-----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, TX1d3F7joyl0D/6nZFOmcJKbprKEnaMBkG9E94R5O2HCFGEF6vP/GGwVuO3Z+qZW t3qbzThUaQx/PSWYLeFftg== 0001169232-06-000043.txt : 20060109 0001169232-06-000043.hdr.sgml : 20060109 20060106192350 ACCESSION NUMBER: 0001169232-06-000043 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20060109 DATE AS OF CHANGE: 20060106 GROUP MEMBERS: HOLTZMAN FINANCIAL ADVISORS, LLC. GROUP MEMBERS: HOLTZMAN OPPORTUNITY FUND, L.P. GROUP MEMBERS: SH INDEPENDENCE, LLC. FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HOLTZMAN SEYMOUR CENTRAL INDEX KEY: 0000904439 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 100 N WILKES BARRE BLVD STREET 2: 4TH FL CITY: WILKES BARRE STATE: PA ZIP: 18702 MAIL ADDRESS: STREET 1: C/O JEWELCOR - 4TH FLOOR STREET 2: 100 N WILKES BARRE BLVD CITY: WILKES BARRE STATE: PA ZIP: 18702 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: 06517711 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 SC 13D/A 1 d66427_sc13da.txt AMENDMENT NO. 2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Amendment No. 2 Under the Securities Exchange Act of 1934 Whitehall Jewellers, Inc. (Name of Issuer) Common Stock, $.001 par value (Title of Class of Securities) 965063100 (CUSIP Number) Seymour Holtzman c/o Jewelcor Companies 100 N. Wilkes Barre Blvd. 4th Floor Wilkes Barre, Pennsylvania 18702 (570) 822-6277 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 5, 2006 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f), or 240.13d-1(g), check the following box: |_| SCHEDULE 13D CUSIP No. 965063100 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Seymour Holtzman ________________________________________________________________________________ 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |x| ________________________________________________________________________________ 3) SEC USE ONLY ________________________________________________________________________________ 4) SOURCE OF FUNDS N/A ________________________________________________________________________________ 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| ________________________________________________________________________________ 6) CITIZENSHIP OR PLACE OF ORGANIZATION United States ________________________________________________________________________________ 7) SOLE VOTING POWER NUMBER OF 1,055,716 SHARES ______________________________________________________________ BENEFICIALLY 8) SHARED VOTING POWER OWNED BY none EACH ______________________________________________________________ REPORTING 9) SOLE DISPOSITIVE POWER PERSON 1,055,716 WITH ______________________________________________________________ 10) SHARED DISPOSITIVE POWER none ________________________________________________________________________________ 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,055,716 ________________________________________________________________________________ 12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| ________________________________________________________________________________ 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.30% ________________________________________________________________________________ 14) TYPE OF REPORTING PERSON IN ________________________________________________________________________________ SCHEDULE 13D CUSIP No. 965063100 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON SH Independence, LLC 20-2923276 ________________________________________________________________________________ 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |x| ________________________________________________________________________________ 3) SEC USE ONLY ________________________________________________________________________________ 4) SOURCE OF FUNDS N/A ________________________________________________________________________________ 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| ________________________________________________________________________________ 6) CITIZENSHIP OR PLACE OF ORGANIZATION Nevada ________________________________________________________________________________ 7) SOLE VOTING POWER NUMBER OF 1,055,716 SHARES ______________________________________________________________ BENEFICIALLY 8) SHARED VOTING POWER OWNED BY none EACH ______________________________________________________________ REPORTING 9) SOLE DISPOSITIVE POWER PERSON 1,055,716 WITH ______________________________________________________________ 10) SHARED DISPOSITIVE POWER none ________________________________________________________________________________ 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,055,716 ________________________________________________________________________________ 12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| ________________________________________________________________________________ 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.30% ________________________________________________________________________________ 14) TYPE OF REPORTING PERSON OO ________________________________________________________________________________ SCHEDULE 13D CUSIP No. 965063100 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Holtzman Financial Advisors, LLC 20-0236486 ________________________________________________________________________________ 