Document:

EXHIBIT 4.2  

INCENTIVE STOCK OPTION PLAN

OF ELDORADO GOLD CORPORATION

OFFICERS & DIRECTORS

Amended and Restated 

as of April 28, 2005

 

	
            1.
 	
            Purpose of the Plan
 

1.1       The purpose of the Plan is to attract and retain superior directors and officers engaged to provide ongoing services to the Company, to provide an incentive for such persons to put forth maximum effort for the continued success and growth of the Company, and in combination with these goals, to encourage their equity participation in the Company.

	
            2.
 	
            Definitions
 

2.1       For the purposes of the Plan, the following terms have the respective meanings set forth below:

	
             
 	
            (a)
 	
            “Addendum” means the addendum attached to and forming a part of this Plan; 
 

	
             
 	
            (b)
 	
            “Affiliate” has the same meaning ascribed to that term as set out in the OSA;
 

	
             
 	
            (c)
 	
            “Associate” has the same meaning ascribed to that term as set out in the OSA;
 

	
             
 	
            (d)
 	
            “Board” means the board of directors of the Company;
 

	
             
 	
            (e)
 	
            “Company” means Eldorado Gold Corporation;
 

	
             
 	
            (f)
 	
            “Compensation Committee” means the committee of the Board constituted as provided in Section 3 hereof and if none is so constituted, means the full Board;
 

	
             
 	
            (g)
 	
            “Disability” means a physical or mental incapacity of a nature which the Board determines prevents or would prevent the Optionee from satisfactorily performing the substantial and material duties of his or her position with the Company;
 

	
             
 	
            (h)
 	
            “Eligible Person” means, from time to time, any director or officer of the Company;
 

	
             
 	
            (i)
 	
            “Exchange” means any principal exchange upon which the Shares are listed;
 

	
             
 	
            (j)
 	
            “Grant Date” has the meaning ascribed to that term in Subsection 5.1 hereof; 
 

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            (k)
 	
            “Insider” has the meaning ascribed to that term as set out in the OSA and includes Associates and Affiliates of an Insider, but excludes a director or officer of a subsidiary or Affiliate of the Company unless 
 

	
             
 	
            (i)
 	
            such director or senior officer in the ordinary course receives or has access to information as material facts or material changes concerning the Company before the material facts or material changes are generally disclosed; 
 

	
             
 	
            (ii)
 	
            is a director or senior officer of a major subsidiary (as defined in National Instrument 55-101); or
 

	
             
 	
            (iii)
 	
            is an Insider of the Company in a capacity other than as a director or senior officer of the subsidiary or Affiliate;
 

	
             
 	
            (l)
 	
            “Market Value” of a Share means, on any given day, the closing board lot sale price per share of Shares on the Exchange on the trading day immediately preceding the relevant date and if there was not a board lot sale on the Exchange on such date, then the last board lot sale prior thereto;
 

	
             
 	
            (m)
 	
            “Option” means an option, granted pursuant to Section 5 hereof, to purchase a Share;
 

	
             
 	
            (n)
 	
            “OSA” means the Securities Act (Ontario);
 

	
             
 	
            (o)
 	
            “Option Period” has the meaning ascribed to that term in Subsection 6.3 hereof;
 

	
             
 	
            (p)
 	
            “Option Price” means the price per Share at which Shares may be purchased under the Option, as determined pursuant to Paragraph 5.1(b) hereof and as may be adjusted in accordance with Section 10 hereof;
 

	
             
 	
            (q)
 	
            “Optionee” means an Eligible Person to whom an Option has been granted;
 

	
             
 	
            (r)
 	
            “Plan” means the Incentive Stock Option Plan of the Company as set forth herein as the same may be amended and/or restated from time to time;
 

	
             
 	
            (s)
 	
            “Retirement” has the meaning ascribed to that term in Subsection 8.1 hereof;
 

	
             
 	
            (t)
 	
            “Securities Regulators” has the meaning ascribed to that term in Section 11 hereof; 
 

	
             
 	
            (u)
 	
            “Share” means, subject to Section 10 hereof, a Common share without nominal or par value in the capital of the Company; and
 

	
             
 	
            (v)
 	
            “Shareholder” means a holder of Common Shares of the Company.
 

2.2       Unless otherwise indicated, all dollar amounts referred to in this Option Plan are in Canadian funds.

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2.3       As used in this Plan, words importing the masculine gender shall include the feminine and neuter genders and words importing the singular shall include the plural and vice versa, unless the context otherwise requires.

	
            3.
 	
            Administration of the Plan
 

3.1       The Plan shall be administered by the Board with the assistance of the Compensation Committee and the chief executive officer as provided herein.

3.2       The members of the Compensation Committee shall be appointed from time to time by, and serve at the pleasure of, the Board.  A majority of the Compensation Committee shall constitute a quorum thereof.  Acts approved in writing by all members of the Compensation Committee shall constitute valid acts of the Compensation Committee as if taken at a meeting at which a quorum was present.

3.3       The chief executive officer of the Company shall periodically make recommendations to the Compensation Committee as to the grant of Options.

3.4       The Compensation Committee shall, on at least an annual basis, make recommendations to the Board as to the grant of Options.

3.5       The Board may wait until such time as the financial statements of the preceding fiscal year are approved by the Board before making any determination regarding the grant of Options.

3.6       In addition to the powers granted to the Board under the Plan and subject to the terms of the Plan, the Board shall have full and complete authority to interpret the Plan, to prescribe such rules and regulations as it deems necessary for the proper administration of the Plan and to make such determinations and to take such actions in connection therewith as it deems necessary or advisable.  Any such interpretation, rule, determination or other act of the Board shall be conclusively binding upon all persons.

3.7       The Board may authorize one or more officers of the Company to execute and deliver and to receive documents on behalf of the Company.

	
            4.
 	
            Shares Subject to the Plan
 

4.1       The maximum aggregate number of Shares which may be issued under the Plan shall not exceed 11,058,350 Shares, subject to the reloading permitted under section 4.4 and to adjustments as provided in Section 10 hereof. 

4.2       The total number of Shares that may be reserved for issuance to any one Optionee pursuant to Options shall not exceed 1% of the Shares of the Company outstanding on a non-diluted basis on the Grant Date of the Options. The total number of Shares that may be reserved for issuance to all non-executive directors pursuant to Options shall not exceed 0.5% of the Shares of the Company outstanding on a non-diluted basis on the Grant Date of the Options.  Notwithstanding section 5.1, in determining those non-executive directors entitled to grants of options and the number of options to be granted to non-executive directors, the Board shall not discriminate against any particular non-executive director and shall make such determinations in 

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accordance with its duties to act honestly and in good faith with a view to the best interest of the Company.

	
            4.3
 	
            Anything in this Plan to the contrary notwithstanding, 
 

	
             
 	
            (a)
 	
            the maximum number of Shares issued and issuable pursuant to Options granted under the Plan to Eligible Persons, together with the number of Shares issued and issuable to any eligible participants under the Company’s Employees, Consultants & Advisors Amended and Restated Incentive Stock Option Plan and any other previously established or proposed share compensation arrangements shall not exceed 9% of the Shares outstanding on a non-diluted basis at the Grant Date of the Options; and
 

	
             
 	
            (b)
 	
            the maximum number of Shares issued and issuable pursuant to Options granted under the Plan to Eligible Persons together with the number of Shares issued and issuable to any Eligible Persons under any other previously established or proposed share compensation arrangements, shall not exceed 4% of the Shares outstanding on a non-diluted basis at the Grant Date of the Options.
 

Any entitlement to acquire Shares granted pursuant to the Plan or any other options prior to the grantee becoming an Eligible Person shall be excluded for the purpose of the limits set out in paragraph (b) above.

4.4       Options may be granted in respect of authorized and unissued Shares. Shares in respect of which Options have expired, were exercised, cancelled or otherwise terminated for any reason shall be available for subsequent Options under the Plan.  No fractional Shares may be purchased or issued under the Plan.

	
            5.
 	
