REVOLVING CREDIT AGREEMENT
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Exhibit 10.2
REVOLVING CREDIT AGREEMENT, dated as of December 30, 2008 (as the same may be amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), between THE
TALBOTS, INC., a corporation duly organized and validly existing under the laws of the State of
Delaware (the “Borrower”), and SUMITOMO MITSUI BANKING CORPORATION (together with its
successors and assigns, the “Lender”).
WHEREAS, the Borrower desires to borrow, and the Lender agrees to extend, revolving credit
loans to the Borrower during the period from and after the Closing Date (as hereafter defined) in
accordance with the terms and conditions of this Credit Agreement.
NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:
1. Definitions. As used in this Credit Agreement, unless otherwise defined herein, the
following terms shall have the following meanings (such meanings to be equally applicable to both
the singular and plural forms of the terms defined):
“Affiliate” shall mean, as to any Person, any corporation or other entity that, directly or
indirectly, controls, is controlled by or is under common control with such Person. For purposes
of this definition, the term “control” (including “controlling,” “controlled by” and “under common
control with”) of a Person means the possession, direct or indirect, of the power to vote 10% or
more of the voting stock of such Person or to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting stock, by contract or otherwise.
“Applicable Spread” shall mean a percentage determined by the Lender in its sole discretion
upon at the time of each borrowing of Revolving Loans; provided that the Applicable Spread
shall not be lower than 0.625% and shall not be higher than 1.30%.
“Base Rate” shall mean the rate, as determined by the Lender on a daily basis, equal to the
higher of (i) the rate per annum established by the Lender from time to time as the reference rate
for short-term commercial loans in Dollars to domestic corporate borrowers (which the Borrower
acknowledges is not necessarily Lender’s lowest rate), and (ii) the overnight cost of funds of
Lender as determined solely by Lender plus 1/4 of 1% per annum.
“Borrower” is defined in the preamble of this Credit Agreement.
“Borrowing Date” shall mean the date on which a Revolving Loan is made by the Lender in favor
of the Borrower.
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“Capitalized Lease Obligations” shall mean obligations for the payment of rent for any real or
personal property under leases or agreements to lease that, in accordance with GAAP, have been or
should be capitalized on the books of the lessee and, for purposes hereof, the amount of any such
obligation shall be the capitalized amount thereof determined in accordance with GAAP.
“Closing Date” shall mean December 31, 2008, or such other date on which the conditions
precedent set forth in Section 5 hereof have been satisfied in full or waived in accordance with
the terms hereof.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the
regulations and published interpretations thereof.
“Commitment Fee” is defined in Section 2.9 hereof.
“Commonly Controlled Entity” shall mean an entity, whether or not incorporated, which is under
common control with the Borrower within the meaning of Section 414(b) or 414(c) of the Code.
“Cost of Funds Rate” shall mean, with respect to each Interest Period, the rate per annum
determined by the Lender to be its effective cost of funding in Dollars the applicable Revolving
Loan for such Interest Period.
“Default” means any event or circumstance that, with the giving of notice, the lapse of time
or both, would constitute an Event of Default.
“Dollars” and the symbol “$” shall mean dollars in the lawful money of the United States of
America.
“Environmental Action” shall mean any complaint, summons, citation, notice, directive, order,
claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or other
communication from any Governmental Authority or any third party involving violations of
Environmental Laws or releases of Hazardous Materials (i) from any assets, properties or businesses
of the Borrower or any of its Subsidiaries or any predecessor in interest, (ii) from properties or
businesses adjoining any properties or businesses of the Borrower or any of its Subsidiaries or any
predecessor in interest, or (iii) from or onto any facilities which received Hazardous Materials
generated by the Borrower or any of its Subsidiaries or any predecessor in interest.
“Environmental Law” shall mean any present or future statute, ordinance, rule, regulation,
order, judgment, decree, permit, license or other binding determination of any Governmental
Authority imposing liability or establishing standards of conduct for protection of the environment
as the same may be amended or supplemented from time to time.
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“Environmental Liabilities and Costs” shall mean all liabilities, monetary obligations,
remedial actions, losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and
consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of (i) any claim or demand by any Governmental Authority or any third
party which relates to any environmental condition or a release of Hazardous Materials, or (ii) any
breach by the Borrower or any of its Subsidiaries of any Environmental Law.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the rules and regulations and published interpretations thereof.
“Event of Default” is defined in Section 6 hereof.
“FAX” is defined in Section 8.6 hereof.
“GAAP” shall mean generally accepted accounting principles in the United States consistent
with those utilized in preparing the audited financial statements referred to in Section 4(a)
hereof.
“Governmental Authority” shall mean any nation or government, any state or other political
subdivision thereof and any department, commission, board, bureau, instrumentality, agency or other
entity exercising legislative, judicial, regulatory or administrative functions of, or pertaining
to, government.
“Hazardous Materials” shall mean (a) petroleum and petroleum products, byproducts or breakdown
products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and radon
gas, and (b) any other chemicals, materials or substances designated, classified or regulated as
hazardous or toxic or as a pollutant or contaminant under any Environmental Law.
“Hedge Agreements” shall mean any interest rate, commodity or equity swap, cap, floor or
forward rate agreement or collar arrangements, interest rate future or option contracts, currency
swap agreements, currency future or option contracts and other similar agreements or arrangements
designed to protect against fluctuations in interest rates or currency, commodity or equity values,
and any confirmation executed in connection with any such agreement or arrangement.
“Indebtedness” shall mean with respect to any Person, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) all obligations of such Person for the
deferred purchase price of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) all obligations of such Person under or
evidenced by bonds, debentures, notes or other similar instruments or upon which interest payments
are customarily made, (iv) all obligations and liabilities secured by any Lien on any property
owned by such Person whether or not owing by such Person and even though such Person has not
assumed or become liable for payment thereof, (v) all Capitalized Lease
Obligations of such Person, (vi) all obligations and liabilities of such Person created or arising
under any conditional sale or other title retention agreement with respect to property used and/or
acquired by such Person, even though the rights and remedies of the lessor, seller and/or lender
thereunder are limited to repossession or sale of such property, or agreements to pay a specified
purchase price for goods or services whether or not delivered or accepted, i.e., take-or-pay and
similar obligations, (vii) all contingent obligations of such Person, including, without
limitation, the net liabilities of such Person under any Hedge Agreements, as calculated on a basis
satisfactory to the Lender and in accordance with accepted practice, (viii) all indebtedness of
others referred in this definition guaranteed directly or indirectly in any manner by such Person,
and (ix) all obligations referred to in clauses (i) through (ix) of this definition of another
Person secured by (or for which the holder of such indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in any property owned by such Person;
provided, however, that the term Indebtedness shall not include trade payables and
accrued expenses, in each case arising in the ordinary course of business and not more than 60 days
delinquent. The Indebtedness of any Person shall include the Indebtedness of any partnership of
which such Person is a general partner and any joint venture to which such Person is a party.
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“Interest Period” shall mean, with respect to any Revolving Loan, such period as is mutually
agreed upon by the Borrower and the Lender; provided, however, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding Business Day, (ii) no
Interest Period shall be longer than six (6) months, and (iii) no Interest Period shall end after
the Maturity Date and any Interest Period which would, but for this clause, end after the Maturity
Date shall instead end on the Maturity Date, and shall be subject to the payment of all
break-funding and other losses, costs and expenses incurred as a result thereof.
“Lender” is defined in the preamble of this Credit Agreement.
“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, deposit
arrangement, lien (statutory or otherwise), security interest, charge or other encumbrance or
security or preferential arrangement of any nature whatsoever.
“Loan Account” is defined in Section 2.7 hereof.
“Loan Documents” shall mean each of this Credit Agreement, the Note, and each other document,
instrument and agreement executed and delivered pursuant to or in connection herewith or therewith,
as the same may be amended, supplemented or otherwise modified from time to time.
“Material Adverse Effect” shall mean a material adverse effect on any of (a) the operations,
business, assets, properties, prospects or condition (financial or otherwise) of the Borrower, (b)
the ability of the Borrower to perform any of its obligations hereunder, under the Note or under
any other Loan Document to which it is a party, (c) the legality, validity or enforceability of
this Credit Agreement, the Note or any other Loan Document, or (d) the rights and remedies of the
Lender hereunder or under any other Loan Document.