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |x| ________________________________________________________________________________ 3) SEC USE ONLY ________________________________________________________________________________ 4) SOURCE OF FUNDS N/A ________________________________________________________________________________ 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| ________________________________________________________________________________ 6) CITIZENSHIP OR PLACE OF ORGANIZATION Nevada ________________________________________________________________________________ 7) SOLE VOTING POWER NUMBER OF 1,055,716 SHARES ______________________________________________________________ BENEFICIALLY 8) SHARED VOTING POWER OWNED BY none EACH ______________________________________________________________ REPORTING 9) SOLE DISPOSITIVE POWER PERSON 1,055,716 WITH ______________________________________________________________ 10) SHARED DISPOSITIVE POWER none ________________________________________________________________________________ 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,055,716 ________________________________________________________________________________ 12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| ________________________________________________________________________________ 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.30% ________________________________________________________________________________ 14) TYPE OF REPORTING PERSON OO ________________________________________________________________________________ SCHEDULE 13D CUSIP No. 965063100 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Holtzman Opportunity Fund, L.P. 20-2923350 ________________________________________________________________________________ 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |x| ________________________________________________________________________________ 3) SEC USE ONLY ________________________________________________________________________________ 4) SOURCE OF FUNDS WC ________________________________________________________________________________ 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| ________________________________________________________________________________ 6) CITIZENSHIP OR PLACE OF ORGANIZATION Nevada ________________________________________________________________________________ 7) SOLE VOTING POWER NUMBER OF 1,055,716 SHARES ______________________________________________________________ BENEFICIALLY 8) SHARED VOTING POWER OWNED BY none EACH ______________________________________________________________ REPORTING 9) SOLE DISPOSITIVE POWER PERSON 1,055,716 WITH ______________________________________________________________ 10) SHARED DISPOSITIVE POWER none ________________________________________________________________________________ 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,055,716 ________________________________________________________________________________ 12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| ________________________________________________________________________________ 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.30% ________________________________________________________________________________ 14) TYPE OF REPORTING PERSON PN ________________________________________________________________________________ This Amendment No. 2 amends and supplements the Schedule 13D filed with the Securities and Exchange Commission (the "SEC") on November 1, 2005, as amended (the "Statement"), by and on behalf of Seymour Holtzman, SH Independence, LLC ("Independence"), Holtzman Financial Advisors, LLC ("Advisors") and Holtzman Opportunity Fund, L.P. ("Opportunity") with respect to the shares of common stock, par value $.001 per share (the "Common Stock"), of Whitehall Jewellers, Inc., a Delaware corporation (the "Issuer"). The principal executive offices of the Issuer are located at 155 North Wacker Drive, Suite 500, Chicago, Illinois 60606. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The information contained in Item 3 of the Statement is hereby amended and supplemented as follows: On January 5, 2006, Opportunity purchased 153,600 shares of Common Stock from Couchman Capital LLC in a privately negotiated transaction at a price of $1.20 per share. The amount of funds expended for such purchase was $184,320, which was funded by working capital. A copy of a letter agreement in connection with such purchase is attached hereto as Exhibit 99.8. On January 6, 2006, Opportunity purchased 204,000 shares of Common Stock from Myron Kaplan in a privately negotiated transaction at a price of $1.20 per share, subject to adjustment under certain negotiated circumstances. The amount of funds expended for such purchase was $244,800, which was funded by working capital. A copy of a letter agreement in connection with such this purchase is attached hereto as Exhibit 99.9. ITEM 4. PURPOSE OF TRANSACTION. The information contained in Item 4 of the Statement is hereby amended and supplemented as follows: In connection with Opportunity's negotiated purchase of 204,000 shares of Common Stock on January 6, 2006, the seller, which was the record holder of such shares as of the record date for the special meeting of the Issuer's stockholders scheduled for January 19, 