Contract
Exhibit
10.1
THE
INDEBTEDNESS EVIDENCED OR SECURED BY THIS INSTRUMENT IS SUBORDINATED TO THE
PRIOR PAYMENT IN FULL OF THE SENIOR OBLIGATIONS (AS DEFINED IN THE SUBORDINATION
AGREEMENT HEREINAFTER REFERRED TO) PURSUANT TO, AND TO THE EXTENT PROVIDED IN
(i) SECTION 8 OF THIS AGREEMENT AND (ii) THE SUBORDINATION AGREEMENT DATED AS OF
JULY 16, 2008, MADE BY AND AMONG THE SUBORDINATED CREDITORS, THE BORROWER MIZUHO
CORPORATE BANK, LTD., (“MIZUHO”), AS AGENT, AND
MIZUHO, AS BILATERAL LENDER, ALL AS REFERRED TO IN SUCH SUBORDINATION
AGREEMENT.
TERM LOAN
AGREEMENT, dated as of July 16, 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 Aeon
(U.S.A.), Inc., a corporation organized and existing under the State of Delaware
(the "Lender").
WHEREAS,
the Borrower has asked the Lender to extend credit to the Borrower, and the
Lender has agreed to extend such credit, consisting of the Term Loans (as
defined below) in the aggregate principal amount of up to $50,000,000, subject
to the terms and conditions set forth herein;
WHEREAS,
the purpose of the Lender extending the Term Loans is to provide working capital
financing for the Borrower in connection with its proposed restructuring plan
(the "Restructuring
Plan");
WHEREAS,
the proceeds of the Term Loans shall be used for general corporate and other
working capital purposes of the Borrower and to pay fees and expenses related to
this Credit Agreement;
WHEREAS,
the Term Loans shall constitute "Subordinated Debt" under the Existing Credit
Facility and be subordinated to all Senior Indebtedness set forth in Schedule 3 hereto;
and
WHEREAS,
the Lender is willing to extend such credit to the Borrower, subject to the
terms and conditions hereinafter set forth.
NOW,
THEREFORE, the Borrower and the Lender hereby agree as follows:
1. Definitions. (a) 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. For the purposes of Section 3
and Section 4 of this Agreement, the Lender and its Affiliates (other than any
Person constituting an Affiliate of the Borrower solely by virtue of the
Lender's ownership of voting stock of the Borrower) shall not constitute an
Affiliate of the Borrower.
"Applicable Spread"
shall mean a rate per annum equal to 5.00%.
"Assignee" is defined
in Section 9.3(a).
"Board" shall mean the
Board of Governors of the Federal Reserve System of the United States of
America.
"Borrower" is defined
in the preamble of this Credit Agreement.
"Borrower's Account"
shall mean the bank account established in the United States by the Borrower, at
a financial institution designated by the Lender prior to the Closing Date, for
the purposes of this Credit Agreement (or such other bank account as the parties
hereto may mutually agree).
"Borrowing Date" shall
mean the date(s) on which a Term Loan is made by the Lender in favor of the
Borrower.
"Business Day" shall
mean any day other than a Saturday, Sunday or other day on which commercial
banks are required or authorized to be closed in New York, New York or Tokyo,
Japan; provided, however, that when
used in connection with the payment or prepayment of any amounts accruing
interest at such rate or providing notices in connection with such rate,
"Business Day" shall mean any Business Day in New York, New York or Tokyo, Japan
in which dealings in Dollars are carried on in the London interbank market, provided, further, that
when used in connection with the calculation or determination of LIBOR,
"Business Day" shall mean any Business Day in London, in which dealings in
Dollars are carried on in the London interbank market.
"Capital Stock" shall
mean (i) with respect to any Person that is a corporation, any and all shares,
interests, participations or other equivalents (however designated and whether
or not voting) of corporate stock, and (ii) with respect to any Person that is
not a corporation, any and all partnership, membership or other equity interests
of such Person, in each case including any warrants, options or other rights
entitling the holder thereof to purchase or acquire any of the
foregoing.
"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 obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
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"Closing Date" shall
mean the date on which the conditions precedent set forth in Section 5.1 hereof
have been satisfied 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 Period"
means the period from and including the Closing Date to the Maturity
Date.
"Consolidated EBITDA"
shall mean, with respect to any Person for any period, (i) the Consolidated Net
Income of such Person and its Subsidiaries for such period, plus without
duplication, (ii) the sum of the following amounts of such Person and its
Subsidiaries for such period and to the extent deducted in determining
Consolidated Net Income of such Person for such period: (A)
Consolidated Net Interest Expense, (B) income tax expense, (C) depreciation
expense, (D) amortization expense, (E) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets not in the ordinary course
of business), excluding any such non-cash charges to the extent that it
represents an accrual or reserve for potential cash charges in any future period
and (F) any other non-cash charges in excess of $500,000.00, reducing
Consolidated Net Income (excluding any such non-cash charges to the extent that
it represents an accrual or reserve for potential cash charges in any future
period).
"Consolidated EBITDAR"
shall mean, with respect to any Person for any period, the Consolidated EBITDA
of such Person and its Subsidiaries for such period, plus all amounts paid
or payable by such Person and its Subsidiaries on Operating Lease Obligations
for such period as reflected in such Person's financial statements.
"Consolidated Net
Income" means, with respect to any Person for any period, the net income
(loss) of such Person and its Subsidiaries for such period, determined on a
consolidated basis and in accordance with GAAP, but excluding from the
determination of Consolidated Net Income (without duplication) (a) any
extraordinary gains or losses or gains or losses from Dispositions, (b)
restructuring charges and (c) effects of discontinued operations.
"Consolidated Net Interest
Expense" shall mean, with respect to any Person for any period, gross
interest expense of such Person and its Subsidiaries for such period determined
on a consolidated basis and in accordance with GAAP (including, without
limitation, interest expense paid to Affiliates of such Person), less (i) the sum
of interest income for such period, plus (ii) the
upfront costs or fees for such period associated with Hedging Agreements (to the
extent not included in gross interest expense), in each case, determined on a
consolidated basis and in accordance with GAAP.
"Consolidated Net
Worth" shall mean, with respect to any Person at any time, the sum of the
following accounts (or their equivalents) set forth on a consolidated balance
sheet of such Person and its Subsidiaries prepared in accordance with
GAAP: the par or stated value of all outstanding Capital Stock,
capital surplus and retained earnings (or less accumulated
deficits).
3
"Default" shall mean
any event or circumstance that with the giving of notice, the lapse of time or
both would constitute an Event of Default.
"Default Rate" is
defined in Section 2.5.
"Disposition" shall
mean any transaction, or series of related transactions, pursuant to which any
Person or any of its Subsidiaries sells, assigns, transfers or otherwise
disposes of any property or assets (whether now owned or hereafter acquired) to
any other Person, in each case, whether or not the consideration therefor
consists of cash, securities or other assets owned by the acquiring Person,
excluding any
sales of Inventory in the ordinary course of business on ordinary business
terms.
"Dollars" and the
symbol "$" shall mean lawful money of the United States of America.
"EMAIL" is defined in
Section 9.6.
"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 agency, department, bureau,
office or other authority, or any third party involving violations of
Environmental Laws or releases of Hazardous Materials from (i) any assets,
properties or businesses of the Borrower or any of its Subsidiaries or any
predecessor in interest; (ii) from adjoining properties or businesses; 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.
"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, and which relate 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.
"ERISA Affiliate"
shall mean any trade or business (whether or not incorporated) that, together
with the Borrower, is treated as a single employer under Section 414(b) or
(c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the
Code.
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"ERISA Event" shall
mean (a) any "reportable event", as defined in Section 4043 of ERISA
or the regulations issued thereunder with respect to a Plan (other than an event
for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (e) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability (or that could reasonably be
expected to result in Withdrawal Liability) or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Event of Default" is
defined in Section 6.1 hereof.
"Excluded Taxes"
means, (i) any Taxes imposed on the recipient's overall net income, or franchise
or other taxes imposed in lieu of Taxes on overall net income (however
denominated), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office
is located (or, in the case of the Lender, in which its applicable lending
office is located) or otherwise as a result of a present or former connection
between the recipient and the jurisdiction imposing such Tax, other than a
connection arising from such recipient having executed, received a payment under
or enforced this agreement and (ii) any branch profits taxes imposed by the
United States; it being understood, for the avoidance of doubt, that Excluded
Taxes shall not include any withholding tax, including, without limitation, a
withholding tax imposed by the United States on payments to a non-US, person who
is not otherwise subject to tax in the United States on a net income
basis.
"Existing Credit
Facility" shall mean the Term Loan Agreement, dated as of July 24, 2006,
as amended through the date hereof, by and between the Borrower, as borrower,
and Mizuho Corporate Bank, as lender.
"Fair Market Value"
shall mean, with respect to any asset or property, the price which could be
negotiated in an arm's length, free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value
will be determined in good faith by the Borrower, and, upon the Lender's
request, shall be evidenced by a certificate (together with supporting
calculation) of the Borrower to the Lender.
"FAX" is defined in
Section 9.6.
"Federal Funds Rate"
shall mean (i) for any Business Day, the rate on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day by the Federal Reserve Bank of New
York, or, if such rate is not published for any Business Day, the average of the
quotations for such day on such transactions received by the Lender from three
Federal funds brokers of recognized standing selected by the Lender, and (ii)
for any day which is not a Business Day, the Federal Funds Rate for the
preceding Business Day.
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"Fixed Charge
Coverage
Ratio" shall mean, with respect to any Person for any period, the ratio
of (i) Consolidated EBITDAR of such Person and its Subsidiaries for such period
to (ii) the sum of (A) Consolidated Net Interest Expense of such Person and its
Subsidiaries for such period, plus (B) all amounts paid or payable by such
Person and its Subsidiaries on Operating Lease Obligations having a scheduled
due date during such period as reflected in such Person's financial
statements.
"GAAP" shall mean
generally accepted accounting principles in effect from time to time in the
United States, applied on a consistent basis, provided that (i) for
the purpose of Section 4.2 and the definitions used therein, "GAAP" shall mean
generally accepted accounting principles in effect on the date hereof and
consistent with those used in the preparation of the financial statements and
(ii) to the extent "GAAP" is not applied on a consistent basis the Borrower
shall deliver to the Lender a certificate setting forth the items not
consistently applied and the reasons therefor and certifying that such
inconsistencies nonetheless conform with GAAP, provided, further, that if any
change in GAAP that affects in any respect the calculation of any covenant
contained in Section 4.2 occurs after the date of this Credit Agreement, the
Lender and the Borrower shall negotiate in good faith amendments to the
provisions of this Credit Agreement that relate to the calculation of such
covenant with the intent of having the respective positions of the Lender and
the Borrower after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Credit Agreement and, until any such
amendments have been agreed upon, the covenants in Section 4.2 shall be
calculated as if no such change in GAAP has occurred.
"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
contaminate under any Environmental Law.
"Hedging 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.
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"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 acquired by such Person 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, contingent
or otherwise, of such Person in respect of letters of credit, acceptances and
similar facilities, including, without duplication, all drafts drawn thereunder,
(v) all obligations of the kind referred to in clauses (i) through (iv) and (vi)
through (viii) of this definition 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, (vi) all Capitalized Lease
Obligations of such Person, (vii) all obligations and liabilities of such Person
created or arising under any conditional sales 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, (viii) solely for purposes
of Section 6.1(e), contingent obligations of such Person under any Hedging
Agreements, as calculated in accordance with accepted practice, (ix) all
obligations referred to in clauses (i) through (viii) of this definition of
another Person (a) guaranteed directly or indirectly in any manner by such
Person or (b) 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 (y) trade payables (including trade letters
of credit issued for the account of such Person in the ordinary course of its
business, but excluding drafts drawn thereunder or any reimbursement obligations
in respect thereof) or accrued expenses, in each case arising in the ordinary
course of business and not more than 60 days delinquent or (z) gift cards and
other customer liabilities arising in the ordinary course of business of such
Person. The Indebtedness of any Person shall include the Indebtedness
of any partnership of or joint venture in which such Person is a general partner
or joint venturer.
"Interest Payment
Date" shall mean the last day of March, June, September and December in
each year.
"Interest Period"
shall mean (a) as to any Term Loan, the period commencing on and including the
Borrowing Date of such Term Loan and ending on but excluding the first Interest
Payment Date occurring after the applicable Borrowing Date, and (b) thereafter,
each period commencing on and including the immediately preceding Interest
Payment Date and ending on but excluding the next succeeding Interest Payment
Date; provided,
however, that
(i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall end on the immediately preceding Business Day, and (ii) 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.
"Lender" is defined in
the preamble of this Credit Agreement.
7
"Leverage Ratio" shall
mean, on any date of determination, the ratio of (a) Total Indebtedness as of
such date to (b) Consolidated EBITDA for the period of four consecutive fiscal
quarters of the Borrower most recently ended on or prior to such
date.
"LIBOR" shall mean,
with respect to any Interest Period pertaining to any portion of a Term
Loan:
(a) the
rate of interest per annum determined by the Lender on the basis of the rate for
deposits in Dollars for a period comparable to such Interest Period commencing
on the first day of such Interest Period appearing on Page 3750 of the Telerate screen or any
successor thereto at approximately 11:00 a.m. (London time) on the date two
Business Days prior to the first day of such Interest Period, or
(b) if
the rate in the preceding subsection (a) is not available, the rate of interest
per annum determined by the Lender to be the rate in the London interbank market
at approximately 11:00 a.m. (London time) on the date two Business Days prior to
the first day of such Interest Period for the offering by Mizuho in the
interbank market of deposits in Dollars for a period equal to such Interest
Period in amounts comparable to the principal amount of the outstanding Term
Loans to which such Interest Period applies, at the time as of which the Lender
makes such determination.
"Lien" shall mean any
mortgage, deed of trust, pledge, 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 2.8 hereof.
"Loan Documents" shall
mean each of this Credit Agreement, each Note, the Subordination Agreement 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, or condition (financial or otherwise)
of the Borrower, (b) the ability of the Borrower to perform any of its
obligations hereunder, under any Note or under any other Loan Document to which
it is a party and (c) the legality, validity or enforceability of this Credit
Agreement, any Note or any other Loan Document.
"Maturity Date" shall
mean the earlier of (i) January 28, 2012, or, if such day is not a Business Day,
the next succeeding Business Day and (ii) such earlier date on which the Term
Loans become due and payable and the commitment of the Lender to make any such
Term Loans has been terminated or otherwise cancelled (whether at stated
maturity, by mandatory prepayment, by acceleration or otherwise) in accordance
with the terms hereof.
"Multiemployer Plan"
shall mean a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.
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"Non-Cash Pay Preferred
Stock" shall mean preferred Capital Stock of the Borrower that
(a) is not required to be prepaid, redeemed, repurchased or defeased, in
whole or in part, whether on one or more fixed dates, upon the occurrence of one
or more events or at the option of any holder thereof, and which do not require
any payment of cash dividends or distributions, in each case prior to the date
that is six months after the Maturity Date and (b) is not exchangeable or
convertible into Indebtedness of the Borrower or any Subsidiary or any preferred
stock or other Capital Stock (other than common equity of the Borrower or other
Non-Cash Pay Preferred Stock).
"Note" shall mean a
promissory note of the Borrower evidencing a Term Loan, payable to the order of
the Lender, substantially in the form of Exhibit A
hereto, as the same may be amended, supplemented and otherwise modified from
time to time, or any substitute therefor.
"Notice of Borrowing"
is defined in Section 2.2.