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“Maturity Date” shall mean the Business Day immediately following the Revolving Credit
Termination Date, or such earlier date on which the Revolving Loans are due and payable (whether at
stated maturity, by mandatory prepayment, by acceleration or otherwise) in accordance with the
terms hereof.
“Multiemployer Plan” shall mean a Plan described in Section 4001(a)(3) of ERISA.
“Note” shall mean the promissory note of the Borrower evidencing the Revolving Loans, payable
to the order of the Lender, substantially in the form of Exhibit A hereto, as the same may be
amended, supplemented or otherwise modified from time to time, or any substitute therefor.
“Notice of Borrowing” is defined in Section 2.1.2 hereof.
“Other Taxes” is defined in Section 7.2(b) hereof.
“Parent” shall mean AEON (U.S.A.), Inc.
“PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or
all of its functions under ERISA.
“Person” shall mean an individual, corporation, partnership, limited liability company or
partnership, association, joint-stock company, trust, unincorporated organization, joint venture,
Governmental Authority or other entity.
“Plan” shall mean any pension plan that is covered by Title IV of ERISA and in respect of
which the Borrower or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) of
ERISA.
“Prohibited Transaction” shall mean any transaction set forth in Section 406 of ERISA or
Section 4975 of the Code.
“Release” shall mean any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the outdoor or indoor environment.
“Reportable Event” shall mean any of the events set forth in Section 4043 of ERISA.
“Revolving Credit Termination Date” shall mean December 31, 2009, as such date may be extended
in the manner provided in Section 2.5(d) hereof, or such earlier date on which the Revolving Loan
Commitment is terminated in full hereunder and the commitment of the Lender to make Revolving Loans
hereunder has been terminated or otherwise cancelled.
“Revolving Loan” is defined in Section 2.1.1 hereof.
“Revolving Loan Commitment” is defined in Section 2.1.1 hereof.
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“Solvent” shall mean, with respect to any Person on a particular date, that on such date (a)
the fair value of the property of such Person is not less than the total amount of its liabilities
of such Person, (b) the present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on its existing debts
as they become absolute and matured, (c) such Person is able to realize upon its assets and pay its
debts and other liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (d) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person’s property would constitute unreasonably small
capital.
“Subsidiary” shall mean, as to any Person, any corporation or other entity of which capital
stock or other ownership interests having (in the absence of contingencies) ordinary voting power
to elect at least a majority of the board of directors (or persons performing similar functions) of
such corporation or other entity is, at the time of determination, owned directly, or indirectly
through one or more intermediaries, by such Person.
“Taxes” is defined in Section 7.2(a) hereof.
“Ultimate Parent” shall mean AEON Co., Ltd., a Japanese corporation.
“USA Patriot Act” is defined in Section 3(r) hereof.
2. The Revolving Loans.
2.1.1. The Revolving Loan Commitment. On the terms and subject to the conditions of
this Credit Agreement, the Lender agrees, from time to time on any Business Day during the period
commencing on the Closing Date up to but excluding the Revolving Credit Termination Date, to make
revolving loans (the “Revolving Loans”) to the Borrower in an aggregate principal amount
not to exceed $50,000,000 at any time outstanding (the “Revolving Loan Commitment”). The
Revolving Loan Commitment shall be subject to extension, reduction and/or termination as herein
provided (including, without limitation, pursuant to Sections 2.5 and 6.2 hereof). On the terms
and subject to the conditions hereof, the Borrower may from time to time borrow, prepay, and
re-borrow the Revolving Loans. Each Revolving Loan shall be denominated in Dollars and shall be in
a principal amount equal to $100,000 or an integral multiple of $100,000 in excess thereof. On the
Revolving Credit Termination Date the Revolving Loan Commitment shall terminate and the Lender
shall have no obligation whatsoever to make any further Revolving Loans to the Borrower.
2.1.2. Making the Revolving Loans. Each Revolving Loan shall be made upon written
notice, in form and substance satisfactory to the Lender (a “Notice of Borrowing”), given
by the Borrower to the Lender no later than 11:00 a.m. (New York City time) on the proposed
Borrowing Date thereof. Each Notice of Borrowing shall be irrevocable and shall specify (A) the
proposed Borrowing Date, which shall be a Business Day, (B) the principal amount of the requested
Revolving Loan and (C) the duration of the initial Interest Period. Upon fulfillment of
the applicable conditions set forth in Section 5 hereof (or the waiver thereof by the Lender
as herein prescribed), the Lender will make the proceeds of such Revolving Loan available to the
Borrower in same day funds to the Borrower’s account with the Lender maintained at the Lender’s New
York Branch, or at such other place as the Lender shall designate in writing to the Borrower. The
Lender shall notify the Borrower of the Applicable Spread with respect to such Revolving Loan on or
prior to the commencement of the first Interest Period with respect to such Revolving Loan;
provided that the Lender’s failure to notify the Borrower of the Applicable Spread shall
not affect the validity of such Revolving Loan or any obligations of the Borrower hereunder or
under any Loan Document.
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2.2. Interest.
(a) Each Revolving Loan shall bear interest for each day during each Interest Period with
respect thereto at a rate per annum equal to the sum of (i) the Cost of Funds Rate and (ii) the
Applicable Spread.
(b) Subject to Section 2.4 hereof, interest on each Revolving Loan shall be payable, in
arrears, (i) on the last day of each Interest Period, (ii) on the date on which the principal
amount of such Revolving Loan becomes due and payable hereunder (whether at stated maturity, by
mandatory prepayment, optional prepayment by acceleration or otherwise), and (iii) in the case of
any Interest Period which is longer than three (3) months, on each successive date three (3) months
after the first day of such Interest Period.
(c) Notwithstanding anything herein to the contrary, all accrued interest shall be payable on
each date principal is payable hereunder pursuant to Sections 2.3 and 2.5 hereof or such earlier
date as herein required.
(d) Interest shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
2.3. Principal Repayment; Note. (a) The Borrower shall repay the outstanding
principal balance of all outstanding Revolving Loans together with all other outstanding amounts
due and owing hereunder or under the other Loan Documents on the Maturity Date.
(b) The Borrower’s obligations to the Lender with respect to the payment of interest and
principal with respect to the Revolving Loans shall be evidenced by this Credit Agreement and the
Note. The Lender is hereby authorized by the Borrower to endorse on the schedule attached to the
Note (or on a continuation of such schedule attached to the Note and made a part thereof, or any
similar form designated by the Lender in its sole and absolute discretion from time to time, which
may be maintained in its internal records and shown on a computer printout) an appropriate notation
evidencing the date and amount of each Revolving Loan, the date and amount of each principal
payment and prepayment with respect thereto and the interest rate applicable thereto;
provided, however, that the failure of the Lender to make any such notation (or any
error in such notation) shall not affect any obligations of the Borrower hereunder or under the
Note. The Note and the books and records of the Lender shall be conclusive evidence of the
information set forth therein absent manifest error.
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2.4. Default Interest. Any principal, interest or other amount which is not paid when
due, whether at stated maturity, by mandatory prepayment, by acceleration or otherwise, shall bear
interest from the day when due until such principal, interest or other amount is paid in full,
payable on demand, at a rate equal at all times to the Base Rate plus 2% per annum.
2.5. Termination, Reduction or Extension of Revolving Loan Commitment; Prepayment.
(a) The Borrower shall have the right at any time or from time to time, without premium or
penalty, upon not less than three (3) Business Days’ prior irrevocable written notice to the
Lender, to terminate or reduce the Revolving Loan Commitment. Any such reduction of the Revolving
Loan Commitment shall be in an amount equal to $100,000 or an integral multiple of $100,000 in
excess thereof. Any termination or reduction of the Revolving Loan Commitment shall be permanent.
(b) Prepayment. Upon three (3) Business Days’ prior irrevocable written notice by the
Borrower received by the Lender, the Borrower may (and if such notice is given, shall), without
penalty or premium, prepay all or any portion of the principal amount outstanding of any Revolving
Loans on the last day of any Interest Period; provided, however, that (i)
prepayments of Revolving Loans prior to the Maturity Date shall not reduce the Revolving Loan
Commitment; (ii) any partial prepayment shall be in a principal amount equal to $100,000 or an
integral multiple of $100,000 in excess thereof; and (iii) prepayment is accompanied by the payment
of (x) accrued interest to the date of such prepayment on the amount prepaid, (y) any and all
payments required pursuant to Section 7.1(d) hereof in respect of such prepayment, and (z) any
other amounts then due and owing hereunder.