2006, agreed to vote such shares, as well as 612,000 shares purchased by Prentice Capital Management L.P. ("Prentice") from the same seller pursuant to the same letter agreement, in favor of the proposals being submitted by the Issuer's management for approval at such meeting, including electing director nominees, approving the issuance of shares of Common Stock pursuant to the terms of the Notes (as defined in the original Statement), and approving an amendment to the Issuer's certificate of incorporation to effect a 1-for-2 reverse stock split. Pursuant to such letter agreement, the purchasers agreed that in the event that Newcastle Partners, L.P. ("Newcastle") consummates a tender offer for shares of Common Stock at a price in excess of $1.20 per share, the purchasers would pay the seller the difference between $1.20 per share and the per share price paid by Newcastle in connection with such a tender offer. Opportunity expects that any shares of Common Stock beneficially owned by it at the time of the special meeting of the Issuer's stockholders will be voted in favor of the proposals being submitted by the Issuer's management, which was a purpose of Opportunity's recent purchases of Common Stock. On January 5, 2006, Newcastle announced that it had commenced an action against Prentice, Opportunity and the Issuer seeking injunctive relief arising from certain purported securities law violations, among other things. Among other things, the complaint alleges that the Issuer, Prentice and Opportunity have been acquiring a "control block" of shares without disclosing their plans and purchases, that Prentice and Opportunity have engaged in a "de facto tender offer" under which a select group of shareholders are being offered a substantial premium to market prices as a coercive device to pressure them to tender their shares, and that the Issuer has violated federal proxy laws by failing to disclose the activities of Prentice and Opportunity in support of the proposals submitted by the Issuer's management at the special meeting. Opportunity denies the allegations in the complaint and expects to defend such action vigorously, and to seek to assure that the Issuer complies fully with its obligations under the Purchase Agreement (as defined in the original Statement). By virtue of such activity, the purchase of shares of Common Stock pursuant to the letter agreement dated January 5, 2006 to which Prentice is also a party, or otherwise, the Reporting Persons may be deemed to be members of a "group" with Prentice or its affiliates for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5(a) of the Statement is hereby amended and restated as follows: (a) As of January 6, 2006, Opportunity beneficially owns an aggregate of 1,055,716 shares of Common Stock, representing approximately 6.30% of the outstanding shares of Common Stock, based upon 16,763,215 shares outstanding, which is the total number of shares of Common Stock outstanding as of December 9, 2005, as reported in the Company's definitive proxy statement filed with the Securities and Exchange Commission on December 27, 2005 (the "Outstanding Shares"). If, as and when the conditions to issuance of the Notes under the Purchase Agreement are satisfied or waived, and such Notes are issued, then Opportunity at that time may be deemed to beneficially own an aggregate of up to 22,666,667 shares of Common Stock potentially issuable upon conversion of the Notes, including interest shares as described above; such shares, together with the 1,055,716 shares of Common Stock owned by Opportunity, would represent an aggregate of 23,722,383 shares of Common Stock, constituting approximately 22.1% of the then outstanding shares of Common Stock based upon the 107,450,697 shares of Common Stock that would be outstanding assuming all Notes issuable under the Purchase Agreement are issued, and all Notes held by the Investors, including interest shares, are converted. As the general partner of Opportunity, Advisors may be deemed to beneficially own the 1,055,716 shares of Common Stock owned by Opportunity, representing approximately 6.30% of the Outstanding Shares. If, as and when the conditions to issuance of the Notes under the Purchase Agreement are satisfied or waived, and such Notes are issued, then Advisors at that time may be deemed to beneficially own an aggregate of up to 22,666,667 shares of Common Stock potentially issuable upon conversion of the Notes, including interest shares as described above; such shares, together with the 1,055,716 shares of Common Stock owned by Opportunity, would represent an aggregate of 23,722,383 shares of Common Stock, constituting approximately 22.1% of the then outstanding shares of Common Stock based upon the 107,450,697 shares of Common Stock that would be outstanding assuming all Notes issuable under the Purchase Agreement are issued, and all Notes held by the Investors, including interest shares, are converted. As the Managing Member of Advisors, Independence may be deemed to beneficially own the 1,055,716 shares of Common Stock owned by Opportunity, representing approximately 6.30% of the Outstanding Shares. If, as and when the conditions to issuance of the Notes under the Purchase Agreement are satisfied or waived, and such Notes are issued, then Independence at that time may be deemed to beneficially