            Grants of Options
 

5.1       Subject to the provisions of the Plan, the Board shall, in its sole discretion and from time to time, determine those Eligible Persons to whom Options shall be granted and the date on which such Options are to be granted (the “Grant Date”).  The Board shall also determine, in its sole discretion, in connection with each grant of Options:

	
             
 	
            (a)
 	
            the number of Options to be granted;
 

	
             
 	
            (b)
 	
            the Option Price applicable to each Option, provided that the Option Price shall not be less than the Market Value per Share on the Grant Date except as otherwise provided under the Addendum; and
 

	
             
 	
            (c)
 	
            the other terms and conditions (which need not be identical and which, without limitation, may include non-competition provisions) of all Options covered by any grant.
 

	
             
 	
            6.
 	
            Eligibility, Vesting and Terms of Options
 

	
            6.1
 	
            Options may be granted to Eligible Persons only.
 

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6.2       Subject to the adjustments provided for in Section 10 hereof, each Option shall entitle the Optionee to purchase one Share.

6.3       Subject to the provisions of the Addendum, the option period (the “Option Period”) of each Option commences on the Grant Date and expires no later than at 4:30 p.m. Vancouver time on the tenth anniversary of the Grant Date.

6.4       Without restricting the authority of the Board in respect of the terms of Options to be granted hereunder, the Board may at its discretion, in respect of any such Option, provide that the right to exercise such Option will vest in installments over the life of the Option, with the Option being fully-exercisable only when such required time period or periods have elapsed, and in connection therewith determine the terms under which vesting of the Options may be accelerated.  Pursuant to the Company’s Compensation Policy for non-executive directors, at the discretion of the Board non-executive directors may be granted 100,000  fully vested Options upon initial election to the Board.  All subsequent Options granted to non-executive Directors of the Company are subject to vesting requirements as determined by the Board.

6.5       Subject to Section 8, an Option which is not subject to vesting, may be exercised (in each case to the nearest full Share) at any time during the Option Period.  Subject to Section 8, an Option which is subject to vesting, may once vested, be exercised (in each case to the nearest full Share) at any time during the Option Period.

6.6       An Option is personal to the Optionee and is non-assignable and non-transferrable otherwise than by will or by the laws governing the devolution of property in the event of death of the Optionee.

	
            7.
 	
            Option Agreement
 

7.1       Upon the grant of an Option, the Company and the Optionee shall enter into an option agreement, in a form set out in Appendix A or in such form as approved by the Board, subject to the terms and conditions of the Plan, which agreement shall set out the Optionee’s agreement that the Options are subject to the terms and conditions set forth in the Plan as it may be amended or replaced from time to time, the Grant Date, the name of the Optionee, the Optionee’s position with the Company, the number of Options, the Option Price, the expiry date of the Option Period and such other terms and conditions as the Board may deem appropriate.

	
            8.
 	
            Termination of Employment, Engagement or Directorship
 

8.1       Any Optionee whose employment or directorship with the Company is terminated due to retirement on or after such Optionee’s normal retirement date under the Company’s applicable retirement policy or due to early retirement with the consent of the Board (collectively, “Retirement”) shall have 365 days from the date of such termination to exercise any Option granted hereunder to the extent such Option was exercisable and had vested on such date of termination; provided, however, that no Option shall be exercisable following the expiration of the Option Period applicable thereto.

8.2       Any Optionee whose employment or directorship with the Company is terminated due to Disability shall have 365 days from the date of such termination to exercise any Option granted 

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hereunder to the extent such Option was exercisable and had vested on the date of such termination; provided, however, that no Option shall be exercisable following the expiration of the Option Period applicable thereto.

8.3       Any Optionee whose employment or directorship with the Company is terminated at any time in the six months following a change of control of the Company (as hereinafter defined) shall have 180 days from the date of such termination to exercise any Option granted hereunder to the extent such Option was exercisable and had vested on the date of such termination; provided, however, that no Option shall be exercisable following the expiration of the Option Period applicable thereto.  For the purposes of this Subsection 8.3, “change of control” shall mean the acquisition by a person, or combination of persons acting in concert, of a sufficient number of the voting rights attached to the outstanding voting securities of the Company at the time of such acquisition, to affect materially the control of the Company.

8.4       In the event of the death of an Optionee, either while in the employment or while a director of the Company, the Optionee’s estate may, within 365 days from the date of the Optionee’s death, exercise any Option granted hereunder to the extent such Option was exercisable and had vested on the date of the Optionee’s death; provided, however, that no Option shall be exercisable following the expiration of the Option Period applicable thereto.  The Optionee’s estate shall include only the executors or administrators of such estate and persons who have acquired the right to exercise such Option directly from the Optionee by bequest or inheritance.

8.5       In the event an Optionee’s employment or directorship terminates for any reason other than death, Disability, Retirement, cause or in the circumstances described in Subsection 8.3 hereof, the Optionee may exercise any Option granted hereunder to the extent such Option was exercisable and had vested on the date of termination no later than thirty (30) days after such termination or such later date within the Option Period first established by the Board for such Option as the Board may fix.  In the event an Optionee’s employment or directorship is terminated for cause, each Option held by the Optionee that has not been effectively exercised prior to such termination shall lapse and become null and void immediately upon such termination.

8.6       The Board may also in its sole discretion increase the periods permitted to exercise all or any of the Options covered by any Grant following a termination of employment or directorship as provided in Subsections 8.1, 8.2, 8.3, 8.4 or 8.5 above, if allowable under applicable law; provided, however, that in no event shall any Option be exercisable following the expiration of the Option Period applicable thereto.

8.7       The Plan shall not confer upon any Optionee any right with respect to a continuation of employment or directorship of, the Company nor shall it interfere in any way with the right of the Company to terminate any Optionee’s employment at any time.

8.8       For the purposes of Section 8, termination in the case of officers is determined to be the last day of active employment with the Company or its Affiliate, as the case may be, regardless of any salary continuance or notice period to the Company.

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            9.
 	
            Exercise of Options
 

9.1       Subject to the provisions of the Plan, an Option may be exercised from time to time by delivery to the Company at its head office of a written notice of exercise addressed to the Secretary of the Company specifying the number of Shares with respect to which the Option is being exercised, together with the appropriate form of payment (to be determined by the Company) for the aggregate of the Option Prices to be paid for the Shares to be purchased.  Certificates for such Shares shall be issued and delivered to the Optionee within a reasonable time following the receipt of such notice and payment. 

	
            10.
 	
            Adjustment on Alteration of Share Capital
 

10.1     In the event of a subdivision, consolidation or reclassification of outstanding Shares or other capital adjustment, or the payment of a stock dividend thereon, the number of Shares reserved or authorized to be reserved under the Plan, the number of Shares receivable on the exercise of an Option and the Option Price therefor shall be increased or reduced proportionately and such other adjustments shall be made as may be deemed necessary or equitable by the Board.

10.2     If the Company amalgamates, consolidates with or merges with or into another body corporate, whether by way of amalgamation, statutory arrangement or otherwise (the right to do so being hereby expressly reserved), any Share receivable on the exercise of an Option shall be converted into the securities, property or cash which the Optionee would have received upon such amalgamation, consolidation or merger if the Optionee had exercised his or her Option immediately prior to the effective date of such amalgamation, consolidation or merger and the Option Price shall be adjusted appropriately by the Board and such adjustment shall be binding for all purposes of the Plan.

10.3     In the event of a change in the Company’s currently authorized Shares which is limited to a change in the designation thereof, the shares resulting from any such change shall be deemed to be Shares within the meaning of the Plan.

10.4     In the event of any other change affecting the Shares, such adjustment, if any, shall be made as may be deemed equitable by the Board to properly reflect such event.

10.5     No adjustment provided in this Section 10 shall require the Company to issue a fractional Share and the total adjustment with respect to each Option shall be limited accordingly.

10.6     If, at any time when an Option granted under the Plan remains unexercised, an offer to purchase all of the Shares of the Company is made by a third party, the Company shall use its best efforts to bring such offer to the attention of the Optionee as soon as practicable and the Company may, at its option, require the acceleration of the time for the exercise of the Options granted under the Plan and of the time for the fulfillment of any conditions or restrictions on such exercise (including without limitation, vesting requirements).

