding, (iii) each of Prentice Capital Management and Mr. Zimmerman may be deemed to beneficially own 71,248,894 Shares, including the 2,094,346 Shares issued upon exercise of the Warrant and 68,020,815 Shares issuable upon conversion of the Notes, which combined represent beneficial ownership of approximately 66.31% of the Shares (assuming issuance of the Notes and 19.26% otherwise). In addition, as described under Item 4, Holtzman is deemed to constitute a "group" with the Reporting Persons within the meaning of Section 13(d)(3) of the Act. Collectively, the Reporting Persons and Holtzman are deemed to beneficially own approximately 25.55% of the Shares outstanding (without taking into account any Shares issuable upon conversion of the Notes and payable as shares of interest under the Notes). Each Reporting Persons expressly disclaims beneficial ownership of any of the shares of Common Stock other than those reported herein as being owned by it. None of the foregoing share calculations takes into account the 1 for 2 reverse stock split contemplated by the Purchase Agreement. (a) The Reporting Persons are making this single, joint filing because they may be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the Act. Each Reporting Persons expressly disclaims beneficial ownership of any of the shares of Common Stock other than those reported herein as being owned by it. (b) Certain of the Reporting Persons share voting and dispositive powers over the Shares beneficially owned to the extent reported herein. (c) On October 3, 2005, in connection with the execution of the Securities Purchase Agreement, the Company (i) issued to PWJ Lending the Warrant to purchase 2,094,346 Shares at an exercise price of $.75 per share and (ii) entered into the Securities Purchase Agreement whereby the Company would issue to PWJ Funding Notes convertible into 68,020,815 Shares, including the payment of interest shares for the first three years of the term of the Notes, at a conversion price of $.75 per share. None of the foregoing share calculations takes into account the 1 for 2 reverse stock split contemplated by the Securities Purchase Agreement. On December 6, 2005, PWJ Lending exercised the Warrant in full and as of said date was the record owner of 2,094,346 Shares that were issued upon exercise of the Warrant. Pursuant to a letter agreement dated January 4, 2006 (the "HARMAN LETTER") between Matthew Harman ("MR. HARMAN") and PWJ Funding, PWJ Funding agreed to purchase 213,333 Shares from Mr. Harman. A copy of the Harman Letter was filed on January 6, 2006 by the Reporting Persons as Exhibit B to Amendment No. 4 and is incorporated herein by reference. Subsequent to the date of the Harman Letter, PWJ Funding and Mr. Harman orally modified the Harman Letter to reflect that PWJ Funding would purchase only 163,433 Shares and on January 5, 2006, PWJ Funding purchased such amount of Shares at a per Share price of $1.20 in cash. As previously described in Amendment No. 4 of this Schedule 13D, PWJ Funding purchased an additional 612,000 in another privately negotiated transaction at an initial per Share price of $1.20 in cash on January 6, 2006, subject to adjustment, based on the difference between $1.20 per Share and the per Share price paid by Newcastle in its tender offer payable on the same date that Newcastle pays the tendering Company stockholders for their Shares, if at all. On January 9, 2006, PWJ Funding purchased the 49,900 remaining Shares not previously purchased pursuant to the Harman Letter at a per Share price of $1.20 in cash for a total purchase price of $59,880. On January 24, 2006, in a privately negotiated transaction, PWJ Funding purchased 308,400 Shares at a per Share price of $1.50 in cash for a total purchase price of $462,600, pursuant to the Fearon Letter Agreement. As of that date, such Shares had not been physically delivered to the Reporting Person. (d) No person (other than the Reporting Persons) is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE COMPANY. Item 6 is hereby amended to insert the following at the end thereof: The Fearon Letter Agreement is incorporated by reference into this Item 6. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit A Joint Filing Agreement dated October 12, 2005 (previously filed with Schedule 13D on October 13, 2005 and incorporated by reference herein). Exhibit B Letter Agreement by and between PWJ Funding LLC, Richard E. Fearon, Jr. and Accretive Capital Partners, LLC dated January 24, 2006. SIGNATURES After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2006 PRENTICE CAPITAL MANAGEMENT, LP By: /s/ Michael Weiss ------------------------------------------- Name: Michael Weiss Title: Chief Financial Officer PWJ FUNDING LLC By: Prentice Capital Management, LP, its Manager By: /s/ Michael Weiss ------------------------------------------- Name: Michael Weiss Title: Chief Financial Officer PWJ LENDING LLC By: /s/ Jonathan Duskin ------------------------------------------- Name: Jonathan Duskin Title: Managing Director MICHAEL ZIMMERMAN /s/ Michael Zimmerman - ------------------------------------------- Michael Zimmerman EXHIBIT INDEX Exhibit A Joint Filing Agreement dated October 12, 2005 (previously filed with Schedule 13D on October 13, 2005 and incorporated by reference herein). Exhibit B Letter Agreement by and between PWJ Funding LLC, Richard E. Fearon, Jr. and Accretive Capital Partners, LLC dated January 24, 2006. EX-99 2 exhibit_b.txt EXHIBIT B January 24, 2006 Richard E. Fearon, Jr. 11 Connecticut Avenue Danbury, CT 06810 Re: Sale of 308,400 shares of common stock of Whitehall Jewellers, Inc. Dear Mr. Fearon: In connection with the sale by Mr. Richard E. Fearon, Jr. and his affiliate Accretive Capital Partners, LLC (together, the "Sellers") of 115,500 and 192,900 shares of common stock of Whitehall Jewellers, Inc. ("Whitehall"), respectively, to PWJ Funding LLC ("Prentice"), we wish to confirm the following: 1. You have agreed to sell 308,400 shares of common stock of Whitehall (the "Stock") to Prentice, which represents, in the aggregate, all shares of common stock of Whitehall beneficially owned (within the meaning of Rule 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) by the Sellers as of the date hereof at a price of $1.50 per share, representing a total purchase price of $462,600 (the "Purchase Price"). The transfer of the Stock shall be completed on or before January 24, 2006, unless extended by mutual agreement of the parties (the "Closing Date"). Prentice shall, on the Closing Date, forward the Purchase Price of the Stock to you by wired funds to the 3 accounts designated in the 1/24/06 email to Michael Weiss. The Sellers hereby represent and warrant, on a joint and several basis, to Prentice that each such Seller is not an affiliate of Whitehall (as such term is defined under Rule 12b-2 of the Exchange Act) and do not beneficially own any shares of common stock of Whitehall other than the Stock to be purchased hereunder. 