"Operating Lease
Obligations" shall mean all obligations for the payment of rent for any
real or personal property under leases or agreements to lease, other than
Capitalized Lease Obligations.
"Other Taxes" is
defined in Section 7.2(b).
"Payment in Full"
means the payment in full in immediately available funds, of all outstanding
Senior Indebtedness (other than inchoate indemnity obligations for which no
claim has been made). The term “Paid in Full” shall have a
correlative meaning.
"PBGC" shall mean the
Pension Benefit Guaranty Corporation referred to and defined in ERISA and any
successor entity performing similar functions.
"Permitted
Indebtedness" shall mean:
(b) any
other Indebtedness listed on Schedule 4.1(s) (including
Indebtedness under lines of credit and other credit facilities described on such
Schedule, as in effect on the date hereof), and the extension of maturity,
refinancing or modification of the terms thereof; provided, however, that after
giving effect to such extension, refinancing or modification, the amount of such
Indebtedness is not greater than the amount of Indebtedness outstanding
immediately prior to such extension, refinancing or modification;
(d) Indebtedness
permitted by clause (d) or (e) of the definition of "Permitted
Liens";
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(g) unsecured
Indebtedness not otherwise permitted hereunder, provided that the Borrower and
its Subsidiaries are in compliance with the financial covenants set forth in
Section 4.2 calculated on a pro forma basis after giving effect to such
Indebtedness as at the last day of the most recently ended fiscal quarter of the
Borrower for which financial statements are available (as though such
Indebtedness had been consummated as of the first day of the four quarter period
ending as at such date).
"Permitted
Investments" shall mean (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case, maturing within six months from the date of acquisition thereof;
(b) commercial paper, maturing not more than 270 days after the date
of issue rated P-1 by Xxxxx'x or A-1 by Standard & Poor's;
(c) certificates of deposit maturing not more than 270 days after the
date of issue, issued by commercial banking institutions and money market or
demand deposit accounts maintained at commercial banking institutions, each of
which is a member of the Federal Reserve System and has a combined capital and
surplus and undivided profits of not less than $500,000,000; (d) repurchase
agreements having maturities of not more than 90 days from the date of
acquisition which are entered into with major money center banks included in the
commercial banking institutions described in clause (c) above and which are
secured by readily marketable direct obligations of the United States Government
or any agency thereof; (e) money market accounts maintained with mutual
funds having assets in excess of $2,500,000,000; and (f) tax exempt
securities rated A or better by Xxxxx'x or A+ or better by Standard & Poor's
maturing within six months from the date of acquisition thereof.
"Permitted Liens"
shall mean:
(a) Liens
for taxes, assessments and governmental charges the payment of which is not
required under Section 4.1(i);
(b) Liens
imposed by law, such as carriers', warehousemen's, mechanics', materialmen's and
other similar Liens arising in the ordinary course of business and securing
obligations (other than Indebtedness for borrowed money) that are not overdue by
more than 30 days or are being contested in good faith and by appropriate
proceedings promptly initiated and diligently conducted, and a reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
therefor;
(c) Liens
described on Schedule
4.1(r), but not the
extension of coverage thereof to other property or the extension of maturity,
refinancing or other modification of the terms thereof or the increase of the
Indebtedness secured thereby;
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(e) deposits
and pledges of cash securing (i) obligations incurred in respect of workers'
compensation, unemployment insurance or other forms of governmental insurance or
benefits, (ii) the performance of bids, tenders, leases, contracts (other
than for the payment of money) and statutory obligations, (iii) obligations on
surety or appeal bonds, but only to the extent such deposits or pledges are
incurred or otherwise arise in the ordinary course of business and secure
obligations not past due or (iv) letters of credit or other extensions of credit
extended for any of the foregoing purposes;
(f) easements,
zoning restrictions and similar encumbrances on real property and minor
irregularities in the title thereto that do not (i) secure obligations for the
payment of money or (ii) materially impair the value of such property or its use
by the Borrower or any of its Subsidiaries in the normal conduct of such
Person's business; and
(g) Liens
securing Indebtedness permitted by subsection (c) of the definition of Permitted
Indebtedness.
"Permitted
Payment" shall mean (a) regularly scheduled payments of interest (including
interest at the interest rate charged during the continuance of an event of
default) on the Subordinated Indebtedness due and payable on a non-accelerated
basis in the manner in the stated amounts and on the stated dates of payment
thereof as set forth in the Loan Documents and otherwise in accordance with this
Agreement (including regularly scheduled interest payments which accrued during
any period payment thereof was prohibited pursuant to Section 8 of this
Agreement); provided,
however, that the due
dates for the payments of such interest payments, and the amounts thereof, may
be extended, reduced, or increased (provided any increase is due solely to the
deferral of prior interest payments), respectively, without changing their
characterization as Permitted Payments; (b) payments of fees and expenses under
the Loan Documents, (c) reimbursement of reasonable out of pocket costs and
expenses (including reasonable attorney’s fees) of the Lender; and (d)
obligations of the Borrower to reimburse the Lender pursuant to the
indemnification provisions set forth in the Loan Documents as in effect on the
date hereof.
"Person" shall mean a
natural person, 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
employee pension benefit plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
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"Prime Rate" shall
mean the fluctuating rate of interest per annum announced by Mizuho from time to
time as its prime rate in effect at its office in New York City. Each
change in the prime rate shall be effective from and including the date such
change is effective.
"Restricted Payment"
shall mean any dividend or other distribution (whether in cash, securities or
other property) with respect to any shares of any class of Capital Stock of the
Borrower or any of its Subsidiaries, or any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such shares of Capital Stock of the Borrower or any option, warrant or
other right to acquire any such shares of Capital Stock of the
Borrower.
"Restructuring Plan"
shall mean the restructuring plan of the Borrower in form and substance
reasonably satisfactory to the Lender.
"Senior Indebtedness"
shall mean the Indebtedness how or hereafter outstanding under the Contract
set forth in Schedule
3, in each case, as in effect on the date hereof and as the same may be
amended, refinanced, supplemented from time to time in accordance with Section
8.5.
“Senior Lender” shall
mean the lender or lenders from time to time under the applicable Senior
Indebtedness.
"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 the
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 such debts and liabilities as they mature, and (e) such
Person is not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person's property would
constitute unreasonably small capital.
"Subordinated Debt"
shall mean any Indebtedness of the Borrower that (i) does not mature prior
to the date that is six months after the Maturity Date, (ii) is not required to
be repaid, prepaid, redeemed, amortized, repurchased or defeased, in whole or in
part, prior to the date that is six months after the Maturity Date (other than
(x) pursuant to an acceleration of the obligations thereunder by the lenders
party thereto following an event of default and (y) pursuant to customary asset
sale or change in control provisions requiring redemption or repurchase thereof,
in each case only if and to the extent then permitted by this Credit Agreement
and the subordination provisions of such Indebtedness), (iii) is not
secured by any assets of the Borrower or any Subsidiary, (iv) is not
exchangeable or convertible into Indebtedness of the Borrower or any Subsidiary
(except other Subordinated Debt) or any preferred stock other than Non-Cash
Pay Preferred Stock, (v) does not have the benefit of covenants more restrictive
in any material respect than those set forth in this Credit Agreement and (vi)
is subordinated to the obligations of the Borrower under this Credit Agreement
pursuant to a written agreement reasonably satisfactory in form and substance to
and approved in writing by the Lender.
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"Subordination
Agreement" shall mean the Subordination Agreement, dated the date hereof,
among the Lender, the Borrower and certain other creditors of the Borrower (or
their representatives) party thereto, substantially in the form of Exhibit C attached
hereto.
"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 which 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).
"Term Loans" shall
mean the loans made by the Lender to the Borrower on the applicable Borrowing
Date pursuant to Section 2.1.
"Term Loan
Commitment" shall mean $50,000,000, as the same may be
terminated or reduced from time to time in accordance with the terms of this
Credit Agreement.
"Threshold Amount"
shall mean $10,000,000.
"Tilton Property"
shall mean that certain real property located in the Town of Xxxxxx, County of
Xxxxxxx and State of New Hampshire owned by the Borrower, as further described
in that certain Mortgage, Assignment of Leases and Rents and Security Agreement
dated March 1, 1999, by mortgagor to mortgagee, and record in the Xxxxxxx County
Registry of Deeds (the "Recorder's Office") in Book 151 at Page
0596.
"Total Indebtedness"
shall mean, as of any date, the aggregate principal amount of Indebtedness of
the Borrower and its Subsidiaries outstanding as of such date, computed on a
consolidated basis in accordance with GAAP. For avoidance of doubt "Total
Indebtedness" shall exclude contingent obligations of the Borrower and its
Subsidiaries, so long as under GAAP such obligations should be
excluded.
"Uniform Commercial
Code" is defined in Section 1(c).
"USA Patriot Act" is
defined in Section 4.1(p).
"Withdrawal Liability"
shall mean liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan, as such terms are defined in
Part I of Subtitle E of Title IV of ERISA.
(b) Terms Generally . The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms. The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation". The word
"will" shall be construed to have the same meaning and effect as the word
"shall". Unless the context requires otherwise, (i) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(ii) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (iii) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Credit Agreement in its entirety and not to any particular provision hereof,
(iv) all references herein to Articles, Sections, Exhibits and Schedules shall
be construed to refer to Articles and Sections of, and Exhibits and Schedules
to, this Credit Agreement and (v) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any right or
interest in or to assets and properties of any kind whatsoever, whether real,
personal or mixed and whether tangible or intangible.
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(c) Accounting and Other
Terms . Unless
otherwise expressly provided herein, each accounting term used herein shall have
the meaning given it under GAAP applied on a basis consistent with those used in
preparing the financial statements referred to in Section 3(j). All
terms used in this Credit Agreement which are defined in Article 8 or Article 9
of the Uniform Commercial Code as in effect from time to time in the State of
New York (the "Uniform
Commercial Code") and which are not otherwise defined herein shall have
the same meanings herein as set forth therein, provided that terms used herein
which are defined in the Uniform Commercial Code as in effect in the State of
New York on the date hereof shall continue to have the same meaning
notwithstanding any replacement or amendment of such statute except as the
Lender may otherwise determine.
(d) Time References . Unless
otherwise indicated herein, all references to time of day refer to Eastern
Standard Time or Eastern daylight saving time, as in effect in New York City on
such day. For purposes of the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding"; provided, however, that with
respect to a computation of fees or interest payable to the Lender, such period
shall in any event consist of at least one full day.
2.
The Term
Loans .
2.1. The Term Loan
Commitment . Upon satisfaction or waiver of all terms and
conditions precedent to borrowing (including absence of any Default) set forth
herein, the Lender agrees to make Term Loans to the Borrower from time to time
during the Commitment Period in aggregate principal amount not to exceed the
Term Loan Commitment. Any principal amount of a Term Loan which is
repaid or prepaid may not be reborrowed. The Lender's Term Loan Commitment
shall terminate on the Maturity Date and, thereafter, the Lender shall have no
obligation whatsoever to make any Term Loans to the Borrower.
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2.2. Making the Term
Loans . The Term Loans shall be made upon written notice
via FAX and EMAIL (in form and substance satisfactory to the Lender, the "Notice of
Borrowing"), given by the Borrower to the Lender at least five Business
Days prior to the proposed Borrowing Date. The Notice of Borrowing
shall be irrevocable and shall specify therein (A) the proposed Borrowing Date,
which shall be a Business Day and (B) the principal amount of the Term Loan to
be borrowed on the Borrowing Date. Each Term Loan shall be in a
principal amount of $10,000,000 or a whole multiple of $10,000,000 in excess
thereof. Upon fulfillment of the applicable conditions set forth in
Section 5 hereof (or the waiver thereof by the Lender as herein prescribed), the
Lender shall make its Term Loan to be made by it hereunder on the Business Day
specified in the applicable Notice of Borrowing by wire transfer of immediately
available funds by 2:00 p.m., New York City time, to the Borrower's
Account.
2.3. Interest .
(a) Each
Term Loan shall bear interest for each day during each Interest Period with
respect thereto at a rate per annum equal to the sum of (a) LIBOR and (b) the
Applicable Spread.
(b) Subject
to Section 2.5, interest shall be payable on each Term Loan (i) in arrears on
each Interest Payment Date and (ii) on the date on which the principal amount of
a Term Loan becomes due and payable hereunder (whether at stated maturity, by
mandatory prepayment, optional prepayment, acceleration or
otherwise).
(c) Notwithstanding
anything herein to the contrary, all accrued interest shall be payable on each
date principal is payable hereunder pursuant to Sections 2.4 and 2.6 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.
(e) In
the event, and on each occasion, that on the date two Business Days prior to the
commencement of any Interest Period during which any portion of a Term Loan
accrues interest at a rate based upon LIBOR, the Lender shall have in good faith
determined that Dollar deposits are generally not available in the London
interbank market, or that reasonable means do not exist for ascertaining LIBOR,
or that the rates at which such Dollar deposits are being offered will not
adequately and fairly reflect the cost of making or maintaining a Term Loan at
LIBOR during such Interest Period, the Lender shall, as soon as practicable
thereafter, give written or telecopy notice of such determination to the
Borrower. In the event of any such determination, interest shall
accrue with respect to such Term Loans during such Interest Period at a rate
equal to the Federal Funds Rate plus the Applicable Spread. Each
determination by the Lender hereunder shall be conclusive absent manifest
error.
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2.4. Principal Repayment;
Note .
(a) The
Borrower shall repay the aggregate principal amount of the outstanding Term
Loans, together with all other outstanding amounts due and owing hereunder or
under the other Loan Documents, on the Maturity Date.
(b) The
Lender may request that its Term Loan be evidenced by a Note. In such
event, the Borrower shall execute and deliver to the Lender a Note payable to
the order of the Lender, in a principal amount equal to the Lender's Term
Loan. Thereafter, the Lender's Term Loan evidenced by such Note and
interest thereon shall at all times (including after assignment pursuant to
Section 9.3) be represented by one or more Notes in such form payable to the
order of the payee named therein. The Lender is hereby authorized by
the Borrower to endorse on the schedule attached to a Note (or on a continuation
of such schedule attached to such Note and made a part thereof) an appropriate
notation evidencing the date and amount of the Term Loan made by the Lender, 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 any
Note. The Notes and the books and records of the Lender shall be
conclusive evidence of the information set forth therein absent manifest
error.
2.5. Default
Interest . If at any time any Default under Section
6.1(a) or Section 6.1(f) shall exist, (a) the principal of the Term Loans shall
bear interest, from the date such Default occurred until such Default is fully
cured or waived, payable on demand, at a rate equal at all times to the rate
otherwise applicable thereto plus 2% per annum, and (b) interest, fees and other
amounts payable hereunder or under any other Loan Document shall bear interest
from the date such Default occurred until such Default is fully cured or waived,
payable on demand, at a rate equal at all times to the Prime Rate in effect from
time to time plus 2% per annum (the rates described in clauses (a) and (b) are
hereinafter referred to as the "Default
Rate").
2.6. Prepayments; Optional
Prepayments .
(a) The
Borrower shall not prepay all or any portion of the principal amount outstanding
of Term Loans; provided, that, if
the terms of the then outstanding Senior Indebtedness permit prepayment of the
Term Loans, the Borrower may, upon at least five (5) Business Days' prior
written notice to the Lender, prepay all or any portion of the aggregate
principal amount of the Term Loans. Each such prepayment shall be in
an amount not less than $1,000,000 or an integral multiple thereof and any
portion of the Term Loans may be designated by the Borrower to be prepaid if and
only to the extent that prepayment is made on an Interest Payment Date or
subject to the payment of amounts described in Section 7.1(d). Each
prepayment made pursuant to this Section shall be accompanied by the payment of
(i) accrued interest to date of such prepayment on the amount prepaid and (ii)
any and all payments required pursuant to Section 7.1 in respect of such
prepayment. Any principal of the Term Loan that is prepaid may not be
reborrowed.
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(b) The
Borrower may terminate all or any portion of the unused Term Loan Commitment
upon at least five (5) Business Days' prior written notice to the
Lender. Each such partial termination shall be in an amount not less
than $10,000,000 or an integral multiple thereof. Any termination or
reduction of the Term Loan Commitment shall be permanent.
2.7. Method of
Payment .
(a) Payments
Generally. The Borrower shall make each payment required to be
made by it hereunder or under any other Loan Document (whether of principal,
interest, fees or reimbursement of amounts payable under Section 7.1, or
otherwise) by the time expressly required hereunder or under such other Loan
Document for such payment (or, if no such time is expressly required, by 12:00
p.m., New York City time), on the date when due, in immediately available funds,
without setoff or counterclaim. Any amounts received after such time
on any date may, in the discretion of the Lender, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. The Borrower will make each payment under this
Credit Agreement to the Lender's Account in Dollars and in immediately available
funds, except that payments pursuant to Section 7.1 shall be made directly to
the Persons entitled thereto and payments pursuant to other Loan Documents shall
be made to the Persons specified therein. All payments under each
Loan Document shall be made in Dollars.
(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 Term Loans, and thereafter to
the principal amount of the Term 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 (including the first day but
excluding the last day) occurring in the period for which such interest is
payable; provided, however, that if any
Term Loan is repaid on the same day on which it is made, one day's interest
shall be paid on such Term Loan; provided further,
however, that
interest based on the Prime Rate shall be computed on the basis of a year of
365/6 days. Each change in the Prime Rate shall immediately and
simultaneously result in a corresponding change in the Default
Rate.
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(d) Whenever
any payment to be made hereunder or under any 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 a new calendar month or beyond
the Maturity Date, such payment shall be made on the immediately preceding
Business Day.
2.8. Loan
Account . The Lender maintains on its books a loan
account in the Borrower's name (the "Loan Account"),
showing each Term Loan, 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 as to the amount at any time due from
the Borrower, absent manifest error.
2.9. Use of
Proceeds . The Borrower shall apply the proceeds of the
Term Loans solely to (a) pay fees and expenses in connection with the
transactions contemplated hereby and (b) fund working capital and other
general corporate purposes of the Borrower.
2.10. Fees .
(a) Upfront
Fee. Within five Business Days of the date hereof, the
Borrower shall pay to the Lender a non-refundable upfront fee equal to
$750,000.00, which shall be deemed fully earned when paid.
(b) Commitment
Fee. The Borrower shall pay to the Lender on each Interest
Payment Date and on the Maturity Date, commencing on the first such date after
the date hereof, a non-refundable commitment fee in arrears in an amount equal
to 0.50% per annum of the average daily unadvanced amount of the Term Loan
Commitment from time to time in effect from the date hereof to 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 all requisite corporate power and
authority to carry on its present business, to own its property and assets and
to execute, deliver and perform this Credit Agreement, each Note, if any, 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 makes such qualification or licensing necessary, except where the
failure to be so qualified or licensed would not be reasonably likely to result
in a Material Adverse Effect.
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(c) Authorization of
Borrowing. All appropriate and necessary corporate,
shareholder and other actions and approvals have been taken or obtained by the
Borrower to authorize the execution and delivery of this Credit Agreement, each
Note, if any, 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 each Note,
if any, and the other Loan Documents 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 affecting enforcement of creditors' rights
generally, and by general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or equity). The
execution, delivery and performance of this Credit Agreement, the Notes, if any,
and the other Loan Documents and the use of the proceeds of the Term Loans do
not and will not (i) violate or conflict with (A) any provisions of law or any
order, rule, directive or regulation of any court or other Governmental
Authority, (B) the charter, by-laws or other organizational documents of the
Borrower or (C) except as would not be reasonably likely to result in a Material
Adverse Effect, any agreement, document or instrument to which the Borrower or
any Subsidiary is a party or by which its respective assets or properties are
bound, (ii) except as would not be reasonably likely to result in a Material
Adverse Effect, 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) except as would not be
reasonably likely to result in a Material Adverse Effect, 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 any Subsidiary, or (iv) except as
would not be reasonably likely to result in a Material Adverse Effect, result in
any suspension, revocation, impairment, forfeiture or nonrenewal of any permit,
license, authorization or approval applicable to its respective operations or
any of its properties.
(e) Compliance with
Law. There does not exist any conflict with, or violation, or
breach of, any law or any regulation, order, writ, injunction or decree of any
court or governmental instrumentality, which conflict, violation or breach could
reasonably be expected to result in a Material Adverse Effect.
(f) Taxes. The
Borrower has filed all Tax returns required to be filed and has paid all taxes,
assessments, fees and other governmental charges due upon the Borrower with
respect to the conduct of its operations or otherwise the failure of which to
file or to pay could reasonably be expected to result in a Material Adverse
Effect, except to the extent that the Borrower is contesting in good faith its
obligation to pay such taxes or charges and the Borrower has adequately accrued
for such payments in accordance with and to the extent required by
GAAP. There are no tax audits presently being conducted in respect of
the Borrower or any of its Subsidiaries that could reasonably be expected to
result in a Material Adverse Effect.
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(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 Notes, if any, or the other Loan Documents, except for such as
have been obtained or made and are in full force and effect.
(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 or its Subsidiaries that if adversely determined could reasonably be
expected to result in a Material Adverse Effect.
(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 is reasonably likely to result in a Material
Adverse Effect.
(j) Financial
Information.
(i) The
Borrower has heretofore furnished to the Lender its consolidated balance sheets,
its consolidated statements of earnings, its consolidated statements of cash
flows and its consolidated statements of stockholder's equity (A) as of and for
the fiscal year ended February 2, 2008, reported on by Deloitte & Touche
LLP, independent registered public accounting firm, and (B) as of and for the
fiscal quarter and the portion of the fiscal year ended May 3,
2008. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (B)
above.
(ii) All
other financial information provided to the Lender by or on behalf of the
Borrower and its Affiliates has been prepared in accordance with GAAP and fairly
presents, in accordance with GAAP consistently applied, the financial position
and results of operations for the periods therein indicated, and there has been
no material adverse change in the financial condition, operations, business or
prospects since February 2, 2008.
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(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. With respect to any such factual
information pertaining to Persons other than the Borrower, its Subsidiaries or
its Affiliates, the foregoing representation is made to the best knowledge of
the Borrower. All projections heretofore or contemporaneously
furnished by or on behalf of the Borrower to the Lender for purposes of or in
connection with this Credit Agreement or any transaction contemplated hereby
have been prepared by the Borrower based upon estimates and assumptions stated
therein, all of which the Borrower believes to be reasonable and fair in light
of current conditions and current facts known to the Borrower and, as of the
Closing Date, reflect the Borrower's good faith and reasonable estimates of the
future financial performance of the Borrower and of the other information
projected therein for the periods set forth therein; provided, however, that any and
all financial projections are subject to uncertainties and contingencies, many
of which are beyond the Borrower's control and no assurance is or can be given
that any financial projections or other results contemplated therein will be
realized.
(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 Indebtedness of
the Borrower, other than Senior Indebtedness. The Term Loans incurred
by the Borrower hereunder constitute "Subordinated Debt" under the Existing
Credit Facility.
(m) Investment Company
Act. 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, except for
failures which are not reasonably likely to result in an Material Adverse
Effect. 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 is reasonably likely to result in a Material Adverse Effect, a Default
or an Event of Default and there is no written claim that any such permit,
consent, license, authorization, approval, entitlement or accreditation is not
in full force and effect.
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(o) Environmental
Matters. Except to the extent not reasonably likely to result
in a Material Adverse Effect, (i) none of the operations of the Borrower or any
of its Subsidiaries violate any Environmental Law, (ii) no Environmental Actions
have 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.
(p) Solvency. The
Borrower is Solvent and will be Solvent after giving effect to the transactions
contemplated by this Credit Agreement and the other Loan Documents.
(q) ERISA; Margin
Regulations. (i) No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed the fair market value of the assets of such Plan by an amount
that would reasonably be expected to have a Material Adverse Effect, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed the fair market value of the assets
of all such underfunded Plans by an amount that would reasonably be expected to
have a Material Adverse Effect.
(ii) None
of the Borrower or any of its Subsidiaries is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock. No part of the proceeds of any Term
Loan will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, in any manner or for any purpose that would result
in a violation by the Lender, the Borrower or such Subsidiary of the regulations
of the Board, including Regulation U or X.
22
(r) Properties; Intellectual
Property. (i) The Borrower and each Subsidiary has good title
to, or valid leasehold interests in, all its material real and personal property
free and clear of all Liens, except for Permitted Liens and defects in title, in
each case that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended
purposes.
(ii) The
Borrower and each Subsidiary owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Borrower and its Subsidiaries does not
infringe upon the rights of any other Person, except, in each case, for any
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect.
4. Covenants . The
Borrower hereby covenants to the Lender that, unless the Lender shall otherwise
consent in writing, during the term of this Credit Agreement or so long as (a)
any amounts owed hereunder or under any other Loan Document are outstanding, or
(b) the Term Loan Commitment has not been reduced to zero and this Credit
Agreement and the other Loan Documents have not been terminated, the Borrower
shall (unless the prior written consent of the Lender has been obtained) perform
the following obligations:
4.1. (a) Financial
Statements. The Borrower shall deliver to the
Lender
(i) within
120 days after the end of each fiscal year of the Borrower its consolidated
balance sheets as of the end of such fiscal year and the related consolidated
statements of earnings, consolidated statements of cash flows and consolidated
statements of stockholder's equity of the Borrower and its Subsidiaries, which
shall be in reasonable detail and shall be audited by independent certified
public accountants of nationally recognized standing 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, and that the examination
of such accounts was made in accordance with the Standards of Public Company
Accounting Oversight Board (United States) and accordingly included such tests
of the accounting records and such other auditing procedures as were considered
necessary under the circumstances;
(ii) as
soon as available and in any event within 60 days after the end of each fiscal
quarter of the Borrower commencing with the first fiscal quarter of the Borrower
ending after the Closing Date, consolidated balance sheets, consolidated
statements of earnings, consolidated statements of cash flows and consolidated
statements of stockholder's equity of the Borrower and its Subsidiaries as at
the end of such quarter, and for the period commencing at the end of the
immediately preceding fiscal year and ending with the end of such quarter,
setting forth in each case in comparative form the figures for the corresponding
date or period of the immediately preceding fiscal year, all in reasonable
detail and certified by an authorized officer of the Borrower as fairly
presenting, in all material respects, the financial position of the Borrower and
its Subsidiaries as of the end of such quarter and the results of operations and
cash flows of the Borrower and its Subsidiaries for such quarter, in accordance
with GAAP applied in a manner consistent with that of the most recent audited
financial statements of the Borrower and its Subsidiaries furnished to the
Lender, subject to normal year-end adjustments;
23
(iii) simultaneously
with the delivery of the financial statements of the Borrower and its
Subsidiaries required by clauses (i) and (ii) of this Section 4.1(a), a certificate of an
authorized officer of the Borrower (A) stating that such authorized officer has
reviewed the provisions of this Credit Agreement and the other Loan Documents
and has made or caused to be made under his or her supervision a review of the
condition and operations of the Borrower and its Subsidiaries during the period
covered by such financial statements with a view to determining whether the
Borrower and its Subsidiaries were in compliance with all of the provisions of
this Credit Agreement and such Loan Documents at the times such compliance is
required hereby and thereby, and that such review has not disclosed, and such
authorized officer has no knowledge of, the existence during such period of an
Event of Default or Default or, if an Event of Default or Default existed,
describing the nature and period of existence thereof and the action which the
Borrower and its Subsidiaries propose to take or have taken with respect thereto
and (B) attaching a schedule showing the calculations of the financial
covenants specified in Section 4.2; and
(iv) Within
30 days after the end of each fiscal month during the Commitment Period, receipt
by the Lender of a financial report of the Borrower and its consolidated
subsidiaries for such month, in form and substance reasonably satisfactory to
the Lender.
(b) Proxy Statements,
etc. Promptly after the sending or filing thereof, the
Borrower will provide 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
governmental authority which may be substituted therefor, or with any national
securities exchange.
(c) 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, (i) the budgets and business plans of the
Borrower and its Subsidiaries, (ii) a periodic Restructuring Status Report in
form and substance reasonably satisfactory to the Lenders and (iii) using
commercially reasonable efforts to provide to the Lender information with
respect to accountant's letters, in each case as the Lender may from time to
time reasonably request.
(d) 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 investigation, proceeding or action is reasonably
likely to result in a Material Adverse Effect, Default or Event of Default and,
upon request, provide the Lender with all material documents and information
furnished by the Borrower in connection therewith;
24
(ii) the
occurrence of any Default or Event of Default or any other development which is
reasonably likely 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;
(iii) any
change in the Borrower's key management personnel, including without limitation,
its President, Controller or Treasurer; and
(iv) the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in a Material
Adverse Effect.
(e) Compliance with Laws,
Etc. The Borrower shall comply in all material respects with
the requirements of all applicable laws (including, without limitation, any
Environmental Law) and maintain and preserve its corporate existence and, except
to the extent that the failure to do so could not reasonably be expected to have
a Material Adverse Effect, rights and privileges.
(f) 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.
(g) Inspection
Rights. The Borrower shall permit the Lender or any of its
agents and representatives at any time and from time to time during reasonable
business hours and, provided 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 and accounts with any of its directors, officers, employees,
accountants or other representatives.
(h) Insurance. The
Borrower shall maintain or cause to be maintained, and cause each of its
Subsidiaries to maintain or cause to be maintained (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.
(i) Taxes. The
Borrower shall timely pay and discharge all material taxes, assessments, levies
and governmental charges upon it or against any of its properties, assets or
income except to the extent that the Borrower shall be contesting in good faith
its obligation to pay such taxes or charges and the Borrower has adequately
accrued for such payments in accordance with and to the extent required by
GAAP.
25
(j) 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.
(k) 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 30 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
Material Adverse Effect or any Default or Event of Default shall occur and be
continuing both immediately before and immediately after such merger,
consolidation or amalgamation;
(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 therefrom; or
(iv) sell,
lease, transfer or otherwise dispose of all or substantially all of its
non-"Margin Stock" (as defined in Regulation U of the Board) assets or
properties whether in any single transaction or one or more transactions in the
aggregate.
(l) Change in Nature of
Business. The Borrower shall not make any material changes in
the nature of its business activities as presently conducted to the extent
reasonably likely to result in a Material Adverse Effect.
(m) 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 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.
(n) Corporate
Documents. The Borrower shall not amend its certificate of
incorporation in any manner which is reasonably likely to materially adversely
affect the Lender's rights under any of the Loan Documents or the Lender's
ability to enforce any such rights.
26
(o) Fiscal
Year. The Borrower shall not permit its fiscal year to end on
a day other than the first Saturday between January 28th and February 3rd of any
given year.
(p) USA PATRIOT Act
Compliance. The Borrower shall provide, 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 (as amended, the "USA Patriot Act") or
similar laws and the rules and regulations promulgated thereunder, in each case,
as the same may be in effect from time to time.