(c) If the Borrower receives notice from the Lender that the aggregate principal amount of all
Revolving Loans outstanding hereunder exceeds at any time $50,000,000, the Borrower shall prepay
Revolving Loans, together with all accrued interest thereon and any amounts due under Section
7.1(d) hereof, as necessary to eliminate such excess within two (2) Business Days after receipt of
such notice.
(d) The Revolving Credit Termination Date may be extended any number of times as follows:
(i) The Borrower shall give the Lender an irrevocable written request
substantially in the form of Exhibit C hereto at least 30 days before the Revolving
Credit Termination Date then in effect.
(ii) Upon receipt of such request the Lender shall consider and determine
whether to grant such request and shall give a written notice of its decision on or
prior to the day two weeks before the Revolving Credit Termination Date then in
effect.
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(iii) In the event the Lender grants the Borrower’s request the Revolving
Credit Termination Date then in effect shall be extended for one year. Otherwise
the Revolving Credit Termination Date shall remain unchanged.
2.6. Method of Payment.
(a) All sums payable by the Borrower to the Lender hereunder or under the Note shall be
payable in New York, New York, in Dollars, in immediately available funds and without any defense,
set-off or counterclaim no later than 12:00 noon (New York time) on the day when due, for the
account of and as directed by the Lender. Any payments made after 12:00 noon (New York time) on
any day shall be deemed to have made on the immediately following Business Day.
(b) Any payments shall be applied first to default charges, indemnities, expenses and other
non-principal and interest amounts owed under any of the Loan Documents, if any, then to interest
due and payable on the Revolving Loans, and thereafter to the principal amount of the Revolving
Loans due and payable.
(c) All computations of interest and fees shall be made by the Lender on the basis of a year
of 360 days for the actual number of days elapsed during the period for which such amount is
payable (including the first day but excluding the last day); provided, however,
that if a Revolving Loan is repaid on the Borrowing Date thereof, one day’s interest shall be paid
on such Revolving Loan. Each change in the Base Rate shall immediately and simultaneously result
in a corresponding change in the Default Rate.
(d) Whenever any payment to be made hereunder or under the Note or any other instrument
delivered hereunder shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest; provided, however, that if
such extension would cause such payment to be made in the next calendar month or beyond the
Maturity Date, such payment shall be made on the next preceding Business Day or on the Maturity
Date, as applicable.
(e) The Borrower hereby authorizes the Lender, if and to the extent payment is not made when
due under any Loan Document, to charge from time to time against any account of the Borrower with
the Lender or any of its affiliates any amount so due. The Lender agrees to promptly notify the
Borrower of any such charge made by the Lender; provided, however, that the Lender
shall incur no liability for failing to do so and the failure of the Lender to so notify the
Borrower shall in no event diminish the Lender’s right to make such charge under this Section
2.6(e).
2.7. Loan Account. The Lender maintains on its books a loan account in the Borrower’s
name (the “Loan Account”), showing the Revolving Loans, prepayments, the computation and
payment of interest, and any other amounts due and sums paid hereunder and under the other Loan
Documents. The entries made by the Lender in the Loan Account shall be
conclusive and binding on the Borrower and the Lender as to the amount at any time due from the
Borrower, absent manifest error.
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2.8. Use of Proceeds. The Borrower shall apply the proceeds of the Revolving Loans
towards working capital; provided, however, that no proceeds of any of the
Revolving Loans may be used to acquire or carry any equity security of a class which is registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended and as in effect from
time to time, or any “Margin Stock”, as defined in Federal Reserve Board Regulation U or otherwise
be used in a manner which would violate or be inconsistent with Section 7 of the Securities
Exchange Act of 1934, as amended and as in effect from time to time, or any regulations issued
pursuant thereto, or any regulations issued pursuant thereto or the provisions of the regulations
of the Federal Reserve Board or any Governmental Authority.
2.9. Commitment Fee. The Borrower shall pay to the Lender on the last Business Day of
each June and December while the Revolving Loan Commitment is in effect, commencing on June 30,
2009, a non-refundable commitment fee in arrears in an amount equal to 0.3125% per annum of the
average daily unadvanced amount of the Revolving Loan Commitment from time to time in effect from
(and including) the date hereof to (but excluding) the Maturity Date.
3. Representations and Warranties. The Borrower hereby represents and warrants to the
Lender as follows:
(a) Organization of Borrower. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) Power and Authority. The Borrower has full legal right, power and authority to
carry on its present business, to own its property and assets and to execute, deliver and perform
this Credit Agreement, the Note and each other Loan Document to which it is a party. The Borrower
is duly qualified or licensed as a foreign corporation authorized to conduct its activities and is
in good standing in all jurisdictions in which the character of the properties owned or leased by
it or the nature of the activities conducted by it makes such qualification or licensing necessary
except where the failure to be so qualified or licensed could not reasonably be expected to have a
Material Adverse Effect.
(c) Authorization of Borrowing. All appropriate and necessary corporate, shareholder
and other actions and approvals (including any governmental or regulatory approvals) have been
taken or obtained by the Borrower to authorize the execution and delivery of this Credit Agreement,
the Note and the other Loan Documents to which it is a party and to authorize the performance and
observance of the terms of each.
(d) Agreement Binding; No Conflicts. This Credit Agreement constitutes, and the Note
and each other Loan Document when executed and delivered pursuant hereto will constitute, the
legal, valid and binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws and general equity principles
affecting the enforcement of creditor’s rights generally. The execution, delivery and
performance of this Credit Agreement, the Note and each other Loan Document to which the Borrower
is a party and the use of the proceeds of any Revolving Loan do not and will not (i) violate or
conflict with any provisions of law or any order, rule, directive or regulation of any court or
other Governmental Authority, the charter, by-laws or other organizational documents of the
Borrower or any agreement, document or instrument to which the Borrower is a party or by which its
assets or properties are bound, (ii) constitute a default or an event or circumstance that, with
the giving of notice or the passing of time, or both, would constitute a default under any such
agreement, document or instrument, (iii) result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any assets or properties of the Borrower, or (iv)
result in any suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to its operations or any of its properties.
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(e) Compliance with Law. The Borrower is not in conflict with or violation or breach
of any law or any regulation, order, writ, injunction or decree of any court or other Governmental
Authority.
(f) Taxes. The Borrower has filed all tax returns (federal, state and local) required
to be filed and has paid all taxes, assessments, fees and other governmental charges due by the
Borrower with respect to the conduct of its operations or otherwise the failure of which could
reasonably be expected to have a Material Adverse Effect.
(g) Governmental Consents. No consent, approval, authorization or order of, notice to
or declaration or filing with, any administrative body or agency or other Governmental Authority on
the part of the Borrower is required for the valid execution, delivery and performance by the
Borrower of this Credit Agreement, the Note or any other Loan Document to which the Borrower is a
party.
(h) Litigation. There are no pending or, to the knowledge of the Borrower, threatened
legal actions, suits, claims or administrative, arbitration or other proceedings against the
Borrower that, either individually or in the aggregate, if adversely determined, could reasonably
be expected to have a Material Adverse Effect, or result in a Default or an Event of Default.
(i) Other Obligations. The Borrower is not in default in any material respect in the
performance, observance or fulfillment of any obligation, covenant or condition in any agreement,
document or instrument to which it is a party or by which it is bound which could be reasonably
likely to result in a Material Adverse Effect.
(j) Financial Information. (i) All financial information provided to the Lender by or
on behalf of the Borrower and its Subsidiaries has been prepared in accordance with GAAP and fairly
presents, in accordance with GAAP consistently applied, the consolidated financial condition of the
Borrower and its Subsidiaries as at the respective dates thereof and the consolidated results of
operations of the Borrower and its Subsidiaries for the fiscal periods ended on such respective
dates. Except as fully disclosed in such financial information, there were no liabilities or
obligations with respect to the Borrower of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in
aggregate, could reasonably be expected to have a Material Adverse Effect on the Borrower.
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(ii) Since February 2, 2008, there has been no material adverse change in the
operations, condition (financial or otherwise), business, assets or prospects of the
Borrower and its Subsidiaries, taken as a whole, or of the Borrower or any of its
Subsidiaries, on an individual basis.