10.7     Notwithstanding any other provision herein, if because of a proposed merger, amalgamation or other corporate arrangement or reorganization, the exchange or replacement of shares in the Company of those in another company is imminent, the Board may, in a fair and 

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equitable manner, determine the manner in which all unexercised option rights granted under the Plan shall be treated including, for example, requiring the acceleration of the time for the exercise of such rights by the Optionees and of the time for the fulfillment of any conditions or restrictions on such exercise (including without limitation, vesting requirements). All determinations of the Board under this paragraph 10.7 shall be binding for all purposes of the Plan.

	
            11.
 	
            Regulatory Approval
 

11.1     Notwithstanding any of the provisions contained in the Plan or any Option, the Company’s obligation to grant Options and issue Shares and to issue and deliver certificates for such securities to an Optionee pursuant to the exercise of an Option shall be subject to:

	
             
 	
            (a)
 	
            compliance with all applicable laws, regulations, rules, orders of governmental or regulatory authorities in Canada and the United States (“Securities Regulators”);
 

	
             
 	
            (b)
 	
            compliance with the requirements of the Exchange; and
 

	
             
 	
            (c)
 	
            receipt from the Optionee of such covenants, agreements, representations and undertakings, including as to future dealings in such Shares, as the Company determines to be necessary or advisable in order to safeguard against the violation of the securities laws of any jurisdiction.
 

11.2     The Company shall in no event be obligated to take any action in order to cause the issuance and delivery of such certificates to comply with any laws, regulations, rules, orders or requirements.

11.3     Notwithstanding any provisions contained in the Plan or any Option, if any amendment, modification or termination to the provisions hereof or any Option made pursuant hereto are required by any Securities Regulators, a stock exchange or a market as a condition of approval to a distribution to the public of any Shares or to obtain a listing or quotation of any Shares, the Board is authorized to make such amendments and thereupon the terms of the Plan, any Options, including any option agreement made pursuant hereto, shall be deemed to be amended accordingly without requiring the consent or agreement of any Optionee or shareholder approval.

	
            12.
 	
            Miscellaneous
 

12.1     An Optionee entitled to Shares as a result of the exercise of an Option shall not be deemed for any purpose to be, or to have rights as, a shareholder of the Company by such exercise, except to the extent Shares are issued therefor and then only from the date such Shares are issued.  No adjustment shall be made for dividends or distributions or other rights which the record date is prior to the date such Shares are issued pursuant to the exercise of Options.

12.2     The Company may require an Optionee, as a condition of exercise of an Option, to pay or reimburse any taxes which are required to be withheld in connection with the exercise of such Option.

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            13.
 	
            Effective Date, Amendment and Termination
 

13.1     The Plan is effective as of April 30, 2003. The Plan has been amended and restated as of April 28, 2005 and such amendments are effective as of April 28, 2005.

13.2     The Board may, subject where required to Securities Regulators and/or Exchange approval, from time to time amend, suspend or terminate the Plan in whole or in part. Without limiting the foregoing, the Board is specifically authorized to amend or revise the terms of the Plan without obtaining shareholder approval in the following circumstances:

	
             
 	
            (a)
 	
            to change the vesting provisions;
 

	
             
 	
            (b)
 	
            to change the termination provisions of the Options or Plan which does not extend beyond the original expiry date;
 

	
             
 	
            (c)
 	
            to amend the eligibility requirements of Eligible Persons which would have the potential of broadening or increasing insider participation;
 

	
             
 	
            (d)
 	
            to add cashless exercise feature, payable in cash or securities, whether or not the feature provides for a full deduction of the number of underlying Shares from the reserved Shares; 
 

	
             
 	
            (e)
 	
            to add a deferred or restricted share unit or any other provision which results in Eligible Persons receiving securities while no cash consideration is received by the Company; and 
 

	
             
 	
            (f)
 	
            other amendments of a housekeeping nature.
 

Except as otherwise permitted by the TSX, amendments to the number of Shares issuable under the Plan (including an increase to a fixed maximum number of Shares or a fixed maximum percentage of Shares, as the case may be, or a change from a fixed maximum number to a fixed maximum percentage) may not be made without obtaining approval of the Shareholders in accordance with TSX requirements.  For greater certainty, an increase does not include reloading after exercise under a fixed maximum number or percentage provided the fixed maximum is not increased and the Plan permits reloading.

13.3     No action by the Board to terminate the Plan pursuant to this Section 13 shall affect any Options granted hereunder which became effective pursuant to the Plan prior to such action.

Except as set out below, the Board may amend, modify or terminate any outstanding Option, including, but not limited to, substituting another award of the same or of a different type or changing the date of exercise; provided, however that, the Optionee’s consent to such action shall be required unless the Board determines that the action, when taken with any related action, would not materially and adversely affect the Optionee or is made pursuant to Section 11 hereof.  

The exercise price of any outstanding Option may not be reduced unless Shareholder approval is obtained by way of a resolution passed by a majority of the votes cast by the Shareholders at a meeting of Shareholders.  The Option Price of any outstanding Option granted may not be 

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reduced and the original Option Period may not be extended to the benefit of Insiders unless disinterested Shareholder approval is obtained in accordance with TSX requirements.

13.4     Notwithstanding any provision contained in the Plan, effective April 28, 2005, the Plan must be reconfirmed, every three years, by a resolution passed by a majority of the votes cast by Shareholders at a meeting of Shareholders and if the Plan is not reconfirmed by the Shareholders as required by this provision, no further grants of options may be made under the Plan.  

ADDENDUM

 

TO INCENTIVE STOCK OPTION PLAN

 

OF ELDORADO GOLD CORPORATION

 

OFFICERS & DIRECTORS

 

	
            1.
 	
            Application of Plan and Addendum
 

1.1       As determined from time to time by the Board, this Addendum shall apply to any grant of Options made on or before April 30, 2003 to any of the following persons:

Joseph Conway

Paul Curtis

Wayne Lenton

Hugh Morris

Dawn Moss

Earl Price

Paul N. Wright

1.2       The Plan shall apply to a grant of Options to which this Addendum applies except insofar as the Plan is inconsistent with this Addendum.  The Plan and this Addendum shall be read and construed as one document for the purposes of a grant of Options to which this Addendum applies.

	
            2.
 	
            Option Price and Option Period
 

2.1       Notwithstanding paragraph 5.1(b) and Subsection 6.3 of the Plan, the Option Price, Option Period and other terms applicable to Options granted to each person identified in Subsection 1.1 above shall be as set out below:

 

	
            Name
  	
            Number
  of Options
  	
             
  	
            Expiry  Date(1)
  	
             
  	
            Option  Price 
  	
             
  	
            Vesting
  
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            Wayne Lenton
 	
            20,000
 	
             
 	
            29-May-06
 	
             
 	
            $0.51
 	
             
 	
            fully vested
 
	
             
 	
            20,000
 	
             
 	
            06-Dec-06
 	
             
 	
            $0.26
 	
             
 	
            fully vested
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            Hugh Morris 
 	
            30,000
 	
             
 	
            29-May-06
 	
             
 	
            $0.51
 	
             
 	
            fully vested
 
	
             
 	
            100,000
 	
             
 	
            25-Feb-07
 	
             
 	
            $0.70
 	
             
 	
            fully vested
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
            170,000
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
									

            

	
            (1)
 	
            Options shall expire at 4:30 p.m., Vancouver time, on the Expiry Date of the Options.
 

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            3.
 	
            Interpretation
 

3.1       Unless otherwise indicated, all defined terms shall have the respective meanings attributed thereto in the Plan of the Company as amended and/or restated from time to time.

APPENDIX A

OFFICERS & DIRECTORS INCENTIVE STOCK OPTION PLAN

OF ELDORADO GOLD COMPANY

(“the Company”)

 

OPTION AGREEMENT

 

This Option Agreement is entered into between the Company and the Optionee named below pursuant to the Company’s Incentive Stock Option Plan (the “Plan”) a copy of which is attached hereto, and confirms the following:

 

	
             
 	
            Grant Date:
 	
             
 
	
             
 
	
             
 	
            Optionee:
 	
             
 
	
             
 
	
             
 	
            Optionee’s Position with the Company:
 	
             
 
	
             
 
	
             
 	
            Number of Options:
 	
             
 
	
             
 
	
             
 	
            Option Price
 ($ per Share):
 	
            
 $
 
	
             
 
	
             
 	
            Expiry Date of Option Period:
 	
             
 

Each Option that has vested entitles the Optionee to purchase one Share at any time up to 4:30 p.m. Vancouver time on the expiry date of the Option Period. 