(q) Seniority. The
obligations of the Borrower under this Credit Agreement and the other Loan
Documents to which it is a party shall at all times rank at least pari passu in
priority of payment and in all other respects with all other unsecured senior
Indebtedness of the Borrower, other than Senior Indebtedness.
(r)
Liens,
Etc. The Borrower shall not, and shall not permit its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any of its properties, whether now owned or hereafter acquired; file
or suffer to exist under the Uniform Commercial Code or any similar law or
statute of any jurisdiction, a financing statement (or the equivalent thereof)
that names it or any of its Subsidiaries as debtor; sign or suffer to exist any
security agreement authorizing any secured party thereunder to file such
financing statement (or the equivalent thereof); sell any of its property or
assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of accounts receivable other
than in connection with collection of defaulted accounts receivable) with
recourse to it or any of its Subsidiaries or assign or otherwise transfer; or
permit any of its Subsidiaries to assign or otherwise transfer, any account or
other right to receive income, other than, as to all of the above, Permitted
Liens.
(s) Indebtedness. The
Borrower shall not, and shall not permit its Subsidiaries to, create, incur,
assume, guarantee or suffer to exist, or otherwise become or remain liable with
respect to, or permit any of its Subsidiaries to create, incur, assume,
guarantee or suffer to exist or otherwise become or remain liable with respect
to, any Indebtedness other than Permitted Indebtedness.
27
(t) Restricted
Payments. The Borrower shall not, and shall not permit any of
its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except (a) the Borrower may declare and pay
dividends with respect to its Capital Stock payable solely in additional shares
of its common stock, (b) so long as no Event of Default has occurred and is
continuing, the Borrower may declare and pay dividends with respect to its
Capital Stock, (c) any Subsidiary may declare and pay dividends to the Borrower
or, in the case of any Subsidiary that is wholly owned by another Subsidiary, to
such other Subsidiary, (d) the Borrower may make Restricted Payments pursuant to
and in accordance with stock option plans or other benefit plans for management
or employees of the Borrower and its Subsidiaries, (e) so long as no Event of
Default has occurred and is continuing, the Borrower may repurchase its Capital
Stock and (f) netting shares under employee benefit plans to settle option price
payments owed by employees and directors with respect thereto and settling
employees' and directors' federal, state and income tax liabilities (if any)
related thereto.
(u) Loans, Advances,
Investments, Etc. The Borrower shall not, and shall not permit
its Subsidiaries to, make or commit or agree to make any loan, advance,
guarantee of obligations, other extension of credit or capital contributions to,
or hold or invest in or commit or agree to hold or invest in, or purchase or
otherwise acquire or commit or agree to purchase or otherwise acquire any shares
of the Capital Stock, bonds, notes, debentures or other securities of, or make
or commit or agree to make any other investment in, any other Person, or
purchase or own any futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a
futures contract, or permit any of its Subsidiaries to do any of the foregoing,
except for: (i) investments existing on the date hereof, as set
forth on Schedule 4.1(u)
hereto, but not any increase in the amount thereof as set forth in such Schedule
or any other modification of the terms thereof, (ii) loans, advances and
other investments by the Borrower to any of its Subsidiaries, by any such
Subsidiary to the Borrower or by any such Subsidiary to any other such
Subsidiary, made in the ordinary course of business and not exceeding in the
aggregate for the Borrower and all of its Subsidiaries at any one time
outstanding $50,000,000 (calculated on the basis of the actual amount of all
such loans, advances and investments (net of any amounts repaid to the Borrower
or such Subsidiaries) and without regard to any increase or decrease in the
value thereof or to any write off, write down or other similar reduction), and
(iii) Permitted Investments.
(v) Sale/Leaseback
Transactions. Except for sale/leaseback transactions entered
into in the ordinary course of business with respect to a retail location, the
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred.
28
(w) Asset
Dispositions. The Borrower will not, and will not permit any
of its Subsidiaries to, sell, transfer, license, lease or otherwise dispose of
any asset which has a Fair Market Value in excess of $1,000,000, including any
Capital Stock owned by it, nor will the Borrower permit any of its Subsidiaries
to issue any additional Capital Stock in such Subsidiary, except:
(i) (A)
sales of inventory and (B) sales, transfers, licenses, leases or other
dispositions of the Xxxxxx Property or other used, surplus, obsolete or worn-out
assets (including real property) and Permitted Investments in the ordinary
course of business;
(ii) sales,
transfers, licenses, leases or other dispositions of assets (including Capital
Stock) or issuances of any additional Capital Stock by Borrower to any of its
Subsidiaries, by any such Subsidiary to Borrower, and by any such Subsidiary to
any other such Subsidiary; provided that any
such dispositions to a Subsidiary shall be made in compliance with Section
4.1(m);
(iii) sales
transfers, licenses, leases or other dispositions deemed to occur as a result of
the creation of Liens permitted by Section 4.1(r); and
(iv) the
termination, surrender or sublease of a real estate lease of the Borrower or any
of its Subsidiaries.
(x) Subordinated
Debt . The
Borrower will not, nor will it permit any Subsidiary to, make or agree to make,
directly or indirectly, any payment or other distribution (whether in cash,
securities or other property) of or in respect of principal of or interest on
any Subordinated Debt or other Indebtedness expressly subordinated in right of
payment to the obligations of the Borrower hereunder, including any sinking fund
or similar deposit with respect to any of them, or any prepayment, purchase,
redemption, retirement, acquisition, cancellation or termination of any such
Subordinated Debt or other Indebtedness prior to its scheduled maturity, except
regularly scheduled interest payments, as and when due (other than interest
payments prohibited by the subordination provisions thereof).
4.2. Financial
Covenants . So
long as any principal of or interest on any Term Loan or any other obligation
(whether or not due) hereunder shall remain unpaid, the Borrower shall not,
unless the Lender shall otherwise consent in writing:
(a) Leverage
Ratio. Permit the Leverage Ratio of the Borrower and its
Subsidiaries as of the last day of any period of four consecutive fiscal
quarters ending on a date set forth below to exceed the applicable ratio set
forth below opposite such date:
00
|
Xxxxxx
Xxxxxxx Xxx
|
Leverage
Ratio
|
|
|
Third
fiscal quarter 2007 through fourth fiscal quarter 2008
|
4.00
to 1.00
|
|
|
First
fiscal quarter 2009 through fourth fiscal quarter 2009
|
3.50
to 1.00
|
|
|
First
fiscal quarter 2010 and each fiscal quarter thereafter
|
3.00
to 1.00
|
(b) Net
Worth. Permit Consolidated Net Worth of the Borrower and its
Subsidiaries at any time to be less than $500,000,000.
(c) Fixed Charge Coverage
Ratio. Permit the Fixed Charge Coverage Ratio of the Borrower
and its Subsidiaries as of the last day of any period of four consecutive fiscal
quarters ending on a date set forth below to be less than the applicable ratio
set forth below opposite such date:
|
Fiscal
Quarter End
|
Fixed
Charge
Coverage
Ratio
|
|
|
Third
fiscal quarter 2007 through fourth fiscal quarter 2008
|
1.25
to 1.00
|
|
|
First
fiscal quarter 2009 through fourth fiscal quarter 2009
|
1.40
to 1.00
|
|
|
First
fiscal quarter 2010 and each fiscal quarter thereafter
|
1.60
to 1.00
|
5. Conditions Precedent to the
Term Loans .
5.1. The
obligation of the Lender to make the initial Term Loan is subject to the prior
fulfillment of the following conditions:
(a) Documents. The
Lender shall have received the following, each in form and substance
satisfactory to the Lender:
(i) Executed
Agreement. This Credit Agreement, duly executed by an
authorized officer of the Borrower.
(ii) Note. To
the extent requested by the Lender, the Lender (or its counsel) shall have
received a Note, in the amount of the Lender's Term Loan, duly executed by an
authorized officer of the Borrower.
(iii) Borrower's 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 and
by-laws of the Borrower, (x) resolutions of the board of directors of the
Borrower (or a committee of the board of directors authorized to approve this
transaction) authorizing the Borrower to execute, deliver and perform this
Credit Agreement, each Note, if any, and each other Loan Document to which it is
a party; (y) the names and signatures of the officers of the Borrower authorized
to execute this Credit Agreement, each Note, if any, and each other Loan
Documents to which it is a party; and (z) the absence of any amendment or
modification to any of the attached organizational documents or by-laws (or the
equivalent thereof), if any, of the Borrower since the date of the most recent
certification thereof.
30
(iv) Notice of
Borrowing. The Notice of Borrowing duly executed by an
authorized officer of the Borrower as required under Section 2.2
hereof. The submission by the Borrower of the Notice of Borrowing to
the Lender and the Borrower's acceptance of the proceeds of a Term 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.
(v) Executed Subordination
Agreement. The Subordination Agreement, duly executed by an
authorized officer of the Borrower and each of the Senior Lenders party
thereto.
(vi) Opinion of Counsel to the
Borrower. A favorable written opinion of Xxxxx & XxXxxxx
LLP, counsel for the Borrower, in form and substance reasonably satisfactory to
the Lender and covering such matters relating to the Borrower, the Loan
Documents and such other matters reasonably requested by the
Lender.
(vii) Good
Standing. A certificate of the appropriate official(s) of the
state of organization of the Borrower and each of its significant domestic
Subsidiaries certifying as of a recent date not more than 30 days prior the
Closing Date as to the subsistence in good standing of, and the payment of taxes
by, the Borrower and such Subsidiary in such states; provided, however, that in the
case of a Subsidiary of the Borrower that is not organized in the State of
Delaware, the Borrower may, after using commercially reasonable efforts to
obtain a certificate of payment of taxes for such Subsidiary, deliver to the
Lender such certificate within 180 days of the Closing Date, provided, further, however, that the
Borrower shall have no obligation to deliver such certificate if it is unable to
do so due to a failure to pay taxes that are contested in the manner permitted
under this Agreement.
(viii) Restructuring
Plan. Copies of the final Restructuring Plan, in form and
substance satisfactory to the Lender.
(ix) Existing
Indebtedness. Evidence that the Borrower's Indebtedness
existing on the Closing Date is in full force and effect, without amendment or
modification thereto in a manner adverse to the Lender in any material
respect.
(x) Compliance with Financial
Covenants. Sufficient information, such that the Lender can be
reasonably certain that the Borrower will be in compliance with the financial
covenants in the Existing Credit Facility over the 12 months following the
Closing Date.
(xi) Other
Items. Such other agreements, instruments, approvals, opinions
and documents as the Lender may reasonably request.
(b) 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.
(c)
Legality. The
making of any Term Loan and the consummation of the transactions contemplated
hereunder shall not contravene any law, rule or regulation applicable to the
Lender or the Borrower.
31
(d)
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 Borrowing Date of such Initial Term 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 a Term Loan
shall be deemed to be a representation and warranty by the Borrower to the
Lender to such effect.
(e)
Defaults; Material Adverse
Effect. No Default or Event of Default shall have occurred and
be continuing on the date of any Term Loan or would result from making any Term
Loan. No Material Adverse Effect shall have occurred and be
continuing since February 2, 2008 or would result from making any Term
Loan. The acceptance by the Borrower of the proceeds of a Term Loan
shall be deemed to be a representation and warranty by the Borrower to the
Lender to such effect.
(f)
Proceedings. There
shall not exist any threatened or pending action, proceeding or counterclaim by
or before any court or governmental, administrative or regulatory agency or
authority, domestic or foreign, (i) challenging the consummation of the
transactions contemplated hereby or which would restrain, prevent or impose
burdensome conditions on any transaction contemplated hereunder, which could
reasonably be expected to have a Material Adverse Effect, (ii) seeking to
prohibit the ownership or operation by the Borrower of all or a material portion
of its business or assets which could reasonably be expected to have a Material
Adverse Effect, or (iii) seeking to obtain, or having resulted in the entry of
any judgment, order or injunction that (A) would restrain, prohibit or impose
adverse conditions on the ability of the Lender to make its Term Loan, (B) could
reasonably be expected to affect the legality, validity or enforceability of any
of the Loan Documents or the ability of any party thereto to perform its
obligations thereunder or (C) is seeking any material damages as a result
thereof.
(g) Approvals. All
consents, authorizations and approvals of, and filings and registrations with,
and all other actions in respect of, any Governmental Authority or other Person
required in connection with the making of the Term Loans or the conduct of the
Borrower's business shall have been obtained and shall be in full force and
effect
(h) Bank
Account. The Borrower shall have opened the Borrower
Account.
5.2. Subsequent Loans. The
obligation of the Lender to make subsequent Term Loans shall, in addition to the
fulfillment of the conditions set forth in Section 5.1 above, be subject to the
following:
32
(a)
Notice of
Borrowing. The Lender shall have received a Notice of Borrowing, duly
executed by an authorized officer of the Borrower as required under Section 2.2
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.
(b) 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.
(c)
Legality. The making
of such Term Loans and the consummation of the transactions contemplated
hereunder shall not contravene any law, rule or regulation applicable to the
Lender or the Borrower.
(d) 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 Borrowing Date of such Term Loans shall be true and correct
in all material respects as though made on and as of such date.
(e) Defaults. No Default,
Event of Default or Material Adverse Effect shall have occurred and be
continuing on the date of such Term Loans or would result from making of such
Term Loans.
(f) Compliance with Financial
Covenants. Sufficient information, such that the Lender can
reasonably expect that the Borrower will be in compliance with the financial
covenants contained herein over the 12 months following incurrence of any such
Term Loan.
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 (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) (i) any principal of any Term
Loan or any Note, or (ii) any interest on any Term Loan or any Note, any fee,
any indemnity or any other amount payable hereunder or under any other Loan
Document and any such failure referred to in this clause (ii) shall continue for
three Business Days; or
(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 or deemed made; or
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(c) The
Borrower shall fail to perform or shall violate any provision, covenant,
condition or agreement in Section 4.1 of this Credit Agreement (other than
4.1(a), 4.1(b), 4.1(c), 4.1(d), 4.1(e), 4.1(f), 4.1(g), 4.1(h), 4.1(i) and
4.1(j)) or Section 4.2 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 thirty (30)
days after the earlier of (i) notice from the Lender or (ii) such time as the
Borrower 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 under any agreement, document or instrument
with respect to an aggregate amount of Indebtedness equal to or greater than the
Threshold Amount (or the equivalent thereof in any foreign currency), 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 is adjudicated a 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, or bankruptcy, dissolution, liquidation or reorganization proceedings
(or proceedings similar in purpose and effect) are instituted by the Borrower or
are instituted against (and not vacated or discharged within 60 days) the
Borrower; or
(g) Any
money judgment or warrant of attachment or similar process involving,
individually or in the aggregate, in excess of the Threshold Amount (or the
equivalent thereof in any foreign currency) shall be entered or filed against
the Borrower 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
shall be contested by or on behalf of the Borrower; or a proceeding shall be
commenced by a 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) The
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in 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 Term Loan Commitment shall
automatically be reduced to zero and the outstanding amount of all Term Loans
and all other amounts payable hereunder, under any 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 Term Loan Commitment and
declare all of the outstanding principal amount of the Term Loans and all other
amounts payable hereunder, under any Note and under any other Loan Document to
be immediately due and payable, whereupon the Term Loan Commitment shall be
terminated and the unpaid principal amount of any 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.
7.
Additional Costs and
Expenses; Indemnity .
7.1. (a) The
Borrower shall pay to (x) the Lender on demand all reasonable out-of-pocket
costs and expenses of the Lender actually incurred in connection with the
preparation, execution and delivery of this Credit Agreement, each Note and any
other Loan Documents or any amendment, modification or waiver of the provisions
hereof or thereof, and (y) the Lender all out-of-pocket costs and expenses
incurred in connection with: (i) the negotiation of any
restructuring, work-out or renegotiation of any terms of this Credit Agreement,
any Note or any other Loan Documents or the obligations of the Borrower
hereunder or thereunder, (ii) the enforcement of the preservation or protection
of the Lender' rights under this Credit Agreement and the other Loan Documents
and (iii) the response to any subpoena or similar process compelling the
production of documents or other response in connection with this Credit
Agreement, any Note or any other Loan Documents, 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 their
respective officers, directors and employees against any losses, damages, claims
and expenses arising out of the use or proposed use by the Borrower of any Term
Loan hereunder. In addition, the Borrower agrees to defend, indemnify
and hold harmless the Lender and their respective 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
and performance and administration of this Credit Agreement and the other Loan
Documents, and the consummation of the transactions contemplated hereunder and
thereunder 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 or 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 non-appealable judgment of a
court of competent jurisdiction.
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(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, any 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 Term 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.
(c) If,
after the date hereof, by reason of any applicable law or regulation or
regulatory requirement or the interpretation or application thereof, it shall
become unlawful or otherwise prohibited for the Lender to make or maintain its
Term Loan or any portion thereof 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 its Term Loan or any
portion thereof 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 the Term Loans owed to the Lender, together with interest accrued
thereon and all other amounts owed with respect thereto.
(d) If,
due to any prepayment pursuant to Section 2.6 hereof or any acceleration of the
maturity of the Term Loans pursuant to Section 6 hereof or any other prepayment
hereunder, the Lender is subject to a change of interest rate on a Term Loan or
the Lender receives payment of principal of a Term Loan other than as provided
herein, the Borrower shall, promptly after demand by the Lender, pay to the
Lender any amounts required to compensate the Lender for any additional losses,
costs or expenses which it may reasonably incur as a result of such change or
payment, 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 the Lender's Term 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.
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(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"), except as
otherwise required by law. If and to the extent that Taxes, other
than Excluded Taxes, are required to be withheld from any payment, (i) the
amount of such payment 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 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 any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or under any other Loan Document or from
the execution, delivery or registration of, or otherwise with respect to, this
Credit Agreement or any other Loan Document, excluding taxes, for the avoidance
of doubt, on the overall net income of the Lender (hereinafter referred to as
"Other
Taxes").
(c) The
Borrower shall indemnify and agrees to hold harmless 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), other than Excluded Taxes, 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. This indemnification shall be made within five (5) days
after the date the Lender makes written demand therefor, specifying in
reasonable detail the basis, calculation and amount of such Taxes or Other Taxes
and any liabilities arising therefrom.
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(d) Within
30 days after the date of the Borrower's payment or a payment on behalf of the
Borrower 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 9.6 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 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 until the expiration of the
statute of limitations applicable to the subject Taxes.
(f)
The Lender agrees that, at the request of the Borrower, it
will deliver to the Borrower two properly completed and duly executed copies of
Internal Revenue Service form W-9 or any subsequent version thereof or successor
thereto, certifying that the Lender is entitled to a complete exemption from
United States backup withholding tax on payments pursuant to this Agreement (and
shall deliver to the Borrower additional copies of the relevant forms on or
before the date that such form expires, and shall promptly notify the Borrower
of any form or other documentation previously submitted that becomes
incorrect).
(g) The
Borrower shall not be required to indemnify the Lender, or pay any additional
amounts to the Lender, in respect of Taxes and liabilities arising therefrom
pursuant to this Section 7.2 to the extent that the obligation to pay such
additional amounts would not have arisen but for a failure by the Lender to
comply with the provisions of clause (f) above.
(h)
If the Lender determines, in its sole discretion, that
it has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts, in either case pursuant to this Section 7.2 it shall pay to
the Borrower an amount equal to such refund recovered (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such refund or
recovery), net of all out-of-pocket expenses of the Lender and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund or recovery); provided, however, that the
Borrower shall promptly repay the amount paid over to the Borrower to the Lender
in the event in the event the Lender is required to repay such refund to the
relevant Governmental Authority. This Section 7.2(h) shall not be
construed to require the Lender to make available its tax returns (or any other
information that it deems confidential) to the Borrower or any other
Person.
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(i) If
the Lender requests compensation under Section 7.1(b) or (c) or Section 7.2, or
if the Borrower is required to pay any additional amount to the Lender or any
Governmental Authority for the account of the Lender pursuant to Section 7.2,
then the Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Term Loans hereunder or to assign its rights
and obligations hereunder to another of its offices, branches or affiliates, if,
in the judgment of the Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant thereto in the future and (ii)
would not subject the Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to the Lender.
8.
Subordination.
8.1. Agreement To
Subordinate. The Lender and the Borrower agree that the obligations
evidenced by the Loan Documents are and shall be junior and subordinate, to the
extent and in the manner set forth herein, in right of payment to the prior
Payment in Full of the Senior Indebtedness. The Indebtedness represented by the
Loan Documents shall in all respects rank pari passu in right of
payment with all existing and future senior Indebtedness of the Borrower, and
will be senior in right of payment to all existing and future subordinated
Indebtedness of the Borrower (other than the Senior Indebtedness); and only
Indebtedness of the Borrower that is Senior Indebtedness shall rank senior to
obligations of the Borrower under the Loan Documents in accordance with the
provisions set forth in this Section 8.
8.2. Liquidation, Dissolution,
Bankruptcy. Upon any payment or distribution of the assets of the
Borrower upon (i) a total or partial liquidation or dissolution, (ii)
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Borrower or its property, (iii) an assignment of the Borrower’s
assets for the benefit of its creditors, or (iv) any marshalling of the
Borrower’s assets and liabilities:
(a) the
Senior Indebtedness shall be entitled to receive Payment in Full of such Senior
Indebtedness before the Lender is entitled to receive any payment or
distribution of any kind or character with respect to any obligations on, or
relating to, the Loan Documents; and
(b) until
the Senior Indebtedness is Paid in Full, any payment or distribution to which
the Lender would be entitled but for the subordination provisions of this
Agreement shall be made to the Senior Indebtedness as their interests may
appear.
If a distribution is made to the Lender
that, due to the subordination provisions, should not have been made to them,
the Lender shall be required to hold it in trust for the Senior Indebtedness and
pay it over to them as their interests may appear. The provisions of
this Section 8.2 shall not apply to payments or distributions of shares of stock
of the Borrower as reorganized or readjusted or debt securities of the Borrower
paid or distributed to the Lender by a plan of reorganization, arrangement or
readjustment, the payment of which is subordinated to Senior Indebtedness (or
any replacement securities the Lender may receive in such plan) to at least the
same extent as provided for hereunder.
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8.3. Default on Senior
Indebtedness.
(a) The
Lender will not ask, demand, xxx for, take or receive, directly or indirectly,
from the Borrower, in cash or other property, by set-off, by realizing upon
collateral or in any other manner, payment of, or security for, any or all of
the obligations under the Loan Documents unless and until the Senior
Indebtedness shall have been Paid in Full; provided, however, that the Lender
may receive, collect, ask for and demand, and the Borrower may make, Permitted
Payments to the extent, but only to the extent, the applicable conditions set
forth in clauses (i) and (ii) of this Section 8.3(a) have been
satisfied:
(i) no
default or event of default under any Senior Indebtedness shall have
occurred and be continuing (either before or immediately after the making of
each such payment) by reason of the failure of the Borrower to pay when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) any amount in excess of $50,000 payable by it to any Senior Lender
under any Senior Indebtedness (a “Payment Default”); and
(ii) either
(A) no default or event of default under the Senior Indebtedness, other than
Payment Defaults, shall have occurred and be continuing (all such defaults and
events of defaults, other than Payment Defaults, hereinafter referred to as
“Non-Payment Defaults”), (B) a Non-Payment Default shall have occurred and be
continuing and no Senior Lender shall have delivered to the Lender a written
notice (a “Payment Blockage Notice”, which shall specify that it is a Payment
Blockage Notice delivered pursuant to this Agreement and shall specify the
Non-Payment Default that gives rise to such notice) stating that a Non-Payment
Default has occurred and is continuing or (C) a Non-Payment Default shall have
occurred and be continuing and any Senior Lender shall have delivered to the
Lender a Payment Blockage Notice and (x) 150 days shall have elapsed after such
Payment Blockage Notice shall have been given to the Lender and (y) any Senior
Lender shall not have declared any of the Obligations (in excess of $50,000) due
and payable prior to the date fixed therefor in respect of any such Non-Payment
Default); provided,
however, that,
notwithstanding the foregoing clauses (A), (B) and (C), if any such Non-Payment
Default shall have been remedied or waived and such Senior Lender so notifies
the Lender in writing, and the Payment Blockage Notice shall be deemed
terminated and the suspended payments (including all Permitted Payments
suspended during the blockage period) may resume subject to the provisions of
this Agreement; and provided, further, however, (i) no more than six
(6) Payment Blockage Notices shall be permitted to be delivered pursuant to
clause (C) above during the term of this Agreement and no more than two (2)
Payment Blockage Notices shall be permitted to be delivered pursuant to clause
(C) above during any calendar year, and (ii) no Non-Payment Default which
existed or was continuing on the date such Payment Blockage Notice was given
shall be made the basis for any subsequent Payment Blockage Notice whether or
not within a period of 365 consecutive days unless such Non-Payment Default is
cured or waived for a period of not less than 90 consecutive
days. There shall be at least 90 consecutive days during which no
Payment Blockage Notice is in effect during any consecutive 365 day
period.
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8.4. Acceleration of
Payment. If payment under the Loan Documents is accelerated
because of an Event of Default, the Borrower shall promptly notify the Senior
Lender of the acceleration in accordance with the terms of the relevant Senior
Indebtedness; provided that any failure to give such notice shall have no effect
whatsoever on the provisions of this Section 8. If any Senior
Indebtedness is outstanding, the Borrower may not make payments under the Loan
Documents until five (5) Business Days after the Senior Lenders receive notice
of such acceleration and, thereafter, may make such payments only if this
Agreement otherwise permits payment at that time.
8.5. Amendments to Senior
Indebtedness. So long as the Loan Documents are outstanding,
the Borrower agrees, that it will not, without the prior written consent of the
Lender:
(a) permit
the terms of the Senior Indebtedness to be changed to result in an increase in
the principal amount of the Senior Indebtedness (excluding any fees and expenses
incurred by the Borrower in connection with the Senior Indebtedness and any
capitalized interest, fees, or other expenses incurred by the Borrower) to an
amount in excess of the principal amount outstanding on the date
hereof;
(b) increase
the interest rate margins (or other yield component) or any recurring fees with
respect to the Senior Indebtedness by more than two hundred fifty (250) basis
points in the aggregate, except in connection with the imposition of a default
rate of interest in accordance with the terms of the Senior Documents as in
effect on the date hereof;
(c) subordinate
in right of payment or otherwise any Senior Indebtedness;
(d) extend
or advance the final maturity or any other scheduled payment for principal,
interest or any other amount in respect of the Senior Indebtedness;
or
(e) prohibit
or restrict the ability of any of the Borrower to repay the principal, interest
or other amounts payable with respect to the obligations under the Loan
Documents in a manner that is more restrictive than the prohibitions and
restrictions contained in the Senior Indebtedness as in effect on the date
hereof.
8.6. When Distribution Must Be
Paid Over. If a distribution is made to the Lender that because of this
Section 8 should not have been made to it, the Lender shall hold it in trust for
the Senior Indebtedness and pay it over to the Senior Lenders as their interests
may appear.
8.7. Subrogation. After
all Senior Indebtedness is Paid in Full and until the obligations hereunder are
Paid in Full, the Lender shall be subrogated to the rights of the Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness. A
distribution made under this Section 8 to such Senior Indebtedness which
otherwise would have been made to the Lender is not, as between the Lender and
the Borrower, a payment by the Borrower on such Senior
Indebtedness.
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8.8. Relative Rights. This
Section 8 defines the relative rights of Borrower and the Senior Lenders.
Nothing in this Agreement shall: (i) impair, as between the Borrower and the
Lender, the obligation of the Borrower, which is absolute and unconditional, to
pay principal of and interest on the Note and the other Loan Documents in
accordance with their terms; or (ii) prevent the Lender from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
Senior Indebtedness to receive distributions otherwise payable to the
Lender.
8.9. Section 8 Not To Prevent
Events of Default or Limit Right To Accelerate. The failure to make a
payment pursuant to any Loan Document by reason of any provision in this Section
8 shall not be construed as preventing the occurrence of a Default or Event of
Default. Nothing in this Section 8 shall have any effect on the right of the
Lender to accelerate the maturity of any amounts payable under this
Agreement.
8.10. Separate Subordination
Agreements. The Lender, the Borrower and any Senior Lender (or
their representatives) may enter into separate subordination agreements with
respect hereto which, upon execution thereof shall supersede this Section 8
solely with respect to the applicable Senior Indebtedness. In the
event of any conflict between the provisions of this Section 8 and the
Subordination Agreement or any additional subordination agreement, the
provisions of the applicable subordination agreement shall prevail.
9.
Miscellaneous .
9.1. Entire
Agreement . This Credit Agreement, the other Loan
Documents and the documents referred to herein and therein constitute the entire
obligation of the parties 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.
9.2. 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' 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.
9.3. Assignment; Binding
Effect .
(a) Successors and
Assigns. The provisions of this Credit Agreement shall be
binding upon and inure to the benefit of each of the parties hereto and its
successors and assigns permitted hereby, except that (i) the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void), it being
understood that mergers, consolidations and other corporate changes permitted by
Section 4.1 of this Credit Agreement shall not be deemed to be assignments for
purposes of this sentence, and (ii) (1) the Lender may assign to one or
more assignees (each, an "Assignee") all or a
portion of its rights and obligations under this Credit Agreement with notice to
the Borrower or (2) the Lender may at any time, with notice to the Borrower,
sell participations to any Person; provided, that if no
Default or Event of Default shall have occurred and be continuing, the prior
written consent of the Borrower (which shall not be unreasonably withheld) shall
be required.
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(b) The
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Credit Agreement to secure obligations of the
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such
pledge or assignment of a security interest shall release the Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for the
Lender as a party hereto.
9.4. 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, ANY NOTE EXECUTED PURSUANT HERETO OR ANY OTHER
LOAN DOCUMENT.
9.5. Submission to
Jurisdiction .
(a) The
Borrower hereby irrevocably agrees that any legal action or proceedings against
it with respect to this Credit Agreement, any 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 9.6 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, any 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.
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(c) To
the extent that the Borrower has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, the Borrower hereby
irrevocably waives such immunity in respect of its obligations under this Credit
Agreement and any other Loan Document to which it is a party.
9.6. 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") and electronic
mail ("EMAIL")to the parties
as follows:
|
To
the Borrower:
|
THE
TALBOTS, INC.
000
Xxxx Xxxxxx
Xxxxxxx,
Xxxxxxxxxxxxx 00000
Telephone:
FAX:
EMAIL:
Attention: Xx. Xxxxxx
X. Xxxxxx, CFO
with
a copy (which shall not constitute notice) to:
THE
TALBOTS, INC.
000
Xxxxx Xxxxx Xxxxxx
Xxxxx
000
Xxx
Xxxxx, XX 00000
Attn:
Xxxxxxx X. X'Xxxxxxx, Xx., Executive Vice President and General
Counsel
|
44
|
To
the Lender:
|
AEON
(USA), INC.
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Telephone:
FAX:
EMAIL:
Attention: President
with
a copy (which shall not constitute notice) to:
AEON
CO., LTD.
5-1,
1-chome, Xxxxxx
Xxxxxx-xx,
Xxxxx-xxx
Xxxxx,
000-0000 Xxxxx
Telephone:
FAX:
EMAIL:
Attention: International
Division
|
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) on 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.
9.7. 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. Notwithstanding the foregoing, the
terms hereof may only be amended in accordance with the provisions of the
Subordination Agreement.
9.8. Usury . Anything
in this Credit Agreement to the contrary notwithstanding, the obligation of the
Borrower to pay interest on the Term Loans and any Notes 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.
9.9. 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.
45
9.10. 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.
9.11. 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.
9.12. 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.
[SIGNATURE
PAGE FOLLOWS.]
46
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
|
|||
| Signed in: | Hingham, MA | ||
| AEON (U.S.A.), INC. | |||
| By: |
/s/Xxxxxxx
Xxxxxx
|
||
|
Name:
Xxxxxxx Xxxxxx
|
|||
|
Title:
Senior Vice President
|
|||
| Signed in: | Tokyo Japan | ||
EXHIBIT
A
THE
INDEBTEDNESS EVIDENCED OR SECURED BY THIS INSTRUMENT IS SUBORDINATED TO THE
PRIOR PAYMENT IN FULL OF THE SENIOR OBLIGATIONS (AS DEFINED IN THE SUBORDINATION
AGREEMENT HEREINAFTER REFERRED TO) PURSUANT TO, AND TO THE EXTENT PROVIDED IN
(i) SECTION 8 OF THE LOAN AGREEMENT AND (ii) THE SUBORDINATION AGREEMENT DATED
AS OF JULY 16, 2008, MADE BY AND AMONG THE SUBORDINATED CREDITORS, THE BORROWER
MIZUHO CORPORATE BANK, LTD., (“MIZUHO”),
AS AGENT, AND MIZUHO, AS BILATERAL LENDER, ALL AS REFERRED TO IN SUCH
SUBORDINATION AGREEMENT.
NOTE
|
US$
|
________ ,
20__
|
FOR VALUE
RECEIVED, The Talbots Inc. (the "Borrower")
unconditionally promises to pay to the order of Aeon (U.S.A.), Inc., a Delaware
corporation (the "Lender"), to the
Lender's Account specified in the Credit Agreement described below, the
principal sum of
Dollars ($ )
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 Term Loan Agreement, dated as of July 16, 2008,
by and among 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 on 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.
A-1
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:
|
|||
2
EXHIBIT
B
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 Term Loan Agreement, dated as of July 16, 2008 by and among
the Borrower and Aeon (U.S.A.), Inc., a Delaware corporation (the "Lender") (the
"Credit
Agreement"; terms defined in the Credit Agreement shall have the
same meaning in this certificate), together with each 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, each Note and each other Loan
Document has been taken by resolutions of the Board of Directors of the
Borrower adopted by written consent by such Board of Directors 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 there to, 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 (or a committee of
the Board of Directors authorized to approve this transaction) approving
and authorizing the execution, delivery and performance of the Credit
Agreement, each Note and each other Loan Document, which resolutions
remain in full force and effect without modification or amendment on and
as of the date hereof.
|
|
6.
|
All
representations and warranties contained in the Credit Agreement are true
and correct in all material respects on and as of the date
hereof.
|
|
7.
|
No
Default or Event of Default or any 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 any Term
Loan.
|
|
8.
|
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.
|
|
9.
|
The
following persons are, and have been at all times since a date prior to
_______ ,
200_ duly qualified and acting officers of the Borrower duly elected or
appointed to the offices set forth opposite the name of such person, and
each such person who, as an officer of the Borrower, signed the Credit
Agreement, each Note and any other Loan Documents was duly elected or
appointed, qualified and acting as such officer at the time of such
signing and delivery, and the signature of each such person appearing on
such documents is such person's genuine
signature.
|
|
Name
|
Office
|
Signature
|
|||
|
10.
|
No
proceeding for the winding-up, liquidation, dissolution or sale of all
substantially all of the assets of the Borrower is pending or
contemplated.
|
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Borrower.
Dated: ______
,
200_
I,
_________________________, the _________________________ of The Talbots, Inc.
(the "Borrower") hereby
certify that I am the duly elected, qualified and acting __________________ of
the Borrower and that ____________________is the duly elected, qualified and
acting ____________________of the Borrower and such person's signature above is
the true and genuine signature of such person.
Exhibit
C
SUBORDINATION
AGREEMENT
SUBORDINATION
AGREEMENT, dated as of July 17, 2008, made by and among Aeon (USA), Inc.
(together with each lender from time to time party to the Subordinated Loan
Agreement referred to below, each a "Subordinated
Creditor" and, collectively, the "Subordinated
Creditors"), The Talbots, Inc. a Delaware corporation (the "Borrower"), Mizuho
Corporate Bank, Ltd., a corporation organized and existing under the laws of
Japan ("Mizuho"), as arranger
and administrative agent for the Lenders referred to below (in such capacities,
the "Agent")
for the Syndicated Lenders (as defined below) party to the Syndicated Loan
Agreement referred to below, and Mizuho, as lender under the Bilateral Loan
Agreements referred to below (in such capacity, the "Bilateral
Lender").
W I T N E S S E T
H:
WHEREAS,
the Borrower, the lenders from time to time party thereto (collectively, the
"Syndicated
Lenders" and together with the Bilateral Lender, each a "Lender" and
collectively the "Lenders") and the
Agent have entered into a Term Loan Agreement dated as of July 24, 2006 (such
Agreement, as amended or otherwise modified from time to time, the "Syndicated Loan
Agreement");
WHEREAS,
pursuant to the Syndicated Loan Agreement, the Syndicated Lenders have agreed to
make certain term loans (such term loans are hereinafter referred to
individually as a "Syndicated Loan" and
collectively, the "Syndicated Loans") to
the Borrower in an aggregate principal amount at any one time outstanding not to
exceed the Total Term Loan Commitment (as defined in the Syndicated Loan
Agreement);
WHEREAS,
the Borrower and the Bilateral Lender previously entered into that certain (a)
General Financing Agreement, dated as of August 24, 2007 (as amended,
supplemented, or otherwise modified from time to time, the "Financing
Agreement"), pursuant to which the Bilateral Lender has made and may
hereafter extend loans (the "Financing Agreement
Advances") to the Borrower, (b) Revolving Credit Agreement dated as of
January 28, 2004 (as amended, supplemented, or otherwise modified from time to
time, the "2004 Credit
Agreement"), pursuant to which the Bilateral Lender has made and may
hereafter extend loans (the "Credit Agreement
Advances") to the Borrower from time to time up to $18,000,000 and (c)
Revolving Loan Credit Agreement dated as of April 17, 2003 (as amended,
supplemented, or otherwise modified from time to time, the "2003 Credit
Agreement" and, together with the 2004 Credit Agreement and the Financing
Agreement, each a "Bilateral Loan
Agreement" and collectively, the "Bilateral Loan
Agreements"; the Bilateral Loan Agreements together with the Syndicated
Loan Agreement, each a "Loan Agreement" and
collectively, the "Loan Agreements"),
pursuant to which the Bilateral Lender has made and may hereafter extend loans
up to $18,000,000.00 (together with the Credit Agreement Advances and the
Financing Agreement Advances, the "Bilateral Loans" and,
together with the Syndicated Loans, collectively the "Loans") to the
Borrower from time to time;
WHEREAS,
the Borrower and the Subordinated Creditors have entered into a Term Loan
Agreement, dated as of July __, 2005 (such Loan Agreement, as amended or
otherwise modified from time to time in accordance
with the terms of this Agreement, the "Subordinated Loan
Agreement"), with respect to subordinated term loans in the aggregate
principal amount not exceeding $50,000,000 (the "Subordinated Term
Loans") evidenced by one or more
subordinated promissory notes issued from time to time by the Borrower to the
respective Subordinated Creditors in the original principal amounts set forth
opposite the names of the respective Subordinated Creditors in the column
captioned "Original Principal Amount" on Schedule I hereto as amended or
otherwise modified pursuant to the terms of this Agreement (the "Subordinated Notes");
and
WHEREAS,
pursuant to the Loan Agreements, each Subordinated Creditor and each Obligor is
required to execute and deliver to the Agent and the Bilateral Lender an
agreement subordinating all indebtedness and other obligations of the Obligors
from time to time existing in favor of such Subordinated Creditor under the Subordinated Term Loan to the prior payment in full of all of the
obligations of the Obligors from time to time existing in favor of the Lenders
and the Agent;
NOW,
THEREFORE, in consideration of the premises and in order to induce the Lenders
to maintain the Loans pursuant to the Loan Agreements, the Subordinated
Creditors and the Obligor, severally and not jointly, hereby agree with the
Agent (on its behalf and on behalf of the Syndicated Lenders) and the Bilateral
Lender as follows:
SECTION
1. Definitions.
(a)
Reference is hereby made to the Loan
Agreements for a statement of the terms thereof. Any capitalized term
used herein and not defined shall have the meaning assigned to it in the
applicable Loan Agreement.
(b)
In addition, as used in this Agreement, the
following terms shall have the respective meanings indicated below, such
meanings to be applicable equally to both the singular and plural forms of such
terms:
"Enforcement Action"
means any action to enforce or attempt to enforce any right or remedy available
to the Subordinated Creditors under the Subordinated Documents, applicable law
or otherwise, including any action to (a) accelerate the maturity of, or
demand as immediately due and payable, all or any part of the Subordinated
Obligations, (b) to xxx for or exercise any right of set-off,
(c) commence, continue or participate in any judicial, arbitral or other
proceeding, or any other collection or enforcement action of any kind, against
any Obligor or any of any Obligor's assets (including any Insolvency
Proceeding), seeking, directly or indirectly, to enforce any rights or remedies,
or to enforce any of the obligations incurred by any Obligor, under or in
connection with the Subordinated Obligations or the Subordinated Documents,
(d) commence or pursue any judicial, arbitral or other proceeding or legal
action of any kind, seeking injunctive or other equitable relief to prohibit,
limit or impair the commencement or pursuit by the Agent or any Lenders of any
of its rights or remedies under or in connection with the Senior Documents or
otherwise available to the Agent or any Lender under applicable law or (e) to
take any action in respect of the Subordinated Obligations under the provisions
of any state, local, federal or foreign law, including, without limitation, the
Uniform Commercial Code as in effect in any applicable jurisdiction, or under
any Subordinated Document, to foreclose upon, take possession of or sell any
property or assets of any Obligor.
"Obligor" means the
Borrower, each other Loan Party and each other Subsidiary of the Borrower that
may from time to time guaranty any portion of the Senior
Obligations.
"Maximum Senior Principal
Amount" means $371,000,000, less the
aggregate principal amount of all prepayments and repayments thereof (other than
a permitted refinancing).
"Payment in Full"
means the full and final payment in cash, in immediately available funds, of all
the Senior Obligations, other than inchoate
indemnity obligations for which no claim has been made (whether or not
any of the Senior Obligations shall have been voided, disallowed or subordinated
pursuant to any provision of the Bankruptcy Code (or other Applicable Bankruptcy
Law), any applicable state fraudulent conveyance law, any other law in
connection with an Insolvency Proceeding or otherwise) after (i) all principal
of the Loans, interest thereon (including interest accruing subsequent to the
filing of any petition initiating any Insolvency Proceeding, whether or not a
claim for such interest is allowed in any such proceeding) and all other Senior
Obligations (other than inchoate indemnity
obligations for which no claim has been made) shall have been paid in
full, and (ii) the receipt by the Agent and the Bilateral Lender of cash
collateral in such amounts as the Agent and the Bilateral Lender determine are
reasonably necessary to secure the Agent and the Lenders from loss, cost, damage
or expense, including attorneys' fees, costs and expenses, in connection with
any contingent Senior Obligations, including, without limitation, checks or
other payments provisionally credited to the Senior Obligations and as to which
the Agent or any Lender has not yet received final and indefeasible
payment. The expressions "prior payment in full", "payment in full",
"paid or satisfied in full" and "paid in full" (whether or not such expressions
are capitalized) and other similar phrases shall have correlative
meanings. For the purposes of this Agreement, the Senior Obligations
shall not be deemed to have been "Paid in Full," and "Payment in Full" of the
Senior Obligations shall not be deemed to have occurred, until 91 days following
the date on which all of the Senior Obligations have been paid in full in
accordance with the terms set forth in the first sentence of this
definition.
"Permitted
Payment" means (a) regularly scheduled
payments of interest (at the non-default cash rate of interest ) on the Subordinated Obligations due and payable on a non-accelerated basis in
the manner in the stated amounts and on the stated dates of payment thereof as
set forth in the Subordinated Loan Agreement as in effect on the date hereof and
otherwise in accordance with the Subordinated Loan
Agreement as in effect on the date hereof (including regularly scheduled
interest payments which accrued during any period payment thereof was prohibited
pursuant to Section 3 of this Agreement); provided,
however, that the due dates for the payments of such interest payments, and the amounts
thereof, may be extended, reduced, or increased (provided any such increase is
due solely to the deferral of prior interest payments), respectively,
without changing their characterization as Permitted Payments; (b) payments of fees and expenses under the
Subordinated Loan Agreement as in effect on the date hereof; (c) reimbursement
of reasonable out of pocket costs and expenses (including reasonable attorney's
fees) of the Subordinated Creditors; and
(d) obligations of the
Obligors to reimburse the Subordinated Creditors pursuant to the indemnification
provisions set forth in the Subordinated Documents as in effect on the date
hereof; provided, that, the aggregate amount paid by the Obligors
pursuant to clauses (c) and (d) above shall not exceed $1,000,000 in the
aggregate and with respect to any such indemnities payments not constituting
reimbursement payments for out-of-pocket costs and expenses, the Borrower or any
Subordinated Creditor shall have provided the Agent with not less than five (5)
Business Days' prior written notice of payment thereof, specifying the nature
and amount of such payments, for such payments to constitute "Permitted
Payments" hereunder.
"Prohibited
Payment" means any payment due
with respect to any of the Subordinated
Obligations that, if made by any Obligor or any other Loan Party, is not or
would not be a Permitted Payment when made.
"Senior Documents"
means the Loan Agreement, the other Loan Documents, the Bilateral Loan
Agreements and the other agreements, documents and instruments relating
thereto.
"Senior Obligations"
means all Obligations, including, without limitation, any and all indebtedness,
obligations and other liabilities of the Obligors now or hereafter existing in
favor of the Lenders and the Agent under the Loan Agreements and the other
Senior Documents (in each case, as amended or otherwise modified from time to
time in accordance with the terms of this Agreement), in each case whether for
principal, interest (including interest accruing subsequent to the filing of any
petition initiating any Insolvency Proceeding, whether or not a claim for such
interest is allowed in any such proceeding), guaranteed obligations, premiums,
indemnities, fees, costs, expenses (including, without limitation, auditor,
legal and other professional fees, costs and expenses, and including, without
limitation, fees, costs and expenses accruing subsequent to the filing of any
petition initiating any Insolvency Proceeding, whether or not a claim for such
fees, costs and expenses is allowed in any such proceeding), or otherwise, in
each case whether now existing or hereafter arising, direct or indirect,
absolute or contingent, joint or several, secured or unsecured, matured or
unmatured, monetary or nonmonetary, liquidated or unliquidated, acquired
outright, conditionally or as collateral security from another, all other
indebtedness and liabilities now or hereafter existing in favor of any of the
Lenders or the Agent under the Senior Documents, and all extensions, renewals,
refundings, replacements and modifications of any of the foregoing.