own an aggregate of up to 22,666,667 shares of Common Stock potentially issuable upon conversion of the Notes, including interest shares as described above; such shares, together with the 1,055,716 shares of Common Stock owned by Opportunity, would represent an aggregate of 23,722,383 shares of Common Stock, constituting approximately 22.1% of the then outstanding shares of Common Stock based upon the 107,450,697 shares of Common Stock that would be outstanding assuming all Notes issuable under the Purchase Agreement are issued, and all Notes held by the Investors, including interest shares, are converted. As the sole member of Independence, Seymour Holtzman may be deemed to beneficially own the 1,055,716 shares of Common Stock owned by Opportunity, representing approximately 6.30% of the Outstanding Shares. If, as and when the conditions to issuance of the Notes under the Purchase Agreement are satisfied or waived, and such Notes are issued, then Mr. Holtzman at that time may be deemed to beneficially own an aggregate of up to 22,666,667 shares of Common Stock potentially issuable upon conversion of the Notes, including interest shares as described above; such shares, together with 1,055,716 shares of Common Stock owned by Opportunity, would represent an aggregate of 23,722,383 shares of Common Stock, constituting approximately 22.1% of the then outstanding shares of Common Stock based upon the 107,450,697 shares of Common Stock that would be outstanding assuming all Notes issuable under the Purchase Agreement are issued, and all Notes held by the Investors, including interest shares, are converted. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. As noted in Items 3 and 4 above, in connection with its negotiated purchase of Common Stock from Couchman Capital LLC and its negotiated purchase of Common Stock from Myron Kaplan, Opportunity entered into letter agreements, copies of which are attached as Exhibits 99.8 and 99.9 hereto, respectively, and incorporated by reference herein. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 99.8 Letter Agreement dated January 3, 2005 and executed January 4, 2005 between Couchman Capital LLC and Holtzman Opportunity Fund, L.P. 99.9 Letter Agreement dated January 5, 2005 among Myron Kaplan, on the one hand, and Holtzman Opportunity Fund, L.P. and Prentice Capital Management, L.P., on the other hand. SIGNATURES After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this Statement is true, complete and correct. Dated: January 6, 2006 /s/ Seymour Holtzman ------------------------ Seymour Holtzman SH INDEPENDENCE, LLC By: /s/ Seymour Holtzman -------------------- Name: Seymour Holtzman Title: Managing Member HOLTZMAN FINANCIAL ADVISORS, LLC By: SH Independence, LLC, its Managing Member By: /s/ Seymour Holtzman -------------------- Name: Seymour Holtzman Title: Manager HOLTZMAN OPPORTUNITY FUND, L.P. By: Holtzman Financial Advisors, LLC, its General Partner By: SH Independence, LLC, its Managing Member By: /s/ Seymour Holtzman -------------------- Name: Seymour Holtzman Title: Manager EX-99.8 2 d66427_ex99-8.txt LETTER OF AGREEMENT Exhibit 99.8 HOLTZMAN OPPORTUNITY FUND, L.P. 100 N. Wilkes-Barre Blvd., Fourth Floor Wilkes-Barre, PA 18702 (570) 822-6277 (570) 820-7014 Facsimile January 3, 2006 Couchman Capital LLC 800 Third Avenue, 31st Floor New York, NY 10022 Attn: Jonathon Couchman Re: Sale of 153,600 shares of common stock of Whitehall Jewellers, Inc. Dear Mr. Couchman: In connection with the sale by Couchman Capital LLC ("Couchman") of 153,600 shares of common stock of Whitehall Jewellers, Inc. ("Whitehall") to Holtzman Opportunity Fund, L.P. ("Holtzman"), we wish to confirm the following: 1. Couchman has agreed to sell 153,600 shares of common stock of Whitehall (the "Stock") to Holtzman at a price of $1.20 per share, representing a total purchase price of $184,320.00 (the "Purchase Price"). The transfer of the Stock shall be completed on or before January 4, 2006, unless extended by mutual agreement of the parties (the "Closing Date"). 2. Couchman, through its authorized representatives, will immediately execute all documents and take all action necessary to transfer the Stock to Holtzman on or before the Closing Date. 3. Holtzman shall, on the Closing Date, forward the Purchase Price of the Stock to Couchman on a delivery verses payment basis. 4. Couchman has made an independent decision to sell the Stock to Holtzman based on the information available to it, which Couchman has determined is adequate for that purpose, and Couchman has not relied on any information (in any form, whether written or oral) furnished by Holtzman, any of its representatives or any third person on their behalf in making that decision. 5. 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. 6. 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, Couchman acknowledges that Holtzman 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. Couchman further acknowledges that Holtzman is a shareholder of Whitehall and that Seymour Holtzman, the controlling manager of Holtzman, is a director nominee of Whitehall. Each party 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. 