This Option Agreement is subject to the terms and conditions set out in the Plan, as amended or replaced from time to time.  In the case of any inconsistency between this Option Agreement and the Plan, the Plan shall govern.

Unless otherwise indicated, all defined terms shall have the respective meanings attributed thereto in the Plan.

By signing this agreement, the Optionee acknowledges that he, she, or his or her authorized representative has read and understands the Plan.

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IN WITNESS WHEREOF the parties hereto have executed this Option Agreement as of the           day of                       ,            .

 

 

	
             
 	
             
 	
            ELDORADO GOLD CORPORATION
 
	
             
 	
             
 	
             
 	
             

 

Per:
 	
             
 
	
            Signature of Optionee
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             

Per:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatoryc50094_ex10-45 .pdf -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

EXHIBIT 10.45

SETTLEMENT AGREEMENT AND RELEASE 

     This Settlement Agreement and Release (the “Agreement”) is entered into between John R. Desjardins, on behalf of himself and his present, former and future heirs, agents, executors, employees, attorneys, and any business entities which he owns or controls (collectively referred to herein as “Employee”), and Whitehall Jewellers, Inc., its present, former and future parents, subsidiaries, affiliates, divisions, predecessors, successors, and assigns, and their respective present, former and future officers, directors, shareholders, partners, joint ventures, insurers, benefit plans, plan fiduciaries and plan administrators, employees, agents and representatives (collectively referred to herein as “Whitehall”). 

     WHEREAS, Employee and Whitehall are parties to that certain Severance Agreement dated May 7, 1996, as modified by a letter agreement dated August 22, 2000 (collectively the “Severance Agreement”); 

     WHEREAS, Employee and Whitehall have terminated their employment relationship; 

     WHEREAS, Employee has filed an action in the Circuit Court of Cook County entitled John R. Desjardins v. Whitehall Jewellers, Inc. f/k/a Marks Bros. Jewelers, Inc., Case No. 2006 L 012802 (hereinafter “the Complaint”); 

     NOW THEREFORE, in consideration of the covenants contained herein, the parties agree as follows: 

1. Waiver and General Release:

     A. In consideration of the payments and promises set forth herein, Employee does hereby fully, finally and forever waive and unconditionally release, acquit and discharge Whitehall from any and all claims, obligations, or causes of action whatsoever, whether currently known or unknown and whether currently suspected or unsuspected, in any way arising out of or relating to any act or omission occurring on or prior to the date Employee executes this Agreement including, but not limited to all claims regarding Employee’s employment with or termination of employment with Whitehall, all claims regarding the Severance Agreement or claims for wrongful discharge, all claims raised or that could have been raised in the Complaint; attorneys’ fees and costs, equitable or injunctive relief, compensatory or punitive damages; breach of contract; tort claims, employment discrim
ination, harassment or retaliation including, but not limited to claims arising under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1001, et seq., the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq., the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e, et seq., as amended, the Americans With Disabilities Act, 42 U.S.C. §12101, et seq., the Age Discrimination in Employment Act, a
s amended by the Older Workers Benefit Protection Act, 29 U.S.C. §621, et seq., the Fair Labor Standards Act, 29 U.S.C. §201 et seq., the Rehabilitation Act of 1973, 29 U.S.C. §701 et seq., Executive Orders 11246 or 11141 or the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §2101 et seq., the Illinois Human Rights Act, or any other statutory or common law causes of action. To the extent permitted by law, Employee represents and warr
ants that, with the exception of the Complaint, Employee has not and will not institute any legal proceeding relating to or arising out of any of the claims released in this Agreement and agrees to withdraw and waive any right to recovery in the event any such legal proceeding is instituted. 

1

     B. Notwithstanding the generality of the foregoing, Employee does not waive and/or release any claims to vested benefits under the Whitehall Jewellers, Inc. 1997 Long-Term Incentive Plan, the Whitehall Jewellers, Inc. (f/k/a Mark Bros. Jewelers, Inc.) Incentive Stock Option Agreement for Employees, the Mark Bros. Jewelers, Inc. Employee Stock Ownership Plan, or the Whitehall Jewellers, Inc. 401 (k) Plan (collectively referred to herein as “the Plans”) to which Employee may be entitled under the written terms of the Plans as they existed on the Termination Date and as a result of Employee’s employment by Whitehall through the Termination Date (as defined herein) in accordance with the terms and conditions of the Plans, but this Agreement does release and extinguish all claims for additional benefits or compensation that relate to or arise out of the Plans, Se
verance Agreement or Employee’s employment with Whitehall. 

     C. Notwithstanding paragraphs 1.A and 1.B above, Employee does not waive and/or release any claims arising under this Agreement or arising under the Promissory Note attached hereto and incorporated herein as Exhibit A, the Indemnity Agreement attached hereto and incorporated herein as Exhibit B or the Subordination Agreement attached hereto and incorporated herein as Exhibit C being executed in order to effectuate the terms of this Agreement, even if said documents are executed prior to or of even date herewith. Employee specifically reserves the right to file any documents necessary to protect or preserve his rights under said documents or the agreements represented by documents, including, but not limited to, the filing of litigation to enforce his rights.

     D. Following the execution of this Agreement, Employee will move to voluntarily dismiss the Complaint with prejudice and without costs to either side, but subject to the Circuit Court retaining jurisdiction to enforce the terms of the Settlement Agreement and the Promissory Note, Indemnification Agreement and Subordination Agreement referred to herein. 

     E. In consideration of the promises set forth herein, Whitehall does hereby fully, finally and forever waive and unconditionally release, acquit and discharge Employee from any and all claims, obligations or causes of action whatsoever, whether currently known or unknown, and whether currently suspected or unsuspected, which in any way arise out of or relate to any act or omission occurring on or prior to the date Employee executes this Agreement, including, but not limited to all claims regarding Employee’s employment with Whitehall (whether or not arising under the Severance Agreement). Whitehall warrants and represents that Whitehall has not filed or caused to be filed and will not institute any legal actions in any forum whatsoever against Employee, or any charges or complaints against Employee with any municipal, state or federal agency charged with the enforcement of any law which actions relate to or arise out of the claims re
leased in this Agreement. Whitehall further agrees to withdraw and waive any right to recovery in the event any such legal proceeding is instituted.

2. Employee’s Termination Date: Employee’s termination is effective as of the close of business on October 5, 2006, for all purposes (the “Termination Date”). Employee acknowledges that Employee has been paid Employee’s base salary through the Termination Date. Except for those payments expressly set forth in this Agreement, employee represents and warrants that Employee has been paid in full for all hours worked and all services performed on behalf of Whitehall. 

3. Payments to Employee:

     A. Severance Payments. Whitehall agrees to pay Employee a severance benefit equal to One Million One Hundred Thirty-Seven Thousand and Twenty Five Dollars 

2

($1,137,625.00) (less applicable tax withholdings) to be paid as follows: (1) an initial payment of Six Hundred Fifty Thousand Dollars (less applicable tax withholdings) will be made (in the form of a cashier’s, bank or certified check) in open court simultaneous with the dismissal of the Complaint by the assigned judge provided, that, the seven (7) day revocation period has expired following the execution of this Agreement, and (2) the remaining balance of $487,625.00 will be paid in twenty-four (24) monthly installments , plus interest on the outstanding balance computed at the rate of 6% interest per annum with the interest commencing on November 6, 2006 (less applicable taxes) in accordance with the amortization schedule attached to the Promissory Note as referenced in Section 3D below. Each installment payment under the Promissory Note shall be made less applicable tax withholdings, commencing on the same day of the next month following the initial payment,
and payable on the same day of each month thereafter. (By way of example, if the initial payment is made on June 23, 2007, the first installment payment will by made on July 23, 2007 with each future installment payment to be made on the 23rd day of each month thereafter until all twenty-four payments have been made.) The initial payment referenced in clause (1) above shall be sent to Mayer Brown Rowe & Maw, LLP (“Mayer Brown”) in advance of the hearing for the dismissal of the Complaint to be held in escrow by Mayer Brown and delivered in open court simultaneous with the dismissal of the Complaint. 