"Subordinated
Documents" means the Subordinated Loan Agreement, the Subordinated Notes,
and any other agreements, documents or instruments
evidencing the Subordinated Obligations or
relating thereto, each as amended, supplemented or otherwise modified from time
to time in accordance with the terms of this Agreement.
"Subordinated
Obligations" means all indebtedness, obligations and other liabilities of
the Obligors now or hereafter existing under the Subordinated Documents in favor
of the Subordinated Creditors, whether now existing or hereafter arising and
whether created directly or acquired by assignment or otherwise, all interest
thereon and all fees, premiums, costs, expenses and other amounts payable in
respect thereof, whether now existing or hereafter arising, direct or indirect,
absolute or contingent, joint or several, secured or unsecured, matured or
unmatured, monetary or nonmonetary, liquidated or unliquidated, acquired
outright, conditionally or as collateral security from another, including,
without limitation, all such indebtedness, obligations and other liabilities of
the Obligors under or in respect of subrogation rights under any guaranty or any
other rights to be subrogated to the rights of the holders of the Senior
Obligations in respect of payments or distributions of assets of, or ownership
interests in, the Obligors made on the Senior Obligations.
"Weighted Average Life to
Maturity" means, when applied to any Indebtedness at any date, the number
of years obtained by dividing (a) the original aggregate principal amount of
such Indebtedness into (b) the sum of the total of the products obtained by
multiplying (i) the amount of each scheduled installment, sinking fund, serial
maturity or other required payment of principal including payment at final
maturity, in respect thereof, by (ii) the number of years (calculated to the
nearest one-twelfth) which will elapse between such date and the making of such
payment.
SECTION
2. Agreement to
Subordinate. Each of the Subordinated Creditors and each
Obligor agrees that the Subordinated Obligations are and shall be junior and
subordinate, to the extent and in the manner hereinafter set forth, in right of
payment to the prior Payment in Full of the Senior Obligations. In the event that all or any part of payment of the
Senior Obligations is rescinded or recovered directly or indirectly from the
Agent or any Lender as a preference, fraudulent transfer or otherwise
(whether by demand, settlement, litigation
or otherwise, and whether or not such rescission or recovery occurs prior to or
after the date on which the Senior Obligations are deemed to have been Paid in
Full), such rescinded or recovered payments shall constitute Senior
Obligations for all purposes hereunder and the obligations of Subordinated
Creditors hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, until such Senior Obligations are Paid in
Full.
SECTION
3. Restrictions on Payments and
Actions;
Permitted Payments; Agreements and Consents of Subordinated
Creditors.
(a)
No Subordinated Creditor will
ask, demand, xxx for, take or receive, directly or indirectly, from the Borrower
or any other Obligor, in cash or other property, by set-off, by realizing upon
collateral or in any other manner, payment of, or security for, any or all of
the Subordinated Obligations unless and until the Senior Obligations shall have
been Paid in Full; provided, however, that the
Subordinated Creditors may receive and the Borrower may make Permitted Payments
to the extent, but only
to the extent, each condition set forth below has been fully
satisfied:
(i) no
Default or Event of Default under any Senior Document shall have occurred and be
continuing (either before or immediately after the making of each such
payment) by reason of the failure of any Obligor
to pay when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) any amount payable by it to any Lender or the Agent under any Senior Document (a
"Payment
Default"),
(ii) after
giving effect to such payment, the Obligors would, to the best knowledge of the
Subordinated Creditors, be in compliance with the financial covenants set forth
in Section 4.2 of the Syndicated Loan Agreement, and
(iii) either (A) no Default or Event of Default under the
Senior Documents, other than Payment Defaults, shall have occurred and be
continuing (all such Defaults and Events of Defaults, other than Payment
Defaults, hereinafter referred to as
"Non-Payment
Defaults"), (B) a Non-Payment Default shall
have occurred and be continuing and the Agent or the Bilateral Lender shall not
have delivered to the Subordinated Creditors a written notice (a "Payment Blockage
Notice", which shall specify that it is a Payment Blockage Notice
delivered pursuant to this Agreement and shall specify the Non-Payment Default
that gives rise to such notice) stating that a Non-Payment Default has occurred
and is continuing or (C) a Non-Payment Default shall have
occurred and be continuing and the Agent or the Bilateral Lender shall have
delivered to the Subordinated Creditors a Payment Blockage Notice and (x) 180
days shall have elapsed after such Payment Blockage Notice shall have been given
to the
Subordinated Creditors and (y) the Agent or the Bilateral Lender shall not have
declared any of the Obligations due and payable prior to the date fixed therefor
in respect of any such Non-Payment Default); provided, however, that,
notwithstanding the foregoing clauses (A), (B) and (C), if any such Non-Payment
Default shall have been remedied or waived, the Agent or the Bilateral Lender,
as applicable, shall so notify the Subordinated Creditors in writing, and the
Payment Blockage Notice shall be deemed terminated and the
suspended payments (including all Permitted Payments suspended during the
blockage period) may resume subject to the provisions of this Agreement;
provided, further, however, (x) no more than four (4) Payment Blockage Notices
shall be permitted to be delivered pursuant to clause (C) above during
any calendar year, and (y) no Non-Payment Default which existed or was
continuing on the date such Payment Blockage Notice was given shall be made the
basis for any subsequent Payment Blockage Notice whether or not
within a period of 365 consecutive days unless such Non-Payment Default is cured
or waived for a period of not less than 30 consecutive days.
(b)
No Obligor will make any payment in cash or other property in
respect of any of the Subordinated Obligations
except Permitted Payments, or take any other action, in contravention of
the provisions of this Agreement.
(c)
Each Subordinated Creditor agrees, for the benefit of
the Borrower, the Agent and each of the Lenders, that (i) the due
date for any Prohibited Payment shall be
automatically extended until the Business Day next following the date on which
payments are no longer prohibited by Section 3(a) (the "Extended Due Date"), and
(ii) that no default, default event or event of default, however denominated,
shall be deemed to have occurred under any of the Subordinated Documents by
reason of the nonpayment of such Prohibited Payment prior to the Extended Due
Date.
SECTION
4. Additional Provisions
Concerning Subordination. Each of the Subordinated Creditors
and each Obligor agrees as follows:
(a)
In the event of any Insolvency
Proceeding relating to any Obligor,
(i) any
payment or distribution of any kind (whether in cash, securities or other
property) which otherwise would be payable or deliverable upon or with respect
to any of the Subordinated Obligations shall be paid or delivered directly to
the Agent for application (in the case of cash) to, or as collateral (in the
case of securities or other non-cash property) for, the payment or prepayment of
the Senior Obligations until the Senior Obligations shall have been Paid in
Full;
(ii) Each
of the Agent and the Bilateral Lender may, and is hereby irrevocably authorized
and empowered (in its own name or in the name of the Subordinated Creditors or
otherwise), but shall have no obligation, to, (A) demand, xxx for, collect and
receive every payment or distribution referred to in clause (i) of subsection
(a) of this Section 4 and give acquittance therefor and (B) file claims and
proofs of claim in respect of the Subordinated Obligations and take such other
action (including, without limitation, voting the Subordinated Obligations) as
the Agent or the Bilateral Lender may deem necessary or advisable for the
exercise or enforcement of any of the rights or interests of the Agent or the
Bilateral Lender hereunder; and
(iii) each
Subordinated Creditor will duly and promptly take such action as the Agent or
the Bilateral Lender may request (A) to collect the Subordinated Obligations
existing in favor of such Subordinated Creditor for the account of the Agent or the
Bilateral Lender and to file appropriate claims or proofs of claim with respect
thereto, (B) to execute and deliver to the Agent or the Bilateral Lender such
powers of attorney, assignments or other instruments as the Agent or the
Bilateral Lender may reasonably request in
order to enable it to enforce any and all claims with respect to, and any
security interests and other Liens securing payment of, the Subordinated
Obligations existing in favor of such Subordinated Creditor, and (C) to collect and
receive any and all payments or distributions which may be payable or
deliverable upon or with respect to the Subordinated Obligations existing in favor of such Subordinated
Creditor.
(b)
All payments or distributions
upon or with respect to the Subordinated Obligations which are received by any
Subordinated Creditor contrary to the provisions of this Agreement shall be
received in trust for the benefit of the Agent and the Lenders, shall be
segregated from other funds and property held by such Subordinated Creditor and
shall be forthwith paid over to the Agent (for the benefit of the Lenders) in
the same form as so received (with any necessary endorsement) to be applied (in
the case of cash) to or held as collateral (in the case of securities or other
non-cash property) for the payment or prepayment of the Senior Obligations until
the Senior Obligations shall have been indefeasibly Paid in Full; provided,
however, that notwithstanding any provision in this
Agreement to the contrary, in no event
shall the Agent or any Lender be entitled to receive or otherwise require any
Subordinated Creditor to pay, deliver or otherwise turnover to the Agent or any
Lender any payment if such payment was a Permitted Payment at the time of
receipt thereof. To the extent
there are any excess amounts paid over to the Agent and the Lenders after the
Senior Obligations have been irrevocably Paid in Full in cash and the
termination of all obligations of the Agent's and the Lender's financial
accommodations to Borrower under the Senior Documents, such excess amounts shall
be remitted to the Subordinated Creditors, or any of them, to the extent
necessary to pay Subordinated Obligations then due in full, which amounts shall
constitute payments in respect of the Subordinated Obligations and will so
reduce the outstanding amount of the Subordinated Obligations; provided, however, that to the
extent of the amount of any such remittance received by it, the applicable
Subordinated Creditor shall indemnify and hold harmless the Agent and the
Lenders from any and all claims, liabilities, damages and expenses suffered by
the Agent or the Lenders in connection with the making of any such remittance to
such Subordinated Creditor.
(c)
Each of the Agent and the
Bilateral Lender is hereby authorized to demand specific performance of this
Agreement at any time when any Subordinated Creditor shall have failed to comply
with any of the provisions of this Agreement applicable to such Subordinated
Creditor whether or not each Obligor shall have complied with any of the
provisions hereof applicable to such Obligor, and each Subordinated Creditor
hereby irrevocably waives any defense based on the adequacy of a remedy at law
which might be asserted as a bar to such remedy of specific
performance.
SECTION
5. Legend; Further
Assurances.
(a)
Each Subordinated Creditor (with respect to Subordinated Obligations existing in
favor of such Subordinated Creditor and with respect to Subordinated Documents
to which such Subordinated Creditor is a
party) and the Obligors will cause each Subordinated Document and any
other instrument hereafter governing or evidencing any Subordinated Obligation
to be indorsed with the following legend:
"The
indebtedness evidenced or secured by this instrument is subordinated to the
prior payment in full of the Senior Obligations (as defined in the Subordination
Agreement hereinafter referred to) pursuant to, and to the extent provided in,
the Subordination Agreement dated as of July __, 2008, made by and among the
Subordinated Creditors, the Borrower, Mizuho Corporate Bank, Ltd. ("Mizuho"), as
Agent and Mizuho, as the Bilateral Lender, all as referred to in such
Subordination Agreement."
(b)
Each of the Subordinated Creditors
(with respect to Subordinated Obligations existing in favor of such
Subordinated Creditor and with respect to Subordinated Documents to which such
Subordinated Creditor is a party) and each Obligor will (i) xxxx its
books of account in such a manner as shall be effective to give proper notice of
the effect of this Agreement and (ii) in the case of any Subordinated Obligation
which is not evidenced by any instrument, upon the Agent's or the Bilateral
Lender's request cause such Subordinated Obligations to be evidenced by an
appropriate instrument or instruments indorsed with the above
legend. The Obligors will, at their sole cost and expense and at any
time and from time to time, promptly execute and deliver all further instruments
and other documents, and take all further action, that may be reasonably
necessary or, in the reasonable opinion of the Agent or the Bilateral Lender,
desirable, or that the Agent or the Bilateral Lender may reasonably request, in
order to protect any right or interest granted or purported to be granted hereby
or to enable the Agent or the Bilateral Lender to exercise and enforce its
rights and remedies hereunder.
SECTION
6. Negative
Covenants.
