EXHIBIT 10.20 

FORM OF UNSECURED TERM PROMISSORY NOTE - EXTENSION AGREEMENT

WHITEHALL JEWELLERS INC.


June 5, 2007

 


 


 


 

Subject: Unsecured Term Promissory Note -Extension Agreement

 

          
  _____________________ (“Noteholder”) and Whitehall Jewellers, Inc.
  (“Whitehall”)
  are parties to an Unsecured Term Promissory Note dated June ____, 2007 issued
  by Whitehall to Noteholder (the “Term
  Note”) in the principal amount of $______________, (_______________________________________ DOLLARS),
  together with accrued interest from January 17, 2006 as provided in the Term
  Note. Whitehall has requested that Noteholder  extend the Maturity Date under
  the Term Note from September 30, 2007 to March 31, 2009 (the “New Maturity
  Date”). Noteholder has agreed, based on the following terms, that the Term
  Note is hereby amended to reflect the New Maturity Date  and that any references
  in the Term Note to the Maturity Date shall hereinafter refer to the New Maturity
  Date:


          I.        Whitehall
agrees and acknowledges (a) that the indebtedness in the Term Note is due and
owing without offset, defense, discount, allowance, or counterclaim of any nature
whatsoever, and Noteholder  agrees and acknowledges that the indebtedness in
the Term Note represents the entire indebtedness due and owing to the Noteholder
pursuant to the ATVEA (as defined below) for Trade Debt due and owing as of September
23, 2005; and (b) that Noteholder  has fully complied to date with its obligations
under the Amended Trade Vendor Extension Agreement dated as of November 15, 2006
(“ATVEA”). Whitehall and Noteholder hereby agree that (A) notwithstanding
Section 13 of the ATVEA, their  respective obligations to each other under ATVEA
shall extend until the earliest to occur of (i) receipt by the Participating
Suppliers of the Settlement Payments and (ii) March 31, 2009 and (B) the Term
Note may only be assigned in accordance with  Section 14(b) of the ATVEA. The
Noteholder shall attach this letter agreement to the Term Note and shall inform
any assignee of the Term Note of this letter agreement.


          II.        Section
3 of the Term Note is hereby amended to add the following provisions:


  
    
      “(e) Prior to the New Maturity Date, Whitehall: 

               (A) fails either: (i) to pay, in the aggregate, the amount of $2,500,000 ("Mandatory Payment") on account of the Term Notes to Participating Suppliers under the ATVEA that have not agreed to the
    New Maturity Date by executing this letter agreement; or (ii) to the extent that the Mandatory Payment is not fully utilized under subsection 3(e)(A)(i), to pay the unused balance, pro rata, to those Participating Suppliers under the ATVEA that have
    executed this letter agreement (the 

  













___________________ 

Attn: _______________

June ___, 2007 

Page 2 


  
    
      “Eligible Participating Suppliers”); any payments made under this clause (ii) shall be applied first to accrued but unpaid interest on the Term Notes held by the Eligible Participating Suppliers and second to the
      outstanding principal on the Term Notes held by the Eligible Participating Suppliers; or 

               (B) pays, in the aggregate, an amount greater than the Mandatory Payment on account of the Term Notes, other than in connection with a partial repayment of the Term Notes by the Company on a pro rata
    basis among the Eligible Participating Suppliers; 

  




            (f)
      the Company shall have terminated the employment of Edward Dayoob and Michael
      Don without Cause (as defined in their respective employment agreements);
      or 

             (g)
      a Change of Control (as defined below) shall have occurred. The term “Change
      of Control” means the occurrence of any one or more of the following
      events: 

                       (i)
      any person (as such term is used in Rule 13d-5 under the Securities Exchange
      Act of 1934 (the “Exchange Act”))
      or group (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the
      Exchange Act), other than affiliates of Prentice Capital Management, LP,
      becomes the beneficial owner of 50% or more of the common stock of the
      Company entitled to vote generally in the election of directors of the
      Company (“Voting Securities”); 

                       (ii)
      individuals who, as of the date hereof, constitute the board of directors
      of the Company (the “Incumbent Directors”)
      cease for any reason to constitute at least 50.1% of the members of the
      board of directors of the Company; provided that any individual who becomes
      a director after the date hereof whose election or nomination for election
      by the Company’s shareholders was approved by at least 50.1% of the
      members of the then-existing board of directors of the Company (other than
      an election or nomination of an individual whose initial assumption of
      office is in connection with an actual or threatened “election contest” relating
      to the election of the directors of the Company (as such terms are used
      in Rule 14a-11 under the Exchange Act) or “tender offer” (as
      such term is used in Section 14(d) of the Exchange Act)) shall be deemed
      to be an Incumbent Director; 

                       (iii)
      the sale, lease, transfer, conveyance or other disposition in one or a
      series of related transactions, of all or substantially all of the assets
      of the Company; or 

                      (iv)
      the consummation of:



  
              (A)
        a merger or consolidation (a “Merger”)
        as a result of which the individuals and entities who were the respective
        beneficial owners of the Voting



  









___________________ 

Attn: _______________

June ___, 2007 

Page 3 


  Securities of the Company immediately before
      such Merger do not beneficially own, immediately after such Merger, directly
      or indirectly, more than 50% of the Voting Securities of the corporation
      resulting from such Merger (or its parent corporation), or 

            (B)
      a plan relating to the liquidation of the Company.




            Any
      references to the Company in this clause (g) shall, following the consummation
      of the contemplated reverse merger pursuant to which a wholly-owned subsidiary
      of a public company will be merged with and into the Company, refer to
      the public company parent entity. 



          III.        Whitehall
shall pay, on or prior to December 24, 2007, for all Holiday Flyer Goods (as
defined below) shipped to it by the Eligible Participating Suppliers; provided,
however, the maximum payment  to be made for such Holiday Flyer Goods on or prior
to December 24, 2007 shall be $10,000,000 and any amounts due and owing in
excess of $10,000,000 shall be paid in accordance with standard vendor terms.
Any payments made for the Holiday  Flyer Goods on or prior to December 24, 2007
shall be made pro rata among the Eligible Participating Suppliers based on the
amount shipped by such Participating Suppliers. The term “Holiday Flyer
Goods” means any merchandise shipped by the
Eligible Participating Suppliers that is displayed in Whitehall’s initial
Holiday Flyer to be distributed on or about November 12, 2007.


          IV.        This
letter agreement amends the Term Note and the obligations of Whitehall and the
Noteholder to each other under the ATVEA and, to the extent there is a conflict
between the terms of this letter  agreement, on the one hand, and the terms of
the Term Note or ATVEA on the other hand, the terms of this letter agreement
shall prevail. Except as amended hereby, the Term Note and ATVEA shall continue
in accordance with its terms. 


          Please confirm Noteholder’s agreement with the foregoing by signing and returning to the undersigned a duplicate copy of this letter agreement. This letter agreement may be executed in any number
of counterparts, each of which, when executed, shall be an original, but all of which, when taken together, shall constitute one and the same instrument. 












___________________ 

Attn: _______________

June ___, 2007 

Page 4 


  	WHITEHALL JEWELLERS,
          INC. 
	 
	 
	By:__________________________ 
	Name: 
	Its: 







The foregoing is acknowledged and agreed to:


_____________________________ 





By: __________________________

Name:

Its: