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SECOND AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING
CREDIT AND GOLD CONSIGNMENT AGREEMENT
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING
CREDIT
AND GOLD CONSIGNMENT AGREEMENT (this "Amendment") is entered
into as of the 31st
day of January, 2005 by and among the banks that are or may from
time to time
become parties hereto (individually a "Bank" and collectively,
the "Banks"),
LASALLE BANK NATIONAL ASSOCIATION, a national banking
association, as
administrative agent ("Administrative Agent") and collateral
agent, ABN AMRO
BANK N.V., as syndication agent, JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, as
documentation agent, and WHITEHALL JEWELLERS, INC., a Delaware
corporation (the
"Borrower").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Agents (as defined in the Agreement), the Banks and
the
Borrower are parties to that certain Second Amended and Restated
Revolving
Credit and Gold Consignment Agreement dated as of July 29, 2003,
as amended by
that certain First Amendment to Second Amended and Restated
Revolving Credit and
Gold Consignment Agreement dated as of March 23, 2004
(collectively, the
"Agreement"); and
WHEREAS, the Borrower and the Banks have agreed to further amend
the
Agreement to, among other items, (i) add an additional reserve
in the amount of
$15,000,000 to the Borrowing Base (as defined in the Agreement)
and (ii) amend
certain financial and reporting covenants, all in accordance
with the terms and
conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the premises and
mutual
agreements herein contained and for the purposes of setting
forth the terms and
conditions of this Amendment, the parties, intending to be
bound, hereby agree
as follows:
1. Incorporation of the Agreement. All capitalized terms which
are not
defined hereunder shall have the same meanings as set forth in
the Agreement,
and the Agreement, to the extent not inconsistent with this
Amendment, is
incorporated herein by this reference as though the same were
set forth in its
entirety. To the extent any terms and provisions of the
Agreement are
inconsistent with the amendments set forth in Paragraph 2 below,
such terms and
provisions shall be deemed superseded hereby. Except as
specifically set forth
herein, the Agreement shall remain in full force and effect and
its provisions
shall be binding on the parties hereto.
2. Amendment of the Agreement.
(a) The first sentence contained within the definition of
the
term "Borrowing Base" is hereby amended and restated to read as
follows:
At the relevant time of reference thereto, an amount
determined by the Administrative Agent by reference to the most
recent
Borrowing Base Report delivered to the Banks and the Agents
pursuant to
ss.10.4(f), which is equal to the sum of (a) the lesser of
(i)
sixty-five percent (65%) of the net book value
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(determined on an average cost basis at lower of cost or market)
of
Eligible Inventory and (ii) the sum of (A) sixty percent (60%)
of the
net book value (determined on an average cost basis at lower of
cost or
market) of Eligible Inventory minus the Fair Market Value of
Precious
Metal contained in Eligible Inventory, plus (B) 90% of the Fair
Market
Value of the Precious Metal contained in Eligible Inventory;
minus (b)
the Inventory Shrink Reserve; minus (c) the Layaway Reserve;
plus (d)
85% of Eligible Accounts Receivable; minus (e) an additional
Reserve in
the amount of $15,000,000 (which $15,000,000 Reserve may only
be
amended at the direction of the Required Banks).
(b) Section 8.4(f) of the Agreement is hereby amended and
restated to read as follows:
(f) within five (5) Business Days following the end of each
calendar week, or at such earlier time as the Administrative
Agent may
reasonably request, a Borrowing Base Report setting forth the
Borrowing
Base as at the end of such calendar week or other date so
requested by
the Administrative Agent. In addition to the foregoing, within
ten (10)
Business Days after the end of each calendar month or at such
earlier
time as the Administrative Agent may reasonably request (i) a
Borrowing
Base Report setting forth the Borrowing Base as at the end of
such
calendar month or other date so requested by the Administrative
Agent,
(ii) a Consigned Precious Metal Report setting forth (1) the
amount of
the Consigned Precious Metal and Borrower's Precious Metal as of
the
end of such calendar month or other date so requested by the
Administrative Agent, and (2) a calculation of the Consignment
Advance
Rate Percentage multiplied by the Fair Market Value of the sum
of (y)
Borrower's Precious Metal plus (z) Consigned Precious Metal as
of the
end of such calendar month or other date so requested by the
Agents,
and (iii) a Monthly Inventory Report, in each case together
with
supporting schedules and documentation, with each such Borrowing
Base
Report and Consigned Precious Metal Report to be accompanied by
a
certification by the Controller, Senior Vice President of
Finance or
the principal financial or accounting officer of the Borrower
that the
information contained therein is true and accurate in all
respects;
(c) Section 10.1 of the Agreement is hereby amended and
restated to read as follows:
10.1 Fixed Charge Coverage Ratio. The Borrower will not
permit, for any period of four consecutive fiscal quarters, the
ratio
of (a) the sum of (i) Consolidated EBITDA for su
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