Exhibit
10.28


AGREEMENT
AND PLAN OF MERGER



                    This
AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of January 29, 2007,
is by and between Whitehall Jewellers, Inc., a Delaware corporation (the
“Company”), and WH Inc. of Illinois, an Illinois corporation (“WHI”).  


                    WHEREAS,
the Company owns 100% of the outstanding shares of common stock, par value $.01
per share, of WHI;


                    WHEREAS,
the Board of Directors of WHI deems it to be in the best interests of WHI to
merge with and into the Company;


                    WHEREAS,
the Board of Directors of the Company deems it to be in the best interests of
the Company to merge WHI with and into the Company; and



                    WHEREAS,
on January 26, 2007, by unanimous written consent, the respective Boards of
Directors of the Company and WHI have adopted this Agreement and approved the
merger (the “Merger”) of WHI with and into the Company, with the Company
surviving the Merger, pursuant to the terms and conditions of this Agreement;
and 


                    NOW,
THEREFORE, for and in consideration of the mutual covenants
contained herein, and for other good and valuable consideration, the receipt of
which each party hereby acknowledges, the parties agree as follows:



                              1.
The Merger. Upon the terms
and subject to the conditions set forth in this Agreement, WHI shall be merged
with and into the Company at the Effective Time (as hereinafter defined).
Following the Merger, the separate corporate existence of WHI shall cease and
the Company shall continue as the surviving corporation (the “Surviving
Corporation”) and shall succeed to and assume all the rights and obligations of
WHI.  



                              2.
Effective Time. The Merger
shall become effective on January 31, 2007 at 10:00 a.m. Central Standard Time
(the “Effective Time”).  



                              3.
Issued Shares. The
outstanding shares of common stock, par value $.01 per share, of WHI shall not
be converted in any manner, but each such share which is outstanding as of the
Effective Time shall be cancelled. 



                              4.
Plan of Liquidation. The
parties agree that the Merger shall constitute a complete liquidation of WHI,
and that the execution of this Agreement constitutes the adoption of a plan of
liquidation, in each case pursuant to Section 332 of the Internal Revenue Code
of 1986, as amended. 







                              5.
Charter and Bylaws; Directors and
Officers. At the Effective Time: 


	
   

  	
   

  
	
   

  	
  (a) the Certificate of
  Incorporation of the Company, as amended, as in effect immediately prior to
  the Effective Time, shall be the Certificate of Incorporation of the
  Surviving Corporation until thereafter amended as provided by applicable law
  and such Certificate of Incorporation;

  
	
   

  	
   

  
	
   

  	
  (b) the By-laws of the
  Company, as in effect immediately prior to the Effective Time, shall be the
  By-laws of the Surviving Corporation until thereafter changed or amended as
  provided by law, the Certificate of Incorporation of the Surviving
  Corporation or such By-laws;

  
	
   

  	
   

  
	
   

  	
  (c) the directors of the
  Company immediately prior to the Effective Time shall be the directors of the
  Surviving Corporation, each to hold office in accordance with the Certificate
  of Incorporation and By-laws of the Surviving Corporation, until their
  successors are duly elected or appointed and qualified, or until their
  earlier death, resignation or removal in accordance with the Surviving
  Corporation’s Certificate of Incorporation or By-laws; and

  
	
   

  	
   

  
	
   

  	
  (d) the officers of the
  Company immediately prior to the Effective Time shall be the officers of the
  Surviving Corporation until their respective successors are duly elected and
  qualified, or until their earlier death, resignation or removal in accordance
  with the Surviving Corporation’s Certificate of Incorporation or By-laws.

  



                              6.
General Provisions.  


	
   

  	
   

  
	
   

  	
  (a) Counterparts. This Agreement may be
  executed in any number of counterparts, all of which shall be considered one
  and the same agreement, and shall become effective when one or more
  counterparts have been signed by each party and delivered to the other party,
  it being understood that the parties need not sign the same counterpart.

  
	
   

  	
   

  
	
   

  	
  (b) Governing Law. This Agreement shall be
  governed by, and construed in accordance with, the laws of the State of
  Delaware, except to the extent that the Illinois Business Corporation Act of
  1983 controls with respect to certain matters.

  
	
   

  	
   

  
	
   

  	
  (c) Partial Validity. Wherever possible,
  each provision hereof shall be interpreted in such manner as to be effective
  and valid under applicable law, but in case any one or more of the provisions
  contained herein shall, for any reason, be held to be invalid, illegal or
  unenforceable in any respect, such provision shall be ineffective to the
  extent, but only to the extent, of such invalidity, illegality or
  unenforceability without invalidating the remainder of such invalid, illegal
  or unenforceable

  



2






	
   

  	
   

  
	
   

  	
  provision or provisions or
  any other provisions hereof, unless such a construction would be
  unreasonable.

  
	
   

  	
   

  
	
   

  	
  (d) Address – Principal Place of Business. The
  Surviving Corporation’s address at its principal place of business is 125
  South Wacker Drive, Suite 2600, Chicago, Illinois 60606.

  



* * *


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                    IN
WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.


	
   

  	
   

  	
   

  
	
   

  	
  WHITEHALL JEWELLERS, INC.  

  
	
   

  	
   

  	
   
  
	
   

  	
  By:

  	
  /s/ Edward Dayoob 

  
	
   

  	
   

  	
  


  
	
   

  	
   

  	
  Name: EDWARD DAYOOB

  
	
   

  	
   

  	
  Title: PRESIDENT AND CEO

  
	
   

  	
   

  	
   
  
	
   

  	
  WH INC. OF ILLINOIS  

  
	
   

  	
   

  	
   
  
	
   

  	
  By: 

  	
  /s/ Michael Don

  
	
   

  	
   

  	
  


  
	
   

  	
   

  	
  Name: Michael Don

  
	
   

  	
   

  	
  Title: Vice President