(k) Accuracy of Information. All factual information heretofore or contemporaneously
furnished by or on behalf of the Borrower to the Lender for purposes of, or in connection with,
this Credit Agreement, any other Loan Document or any transaction contemplated hereby or thereby
(true and complete copies of which were furnished to the Lender in connection with its execution
and delivery hereof) is, and all other factual information hereafter furnished by or on behalf of
the Borrower to the Lender will be, true and accurate in every material respect on the date as of
which such information is dated or certified and, in respect of such information heretofore or
contemporaneously furnished to the Lender, as of the date of the execution and delivery of this
Credit Agreement by the Lender, and such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make such information not
misleading.
(l) Seniority. The obligations of the Borrower under this Credit Agreement and the
other Loan Documents to which it is a party rank, and at all times shall rank, at least
pari passu in priority of payment and in all other respects with all other
unsecured and unsubordinated Indebtedness of the Borrower.
(m) Investment Company Acts. Neither the Borrower nor any of its Subsidiaries is an
“investment company” or an “affiliated person” or “promoter” of, or “principal underwriter” of or
for, an “investment company”, as such terms are defined in the Investment Company Act of 1940, as
amended.
(n) Permits, Etc. The Borrower has all permits, consents, licenses, authorizations,
approvals, entitlements and accreditations required for it lawfully to own, lease, manage or
operate, or to acquire each business currently owned, leased, managed or operated, or to be
acquired, by it. No condition exists or event has occurred which, in itself or with the giving of
notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture
or non-renewal of any such permit, consent, license, authorization, approval, entitlement or
accreditation and which could reasonably be expected to have a Material Adverse Effect, and there
is no claim that any such permit, consent, license, authorization, approval, entitlement or
accreditation is not in full force and effect.
(o) Environmental Matters. Except to the extent not reasonably expected to result in
a Material Adverse Effect or a Default or Event of Default, (i) none of the operations of the
Borrower or any of its Subsidiaries violates any Environmental Law, (ii) no Environmental Action
has been asserted against the Borrower or any of its Subsidiaries in writing nor does the Borrower
have any knowledge of any threatened or pending Environmental Action against the Borrower, any of
its Subsidiaries or any predecessor in interest, (iii) neither the Borrower nor
any of its Subsidiaries has incurred any Environmental Liabilities and Costs, and (iv) to the
Borrower’s knowledge, neither the Borrower nor any of its Subsidiaries has any contingent liability
in connection with any release of any Hazardous Material into the environment.
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(p) ERISA. The Borrower and each of its Subsidiaries are in compliance in all
material respects with all applicable provisions of ERISA. Neither a Reportable Event nor a
Prohibited Transaction has occurred and is continuing with respect to any Plan; no notice of intent
to terminate a Plan has been filed, nor has any Plan been terminated; no circumstances exist which
constitute grounds entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administer, a Plan, nor has the PBGC instituted any such proceedings; neither the Borrower nor
any Commonly Controlled Entity has completely or partially withdrawn from a Multiemployer Plan; the
Borrower and each Commonly Controlled Entity have met their minimum funding requirements under
ERISA with respect to all of their Plans; and neither the Borrower nor any Commonly Controlled
Entity has incurred any liability to the PBGC under ERISA.
(q) Solvency. The Borrower and its Subsidiaries, on both an individual and a
consolidated basis, are Solvent and will be Solvent after giving effect to the transactions
contemplated by this Credit Agreement and the other Loan Documents.
(r) USA PATRIOT Act Compliance. The Borrower shall, and shall cause each of its
Subsidiaries and Affiliates to, provide such information and take such actions as are reasonably
requested by the Lender in order to assist the Lender in maintaining compliance with the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 or similar laws and the rules and regulations promulgated thereunder, in each
case, as the same may be in effect from time to time (the “USA Patriot Act”).
4. Covenants. The Borrower hereby covenants to the Lender that during the term of
this Credit Agreement or so long as (i) any amounts owed hereunder or under any other Loan Document
are outstanding, or (ii) the Revolving Loan Commitment has not been permanently reduced to zero,
the Borrower shall perform the following obligations, unless otherwise agreed by the Lender:
(a) Financial Statements. The Borrower shall deliver to the Lender as soon as
available and in any event within one hundred and twenty (120) days after the end of each fiscal
year of the Borrower a consolidated balance sheet as of the end of such fiscal year and the related
statements of income, expenses and cash flows of the Borrower and its Subsidiaries, setting forth
in comparative form the corresponding figures from the immediately preceding fiscal year of the
Borrower which shall be in reasonable detail and shall be audited by independent certified public
accountants selected by the Borrower and reasonably satisfactory to the Lender, and as to which
such accountants shall have expressed a written opinion that such statements fairly present the
financial position of the Borrower and its Subsidiaries for the period then ended and have been
prepared in accordance with GAAP consistently applied, and that the examination of such accounts
was made in accordance with generally accepted auditing standards, as in effect from time to time,
and accordingly included such tests of the accounting records and such other auditing procedures as
were considered necessary under the circumstances.
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(b) Proxy Statements, etc. Promptly after the sending or filing thereof, the Borrower
shall deliver to the Lender copies of all proxy statements, financial statements, and reports which
the Borrower sends to its stockholders, and copies of all regular, periodic, and special reports,
and all registration statements which the Borrower files with the Securities and Exchange
Commission or any other Governmental Authority which may be substituted therefor, or with any
national securities exchange.
(c) ERISA Reports. As soon as possible, and in any event within thirty (30) days
after the Borrower knows or has reason to know that any circumstances exist that constitute grounds
entitling the PBGC to institute proceedings to terminate a Plan subject to ERISA with respect to
the Borrower or any Commonly Controlled Entity, and promptly but in any event within two (2)
Business Days of receipt by the Borrower or any Commonly Controlled Entity of notice that the PBGC
intends to terminate a Plan or appoint a trustee to administer the same, and promptly but in any
event within five (5) Business Days of the receipt of notice concerning the imposition of
withdrawal liability in excess of $250,000 with respect to the Borrower or any Commonly Controlled
Entity, the Borrower will deliver to the Lender a certificate of the chief financial officer of the
Borrower setting forth all relevant details and the action which the Borrower proposes to take with
respect thereto.
(d) Additional Information. The Borrower shall make available and provide to the
Lender such further information and documents concerning its business and affairs including,
without limitation, budgets and business plans of the Borrower and its Subsidiaries as the Lender
may from time to time reasonably request.
(e) Notices. The Borrower shall promptly notify the Lender of:
(i) any investigation by, or proceeding in or before, any court, arbitrator, administrative
body or agency or other Governmental Authority (other than routine inquiries by a governmental
agency), including, without limitation, any Environmental Action which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect, a Default or an
Event of Default and, upon request, provide the Lender with all material documents and information
furnished by the Borrower in connection therewith;
(ii) the occurrence of any Default or Event of Default or any other development which could
reasonably be expected to result in a Material Adverse Effect, which notice shall be provided to
the Lender as soon as possible, but in no event later than five (5) days after the Borrower becomes
aware of the same and shall include a statement as to what action the Borrower has taken and/or
proposes to take with respect thereto; and
(iii) any change in the Borrower’s key management personnel, including without
limitation, its President, Controller or Treasurer.
(f) Compliance with Laws, Etc. The Borrower shall comply in all material respects
with the requirements of all applicable laws and maintain and preserve its corporate existence,
rights and privileges.
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(g) Books and Records. The Borrower shall keep and maintain adequate records and
books of account, with complete entries made in accordance with GAAP, consistently applied.
(h) Inspection Rights. The Borrower shall permit the Lender or any agents and
representatives of the Lender at any time and from time to time during reasonable business hours
and, so long as no Default or Event of Default has occurred and is continuing, on reasonable prior
notice to the Borrower, to examine and make copies of and abstracts from its records and books of
account, to visit and inspect its properties, to conduct audits and make examinations and discuss
its affairs, finances, prospects, accounts and such other matters as it reasonably requests,
including, without limitation, any event or circumstance which may result in a Material Adverse
Effect, with any of its directors, officers, employees, accountants or other professional advisors
or representatives (collectively, the “Financial Persons”). This provision shall serve as
an authorization and direction by the Borrower to all such Financial Persons to reasonably
cooperate with the Lender in connection with any such inquiry or examination on the part of the
Lender or its representatives.
