OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
WHITEHALL JEWELLERS, INC.
AT
$1.20 NET PER SHARE
BY
JWL ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
NEWCASTLE PARTNERS, L.P.
December 5, 2005
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated December
5, 2005 and the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer") in
connection with the offer by JWL Acquisition Corp. (the "Purchaser"), a Delaware
corporation and a wholly owned subsidiary of Newcastle Partners, L.P. (the
"Parent"), a Texas limited partnership, to purchase for cash all outstanding
shares of common stock, par value $0.001 per share (the "Common Stock"), and the
associated preferred stock purchase rights (the "Rights", the Common Stock and
the Rights together are referred to herein as the "Shares"), of Whitehall
Jewellers, Inc., a Delaware corporation (the "Company"). We are the holder of
record of Shares held for your account. A tender of such Shares can be made only
by us as the holder of record and pursuant to your instructions. The Letter of
Transmittal is furnished to you for your information only and cannot be used by
you to tender Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is directed to the following:
1. The tender price is $1.20 per Share, net to you in cash.
2. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Wednesday, January 4, 2006, unless extended (as
extended, the "Expiration Date").
3. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn before the Expiration Date a
number of Shares, which, together with the Shares then owned by the
Parent and its subsidiaries (including the Purchaser), represents at
least a majority of the total number of Shares outstanding on a
fully diluted basis, (ii) the termination of the Securities Purchase
Agreement, dated as of October 3, 2005, between the Company, PWJ
Funding LLC, PWJ Lending LLC and Holtzman Opportunity Fund, L.P.
pursuant to which the Company would sell up to $50 million in
convertible notes, (iii) stockholder rejection of the conditions to
consummation of such Securities Purchase Agreement, including the
issuance of Shares for the conversion of the notes sold under the
Securities Purchase Agreement, the 1-for-2 reverse stock split, and
the election of the directors nominated by the purchasers under the
3 Securities Purchase Agreement, (iv) a refinancing, acceptable to
the Parent, of the Company's senior credit facility or a consent to
the Offer and the potential merger thereafter, as described in the
Offer to Purchase, by the lenders under the Company's senior credit
facility, (v) the Company's Board of Directors redeeming the
associated preferred stock purchase rights or the Purchaser being
satisfied that the rights have been invalidated or are otherwise
inapplicable to the Offer and the potential merger thereafter, (vi)
the Company's Board of Directors approving replacement financing to
be provided by the Parent of the Company's existing bridge loan
financing with financial terms no less favorable to the Company than
the existing financing, but with no warrants, conversion rights or
other equity related components, and (vii) the Parent being
satisfied that Section 203 of the Delaware General Corporation Law
is inapplicable to the Offer and the potential merger thereafter.
4. Any stock transfer taxes applicable to the sale of Shares to the
Purchaser pursuant to the Offer will be paid by the Purchaser,
except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing, detaching and returning to us the
instruction form below. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified on the instruction form. Your instructions
should be forwarded to us in ample time to permit us to submit a tender on your
behalf by the Expiration Date.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction.
Payment for Shares purchased pursuant to the Offer will in all cases be
made only after timely receipt by American Stock Transfer & Trust Company (the
"Depositary") of (i) certificates representing the Shares tendered or timely
confirmation of the book-entry transfer of such Shares into the account
maintained by the Depositary at The Depository Trust Company (the "Book-Entry
Transfer Facility"), pursuant to the procedures set forth in Section 3 of the
Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined in the Offer to Purchase), in connection with a
book-entry delivery, and (iii) any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering stockholders
at the same time depending upon when certificates for or confirmations of
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility are actually received by the Depositary.
INSTRUCTION FORM WITH RESPECT TO
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
WHITEHALL JEWELLERS, INC.
BY JWL ACQUISITION CORP.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated December 5, 2005, and the related Letter of Transmittal,
in connection with the offer by JWL Acquisition Corp. to purchase all
outstanding shares of common stock, par value $0.001 per share, and the
associated preferred stock purchase rights (together, the "Shares"), of
Whitehall Jewellers, Inc.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
Number of Shares to be Tendered:
SIGN HERE
Shares*
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Signature(s)
Dated , 20
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Name(s)
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Address(es)
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(Zip Code)
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* Unless otherwise indicated, it will be assumed that all Shares held for the
undersigned's account are to be tendered.
Newcastle Partners L P
Filed: 5 Dec 05, 12:00am