     B. Insurance/Benefits Payment. 

	1.      	
As of the Termination Date, life insurance benefits are terminated. Employee shall be eligible for reimbursement of all medical expenses incurred through December 31, 2006. Whitehall shall make a payment of $30,000 (less applicable tax withholdings) in lieu of Exec-U-Care coverage, to be paid in open court simultaneous with the dismissal of the Complaint by the assigned judge provided that the seven (7) day revocation period has expired following the execution of this Agreement. These payments are in addition to Company’s obligations to pay Exec-U-Care expenses
associated with all costs incurred by Employee and his dependents through December 31, 2006 and
in addition to employee’s regular medical coverage. The reimbursement payment referenced in
this Section 3.B.1 shall be sent to Mayer Brown in advance of the hearing for the dismissal of the
Complaint to be held in escrow by Mayer Brown and delivered in open court simultaneous with the
dismissal of the Complaint.

	 
	2.      	
Whitehall will reimburse Employee $15,000
(subject to receipt of documentation evidencing such expense has been paid by Employee)) for the cost
of his previously purchased life insurance policy to be paid in open court simultaneous with the
dismissal of the Complaint by the assigned judge provided that the seven (7) day revocation period
has expired following the execution of this Agreement. ) In connection with this payment,
Whitehall will issue an IRS Form 1090. Employee agrees to accept full responsibility for any
tax liability regarding taxes or penalty and agrees to defend, indemnify and hold Whitehall harmless
against any and all liability of any such tax, interest, charge, or penalty assessed against Whitehall.
The reimbursement payment referenced in this Section 3.B.2 shall be sent to Mayer Brown in advance of
the hearing for the dismissal of the Complaint to be held in escrow by Mayer Brown and delivered in
open court simultaneous with the dismissal of the Complaint.

	 

3

    C. Payment for Professional Fees. Whitehall agrees to pay $50,000 toward employee’s attorney’s fees and costs associated with Employee’s Severance Agreement in open court simultaneous with the dismissal of the Complaint by the assigned judge provided that the seven (7) day revocation period has expired following the execution of this Agreement. The check will be made payable to Reed Smith LLP, in the amount of $50,000.00. The payment referenced in this Section 3.C shall be sent to Mayer Brown in advance of the hearing for the dismissal of the Complaint to be held in escrow by Mayer Brown and delivered in open court simultaneous with the dismissal of the Complaint.

     D. Supporting Documents. Regarding the Severance Payments reflected in Section 3(a) above, Whitehall has executed a Promissory Note in addition to obtaining an Indemnification Agreement and a Subordination Agreement which are attached hereto and incorporated herein. Employee is executing this Settlement Agreement in reliance on the terms set forth in this Paragraph 3D in addition to other terms of this Settlement Agreement.

4. Benefits Continuation: 

     A. Whitehall agrees that any qualified and properly documented medical expenses eligible for reimbursement by Whitehall under the Company’s prior Exec-U-Care Program and that were incurred by Employee (or family members covered through Employee) on or prior to the period ending December 31, 2006, shall be covered and reimbursed to the extent not already paid. Employee expressly agrees and acknowledges that Exec-U-Care coverage or any medical expenses incurred after December 31, 2006 will not be eligible for reimbursement under Exec-U-Care.

     B. Employee’s group health insurance, dental insurance and long-term disability insurance with respect to Employee and his dependents will continue at Whitehall’s expense for a period of thirty (30) months from the Termination Date. Following the expiration of the thirty (30) month period, Employee shall be entitled to COBRA continuation coverage under Whitehall’s group health insurance plan, provided he elects to continue such coverage at his expense in a timely manner.. 

5. Vacation Pay: Employee expressly agrees and acknowledges that he has received $15,963.86 less applicable tax withholdings for unused vacation benefits. Whitehall agrees to pay an additional $3,519.24 less applicable tax withholdings for unused vacation benefits with such payment to be made in open court simultaneous with the dismissal of the Complaint by the assigned judge provided that the seven (7) day revocation period has expired following the execution of this Agreement. Employee expressly agrees and acknowledges that upon receipt of the $3,519.24, no other payments with respect to vacation shall be due and owing to Employee. The payment for vacation referenced in this Section 5 shall be sent to Mayer Brown in advance of the hearing for the dismissal of the Complaint to be held in escrow by Mayer Brown and delivered in open court simultaneous with the dismi
ssal of the Complaint.

6. Expense Reimbursement: Employee expressly agrees and acknowledges that he has been reimbursed for all business expenses actually incurred by Employee during Employee’s employment with Whitehall prior to Termination Date, and Whitehall shall have no obligation to reimburse Employee for any other business expenses. 

7. Other Payments or Benefits: Other than as set forth herein, Employee will not receive compensation, payments or benefits of any kind from Whitehall, and Employee expressly 

4

acknowledges and agrees that Employee is not entitled to any other compensation, payment or benefit from Whitehall, except as otherwise provided herein. All prior written and oral understandings or agreements are released and terminated.

8. Return of Whitehall Property: Employee represents and warrants that Employee has returned to Whitehall all company property in Employee’s possession, custody, or control, including, but not limited to computers, laptops, cell phones, fax machines and credit cards. Employee further represents and warrants that Employee will not retain any copies of such property. Upon execution of this Agreement by Employee, Whitehall shall collect and produce to Employee on CD-ROM, to the extent it is reasonably technically possible to do so, a copy of each and every e-mail currently contained in Employee’s personal folders on Whitehall’s e-mail system. 

9. Confidentiality of this Agreement: Employee and Whitehall agree not to disclose the terms of this Agreement to any person other than Employee’s spouse, attorneys, or accountants as necessary for preparation of income tax returns and other tax related matters, and officers and directors of Whitehall who have a business need to know its terms, as may be necessary to enforce the parties’ rights under the Agreement, or as may be otherwise required by law or truthful response to proper subpoena or other lawful process. The parties further agree that if any of the terms of this Agreement are so disclosed to persons permitted under this paragraph, Employee will direct that person not to disclose the terms of this Agreement to any other person unless said disclosure is necessary to enforce the parties’ rights under this Agreement.

10. Restrictive Covenants: 

     A. During the period that commences on the Termination Date and ends one year later, Employee shall not disclose to any person or entity any nonpublic information that Employee has obtained, maintained, or acquired during the period of Employee’s employment with Whitehall concerning Whitehall, its business and/or financial activities or practices, its marketing or business-development plans or prospective customers, or its employees or applicants for employment.

     B. Intentionally Omitted. 

     C. Employee will not issue any communication, written or otherwise, that disparages, criticizes or otherwise reflects adversely or encourages any adverse action other than as permitted by this Agreement against Whitehall or the employee or the individual or entities that are owners, stockholders, agents, directors, officers, employees, representatives, divisions, parents, subsidiaries, predecessors, successors or assigns of Whitehall, except if testifying under oath pursuant to subpoena or otherwise. Likewise, Whitehall management, directors and officers will not issue any communication, written or otherwise, that disparages, criticizes or otherwise reflects adversely or encourages any adverse action against Employee. 

11. Non-Admission: The parties agree that this Agreement is not intended to and does not constitute any admission of fault, wrongdoing, responsibility or liability on the part of Whitehall or Employee. No final finding or judgments have been made so neither party claims nor will claim to be a prevailing party to any degree or extent.

12. Acknowledgments: Employee hereby acknowledges that (i) this Agreement is written in a manner understood by Employee; (ii) this Agreement refers to and specifically waives claims under the Age Discrimination in Employment Act, as amended; (iii) 

5

Employee has received valuable consideration in addition to any amounts to which Employee is already entitled in exchange for the waiver and release of claims included in this Agreement; (iv) Employee has been advised by Whitehall to consult with an attorney prior to executing this Agreement; (v) Employee may take up to 21 days from receipt of this Agreement to consider whether to sign the Agreement; and (vi) Employee shall have seven (7) days following execution to revoke this Agreement (in which case this Agreement shall be null and void and neither Employee nor Whitehall shall have any obligations under it), and the Agreement shall not take effect until those seven days have expired (“Effective Date”). In order for a revocation of the Agreement by Employee to be effective, a written notice of revocation must be sent to Whitehall at 125 S. Wacker Drive, Suite 2600, Chicago, IL 60606, Attention: General Counsel and must be received by Whitehall within th
e seven (7) day revocation period.