(i) Insurance. The Borrower shall maintain and cause each of its Subsidiaries to
maintain (in each case in the Borrower’s name or in the name of such Subsidiary, as the case may
be), with responsible, financially sound and reputable insurance companies insurance with respect
to its properties and business against such casualties and contingencies and of such types and in
such amounts as is customary in the case of similar businesses.
(j) Taxes. The Borrower shall pay and discharge all taxes, assessments, levies and
governmental charges upon it or against any of its properties, assets or income prior to the date
after which penalties attach for failure to pay except to the extent that (i) the Borrower shall be
contesting in good faith its obligation to pay such taxes, assessments, levies and charges and the
Borrower has adequately accrued for such payments, or (ii) the failure to pay such taxes shall not
have a Material Adverse Effect or result in any Default or Event of Default.
(k) Further Assurances. The Borrower shall do, execute, acknowledge and deliver at
the sole cost and expense of the Borrower, all documents, instruments and agreements and take such
further acts and deeds as the Lender may reasonably require from time to time to carry out the
intention or facilitate the performance of the terms of this Credit Agreement or any other Loan
Document.
(l) Merger, Consolidation, etc. The Borrower shall not:
(i) merge, consolidate or amalgamate with or into any other Person unless: (A)
the Borrower is the surviving entity, (B) the Borrower provides the Lender with at
least 20 days (calendar days) prior written notice thereof, (C) the documentation in
connection therewith is reasonably satisfactory in form and substance to the Lender,
(D) the Borrower provides the Lender with such documents, certificates and opinions
as the Lender may reasonably request, in form and substance reasonably satisfactory
to the Lender, including, without limitation, a
legal opinion given by counsel reasonably satisfactory to the Lender regarding
the legal, valid and binding nature of the Loan Documents and the enforceability
thereof and such other matters as the Lender may reasonably request, and (E) no
Default or Event of Default shall occur and be continuing both immediately before
and immediately after such merger, consolidation or amalgamation, and no Material
Adverse Effect may result;
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(ii) dissolve, wind-up or liquidate;
(iii) purchase or otherwise acquire all or substantially all of the assets, liabilities or
properties of any other Person to the extent a Material Adverse Effect or any Default or Event of
Default may result; or
(iv) sell, lease, transfer or otherwise dispose of all or substantially all of its assets or
properties whether in any single transaction or one or more transactions in the aggregate.
(m) Change in Nature of Business. The Borrower shall not make any changes in the
nature of its business activities as presently conducted except to the extent not reasonably likely
to have a Material Adverse Effect.
(n) Transactions with Affiliates. The Borrower shall not enter into any transaction
with any of its Affiliates unless such transaction is otherwise permitted hereunder or is in the
ordinary course of business of the Borrower and the applicable Affiliate and upon fair and
reasonable terms no less favorable to the Borrower than it would obtain in a comparable arm’s
length transaction with a Person which is not an Affiliate.
(o) Corporate Documents. The Borrower shall not amend any of its organizational
documents in any manner which is reasonably likely to materially adversely affect the Lender’s
rights under any of the Loan Documents or its ability to enforce any such rights.
(p) Fiscal Year. The Borrower shall not permit its fiscal year to end on a day other
than the first Saturday between and including January 28th and February 3rd
of any given year.
(q) Working Capital Financing. The Parent shall for any reason cease to
provide working capital financing for the Borrower in a maximum principal amount of at least
$50,000,000.00.
5. Conditions Precedent to the Initial Revolving Loan.
(a) The obligation of the Lender to make the initial Revolving Loan is subject to the prior
fulfillment of the following conditions:
(i) Documents. The Lender shall have received the following, each in form and
substance satisfactory to the Lender:
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(A) Executed Agreement. This Credit Agreement, duly executed by an authorized officer
of the Borrower.
(B) Note. The Note, duly executed by an authorized officer of the Borrower.
(C) Officer’s Certificate. A certificate of an authorized officer of the Borrower,
substantially in the form of Exhibit B hereto, certifying, among other things, as to (w) the
organizational documents of the Borrower, a copy of which is attached thereto, (x) resolutions of
the board of directors of the Borrower authorizing the Borrower to execute, deliver and perform
this Credit Agreement, the Note and any other Loan Documents to which it is a party, a copy of
which is attached thereto, (y) the names and signatures of the officers of the Borrower authorized
to execute this Credit Agreement, the Note and the other Loan Documents to which it is a party, and
(z) the fact that there have been no changes in the organizational documents or by-laws (or the
equivalent thereof), if any, of the Borrower since the date of the most recent certification
thereof.
(D) Notice of Borrowing. A Notice of Borrowing duly executed by an authorized officer
of the Borrower as required under Section 2.1.2 hereof. The submission by the Borrower of such
Notice of Borrowing to the Lender and the Borrower’s acceptance of the proceeds of such Revolving
Loan shall be deemed to be a representation and warranty by the Borrower that all of the applicable
conditions precedent set forth herein have been satisfied.
(E) Other Items. Such other agreements, instruments, approvals, opinions and
documents as the Lender may reasonably request.
(ii) Fees and Expenses. The Lender shall have received all of the fees, costs and
expenses that are then due and payable hereunder and under the other Loan Documents.
(iii) Legality. The making of the Revolving Loan shall not contravene any law, rule
or regulation applicable to the Lender or the Borrower.
(iv) Representations and Warranties. All of the representations and warranties
contained in Section 3 of this Credit Agreement, in each other Loan Document and in each
certificate and other writing delivered to the Lender pursuant hereto or thereto on or prior to the
date of such Revolving Loan shall be true and correct in all material respects as though made on
and as of such date. The acceptance by the Borrower of the proceeds of such Revolving Loan shall
be deemed to be a representation and warranty by the Borrower to the Lender to such effect.
(v) Defaults; Material Adverse Effect. No Default, Event of Default or event that may
have a Material Adverse Effect shall have occurred and be continuing on the date of such Revolving
Loan or could reasonably be expected to result from making such
Revolving Loan. The acceptance by the Borrower of the proceeds of such Revolving Loan shall be
deemed to be a representation and warranty by the Borrower to the Lender to such effect.
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(b) Subsequent Loans. The obligation of the Lender to make subsequent Revolving Loans
shall, in addition to the fulfillment of the conditions set forth in paragraph (a) above, be
subject to the following:
(i) Notice of Borrowing. The Lender shall have received a Notice of Borrowing, duly
executed by an authorized officer or authorized representative of the Borrower as required under
Section 2.1.2 hereof. The submission by the Borrower of such Notice of Borrowing to the Lender and
the Borrower’s acceptance of the proceeds of such Revolving Loan shall be deemed to be a
representation and warranty by the Borrower that all of the applicable conditions precedent set
forth herein have been satisfied.
(ii) Fees and Expenses. The Lender shall have received all of the fees, costs and
expenses that are then due and payable hereunder and under the other Loan Documents.
(iii) Legality. The making of such Revolving Loans shall not contravene any law, rule
or regulation applicable to the Lender or the Borrower.
(iv) Representations and Warranties. All of the representations and warranties
contained in Section 3 of this Credit Agreement, in each other Loan Document and in each
certificate and other writing delivered to the Lender pursuant hereto or thereto on or prior to the
date of such Revolving Loans shall be true and correct as though made on and as of such date.
(v) Defaults. No Default, Event of Default or event that may have a Material Adverse
Effect shall have occurred and be continuing on the date of such Revolving Loans or would result
from making of such Revolving Loans.
(vi) Other Items. The Lender shall have received such other agreements, instruments,
approvals, opinions and documents as the Lender may reasonably request.