(a)
Notwithstanding anything
contained herein to the contrary, So long as any of the Senior Obligations have
not been Paid in Full, no Subordinated
Creditor will, without the prior written
consent of the Agent and the Bilateral Lender:
(i) take
any Enforcement Action (other than Permitted Payments pursuant to Section 3 of
this Agreement) with respect to the Subordinated Obligations, until the earliest
to occur of the following and in any event no earlier than ten (10) Business
Days after Agent's and the Bilateral Lender's receipt of written notice of a
Subordinated Creditor's intention to take any such Enforcement
Action:
(A)
acceleration of the Senior Obligations, the institution or commencement of any
legal proceedings, judicial proceedings or right of set off or other remedies by
the Agent or the Lenders to enforce payment of or collect any material portion
of the Senior Obligations, or the institution or commencement of any foreclosure
proceedings or other remedial actions by the Agent or the Lenders (provided,
this clause (A) shall be deemed not to include (I) the implementation of full
cash dominion or the giving of any activation or similar notice under any
agreement relating to the Obligors' deposit or securities accounts, (II) the
institution of any reserves under any revolving credit facility, (III) any
notice by the Agent or any Lender to account debtors of any Obligor to make
payments to a particular bank account or lockbox or any actions by the Agent or
any Lender to verify the terms or existence of any accounts receivable of any
Obligor, (IV) the making of any demand for payment not constituting an
acceleration, the charging of default rate interest or the delivery of any
notices of default or reservation of rights hereunder or (V) the engagement of
an investment banker or similar Person to market all or any portion of the
Obligors' assets); or
(B) the
passage of one hundred eighty (180) days from the delivery of a written notice
from any Subordinated Creditor to the Agent or the Bilateral Lender of the
occurrence and continuance of any Event of Default under any Subordinated Loan
Agreement (a "Subordinated Debt
Default"), which notice shall specify the nature of such Subordinated
Debt Default and state such Subordinated Creditor's intent to commence an
Enforcement Action (the "Subordinated Creditor
Default Notice") if any Subordinated Debt Default described therein shall
not have been cured or waived within such period;
(ii) Notwithstanding
the foregoing,
(A) the
Subordinated Creditors may file proofs of claim against all or any Obligor in
any Insolvency Proceeding involving such Obligor or Obligors and vote such
claim;
(B) any
distributions or other proceeds of any Enforcement Action (other than Permitted
Payments pursuant to Section 3 of this Agreement) obtained by any Subordinated
Creditor shall in any event be held in trust by it for the benefit of the Agent
and Lenders and promptly be paid or delivered to the Agent for the benefit of
the Agent and the Lenders in the form received until all Senior Obligations are
Paid in Full in cash and all commitments to lend under the Senior Documents
shall have been terminated; and
(C) if
following the acceleration of the Senior Obligations by the Agent or the Lenders
such acceleration is rescinded in writing by the Agent or the Lenders (whether
or not any existing Payment Default or Senior Non-Payment Default has been cured
or waived), then all Enforcement Actions taken by any Subordinated Creditor
shall likewise be rescinded; provided that, upon
such rescission of such acceleration in accordance with this Section 6(a)(ii), and
to the extent that an underlying Non-Payment Default or Subordinated Debt
Default remains uncured or unwaived, the payment blockage pursuant to Section
3(a)(iii) or the standstill pursuant to Section 6(a)(i)(B) originally instituted
in connection with such Non-Payment Default or the Subordinated Debt Default (as
applicable) shall be reinstituted and, for the purposes of determining the
passage of time under Section 3(a)(iii)
with respect to such payment blockage and Section 6(a)(i)(B) with respect to
such standstill, such payment blockage or standstill shall be deemed to have run
continually from the date of the original institution of such payment blockage
or standstill through and including the date of such rescission of such
acceleration in accordance this Section 6(a)(ii) or
Section 6(a)(i)(B), as applicable;
(iii) (A)
cancel or otherwise discharge any Subordinated Obligation, (B) subordinate any
Subordinated Obligation to any
indebtedness of the Obligors other than the Senior Obligations and the other
Senior Indebtedness (as defined in the Subordinated Loan Agreement), or (C)
obtain or otherwise receive the benefit of any Lien on any collateral securing
any of the Subordinated Obligations, or obtain or otherwise receive the benefit
of any guaranty with respect to any of the Subordinated Obligations existing in favor of such Subordinated
Creditor;
(iv)
sell, assign, pledge, encumber or otherwise dispose of any Subordinated
Obligation unless such sale,
assignment, pledge, encumbrance or disposition is made expressly subject to this
Agreement;
(v) permit any
Subordinated Document to which such
Subordinated Creditor is a party or the terms of any
Subordinated Obligation to be amended or
otherwise modified if the effect thereof is to (A)
increase the maximum principal amount of the Subordinated Obligations, (B) increase the interest rate margins (or other
yield component) or any recurring fees with respect to the Subordinated
Obligations, except in connection with the imposition of a default rate of
interest in accordance with the terms of the Subordinated Documents as in
effect on the date hereof, (C) shorten the amortization or accelerate the
repayment of the principal of the Subordinated Obligations in any way (other
than after the occurrence and during the continuance of an event of
default under the Subordinated Documents)
of any portion of the Subordinated Obligations (as set forth in the Subordinated
Documents in effect on the date hereof), (D) add or make more restrictive any
covenant or event of default with respect to the Subordinated
Obligations; provided, however, that if any covenant or event of
default contained in any Senior Document is modified, supplemented, restated or
amended (or any new covenant or event of default is added), and if such
modification, supplementation, restatement or amendment has the effect
of making such covenant or event of default therein more restrictive with
respect to the Obligors, then the Obligors, the Subordinated Creditors shall
have the option to make a substantially similar modification, supplementation,
restatement or amendment to the Subordinated Documents (a
"Corresponding
Amendment"), it being understood that any
such Corresponding Amendment of financial or numerical covenants in the
Subordinated Documents shall be made proportionately, as nearly as
possible, to the modification,
supplementation, restatement or amendment affecting the equivalent financial or
numerical covenant contained in the Senior Documents, (E) change any date upon
which payments of principal, interest, premiums or fees are due to an
earlier date, (F) change any redemption, put or prepayment
provisions of the Subordinated Obligations or (G) make any other changes or
modifications with respect the Subordinated Documents or the Subordinated
Obligations that could reasonably be expected to result in a material
adverse effect on the Obligors, the Agent or the Lenders;
(vi) commence,
or join with any creditor other than the Agent or a Lender or any group in which
the Agent or any Lender is, in commencing, any Insolvency Proceeding with
respect to the Obligors;
(vii) acquire
any Lien or security interest for any Subordinated Obligation; or
(viii) seek
to challenge, to avoid, to subordinate or to contest or directly or indirectly
to support any other Person in challenging, avoiding or contesting in any
judicial or other proceeding, including, without limitation, any Insolvency
Proceeding with respect to any Obligor or the validity or enforceability of any
of the Senior Obligations.
(b)
So long
as the Subordinated Loan Agreement is
outstanding or any of the Subordinated Notes shall not have been repaid in
full, the Agent, on behalf of the Lenders, and
the Bilateral Lender agree that they will not, without the prior written consent
of the Subordinated Creditors (i) permit
the terms of the Senior Documents to be changed
to result in an increase in the principal amount of the Senior Obligations
(excluding any fees and expenses incurred by the Obligors in connection with the
Senior Documents and any capitalized interest, fees, or other expenses incurred
by the
Obligors or any of their Subsidiaries) to an amount in excess of the Maximum
Senior Principal Amount or (ii)
advance the final scheduled maturity of the Senior Obligations (other than as a
result of acceleration due to the exercise of rights and remedies by the Agent
or the Lenders) or advance any scheduled principal payment (other than as a
result of (A) acceleration due to the exercise of rights and remedies by the
Agent or the Lender, (B) the making of voluntary and, to the extent contemplated
in the Senior Loan Agreement, mandatory prepayments, (C) increases in the
amounts of principal installments resulting from additional extensions of credit
by the Agent or the Lenders to the extent the additional principal amounts are
otherwise permitted under the definition of "Senior Obligations" or (D) one or
more advances in the final scheduled maturity of the Senior Obligations or in
any scheduled principal payment on the Senior Obligations which, taken
collectively, do not result in the Weighed Average Life to Maturity of the
Senior Obligations changing by more than 12 months as compared to the Weighted
Average Life to Maturity of the Senior Obligations on the date
hereof).
SECTION
7. Obligations
Unconditional.
(a)
All rights and interests of the
Agent and Lenders hereunder, and all agreements and obligations of each
Subordinated Creditor and each Obligor hereunder, shall remain in full force and
effect irrespective of: (i) any lack of validity or enforceability of
any Senior Document or any other agreement or instrument relating thereto, (ii)
any change in the time, manner or place of payment of, or in any other term in
respect of, all or any of the Senior Obligations, or any other amendment or
waiver of or any consent to departure from any Senior Document, (iii) any
exchange or release of, or non-perfection of any Lien on or security interest
in, any collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Senior Obligations, (iv ) all
other notices, demands and protests, and all other formalities of every kind in
connection with the enforcement of the Senior Obligations or of the obligations
of the Subordinated Creditors and the Obligors hereunder, the omission of or
delay in which, but for the provisions of this Section 7, might constitute
grounds for relieving any Subordinated Creditor or any Obligor of its
obligations hereunder, (v) any requirement that the Agent or any Lender protect,
secure, perfect or insure any security interest or other Lien or any property
subject thereto or exhaust any right to take any action against an Obligor or
any other Person or any collateral; or (vi) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, any Obligor in
respect of any of the Senior Obligations or a Subordinated Creditor or any
Obligor in respect of this Agreement.
(b) This
Agreement shall continue to be effective or shall be reinstated, as the case may
be, if at any time any payment of any of the Senior Obligations is rescinded or
must otherwise be returned by a Lender or the Agent upon the commencement of an
Insolvency Proceeding with respect to an Obligor or otherwise, all as though
such payment had not been made.
SECTION
8. Waivers. Each
of the Subordinated Creditors and the Obligors hereby waives (i) promptness and
diligence, (ii) notice of acceptance and notice of the incurrence of any Senior
Obligation by an Obligor, (iii) notice of any actions taken by any Lender or the
Agent or an Obligor under any Senior Document or any other agreement or
instrument relating thereto, (iv) all other notices, demands and protests, and
all other formalities of every kind in connection with the enforcement of the
Senior Obligations or of the obligations of a Subordinated Creditor or an
Obligor hereunder, the omission of or delay in which, but for the provisions of
this Section 8, might constitute grounds for relieving a Subordinated Creditor
or an Obligor of its obligations hereunder, (v) any right to compel the Agent or
any Lender to xxxxxxxx any of the collateral or to seek payment from any
particular assets of any Obligor or from any third party, or (vi) any
requirement that any Lender or the Agent protect, secure, perfect or insure any
security interest or other Lien or any property subject thereto or exhaust any
right to take any action against an Obligor or any other Person or any
collateral.
SECTION
9. Subrogation. No
payment or distribution to the Agent or any Lender pursuant to the provisions of
this Agreement shall entitle any Subordinated Creditor to exercise any rights of
subrogation in respect thereof until the Business
Day next following the date on which the Senior Obligations are Paid in
Full.
SECTION
10. Representations and
Warranties.
(i) Each
Obligor hereby represents and warrants that (i) each Subordinated Document to
which it is a party, a complete and correct copy of which is attached hereto,
constitutes the legal, valid and binding obligation of such Obligor, enforceable
against such Obligor in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws and by equitable principles of general applicability, (ii) the execution,
delivery and performance by such Obligor of this Agreement do not and will not
contravene any treaty, statute, law or regulation or any contractual restriction
binding on or affecting such Obligor, and (iii) no authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority or
other regulatory body is required for the due execution, delivery and
performance by such Obligor of this Agreement.
(b)
Each Subordinated Creditor (with respect to Subordinated Obligations existing in
favor of such Subordinated Creditor and with respect to Subordinated Documents to which such Subordinated Creditor is a
party) and each Obligor hereby represents and warrants (as to itself or
himself only) as follows:
(i)
The aggregate principal amount of the Subordinated Obligations currently
outstanding under such Subordinated Creditor's Subordinated Note is the amount set
forth opposite such Subordinated Creditor's name in the column captioned
"Original Principal Amount" on Schedule I hereto.
(ii)
There are no instruments, agreements or other writings guaranteeing or securing
any Subordinated Obligation. The Subordinated Obligations are not
secured by any Lien, and are not the subject of any guaranty or other similar
instrument. There are no instruments, agreements or other
arrangements, written or oral, in respect of the Subordinated Obligations, other
than the Subordinated Documents.
(iii) None
of the Subordinated Documents has been amended or otherwise modified, and there
exists no default in respect of any thereof.
(c)
Each Subordinated Creditor (with respect to Subordinated Obligations existing in favor of such
Subordinated Creditor and with respect to Subordinated Documents to which such
Subordinated Creditor is a party) hereby represents and warrants (as to
itself only) as follows:
(i)
Such Subordinated Creditor owns the Subordinated
Obligations evidenced by the Subordinated Documents to which such Subordinated
Creditor is a party, free and clear of any Lien.
(ii)
The execution, delivery and performance by such Subordinated Creditor of
this Agreement do not and will not contravene any treaty, statute, law or
regulation or any contractual restriction binding on or affecting such
Subordinated Creditor.
(iii) No
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or other regulatory body is required for the due
execution, delivery and performance by such Subordinated Creditor of this
Agreement.
(iv) This
Agreement constitutes the legal, valid and binding obligation of such
Subordinated Creditor, enforceable against such Subordinated Creditor in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws and by equitable principles of general
applicability.
SECTION
11. Expenses. The
Obligors, jointly and severally, agree to
pay upon demand to the Agent and the Bilateral Lender the amount of any and all
expenses, including the fees and expenses of counsel for the Agent and the
Bilateral Lender, which the Agent or the Bilateral Lender may incur in
connection with the exercise or enforcement of any of the rights or interests of
the Agent or the Bilateral Lender hereunder.
SECTION
12. Notices. All
notices and other communications provided for hereunder shall be in writing and
shall be mailed (by certified mail, postage prepaid and return receipt requested),
telecopied or delivered, if to a Subordinated Creditor, to such Subordinated
Creditor at the address of such Subordinated Creditor set forth below next to
its signature; if to an Obligor, to it at its address specified in the Loan
Agreement; if to the Agent, to it at its address specified in the Syndicated
Loan Agreement; if to the Bilateral Lender, to it at its address specified in
the Bilateral Loan Agreements; or as to any such Person at such other address as
shall be designated by such Person in a written notice to each such other Person
complying as to delivery with the terms of this Section 12. All such
demands, notices, and other communications shall be effective (i) if mailed when
received or five Business Days after
mailing, whichever occurs first, (ii) if telecopied, when transmitted and
appropriate confirmation is received or (iii) if delivered, upon
delivery.
SECTION
13. Miscellaneous.
(a)
No amendment of any provision of this Agreement shall be effective unless it is
in writing and signed by each Subordinated Creditor, each Obligor, the Bilateral
Lender and the Agent, and no waiver of any provision of this Agreement, and no
consent to any departure therefrom, shall be effective unless it is in writing
and signed by the Agent and the Bilateral Lender, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b)
No failure on the part of the
Agent, the Bilateral Lender or any Subordinated Creditor to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
(c)
Any provision of this Agreement
which 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.
(d) This
Agreement shall (i) be binding on the Subordinated Creditors, the Agent, the Lenders and the Obligors and
their respective successors and assigns and (ii) inure, together with all rights
and remedies of the Agent, the Bilateral Lender
and the Subordinated Creditors hereunder, to the benefit of the Agent, the Lenders and the Subordinated Creditors and their respective successors, transferees
and assigns, and no other Person shall have or be entitled to assert rights or
benefits hereunder. Without limiting the generality of clause
(ii) of the immediately preceding sentence, any Lender may assign or otherwise
transfer its rights under any Senior Document, to any other Person, and such
other Person shall thereupon become vested with all of the benefits in respect
thereof granted to such Lender herein or otherwise.
(e)
This Agreement shall be governed by
and construed in accordance with the law of the State of New
York.
(f)
Each Subordinated Creditor and
each Obligor hereby irrevocably and unconditionally:
(i)
Submits for such Person and the
property of such Person in any action, suit or proceeding relating to this
Subordination Agreement or any other Senior Document to which such Person is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the Supreme Court for New York County
in the State of New York, the United States District Court for the Southern
District of New York, and appellate courts thereof;
(ii)
Consents to the service of any and all process in any such action, suit or
proceeding by the mailing of copies by registered or certified mail (or any
substantially similar form of mail), postage prepaid, of such process to such
Person at such Person's address specified in Section 12 hereof (it being
expressly understood and agreed that any final judgment in any such action, suit
or proceeding referred to in clause (ii) hereof shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law);
(iii) Agrees
that any such action, suit or proceeding may be brought in such courts and
waives any objection that such Person may now or hereafter have to the venue of
any such action, suit or proceeding in any such court or that such action, suit
or proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(iv) Agrees
that nothing herein shall affect the right of the Agent and the Bilateral Lender
to effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(v) To
the extent that such Person has or hereafter may acquire any immunity from
jurisdiction of any court from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution or
otherwise) with respect to itself or any of such Person's property, waives such
immunity in respect of such Person's obligations under this Agreement and the
other Senior Documents.
(g)
EACH SUBORDINATED CREDITOR, EACH
OBLIGOR, THE BILATERAL LENDER AND THE AGENT (BY THEIR ACCEPTANCE OF THIS
AGREEMENT) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING THIS AGREEMENT, ANY
SENIOR DOCUMENT OR ANY AMENDMENT, MODIFICATION OR OTHER DOCUMENT NOW OR
HEREAFTER DELIVERED IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREE THAT ANY
SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
[Remainder
of page intentionally left blank]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.
| SUBORDINATED CREDITOR | |||
|
Address for Notices:
|
AEON
(USA), INC.
|
||
|
By:
|
|||
|
Name:
Title:
|
|||
|
BORROWER
THE
TALBOTS, INC.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
ACCEPTED
AND AGREED:
MIZUHO
CORPORATE BANK, LTD.
as
Agent
|
By:
|
||
|
Name:
|
||
|
Title:
|
MIZUHO
CORPORATE BANK, LTD.
as
Bilateral Lender
|
By:
|
||
|
Name:
|
||
|
Title:
|
TALBOTS
GROUP, LIMITED PARTNERSHIP
|
By:
|
||
|
Name:
|
||
|
Title:
|
