GUARANTOR SECURITY AGREEMENT

Exhibit 10.48

GUARANTOR SECURITY AGREEMENT

           THIS GUARANTOR SECURITY AGREEMENT (this " Agreement "), dated as of January 18, 2008, is made by WHITEHALL JEWELERS HOLDINGS, INC. , a Delaware corporation (together with its successors and assigns, the " Guarantor ") in favor of LASALLE BANK NATIONAL ASSOCIATION (“Lasalle”), in its capacity as the Collateral Agent for the Agents and the Lenders party to the Credit Agreement (defined below) (in such capacity, the " Collateral Agent ").

W I T N E S S E T H :

           WHEREAS, pursuant to that certain Third Amended and Restated Credit Agreement dated as of January 20, 2007 (as amended or otherwise modified or restated from time to time, the " Credit Agreement ") among Whitehall Jewelers, Inc., a Delaware corporation (the " Borrower "), various lending institutions party thereto (such lending institutions, together with their respective successors and assigns, are collectively referred to as the " Lenders " and individually as a " Lender "), the Collateral Agent, and LaSalle, in its capacity as administrative agent for the Lenders, the Agents and the Lenders have agreed to make loans to, and provide other financial accommodations for the account of, the Borrower from time to time; and

           WHEREAS, the Borrower is a wholly-owned Subsidiary of the Guarantor and, as such, the Guarantor will benefit by virtue of the financial accommodations extended to the Borrower by the Agents and the Lenders;

           WHEREAS, the Guarantor has executed and delivered that certain Guaranty of even date herewith (as amended or otherwise modified from time to time, the " Guaranty ") with respect to all of the obligations of the Borrower to the Agents and the Lenders under the Credit Agreement;

           WHEREAS, as a condition to the Agents and the Lenders maintaining or further extending the loans and other financial accommodations to the Borrower pursuant to the Credit Agreement, and in consideration thereof, and in consideration of any loans or other financial accommodations heretofore or hereafter extended by the Agents and the Lenders to the Borrower pursuant to the Loan Documents, the Guarantor has agreed to enter into this Agreement in which the Guarantor grants a valid, enforceable security interest in substantially all of the Guarantor 's assets to secure its obligations under the Guaranty.

           NOW, THEREFORE, for and in consideration of any loan, advance or other financial accommodation heretofore or hereafter made to the Borrower under or in connection with the Credit Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

           1.       Definitions; Other Interpretive Provisions . When used herein, (a) the terms Account , Account Debtor , Certificated Security , Chattel Paper , Commercial Tort Claim , Deposit Account , Document , Electronic Chattel Paper , Equipment , Financial Asset, Fixtures , Goods , Health-Care-Insurance Receivable , Inventory , Instrument , Investment Property , Letter-of-Credit Rights , Money , Payment Intangibles , Proceeds , Security , Security Entitlement ,

Supporting Obligations and Uncertificated Security have the respective meanings assigned thereto in the UCC (as defined below); (b) capitalized terms which are not otherwise defined have the respective meanings assigned thereto in the Credit Agreement and (c) the following terms have the following meanings (such definitions to be applicable to both the singular and plural forms of such terms):

           Assignee Deposit Account shall have the meaning ascribed to such term in Section 4 hereof.

           Collateral means all property and rights of the Guarantor in which a security interest is granted to the Collateral Agent hereunder.

           Computer Hardware and Software means all of the Guarantor's rights (including rights as licensee and lessee) with respect to (i) computer and other electronic data processing hardware, including all integrated computer systems, central processing units, memory units, display terminals, printers, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware; (ii) all software and all software programs designed for use on the computers and electronic data processing hardware described in clause (i) above, including all operating system software, utilities and application programs in whatsoever form (source code and object code in magnetic tape, disk or hard copy format or any other listings whatsoever); (iii) any firmware associated with any of the foregoing; and (iv) any documentation for hardware, software and firmware described in clauses (i) , (ii) and (iii) above, including flow charts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes.

           Contract Right means any right of the Guarantor to payment under a contract for the sale or lease of goods or the rendering of services, which right is at the time not yet earned by performance.

           Default means the occurrence of any Event of Default (as defined in the Credit Agreement).

           General Intangibles means all of the Guarantor's "general intangibles" as defined in the UCC and, in any event, includes (without limitation) all of the Guarantor's trademarks, trade names, patents, copyrights, trade secrets, customer lists, inventions, designs, software, software programs, mask works, goodwill, registrations, licenses, franchises, tax refund claims, guarantee claims, Payment Intangibles, security interests and rights to indemnification.

           Intellectual Property means all past, present and future: trade secrets and other proprietary information; trademarks, service marks, business names, Internet domain names, designs, logos, trade dress, slogans, indicia and other source and/or business identifiers, and the goodwill of the business relating thereto and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights (including copyrights for computer programs and software) and copyright registrations or applications for registrations which have heretofore been or may hereafter be issued throughout the world and all tangible property embodying the copyrights; unpatented inventions (whether or

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not patentable); patent applications and patents; industrial designs, industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or disks, flow diagrams, specification sheets, source codes, object codes and other physical manifestations, embodiments or incorporations of any of the foregoing; the right to sue for all past, present and future infringements of any of the foregoing; and all common law and other rights throughout the world in and to all of the foregoing.

           Liabilities means all of the "Guaranteed Obligations" (as defined in the Guaranty).

           Non-Tangible Collateral means, collectively, the Guarantor's Accounts, Contract Rights and General Intangibles.

           Organization I.D. Number means, with respect to the Guarantor, the number assigned to the Guarantor by the applicable governmental unit or agency with which certificate of formation or other organizational document in respect of the Guarantor was filed.

           Supplemental Documentation means all agreements, instruments, documents, financing statements, warehouse receipts, bills of lading, notices of assignment of accounts, schedules of accounts assigned, mortgages and other written matter necessary or reasonably requested by the Collateral Agent to perfect and maintain perfected the Collateral Agent's and the Agents’ and Lenders' security interest in the Collateral.

           Type of Organization means, with respect to the Guarantor, the kind or type of entity of the Guarantor, such as a corporation or limited liability company.

           UCC means the Uniform Commercial Code as in effect in the State of New York from time to time.

           Unless otherwise expressly provided herein, references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document. The term "including" is not limiting and means "including, without limitation".

           2.       Grant of Security Interest . As security for the payment of all Liabilities, the Guarantor hereby assigns to the Collateral Agent for the benefit of the Agents and the Lenders and grants to the Collateral Agent for the benefit of the Agents and the Lenders, a continuing security interest in all of the following whether now or hereafter existing or acquired, regardless of where located, including, without limitation:

           All of the Guarantor's:

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           3.       Warranties . The Guarantor represents and warrants that: (i) no financing statement (other than any which names the Collateral Agent as secured party and may have been filed under this Agreement or in connection with any Permitted Encumbrances covering any of the Collateral is on file in any public office; (ii) the Guarantor is and will be the lawful owner of all Collateral, free of all liens, claims, security interests and encumbrances whatsoever, other than the security interest granted hereunder and Permitted Encumbrances, with full power and authority to execute this Agreement and perform the Guarantor's obligations hereunder, and to subject the Collateral to the security interest granted hereunder; (iii) all information with respect to Collateral and Account Debtors set forth in any schedule, certificate or other writing at any time heretofore or hereafter furnished by the Guarantor to the Collateral Agent is and will be true and correct in all material respects as of the date furnished; (iv) the Guarantor's state of organization, Type of Organization, Organization I.D. Number, the Guarantor's chief executive office and principal place of business are as set forth on Schedule I hereto (and the Guarantor has not changed its state of incorporation or organization, nor maintained its chief executive office and principal place of business at any other location at any time after (5) five years prior to the date of this Agreement); (v) each other location where the Guarantor maintains a place of business or stores or maintains any Collateral or any books and records, including, but not limited to, computer programs, printouts and the materials and records concerning the Collateral is set forth on Schedule II hereto; (vi) the Guarantor's exact legal name is as set forth on the signature pages of this Agreement, and except as set forth on Schedule III hereto, the Guarantor is not now known and during the five years preceding the date hereof has not previously been known by any trade name; (vii) except as set forth on Schedule III hereto, during the five years preceding the date hereof the Guarantor has not been known by any legal name different from those set forth on the signature pages of this Agreement nor has the Guarantor been the subject of any merger or other corporate or organizational reorganization; (viii) Schedule IV hereto contains a complete listing of the Guarantor's Intellectual Property which is subject to registration statutes and is material to the Guarantor's business; (ix) the Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the state of its organization; (x) the execution and delivery of this Agreement and the performance by the Guarantor of its obligations hereunder are within the Guarantor's corporate powers, have been duly authorized by all necessary corporate action, have received all necessary governmental approval (if any shall be required), and do not and will not contravene or conflict with any provision of law or of the Certificate of Incorporation or bylaws of the Guarantor or of any material agreement indenture, instrument or other document, or any material judgment, order or decree, which is binding upon the Guarantor; (xi) this Agreement is a legal, valid and binding obligation of the Guarantor, enforceable in accordance with its terms, except that the enforceability of this Agreement may be limited by bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other similar laws now or

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hereafter in effect relating to creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law); and (xii) the Guarantor is in compliance with the requirements of all applicable laws (including the provisions of the Fair Labor Standards Act), rules, regulations and orders of every governmental authority, the non-compliance with which would reasonably be expected to result in a material adverse effect on the business, assets or financial condition or the Guarantor; (xiii) Schedule V hereto contains a complete listing of all of the Guarantor's Instruments, Investment Property, Letter of Credit Rights, Chattel Paper, Documents and Commercial Tort Claims; (xiv) except as set forth on Schedule VI hereto, the Guarantor has no tangible Collateral located outside of the United States; (xv) Schedule VII hereto contains a complete listing of the Guarantor's tangible Collateral located with any bailee, warehousemen or other third parties; (xvi) Schedule VIII hereto contains a complete listing of all of the Guarantor's Collateral which is subject to certificate of title statutes; and (xvii) Schedule IX hereto contains a complete listing of all of the Guarantor's Deposit Accounts and other bank accounts, including locations and applicable account numbers.

           4.       Collections, Etc . Until such time as the Collateral Agent shall notify the Guarantor of the revocation of such power and authority, the Guarantor (a) may, in the ordinary course of its business, at its own expense, sell, lease or furnish under contracts of service any of the Inventory normally held by the Guarantor for such purpose, use and consume, in the ordinary course of its business, any raw materials, work in process or materials normally held by the Guarantor for such purpose, and use, in the ordinary course of its business, the cash proceeds of Collateral and other money which constitutes Collateral (b) will, at its own expense, endeavor to collect, as and when due, all amounts due under any of the Non-Tangible Collateral, including the taking of such action with respect to such collection as the Collateral Agent may reasonably request or, in the absence of such request, as the Guarantor may deem advisable, and (c) may grant, in the ordinary course of business, to any party obligated on any of the Non-Tangible Collateral, any rebate, refund or allowance to which such party may be lawfully entitled, and may accept, in connection therewith, the return of Goods, the sale or lease of which shall have given rise to such Non-Tangible Collateral. The Collateral Agent, however, may, at any time that a Default exists and is continuing, whether before or after any revocation of such power and authority or the maturity of any of the Liabilities, notify an Account Debtor or any other Person obligated on Collateral to make payment or otherwise render performance to or for the benefit of the Collateral Agent and enforce by suit or otherwise the obligations of an Account Debtor or any other Pers