6. Events of Default
6.1. Events of Default. Each of the following events and occurrences shall constitute
an “Event of Default” under this Credit Agreement:
(a) The Borrower shall fail to pay when due and payable any amount that the Borrower, as the
case may be, is obligated to pay under (i) this Credit Agreement or the Note in the case of the
Borrower, and, in the case of any such amounts other than the principal amount of any Revolving
Loan, such failure shall continue for a period of three (3) Business Days, (ii) any other Loan
Document to which it is a party, or (ii) any other note, instrument or agreement
evidencing Indebtedness of the Borrower, as the case may be to the Lender, subject to any
applicable grace period provided for therein; or
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(b) Any representation or warranty made or deemed made by the Borrower in any Loan Document or
any certificate, report or other document delivered to the Lender pursuant to any Loan Document
shall have been incorrect or misleading in any material respect when made, deemed made or
confirmed; or
(c) The Borrower shall fail to perform or shall violate any provision, covenant, condition or
agreement in paragraph (l) of Section 4 of this Credit Agreement; or
(d) The Borrower shall fail to perform or shall violate any provision, covenant, condition or
agreement of this Credit Agreement or any other Loan Document on its part to be performed or
observed (other than those set forth in paragraphs (a), (b) and (c) of this Section 6.1) and such
failure or violation is not remediable or, if remediable, continues unremedied for a period of
fifteen (15) days after the earlier of (i) notice from the Lender, or (ii) such time as the
Borrower, the Parent, or the Ultimate Parent becomes aware of the same; or
(e) Any event or condition shall occur that results in the acceleration of the maturity of any
Indebtedness of the Borrower or any of its Subsidiaries under any agreement, document or instrument
with respect to an amount of Indebtedness equal to or greater than $1,000,000 (or the equivalent
thereof in any foreign currency) in the aggregate for the Borrower and its Subsidiaries, or that
enables the holder of such Indebtedness or any Person acting on such holder’s behalf to accelerate
the maturity thereof; or
(f) The Borrower, any of its Subsidiaries, the Parent, or the Ultimate Parent is adjudicated
to be bankrupt or insolvent, or admits in writing its inability to pay its debts as they become due
or makes an assignment for the benefit of creditors, or ceases doing business as a going concern or
applies for or consents to the appointment of any receiver or trustee, or such receiver, trustee or
similar officer is appointed with the application or consent of the Borrower, any of its
Subsidiaries, the Parent, or the Ultimate Parent, as the case may be, or bankruptcy, dissolution,
liquidation or reorganization proceedings (or proceedings similar in purpose and effect) are
instituted by the Borrower, any of its Subsidiaries, the Parent, or the Ultimate Parent are
instituted against (and not vacated or discharged within 30 days) the Borrower, any of its
Subsidiaries, the Parent, or the Ultimate Parent; or
(g) Any money judgment or warrant of attachment or similar process involving, individually or
in the aggregate for the Borrower, its Subsidiaries, the Parent and/or the Ultimate Parent, in
excess of $1,000,000 (or the equivalent thereof in any foreign currency) shall be entered or filed
against such party or parties, and shall remain undischarged, unvacated or unbonded for a period of
30 days; or
(h) The validity or enforceability of this Credit Agreement or any other Loan Document, or any
provisions thereof, shall be contested by or on behalf of the Borrower; or a proceeding shall be
commenced by any Governmental Authority having jurisdiction over the
Borrower seeking to establish the invalidity thereof; or the Borrower shall deny that it has any
further liability or obligation under any Loan Document to which it is a party; or
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(i) Any of the following events shall occur or exist with respect to the Borrower: any
Reportable Event shall occur; complete or partial withdrawal from any Multiemployer Plan shall take
place; any Prohibited Transaction shall occur; a notice of intent to terminate a Plan shall be
filed, or a Plan shall be terminated; or circumstances shall exist which constitute grounds
entitling the PBGC to institute proceedings to terminate a Plan, or the PBGC shall institute such
proceedings; and in each case above, such event or condition, together with all other events or
conditions, if any, could subject the Borrower to any tax, penalty, or other liability which in the
aggregate may exceed $1,000,000; or
(j) The Ultimate Parent shall cease to own, directly or indirectly, a majority of the issued
and outstanding shares of capital stock of the Borrower, or to control the board of directors of
the Borrower through the ownership of voting securities having the power to elect a majority of the
board; or
(k) A event has occurred and is continuing or condition exists that has had or is reasonably
likely to have a Material Adverse Effect.
6.2. Consequence of Default. Upon the occurrence of any Event of Default (i)
described in subsection (f) of Section 6.1, the outstanding amount of the Revolving Loan Commitment
shall automatically be reduced to zero and the outstanding amount of all Revolving Loans and all
other amounts payable hereunder, under the Note and under any other Loan Document shall
automatically become immediately due and payable, without presentment, demand, protest or other
requirement of any kind, all of which are hereby expressly waived by the Borrower, or (ii)
described in any other subsection of Section 6.1 and during the continuance thereof, the Lender
may, by notice of default given to the Borrower, terminate the Revolving Loan Commitment and
declare all of the outstanding principal amount of all Revolving Loans and all other amounts
payable hereunder, under the Note and under any other Loan Document to be immediately due and
payable, whereupon the Revolving Loan Commitment shall be terminated and the unpaid principal
amount of the Note, together with accrued interest thereon, and all such other amounts, shall be
immediately due and payable without presentment, protest, demand or other requirement of any kind,
each of which is hereby expressly waived by the Borrower. The rights and remedies of the Lender
under this Credit Agreement are in addition to, and not in substitution of, the rights and remedies
the Lender is entitled to exercise at law, in equity and under any other Loan Document.
7. Additional Costs and Expenses; Indemnity.
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7.1. (a) The Borrower shall pay to Lender on demand all reasonable out-of-pocket costs and
expenses of the Lender actually incurred in connection with: (i) the preparation, execution,
delivery and enforcement of, and the preservation or protection of the Lender’s rights under, this
Credit Agreement, the Note and any other Loan Documents, (ii) the negotiation of any restructuring,
work-out or renegotiation of any terms of this Credit Agreement, the Note or any other Loan
Document or the obligations of the Borrower or the Ultimate Parent hereunder or
thereunder, as the case may be, and (iii) the response to any subpoena or similar process
compelling the production of documents or other response in connection with this Credit Agreement,
the Note or any other Loan Document, including without limitation, in each case, the reasonable and
actual fees and expenses of outside counsel for the Lender, and the Borrower further agrees to
indemnify the Lender and its officers, directors and employees against any losses, damages, claims
and expenses arising out of the use or proposed use by the Borrower of the proceeds of any
Revolving Loan hereunder including, without limitation, to acquire equity securities of any
business or entity. In addition, the Borrower agrees to defend, indemnify and hold harmless the
Lender and its officers, directors and employees from and against any losses, damages, liabilities,
obligations, penalties, fees, costs and expenses, including without limitation the reasonable and
actual fees and expenses of outside counsel for the Lender, arising out of or relating to the
negotiation, preparation, execution, delivery, performance, administration or enforcement of this
Credit Agreement and the other Loan Documents and any amendment, supplement, modification or waiver
with respect hereto or thereto and any claim, litigation, investigation or proceeding relating to
any of the foregoing including, without limitation, all Environmental Liabilities and Costs arising
from or in connection with: (i) the past, present or future operations of the Borrower or any of
its Subsidiaries involving any damage to real or personal property or natural resources or harm or
injury alleged to have resulted from any release of Hazardous Materials, (ii) any Environmental
Action, or (iii) a breach by the Borrower any of its Subsidiaries of any Environmental Law;
provided, however, that none of the foregoing indemnity obligations of the Borrower
shall extend to any liability, obligation, loss, damage, penalty, claim, action, suit, cost,
expense or disbursement to the extent resulting from the willful misconduct or gross negligence of
the Lender as determined by a final judgment of a court of competent jurisdiction.
(b) If any future applicable law, regulation or directive, or any change of any existing law,
regulation or directive or in the interpretation thereof, or compliance by the Lender with any
request or requirement (whether or not having the force of law) of any relevant central bank or
other comparable agency, imposes, modifies or deems applicable any reserve, special deposit,
premium, assessment or similar requirement against assets held by, or deposits in or for the
account of, or advances or loans by, or any other acquisition of funds by the Lender, any capital
adequacy standard or other condition with respect to this Credit Agreement, the Note or any other
Loan Document, and the result of any of the foregoing is to increase the cost to the Lender of
maintaining advances or credit or to reduce any amount receivable in respect thereof, then the
Lender may notify the Borrower, and the Borrower shall pay within five (5) Business Days of the
date of such notice such amount as the Lender may specify to be necessary to compensate the Lender
for such reduced receipt, together with interest on such amount from the date demanded until
payment in full thereof at the same rate applicable to the Revolving Loans. The determination by
the Lender of any amount due under this Section 7.1(b) as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest error, be
conclusive evidence thereof.