13. Cooperation: Employee agrees that if requested by Whitehall, Employee will assist and cooperate with Whitehall in connection with any matter that relates to services performed by Employee, or pertinent knowledge possessed by the Employee for period of twenty-four (24) months following the Termination Date. Such assistance and cooperation to be reasonable in scope and duration and consistent with Employee’s employment with the Company and shall not interfere with Employee’s business or job responsibilities. In such event, Employee shall be reimbursed for his reasonable time at the rate of $200.00 per hour. The parties agree to perform any steps necessary or execute any documentation necessary to effectuate this Agreement 

14. Performance by the Parties. The parties agree and acknowledge that their promises and obligations as set forth in this Agreement are material terms with which each party must strictly comply. Employee is executing this Settlement Agreement in reliance on the terms of Paragraph 3D and the other terms of this Agreement.

15. Applicable Law. The provisions of this Agreement shall be governed by the laws of the State of Illinois without regard for its conflict of laws provisions. The parties waive any objection to venue and personal jurisdiction in the courts located in Cook County, Illinois. THE PARTIES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP CONTEMPLATED THEREBY. In the event any legal measures become necessary to enforce the parties’ rights under this Agreement or litigation that arises out of or is related to this Agreement, and Employee is determined to be the prevailing party after a judgment by a court of competent jurisdiction, Employee shall be entitled to recover, in addition to any and all other remedies, his reasonable attorney's fees and expenses incurred in
 such litigation. 

16. Expenses. Should Employee initiate litigation regarding this Agreement involving the failure or refusal of Whitehall to satisfy its payment obligations arising hereunder, Whitehall shall reimburse Employee, on a current basis upon receipt of itemized attorney invoices, for all reasonable legal fees and expenses, if any, incurred by Employee in connection with such litigation; provided, however, that in the event the resolution of any such litigation includes a finding denying, in total, Employee's claims in such litigation, Employee shall be required to reimburse the Company, over a period of 12 months from the date of such resolution, for all sums advanced to Employee under this paragraph. 

16. Entire Agreement: This Agreement and documentation attached hereto and incorporated hereto as Exhibits sets forth the entire Agreement between the parties and supersedes and replaces all prior representations, communications, agreements and understanding between the parties 

6

pertaining to the subject matter hereof. If any portion of this Agreement is held to be invalid or unenforceable, such portion may be excised or modified so it may become valid and enforceable and, in any event, the rest of this Agreement shall not be affected and shall be given full force and effect; except, if paragraph 1 or attached documentation exhibits which are parts of this Agreement and contain material terms are held to be invalid or unenforceable, the entire Agreement will be null and void and all consideration returned.

If Employee signs this Agreement less than 21 days after he receives it from Whitehall, he confirms that he does so voluntarily and without any pressure or coercion from anyone at Whitehall. 

	AGREED AND ACCEPTED: 	  	  
	JOHN R. DESJARDINS 	  	WHITEHALL JEWELLERS, INC. 
	/s/
       John Desjardins  	  	By: /s/
       Edward A. Dayoob 
	  	  	Title: CEO 
	Dated: 6/15/07 	  	Dated: 

7

PROMISSORY NOTE 

	$487,625 	 	June 15,
          2007 

 FOR VALUE RECEIVED, Whitehall Jewellers,
    Inc. (“Payor”) hereby unconditionally promises to pay to the order
    of John R. Desjardins,
    (“Payee”), the principal sum of Four Hundred Eighty- Seven Six
    Hundred and 00/100 Twenty-Five Dollars ($487,625.00) (the “Principal
    Amount”), plus interest thereon at the rate of six percent (6%) per
    annum with interest starting on November 6, 2006, in accordance with the
    terms of this Promissory Note (the “Note”).

 Payor will pay the Principal Amount
    plus accrued interest hereof in twenty-four (24) installments as set forth
    in the amortization schedule attached hereto and incorporated herein by reference.
    Each installment payment shall be made less applicable tax withholdings,
    commencing on the same day of the next month following the initial payment
    pursuant to the terms of the Separation Agreement and Release incorporated
    herein by reference, and payable on the same day of each month thereafter.
    (By way of example, if the initial payment is made on June 23, 2007, the
    first installment payment will by made on July 23, 2007 with each future
      installment payment to be made on the 23rd day
      of each month thereafter until all twenty-four payments have been made.) 

 This Note shall bear interest from
    and after November 6, 2006 on the unpaid Principal Amount hereof from time
    to time outstanding at the aforestated Rate which shall accrue each month
    and be payable in arrears together with each installment of principal. Interest
    shall be calculated on the basis of a three hundred and sixty five (365)
    day year and actual days elapsed. 

 Notwithstanding anything to the
    contrary, if any payment (whether principal or interest) due on this Note
    is not received by Payee on or before ten (10) days after such payment is
    due and payable, whether at its stated due date or by acceleration, then
    the rate of interest on this Note shall automatically increase to 18% (the “Default
    Rate”) and will remain at such rate until all amounts then due and payable
    shall have been paid in full. 

 The Payor may upon at least five
    (5) business days prior written notice prepay, without penalty or premium,
    all or any portion of the remaining Principal Amount of the Note plus all
    accrued but unpaid interest.

 Both principal and interest of
    this Note shall be payable in lawful currency of the United States to Payee
    at 55 East Erie, Chicago, IL 60611,
    or at such other place or to such other person as may be designated in writing
    by Payee. 

 This Note shall in all respects
    be subordinate to and junior in priority to any and all indebtedness or obligations
    of Payor which now exists or may hereafter exist under Payor’s Third
    Amended and Restated Revolving Credit Facility dated as of February 20, 2007
    (as amended) and to all modifications, amendments, waivers, consents and
    replacements thereto (the “LaSalle Credit Facility”). Payee’s
    right to payment under this Note shall be senior to the rights to payment
    of PWJ Lending LLC (or its successors or assigns) pursuant to the terms of
    the Subordination Agreement. Additionally, Payee’s right to payment
    under this Note shall be senior to any right of payment of Holtzman Opportunity
    Fund, L.P. (or its successors or assigns) and their respective Affiliates
    (as defined herein) to Payor pursuant to the terms of the Subordination.
    For purposes of this Note, Affiliates is defined as any person that would
    be considered 

 to be an affiliate under Rule 144(a)
    of the Rules and Regulations of the Securities and Exchange Commission, as
    in effect on the date hereof, if the Payor were issuing securities.

 Payor hereby waives, for itself
    and its legal representatives, successors and assigns, presentment, demand
    and protest and notice of presentment, dishonor, notice of intent to accelerate,
    notice of acceleration, protest, default, nonpayment, maturity, release,
    compromise, settlement, extension, waiver or renewal and all other notices,
    in connection with the delivery, acceptance, performance, default or enforcement
    of the payment of this Note. Payor hereby agrees to pay on demand all costs
    of collection and enforcement of this Note (including, without limitation,
    reasonable attorney’s fees and expenses and fees and expenses on appeal
    or in any bankruptcy proceeding) incurred by Payee with respect to this Note.
    Payee shall not assign this Note without the prior written consent of Payor.
    This Note shall be binding upon Payor and shall inure to the benefit of Payee
    and his successors and assigns. 

 No delay or omission on the part
    of Payee in exercising any right under this Note shall operate as a waiver
    of the right or of any other right under this Note. A waiver on any one occasion
    shall not be construed as a bar to or waiver of any right or remedy on any
    future occasion.

 This Note shall be construed and
    enforced in accordance with the laws of the State of Illinois, without regard
    to its provisions on the conflict of laws. Payor hereby consents to the exclusive
    jurisdiction of any Illinois or United States District Court sitting in Cook
    County, Illinois with respect to any action or controversy arising out of
    or in connection with this Note. Payor also waives its right to object to
    such court's jurisdiction or venue in any suit or proceeding arising out
    of or in connection with this Note. 