7. Couchman acknowledges that Holtzman, Seymour Holtzman, Efrem Gerszberg and their affiliates may possess material non-public information not known to Couchman 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. Couchman further acknowledges that neither Holtzman, Efrem Gerszberg, Seymour Holtzman nor their affiliates shall have any liability whatsoever (and Couchman 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. 8. Each party 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. [Paragraph 9 continued on next page] 9. Governing Law. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York. Holtzman Opportunity Fund, L.P. By: Holtzman Financial Advisors, LLC, Its General Partner By: /s/ Efrem Gerszberg --------------------------------- Printed Name: Efrem Gerszberg Its: ----- Manager AGREED TO and accepted this 4 day of January, 2006 Couchman Capital LLC By: /s/ Jon Couchman -------------------------- By: /s/ Jon Couchman -------------------------- Printed Name: Jon Couchman Its: Managing Member EX-99.9 3 d66427_ex99-9.txt LETTER OF AGREEMENT Exhibit 99.9 HOLTZMAN OPPORTUNITY FUND, L.P. 100 N. Wilkes-Barre Blvd., Fourth Floor Wilkes-Barre, PA 18702 (570) 822-6277 (570) 820-7014 Facsimile January 5, 2006 Myron Kaplan 475 Grand Avenue Englewood, New Jersey Re: Sale of 816,000 shares of common stock of Whitehall Jewellers, Inc. Dear Mr. Kaplan: In connection with the sale by you of shares of common stock of Whitehall Jewellers, Inc. ("Whitehall") to Holtzman Opportunity Fund, L.P. and Prentice Capital Management, L.P. (collectively "Holtzman"), we wish to confirm the following: 1. You have agreed to sell 816,000 shares of common stock of Whitehall (the "Stock") to Holtzman at a price of $1.20 per share, representing a total purchase price of $979,200 (the "Purchase Price"). In the event Newcastle Partners, L.P. ("Newcastle") consummates a tender offer for shares of Whitehall common stock at a price in excess of $1.20 per share, Holtzman shall also pay to you the difference between $1.20 per share and the per share price paid by Newcastle in connection with the tender offer payable on the same date that Newcastle pays the tendering Whitehall shareholders for their shares. The payment of the Purchase Price and the transfer of the Stock shall be completed on or before January 5, 2006, unless extended by mutual agreement of the parties (the "Closing Date"). 2. You will immediately execute all documents and take all action necessary to transfer the Stock to Holtzman on or before the Closing Date. Additionally, you represent that you have all of the voting rights with regard to the Stock and that you will vote all of the Stock and shares owned by you as of the record date (for such special meeting described below) on Whitehall's white proxy card in favor of management's proposals which include, electing the Whitehall director nominees, approving the issuance of shares of Whitehall's common stock pursuant to the terms of Whitehall's secured convertible note and approving the amendment to Whitehall's Certificate of Incorporation to effect a 1 for 2 reverse stock split. The foregoing vote is in connection with the special meeting of the Company's shareholders scheduled on January 19, 2006. You must vote the Stock and shares owned as of the record date on Whitehall's white proxy card before January 10, 2006 to assure that the Stock is voted in a timely manner. Holtzman shall, on the Closing Date, forward the Purchase Price of the Stock to you by wire transfer. Upon receipt of the Purchase Price, you shall immediately transfer the Stock to Holtzman. 3. You have made an independent decision to sell the Stock to Holtzman based on the information available to it, which you have determined is adequate for that purpose, and you have not relied on any information (in any form, whether written or oral) furnished by Holtzman, 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. 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, you acknowledge that Holtzman 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. You further acknowledge that Holtzman is a shareholder of Whitehall and that Seymour Holtzman, the controlling manager of Holtzman Opportunity Fund, L.P. is a director nominee of Whitehall. Additionally, Jonathan Duskin ("Duskin"), a controlling person of Prentice Capital Management, L.P., is also a director nominee 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. You acknowledge that Holtzman, Seymour Holtzman, Efrem Gerszberg, Duskin and their affiliates may possess material non-public information not known to you 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. You further acknowledge that neither Holtzman, Efrem Gerszberg, Seymour Holtzman, Duskin nor their affiliates shall have any liability whatsoever (and you hereby waive and release all claims that you 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. [Paragraph 8 continued on next page] 8. Governing Law. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York. Holtzman Opportunity Fund, L.P. By: Holtzman Financial Advisors, LLC, Its General Partner By: /s/ Seymour Holtzman ----------------------------------- Printed Name: Seymour Holtzman Its: Managing Director Prentice Capital Management, L.P. By: /s/ Jonathan Duskin ----------------------------------- Printed Name: Jonathan Duskin Its: Managing Director AGREED TO and accepted this 5th day of January, 2006 /s/ Myron Kaplan - ------------------------ Myron Kaplan -----END PRIVACY-ENHANCED MESSAGE-----