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(c) If, by reason of any applicable present or future law or regulation or regulatory
requirement or the interpretation or application thereof, it shall be unlawful or otherwise
prohibited for the Lender to make or maintain any Revolving Loan or give effect to any of its
obligations or benefits as contemplated by this Credit Agreement and the other Loan
Documents, the obligation of the Lender to make, fund and maintain any Revolving Loans under this
Credit Agreement shall be suspended until the Lender shall notify the Borrower that the
circumstances causing such suspension no longer exist and the Borrower shall forthwith prepay to
the Lender the principal amount of all Revolving Loans then outstanding, together with interest
accrued thereon and all other amounts owed with respect thereto, including, without limitation,
amounts owed pursuant to Section 7.1(d) hereof.
(d) If, due to any prepayment or repayment at a time other than as provided herein, including
any prepayment pursuant to Section 2.5 or Section 7.1(c) or the acceleration of the maturity of any
Revolving Loan pursuant to Section 6 hereof, the Lender incurs funding costs or suffers loss of
earnings, the Borrower shall, promptly after demand by the Lender, pay to the Lender any amounts
required to compensate the Lender for any such losses, costs or expenses, including, without
limitation, any loss, cost or expense incurred by reason of liquidation or reemployment of deposits
or other funds acquired by the Lender to fund or maintain any Revolving Loan. A certificate
setting forth the amount of such additional losses, costs or expenses submitted to the Borrower by
the Lender shall, in the absence of manifest error, be conclusive evidence thereof.
(e) Without prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this Section 7.1 shall survive the payment
in full of the principal, interest and all other amounts under this Credit Agreement and under any
other Loan Document and the termination of this Credit Agreement and each other Loan Document.
7.2 Taxes.
(a) Any and all payments made by the Borrower hereunder shall be made free and clear of, and
without deduction for, any present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto (all such taxes, levies, imposts,
deductions, charges, withholdings and liabilities, being hereinafter referred to as
“Taxes”). If and to the extent the laws of the United States or any political subdivision
thereof require that Taxes on the income of the Lender be withheld from any payment of interest,
(i) the amount of such payment of interest shall be increased to the extent necessary to cause the
Lender to receive (after the withholding of such Taxes) an amount equal to the amount it would have
received had the withholding of such Taxes not been required, and (ii) the Borrower shall withhold
such Taxes from such increased payment of interest and pay such Taxes to the relevant taxation
authority or other authority for the account of the Lender in accordance with applicable law.
(b) In addition, the Borrower agrees to pay all present and future stamp, documentary, excise
and property taxes, and all other taxes, charges and similar levies which arise from any payment
made hereunder or under any other Loan Document or from the execution, delivery, registration,
consummation or administration of, or otherwise with respect to, this Credit Agreement or any other
Loan Document or any amendment, supplement or modification of, or waiver with respect to, this
Credit Agreement or such other Loan Document, excluding, in each case, taxes on the overall net
income of the Lender (hereinafter referred to as “Other Taxes”).
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(c) The Borrower shall indemnify the Lender for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 7.2) paid by the Lender or any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. Payment with respect to this indemnification shall be made
within five (5) days after the date the Lender makes written demand therefor.
(d) Within 30 days after the date of payment of any Taxes with respect to any payment due
hereunder or under any other Loan Document, the Borrower will furnish to the Lender, at its address
referred to in Section 8.6 hereof, the original or a certified copy of a receipt evidencing payment
thereof.
(e) Without prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this Section 7.2 shall survive the payment
in full of the principal, interest and all other amounts under this Credit Agreement and under any
other Loan Document and the termination of this Credit Agreement and each other Loan Document.
8. Miscellaneous.
8.1. Entire Agreement. This Credit Agreement, the other Loan Documents and the
documents referred to herein and therein constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and shall supersede any prior expressions of intent or
understanding with respect to the transactions herein and therein contemplated.
8.2. No Waiver; Cumulative Rights. The failure or delay of the Lender to require
performance by the Borrower of any provision of this Credit Agreement shall not operate as a waiver
thereof, nor shall it affect the Lender’s rights to require performance of such provision at any
time thereafter, nor shall it affect or impair any of the remedies, powers or rights of the Lender
with respect to any other or subsequent failure, delay or default. Each and every right granted to
the Lender hereunder or under any other Loan Document or in connection herewith or therewith shall
be cumulative and may be exercised at any time.
8.3. Assignment; Binding Effect.
(a) This Credit Agreement shall be binding upon and shall be enforceable by the Borrower and
the Lender and their respective successors and assigns.
(b) The Lender shall be permitted to assign and participate any Revolving Loan and all of its
other rights and obligations hereunder or under the other Loan Documents without the requirement of
any consent or approval by the Borrower.
(c) The Borrower shall not be permitted to assign or otherwise transfer, in whole or in part,
its rights and obligations hereunder or under any other Loan Document without the prior
written consent of the Lender and any such assignment or transfer without the Lender’s prior
written consent shall be null and void.
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8.4. GOVERNING LAW; JURY TRIAL. THIS CREDIT AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAWS THEREOF. THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL IN
CONNECTION WITH ANY ACTION RELATED TO THIS CREDIT AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT.
8.5. Submission to Jurisdiction.
(a) The Borrower hereby irrevocably agrees that any legal action or proceedings against it
with respect to this Credit Agreement, the Note or any other Loan Document may be brought in any
court of the State of New York or any Federal Court of the United States of America located in the
City or State of New York, or both, as the Lender may elect, and by execution and delivery of this
Credit Agreement the Borrower hereby submits to and accepts with regard to any such action or
proceeding service of process by the mailing of copies thereof by registered or certified airmail,
postage prepaid, to the Borrower at its address set forth in Section 8.6 hereof.
(b) The Borrower hereby irrevocably waives any objection which it may now or hereafter have to
the laying of the venue of any suit, action or proceeding arising out of or relating to this Credit
Agreement, the Note or any other Loan Document in the State of New York and hereby further
irrevocably waives any claim that the State of New York is not a convenient forum for any such
suit, action or proceeding.
8.6. Notices. Any notice hereunder shall be in writing and shall be personally
delivered, transmitted by postage prepaid, registered or certified mail or by overnight mail, or
transmitted by telephonic facsimile (“FAX”) to the parties as follows:
To the Borrower:
|
THE TALBOTS, INC. | |
| 000 Xxxx Xxxxxx | ||
| Xxxxxxx, Xxxxxxxxxxxxx 00000 | ||
| Telephone: (000) 000-0000 | ||
| FAX: (000) 000-0000 | ||
| Attention: Xxxxx Xxxxx, | ||
| Senior Vice President of Finance | ||
To the Lender:
|
SUMITOMO MITSUI BANKING CORPORATION | |
| 000 Xxxx Xxxxxx | ||
| Xxx Xxxx, XX 00000 | ||
| Telephone: (000) 000-0000 | ||
| FAX: (000) 000-0000 | ||
| Attention: CBDA1 |
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All notices and other communications shall be deemed to have been duly given on (i) the date of
receipt if delivered personally, (ii) the date five (5) days after posting if transmitted by
registered or certified mail, (iii) the Business Day after having been sent if transmitted by
overnight mail with a reputable courier, or (iv) the date of transmission if transmitted by FAX and
receipt is confirmed.
8.7. Amendments, Etc. No amendment or waiver of any provision of this Credit
Agreement and the other Loan Documents, and no consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed by the Lender and,
in the case of an amendment, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given.
8.8. Usury. Anything in this Credit Agreement to the contrary notwithstanding, the
obligation of the Borrower to pay interest on any Revolving Loan and the Note or any other amount
due and owing hereunder or under any other Loan Document shall be subject to the limitation that no
payment of such interest shall be required to the extent that receipt of such payment would be
contrary to applicable usury laws.
8.9. Counterparts; Facsimile Signature. This Credit Agreement may be signed in any
number of counterparts. Either a single counterpart or a set of counterparts when signed by all
the parties hereto shall constitute a full and original agreement for all purposes. Delivery of
any executed signature page hereof or of any amendment, waiver or consent to this Credit Agreement
by facsimile transmission shall be as effective as delivery of a manually executed counterpart
thereof.