           Each
    of the following shall constitute an event of default under this Note (an “Event
    of Default”): 

           (i)           the
    failure of Payor to make any installment payment when due hereunder and the
    continuation of such failure for five (5) business days after Payee provides
    Payor written notice of such failure; 

           (ii)          the
    filing of a petition by Payor pursuant to which Payor seeks to avail himself
    of the protection of any federal or state bankruptcy, insolvency or similar
    law; 

           (iii)         the
    appointment of a receiver of or for any part of the property of the Payor; 

           (iii)         the
    initiation of any federal or state bankruptcy or insolvency proceeding against
    Payor which is not dismissed within sixty (60) days; or 

           (iv)         the
    making of a general assignment by Payor for the benefit of its creditors. 

           (v)          Payor
    fails to pay, or defaults in the payment of any principal or interest under
    the Third Amended and Restated Revolving Credit Facility dated as of February
    20, 2007 (the "Facility") within any applicable grace period, if the effect
    of that breach or default is to cause, or to permit the holder or holders
    of indebtedness under the Facility (or a trustee on behalf of such holder
    or holders) to cause the indebtedness of Payor thereunder to become or be
    declared due before its stated maturity (upon the giving or receiving of
    notice, lapse of time, both, or otherwise). 

 Upon the occurrence of an Event
    of Default, Payee may, in Payee’s sole and absolute discretion, accelerate
    this Note by declaring in a written notice to Payor that the then entire
    outstanding principal sum hereof is immediately due and payable. In the event
    that all such sums are not paid within ten (10) business days following receipt
    by Payor of such notice of acceleration, the entire amount accelerated will
    bear interest until paid at the Default Rate.

 No provision of this Note shall
    be modified except by a written instrument executed by Payor and by Payee
    expressly referring to this Note and to the provision modified. In the event
    any provision contained in this Note shall for any reason be deemed invalid,
    illegal or unenforceable in any respect, such provision shall be ineffective,
    but only to the extent of such invalidity, illegality or unenforceability,
    without invalidating the remainder of such provision or any of the remaining
    provisions of this Note. 

 All notices and other communications
    provided for hereunder shall be in writing sent via telefax communication
    or overnight mail. If sent to the Payor, notice shall be delivered to it
    at c/o Whitehall Jewellers,
    Inc., 125 South Wacker Drive, Attention: General Counsel (facsimile: 312.469.5683) with
    a copy to Mayer, Brown, Rowe & Maw,
    LLP, 71 S. Wacker, Chicago, IL 60606, Attention: Jeff Piell, Esq. All
    notices and communications provided for hereunder to the Payee shall be made
    to John R. Desjardins, 55
    East Erie, Chicago, IL 60611 with a
    copy to Reed Smith LLP, 10 South Wacker
    Drive, Chicago, IL 60606,
    Attention: David Bohan, Esq. Any notice,
    request or communication hereunder sent via facsimile shall be deemed to
    have been given when such facsimile is transmitted to the facsimile number
    specified in this Paragraph and confirmation of such successful transmission
    is received. Notice given by overnight mail shall be deemed to have been
    given once it is delivered to the addressee to the address specified in this
    Paragraph. Any party may change the person or address to whom or which the
    notices are to be given hereunder, but any such notice shall be effective
    only when actually received by the party to whom it is addressed. 

 PAYOR AND PAYEE IN ACCEPTING DELIVERY
    OF THIS NOTE, HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE
    RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED
    ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND
    ANY OTHER AGREEMENT SIGNED OR CONTEMPLATED TO BE SIGNED IN CONJUNCTION HEREWITH,
    OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
    WRITTEN) OR ACTIONS OF EITHER PARTY OR THE DIRECTORS, OFFICERS, EMPLOYEES
    OR AGENTS THEREOF. THIS PROVISION IS A MATERIAL INDUCEMENT TO PAYEE TO EXTEND
    CREDIT TO PAYOR. 

  	WHITEHALL
            JEWELLERS, INC.                                              
	 	 
	 	 
	By:  	/s/
            Edward A. Dayoob

	Name:  Edward
          Dayoob 
	Title:  CEO 

 ACKNOWLEDGED AND AGREED: 

 JOHN R. DESJARDINS 

 

	/s/ John Desjardins________________ 

	 	 	 	 	 	SCHEDULE TO 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	WHITEHALL 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	PROMISSORY 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Initial
            Balance 
	 	 	 	 	NOTE 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Interest
          Rate (Basic) 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	APR 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	      	 	 	      	 	 	      	 	 	      	 	 	      	 	 	 	      	 	Total
            Monthly 

	Month 	 	Starting
            Balance 
	 	Interest
            Accrued 
	 	Principal
            Paid 
	 	Interest
            Paid 
	 	Ending
            Balance 
	 	 
	 	Payment 

	0 	 	$ 	- 	 	$ 	- 	 	$ 	- 	 	$ 	- 	 	$ 	1,137,625.00 	 	 	 	$ 	(1,137,625.00 	) 
	1 	 	$ 	1,137,625.00 	 	$ 	5,688.13 	 	$ 	- 	 	$ 	- 	 	$ 	1,143,313.13 	 	 	 	$ 
	- 	 
	2 	 	$ 	1,143,313.13 	 	$ 	5,716.57 	 	$ 	- 	 	$ 	- 	 	$ 	1,149,029.69 	 	 	 	$ 
	- 	 
	3 	 	$ 	1,149,029.69 	 	$ 	5,745.15 	 	$ 	- 	 	$ 	- 	 	$ 	1,154,774.84 	 	 	 	$ 
	- 	 
	4 	 	$ 	1,154,774.84 	 	$ 	5,773.87 	 	$ 	- 	 	$ 	- 	 	$ 	1,160,548.71 	 	 	 	$ 
	- 	 
	5 	 	$ 	1,160,548.71 	 	$ 	5,802.74 	 	$ 	- 	 	$ 	- 	 	$ 	1,166,351.46 	 	 	 	$ 
	- 	 
	6 	 	$ 	1,166,351.46 	 	$ 	5,831.76 	 	$ 	- 	 	$ 	- 	 	$ 	1,172,183.21 	 	 	 	$ 
	- 	 
	7 	 	$ 	1,172,183.21 	 	$ 	5,860.92 	 	$ 	- 	 	$ 	- 	 	$ 	1,178,044.13 	 	 	 	$ 
	- 	 
	8 	 	$ 	1,178,044.13 	 	$ 	5,890.22 	 	$ 	650,000.00 	 	$ 	- 	 	$ 	533,934.35 	 	 	 	$ 	650,000.00 	 
	9 	 	$ 	533,934.35 	 	$ 	2,669.67 	 	$ 	20,317.71 	 	$ 	48,979.02 	 	$ 	467,307.29 	 	 	 	$ 	69,296.73 	 
	10 	 	$ 	467,307.29 	 	$ 	2,336.54 	 	$ 	20,317.71 	 	$ 	2,336.54 	 	$ 	446,989.58 	 	 	 	$ 	22,654.25 	 
	11 	 	$ 	446,989.58 	 	$ 	2,234.95 	 	$ 	20,317.71 	 	$ 	2,234.95 	 	$ 	426,671.87 	 	 	 	$ 	22,552.66 	 
	12 	 	$ 	426,671.87 	 	$ 	2,133.36 	 	$ 	20,317.71 	 	$ 	2,133.36 	 	$ 	406,354.16 	 	 	 	$ 	22,451.07 	 
	13 	 	$ 	406,354.16 	 	$ 	2,031.77 	 	$ 	20,317.71 	 	$ 	2,031.77 	 	$ 	386,036.45 	 	 	 	$ 	22,349.48 	 
	14 	 	$ 	386,036.45 	 	$ 	1,930.18 	 	$ 	20,317.71 	 	$ 	1,930.18 	 	$ 	365,718.74 	 	 	 	$ 	22,247.89 	 
	15 	 	$ 	365,718.74 	 	$ 	1,828.59 	 	$ 	20,317.71 	 	$ 	1,828.59 	 	$ 	345,401.03 	 	 	 	$ 	22,146.30 	 
	16 	 	$ 	345,401.03 	 	$ 	1,727.01 	 	$ 	20,317.71 	 	$ 	1,727.01 	 	$ 	325,083.32 	 	 	 	$ 	22,044.72 	 
	17 	 	$ 	325,083.32 	 	$ 	1,625.42 	 	$ 	20,317.71 	 	$ 	1,625.42 	 	$ 	304,765.61 	 	 	 	$ 	21,943.13 	 
	18 	 	$ 	304,765.61 	 	$ 	1,523.83 	 	$ 	20,317.71 	 	$ 	1,523.83 	 	$ 	284,447.90 	 	 	 	$ 	21,841.54 	 
	19 	 	$ 	284,447.90 	 	$ 	1,422.24 	 	$ 	20,317.71 	 	$ 	1,422.24 	 	$ 	264,130.19 	 	 	 	$ 	21,739.95 	 
	20 	 	$ 	264,130.19 	 	$ 	1,320.65 	 	$ 	20,317.71 	 	$ 	1,320.65 	 	$ 	243,812.48 	 	 	 	$ 	21,638.36 	 
	21 	 	$ 	243,812.48 	 	$ 	1,219.06 	 	$ 	20,317.71 	 	$ 	1,219.06 	 	$ 	223,494.77 	 	 	 	$ 	21,536.77 	 
	22 	 	$ 	223,494.77 	 	$ 	1,117.47 	 	$ 	20,317.71 	 	$ 	1,117.47 	 	$ 	203,177.06 	 	 	 	$ 	21,435.18 	 
	23 	 	$ 	203,177.06 	 	$ 	1,015.89 	 	$ 	20,317.71 	 	$ 	1,015.89 	 	$ 	182,859.35 	 	 	 	$ 	21,333.60 	 
	24 	 	$ 	182,859.35 	 	$ 	914.30 	 	$ 	20,317.71 	 	$ 	914.30 	 	$ 	162,541.64 	 	 	 	$ 	21,232.01 	 
	25 	 	$ 	162,541.64 	 	$ 	812.71 	 	$ 	20,317.71 	 	$ 	812.71 	 	$ 	142,223.93 	 	 	 	$ 	21,130.42 	 
	26 	 	$ 	142,223.93 	 	$ 	711.12 	 	$ 	20,317.71 	 	$ 	711.12 	 	$ 	121,906.22 	 	 	 	$ 	21,028.83 	 
	27 	 	$ 	121,906.22 	 	$ 	609.53 	 	$ 	20,317.71 	 	$ 	609.53 	 	$ 	101,588.51 	 	 	 	$ 	20,927.24 	 
	28 	 	$ 	101,588.51 	 	$ 	507.94 	 	$ 	20,317.71 	 	$ 	507.94 	 	$ 	81,270.80 	 	 	 	$ 	20,825.65 	 
	29 	 	$ 	81,270.80 	 	$ 	406.35 	 	$ 	20,317.71 	 	$ 	406.35 	 	$ 	60,953.09 	 	 	 	$ 	20,724.06 	 
	30 	 	$ 	60,953.09 	 	$ 	304.77 	 	$ 	20,317.71 	 	$ 	304.77 	 	$ 	40,635.38 	 	 	 	$ 	20,622.48 	 
	31 	 	$ 	40,635.38 	 	$ 	203.18 	 	$ 	20,317.71 	 	$ 	203.18 	 	$ 	20,317.67 	 	 	 	$ 	20,520.89 	 
	32 	 	$ 	20,317.67 	 	$ 	101.59 	 	$ 	20,317.71 	 	$ 	101.59 	 	$ 	(0.04 	) 	 	 	$ 	20,419.30 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Grand
          Total 	$ 	1,214,642.50 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