2. The Sellers will immediately execute all documents and take all action necessary to transfer the Stock to Prentice on or before the Closing Date. Additionally, the Sellers represent, on a joint and several basis, that each such Seller has all of the voting rights with regard to the Stock and that each such Seller has not tendered or submitted for tender any of the Stock in connection with the tender offer currently pending by JWL Acquisition Corp. or any of its affiliates. If any such Stock has been so tendered, each Seller agrees to immediately withdraw such shares of Stock and provide PWJ evidence of such withdrawal. As an inducement for Prentice to enter into this agreement, each Seller hereby irrevocably (to the fullest extent permitted by law) appoints and constitutes Jonathan Duskin and Charles Phillips its proxy with respect to all Stock sold pursuant to the agreement with full power of substitution and resubstitution. As of the date hereof, to the extent requested by Prentice, all prior proxies given by or on any Seller's behalf with respect to any of the Stock will be revoked, and no subsequent proxies will be given with respect to any of the Stock by any such Seller. The proxy named above will be empowered, and may exercise this proxy, to vote the Stock, at any time and from time to time, in its sole and absolute discretion and without notice to the Sellers at any meeting of the stockholders of the Company, however called, or in any written action by consent of stockholders of the Company, with respect to all matters brought before a vote of the stockholders for any purpose or reason. This proxy shall be binding upon each Seller's heirs, successors and assigns. Any term or provision of this proxy which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this proxy or affecting the validity or enforceability of any of the terms or provisions of this proxy in any other jurisdiction. If any provision of this proxy is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. Each Seller hereby affirms that this proxy is given for the purpose of and should be construed so as to effectuate the purposes set forth above, and that this proxy is coupled with an interest and is irrevocable during the term hereof. 3. Each Seller has made an independent decision to sell the Stock to Prentice based on the information available to it, which each such Seller has determined is adequate for that purpose, and each such Seller has not relied on any information (in any form, whether written or oral) furnished by Prentice, any of its representatives or any third person on their behalf in making that decision. 4. No party to this agreement has rendered any opinion to any other party as to whether the purchase or sale of the Stock is prudent or suitable, and no party to this Agreement is relying on any representation or warranty by any other party except as expressly set forth in this Agreement. Each Seller hereby agrees to keep the terms of this Agreement confidential and not disclose the existence of this Agreement or the terms hereof to any person or entity without the prior written consent of Prentice, except that the Sellers may disclose the terms of this Agreement to its respective affiliates provided they agree to be bound by the terms of this Agreement. 5. Each party acknowledges and represents that it is a sophisticated investor with respect to the Stock and it has adequate information concerning the business and financial condition of Whitehall and any affiliates of Whitehall, and understands the disadvantage to which any party may be subject on account of the disparity of information as between the parties. In this regard, each Seller acknowledges that Prentice has been, and continues to be, provided information concerning the operation of Whitehall, including but not limited to financial information, as a result of its participation in a thirty million dollar ($30,000,000) bridge loan to Whitehall. Each Seller acknowledges that Prentice is a shareholder of Whitehall and that John Duskin and Charles Phillips, each a controlling person of Prentice, are director nominees of Whitehall. Each party hereto believes, by reason of its business or financial experience, that it is capable of evaluating the merits and risks of the sale and of protecting its own interests in connection with the purchase and sale of the Stock. 6. Each Seller acknowledges that Prentice, John Duskin, Charles Phillips and their affiliates may possess material non-public information not known to the Sellers regarding or relating to Whitehall or the Stock, including, but not limited to, information concerning the business, financial condition and any prospects or restructuring plans of Whitehall. Each Seller further acknowledges that neither Prentice, John Duskin, Charles Phillips nor their affiliates shall have any liability whatsoever (and each such Seller hereby waives and releases all claims that it may otherwise have) with respect to the nondisclosure of any such information, whether before or after the date of this Agreement. 7. Each party hereto expressly releases the other party, their affiliates, successors and/or assigns and their respective officers, directors, employees, agents, trustees and controlling persons from any and all liabilities arising from the failure to disclose non-public information with respect to Whitehall or the Stock, and each party agrees to make no claim against the other party, their affiliates, successors and/or assigns and their respective officers, directors, employees, managers, agents, trustees and controlling persons in respect of the sale of the Stock relating to any failure to disclose such non-public information. 8. Governing Law. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York. PWJ Funding LLC By: /s/ Michael Weiss Its: CFO of Prentice Capital Management, its Manager AGREED TO and accepted this 24th day of January, 2006 By: /s/ Richard E. Fearon, Jr. Printed Name: Richard E. Fearon, Jr. Its: Managing Partner -----END PRIVACY-ENHANCED MESSAGE-----