8.10. Severability. Any provision of this Credit Agreement or any other Loan Document
that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
8.11. Right of Set-Off. Upon the occurrence and during the continuance of any Event
of Default, the Lender is hereby authorized at any time and from time to time, without notice to
the Borrower (any such notice being expressly waived by the Borrower) and to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other Indebtedness at any time owing by the Lender or
any of its Affiliates (including any branch or agency of the Lender or any of its Affiliates) to or
for the credit or the account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing hereunder or under any other Loan Document, irrespective of
whether or not the Lender shall have made any demand hereunder or thereunder and although such
obligations may be unmatured. The Lender agrees promptly to notify the Borrower after any such
set-off and application, provided that the failure to give such notice shall not affect the
validity of such set-off and application or any obligations of the Borrower to the Lender hereunder
or under any other Loan Document or otherwise. The rights of the Lender under this
Section 8.11 are in addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Lender may have under law, equity or otherwise.
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8.12. No Party Deemed Drafter. The Borrower and the Lender agree that no party hereto
shall be deemed to be the drafter of this Credit Agreement.
8.13. USA Patriot Act Notification. The following notification is provided to the
Borrower pursuant to Section 326 of the USA Patriot Act:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government
fight the funding of terrorism and money laundering activities, Federal law requires all financial
institutions to obtain, verify and record information that identifies each person or entity that
opens an account, including any deposit account, treasury management account, loan, other extension
of credit or other financial services product. WHAT THIS MEANS FOR THE BORROWER: When the
Borrower opens an account, the Lender will ask the Borrower for certain information, including,
without limitation, the Borrower’s name, tax identification number, business address and other
information that will allow the Lender to identify the Borrower. The Lender may also seek to see
the Borrower’s legal organizational documents or other identifying documents, among other things.
The Borrower agrees to cooperate with the Lender and provide true, accurate complete information to
the Lender in response to any such request.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be executed by their
duly authorized representatives as of the date first written above.
| THE TALBOTS, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Senior Vice President, Finance Chief Financial Officer and Treasurer | |||
| SUMITOMO MITSUI BANKING CORPORATION |
||||
| By: | /s/ Xxxxxx Xxxxxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxxxxx | |||
| Title: | Senior Vice President | |||
-28-
EXHIBIT A
NOTE
-29-
NOTE
US$50,000,000.00
December 31, 2008
FOR VALUE RECEIVED, The Talbots, Inc. (the “Borrower”) unconditionally promises to pay to
the order of Sumitomo Mitsui Banking Corporation (the “Lender”), to and for any account
designated by the Lender, the principal sum of Fifty Million Dollars ($50,000,000) or such lesser
amount as may be outstanding from time to time hereunder and to pay interest thereon at such rates
and according to such methods of calculation as are provided pursuant to the Revolving Credit
Agreement dated as of December 30, 2008, between the Borrower and the Lender (as the same may be
amended, supplemented, or otherwise modified from time to time, the “Credit Agreement”).
The Borrower hereby authorizes the Lender to enter on the schedule attached hereto the dates,
amounts, denomination, maturities, interest rates and interest periods applicable to each borrowing
and absent manifest error such notations shall be binding and conclusive upon the Borrower;
provided, however, that failure by the Lender to make any notation on such schedule
or any error in such notations shall in no way affect the Borrower’s obligation to repay
outstanding amounts under this Note.
The outstanding principal of this Note and any accrued interest thereon shall be repaid as set
forth in the Credit Agreement, with final payment on the Maturity Date (as defined in the Credit
Agreement).
All payments of principal and interest on this Note shall be payable in lawful money of the
United States of America in immediately available funds without set-off, defense or counterclaim.
This Note is issued pursuant to the terms of the Credit Agreement and is subject to the terms
and conditions and entitled to the benefits therein provided. Upon the occurrence of an Event of
Default (as defined in the Credit Agreement), the principal of and the accrued interest on this
Note may become due and payable in the manner and with the same effect as provided in the Credit
Agreement, without presentment, demand, protest or notice of any kind unless otherwise expressly
required therein.
Failure or delay of the holder of this Note to enforce any provision of this Note shall not be
deemed a waiver of any such provision, nor shall the holder of this Note be estopped from enforcing
any such provision at a later time. Any waiver of any provision hereof must be in writing. This
Note shall be governed by and interpreted in accordance with the laws of the State of New York
without regard to the conflict of law provisions thereof.
| THE TALBOTS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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SCHEDULE TO NOTE
CUSTOMER: THE TALBOTS, INC.
LINE AMOUNT: U.S.$50,000,000.00
LINE AMOUNT: U.S.$50,000,000.00
| Unpaid | Name of | |||||||||||||||||||||||||||
| Our | Amount of | Balance of | Person | |||||||||||||||||||||||||
| Date Made | Reference | Amount | Interest | Principal | Revolving | Making | ||||||||||||||||||||||
| or Paid | Number | of Loan | Due Date | Rate | Paid | Credit | Notation | |||||||||||||||||||||
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OFFICER’S CERTIFICATE OF BORROWER
I, _________, the ____________ of The Talbots, Inc., a Delaware
corporation (the “Borrower”) do hereby certify that:
1. The Borrower has full corporate power and authority to execute, enter into and deliver the
Revolving Credit Agreement, dated as of December 30, 2008, between the Borrower and Sumitomo Mitsui
Banking Corporation (the “Lender”) (the “Credit Agreement”; terms defined in the
Credit Agreement shall have the same meaning in this certificate) together with the Note and each
other Loan Document to which it is a party.
2. All corporate action necessary to authorize the execution, delivery and performance of the
Credit Agreement, the Note and each other Loan Document to which it is a party has been taken by resolutions of
the Board of Directors of the Borrower [at a meeting duly called at which a
majority was present and acting throughout] or [adopted by unanimous written consent] and such resolutions have not been modified or amended in
any respect and are in full force and effect on the date hereof.
3. Attached hereto as Exhibit A is a true, correct and complete copy of the Borrower’s
Certificate of Incorporation, together with all amendments thereto, as in effect on and as of the
date hereof.
4. Attached hereto as Exhibit B is a true, correct and complete copy of the Borrower’s
By-laws, together with all amendments thereto, as in effect on and as of the date hereof.
5. Attached hereto as Exhibit C is a true, correct and complete copy of the resolutions
of the Board of Directors of the Borrower
approving and authorizing the execution, delivery and performance of the Credit Agreement, the
Note, and each other Loan Document, which minutes remain in full force and effect without
modification or amendment on and as of the date hereof.
6. Attached hereto as Exhibit D is a good standing certificate from the office of the
Secretary of State of Delaware dated as of a recent date.
7. All representations and warranties contained in the Credit Agreement are true and correct
in all material respects on and as of the date hereof.
8. No Default or Event of Default or event that may have a Material Adverse Effect has
occurred and is continuing on and as of the date hereof or would result from the Credit Agreement
becoming effective in accordance with its terms, both immediately before and immediately after
giving effect to the Revolving Loans.
9. The Borrower has performed in all material respects all agreements and satisfied in all
material respects all conditions, which the Credit Agreement provides shall be performed by it on
or before the date hereof.
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10. The following persons are, and have been at all times since a date prior to December 30,
2008, duly qualified and acting officers of the Borrower duly elected or appointed to the offices
set forth opposite the name, and such person who, as an officer of the Borrower, signed
the Credit Agreement, the Note and any other Loan Documents to which the Borrower is a party was
duly elected or appointed, qualified and acting as such officer at the time of such signing and
delivery, and the signature of such person appearing on such documents is such person’s genuine
signature.
| Name | Office | Signature | ||||
11. No proceeding for the winding-up, liquidation, dissolution or sale of all, or
substantially all, of the assets of the Borrower is pending or contemplated.
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IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Borrower.
Dated: December 30, 2008
I, _________, the _________ of The Talbots, Inc. (the “Borrower”) hereby certify
that I am the duly elected, qualified and acting _________ of the Borrower and that such person’s
signature above is the true and genuine signature of such person.
-34-
EXHIBIT C
FORM OF EXTENSION REQUEST
To: Sumitomo Mitsui Banking Corporation
Re: Revolving Loan Credit Agreement dated as of December 30, 2008, by and between The Talbots, Inc.
and Sumitomo Mitsui Banking Corporation (the “Credit Agreement”)
Dear Sir or Madam,
Pursuant to Section 2.5 (d) of the Credit Agreement, we hereby irrevocably request that the
Revolving Credit Termination Date (as defined in the Credit Agreement) be extended to December ___,
, the date that is not more than one year beyond the Revolving Credit Termination Date in
effect at present.
| Very truly yours, THE TALBOTS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