	/s/
    Edward Dayoob                         
	 	/s/
          John Desjardins                         

	Edward Dayoob	 	John Desjardins
	 	 	 
	Whitehall Jewelers, Inc. 	 	 

 June 15, 2007 

 John R. Desjardins

    55 East Erie 

    Chicago, IL 60611 

           Subject:           Subordination – PWJ
    Lending LLC and Holtzman Opportunity Fund, L.P. 

           This
    letter is to memorialize the agreement between PWJ Lending LLC (“PWJ”)
    and Holtzman Opportunity Fund, L.P. (“Holtzman”) and John R. Desjardins
    (“Desjardins”) for the subordination of those amounts owed to PWJ
    and Holtzman from Whitehall Jewellers, Inc. (“Whitehall”). This
    subordination is in connection with payments (the “Obligations”)
    that will be made to Desjardins by Whitehall under the Separation Agreement
    and Release (“the Agreement”) between Desjardins and Whitehall.

           Each
    of PWJ and Holtzman agree that in the event of any bankruptcy, insolvency,
    reorganization or receivership proceedings relating to Whitehall, all obligations
    of Whitehall owing to PWJ and Holtzman shall be subordinate in right of payment
    to the prior payment in full of the Obligations.

           Please
    confirm agreement with the foregoing by signing and returning to the undersigned
    a duplicate copy of this letter. 

	PWJ
        Lending LLC 	 	Holtzman Opportunity
        Fund, L.P. 
	By: Prentice
        Capital Management, LP, its manager 	 	 
	 
	By:  	 /s/
          Mathew Hoffman 
	 	                   By:
        Holtzman Financial Advisors, LLC, 
	Name:  Mathew
        Hoffman 	 	                   its
        General Partner 
	Its:  	     General
        Counsel 	 	 
	 	 	 	By: SH Independence, LLC, 
	 	 	 	          its
        Managing Member 
	 
	 
	 	 	 	By:  	/s/
    Seymour Holtzman 
	 
	 	 	 	Name: Seymour Holtzman 
	 	 	 	Title: Sole Member 

 The foregoing is acknowledged and
    agreed to:

	By:  	/s/
          John Desjardins

	 	   John R.
        Desjardins                                    

 June ___, 2007 

 John R. Desjardins

    55 East Erie 

    Chicago, IL 60611 

           Subject:           Indemnification – PWJ
    Lending LLC 

           This
    letter is to memorialize the agreement between PWJ Lending LLC, or its successors
    or assigns (“PWJ”) and John R. Desjardins (“Desjardins”)
    for certain indemnification obligations of PWJ to Desjardins and his heirs
    (the “Indemnified Parties” or “Indemnified Party”) relating
    to payments (the “Obligations”) that will be made to Desjardins
    by Whitehall Jewellers, Inc. (“Whitehall”) under the Separation
    Agreement and Release (“the Agreement”) between Desjardins and
    Whitehall.

           PWJ
    agrees to indemnify and hold harmless the Indemnified Parties for liabilities
    incurred by Desjardins if any payment made by Whitehall to Desjardins under
    the Agreement is recovered, in whole or in part, by Whitehall or a representative
    of Whitehall’s bankruptcy estate as a result of a cause of action or
    demand to recover such payment as a preference or fraudulent transfer under
    the Bankruptcy Code or applicable state law (an “Avoidable Transfer”).
    PWJ’s liability under this indemnity is expressly limited to the amount
    that an Indemnified Party actually pays to Whitehall or its bankruptcy estate
    because of the Avoidable Transfer plus reasonable and documented costs, expenses
    and attorneys’ fees of the Indemnified Party related thereto. PWJ shall
    make payment under the indemnity upon presentation by Desjardins of either
    (x) a final order requiring an Indemnified Party to pay an indemnified amount
    to Whitehall or a representative of Whitehall’s bankruptcy estate; or
    (y) a fully executed settlement agreement between an Indemnified Party and
    Whitehall, or a representative acting for the benefit of Whitehall’s
    bankruptcy estate (if the representative is authorized to enter into settlements)
    in which an Indemnified Party agrees to pay an indemnified amount to Whitehall
    or a representative of Whitehall’s bankruptcy estate. Any such settlement
    agreement shall be subject to PWJ’s prior approval. The Indemnified
    Party agrees to transfer to PWJ any claim he may have against Whitehall or
    its bankruptcy estate arising out of his repayment of any Avoidable Transfer
    reimbursed by PWJ under this indemnity. 

           Please
    confirm agreement with the foregoing by signing and returning to the undersigned
    a duplicate copy of this letter. 

  	       PWJ
          Lending LLC 
	By: Prentice
          Capital Management, LP, its           
	manager 
	 	 
	By:  	/s/
            Mathew Hoffman

	Name: Mathew
          Hoffman 
	 	 
	Its: General
          Counsel 

 The foregoing is acknowledged and
    agreed to:

	By:  	/s/
          John Desjardins

	 	  John R. Desjardins

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]