EXHIBIT 10.1
LASALLE BANK NATIONAL ASSOCIATION
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October 29, 2003
Whitehall Jewellers, Inc.
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Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Re: Whitehall Jewellers, Inc. Credit Agreement
Dear ▇▇▇▇:
Reference is hereby made to that certain Second Amended and Restated
Revolving Credit and Gold Consignment Agreement dated as of July 29, 2003 (the
"Credit Agreement") by and among Whitehall Jewellers, Inc. a Delaware
corporation (the "Borrower"), LaSalle Bank National Association, as
administrative agent for the banks ("Banks") party thereto (in such capacity,
"Administrative Agent"), the Banks, ABN AMRO Bank N.V., as syndication agent,
and ▇▇ ▇▇▇▇▇▇ Chase Bank, as documentation agent. Terms not otherwise defined
herein shall have the meanings assigned to them in the Credit Agreement.
Reference is also hereby made to (i) that certain pending lawsuit filed
August 13, 2003 in which the Borrower has been named as one of the 14 defendants
in the United States District Court for the Southern District of New York,
styled Capital Factors, Inc. v. Cosmopolitan Gem Corp., et. al., ▇▇. ▇▇ ▇▇▇.
▇▇▇▇ (▇▇▇ "Capital Factors Lawsuit"), (ii) that certain inquiry initiated by the
Securities and Exchange Commission into the matters involving the Company that
are the subject of the Capital Factors Lawsuit (the "SEC Inquiry") and (iii)
that certain criminal investigation initiated by the office of the United States
Attorney for the Eastern District of New York into the matters alleged in the
Capital Factors Lawsuit of which the Borrower is one of the subjects of such
investigation (the "US Attorney Investigation").
This letter serves as notice to Borrower that as of the date hereof,
based on the facts and circumstances set forth in the initial complaint filed by
Capital Factors, Inc. on August 13, 2003 and a discussion of the facts,
circumstances and merits of the Capital Factors Lawsuit with the Borrower and
its counsel, the Agent and the Banks have yet to make a determination as to
whether the Capital Factors Lawsuit, if adversely determined, could reasonably
be expected to materially adversely affect the properties, assets, financial
condition or business of the Borrower in breach of Section 7.7 of the Credit
Agreement. Further, as of the date hereof and based on a discussion of the facts
and circumstances of the SEC Inquiry and the US Attorney Investigation with the
Borrower and its counsel and the information received to date from the Borrower
and its counsel, the Agent and the Banks have yet to make a determination
whether the SEC Inquiry or the US Attorney Investigation, (i) if adversely
determined, could reasonably be expected to materially adversely affect the
properties, assets, financial condition or business of the Borrower in breach of
Section 7.7 of the Credit Agreement or (ii) involves the violation of any
statute, rule
or regulation that could reasonably be expected to result in the imposition of
substantial penalties or materially and adversely affect the financial
condition, properties or business of the Borrower or any of its Subsidiaries in
breach of Section 7.9 of the Credit Agreement.
In furtherance of the foregoing, if the Required Lenders, at any time,
determine in their sole discretion based in whole or in part on events occurring
either before or after the date of this letter, including, but not limited to,
events described above, that either the Capital Factors Lawsuit, the SEC Inquiry
or the US Attorney Investigation, if adversely determined, could reasonably be
expected to materially adversely affect the properties, assets, financial
condition or business of the Borrower, the Agent shall have the right to, and
will upon direction of the Required Lenders, (i) declare an Event of Default and
cause the Lenders to cease funding of all Loans and the issuance of all Letters
of Credit under the Credit Agreement and (ii) exercise all rights and remedies
upon an Event of Default.
As a condition of the agreement set forth herein, the Borrower agrees
to (i) provide the Agent with periodic written and oral updates as to the status
of the Capital Factors Lawsuit, the SEC Inquiry and the US Attorney
Investigation as may be requested from time to time by Agent and (ii) provide
the Agent with copies of all written inquires and material pleadings, rulings
and determinations made in such actions involving the Borrower, including, but
not limited to, requests for information, motions, complaints, responses to
discovery, responses to requests, answers, orders and rulings, as promptly as
practicable upon the submission, the receipt or the filing thereof, as
applicable, by the Borrower or its counsel.
The Borrower hereby acknowledges and agrees that (i) the agreement
contained in this letter agreement is granted by the Agent and the Banks only
for the limited purpose set forth herein and should not be deemed a waiver or
limitation of any claims, demands, rights or remedies of the Agent and the Banks
under the Credit Agreement and all of the Loan Documents, (ii) each term and
provision of the Credit Agreement continues in full force and effect and (iii)
the disclosure by the Borrower to the Agent of the existence of the Capital
Factors Lawsuit, the SEC Inquiry and the US Attorney Investigation does not
fulfill any of the ongoing disclosure obligations of the Borrower pursuant to
this letter agreement and the Credit Agreement. This agreement is granted only
for the specific instance specified herein and in no manner creates a course of
dealing or otherwise impairs the future ability of the Banks or the Agent to
declare an Event of Default under or otherwise enforce the terms of the Credit
Agreement.
None of the terms and conditions of this letter agreement may be
changed, modified, waived, or canceled, except by writing signed by all the
parties hereto, specifying such change, modification, waiver, or cancellation.
Except as otherwise specifically set forth herein, the Credit Agreement and all
the Loan Documents are hereby confirmed and ratified in all respects and shall
remain in full force and effect according to their respective terms.
This letter agreement shall not suspend, waive or affect any
representation, warranty, covenant or condition contained in the Credit
Agreement. All provisions, terms and conditions of the Credit Agreement remain
in full force and effect.
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Very truly yours,
Acknowledged and Agreed to as of
this 29th day of October, 2003 LASALLE BANK NATIONAL
ASSOCIATION, for itself and as Agent for
WHITEHALL JEWELLERS, INC. the Banks
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ -------------------------
------------------------- Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Title: First Vice President
Title: Executive Vice President
Chief Financial Officer JPMORGAN CHASE BANK, individually
and as Documentation Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
ABN AMRO BANK N.V., individually
and as Syndication Agent
By: /s/ ▇▇▇▇. Sarfuty
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Name: ▇▇▇▇. Sarfuty
Title: VP
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP
FLEET CAPITAL CORPORATION, as a
Bank
By: /s/ ▇▇▇▇ ▇. Melazzio
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Name: ▇▇▇▇ ▇. Melazzio
Title: SVP
SOVEREIGN BANK, as a Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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