Exhibit 10.36
CREDIT AGREEMENT
This CREDIT AGREEMENT (this "Agreement") is dated as of April 17, 1998
and is by and between TALBOTS, INC. (the "Borrower"), a corporation duly
organized and validly existing under the laws of the State of Delaware, and THE
BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH (the "Bank"), the New York
branch of a banking corporation organized under the laws of Japan.
The Borrower desires the Bank to extend credit to the Borrower, and the
Bank agrees to extend credit to the Borrower, all in accordance with the terms
and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby confirmed and acknowledged, the Borrower and the
Bank hereby agree as follows:
Section 1. Definitions and Interpretation.
As used herein, the following terms shall have the meanings set forth
below:
(a) "Affiliate" shall mean, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such first
Person.
(b) "Agreement Date" shall mean the date first set above, such date
being the date as of which this Agreement was executed and delivered by the
parties hereto.
(c) "Applicable Law" shall mean, anything in Section 13 to the contrary
notwithstanding, (i) all applicable common law and principles of equity and (ii)
all applicable provisions of all (A) constitutions, statutes, rules, regulations
and orders of governmental bodies, (B) Governmental Approvals and (C) orders,
decisions, judgments and decrees of all courts (whether at law or in equity or
admiralty) and arbitrators.
(d) "Bank's Office" shall mean The Bank of Tokyo-Mitsubishi, Ltd., New
York Branch, 1251 Avenue of the Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
(e) "Business Day" shall mean any day except a day (i) which is a
Saturday or a Sunday, (ii) on which commercial banks are not required or
authorized to remain open for the regular transaction of international and
domestic business in the City of New York, or (iii) when used in connection with
Loans bearing interest based on the LIBOR rate of interest, on which commercial
banks in London, U.K. are not conducting regular business in the London
interbank market for Dollar deposits.
(f) "Credit Agreement Related Claim" shall mean any claim (whether
sounding in tort, contract or otherwise) in any way related to, arising out of,
or connected with, this Agreement, the Note or the relationships established
hereunder or thereunder, whether such claim arises or is asserted before or
after the Agreement Date.
(g) "Credit Facili1y" shall have the meaning ascribed to such term in
Section 2 hereof.
(h) "Credit Facility Termination Date" shall mean April 17, 2000;
provided, however, that the Credit Facility Termination Date may be extended for
successive periods of one year in accordance with this Section 1(h). If the
Borrower desires to so extend the Credit Facility Termination Date, it shall
give the Bank an irrevocable written request to that effect at least 13 months
before the then current Credit Facility Termination Date (the "Scheduled
Termination Date"). Upon its receipt of such a request, the Bank will consider
and decide, in its sole discretion, whether to grant the request on or before
the date which is one year prior to the Scheduled Termination Date. If the Bank
elects to grant the Borrower's request for an extension of the Scheduled
Termination Date, the Scheduled Termination Date shall be extended to the first
anniversary of the then Scheduled Termination Date, and references herein to the
Credit Facility Termination Date shall be to the Credit Facility Termination
Date as so extended.
(i) "Default" shall mean any condition or event that constitutes an
Event of Default or that with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
(j) "Dollars" and the sign "$" shall each refer to the lawful currency
of the United States of America.
(k) "Environmental Laws" shall mean as of any date the Comprehensive
Environmental Response, Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Resource Conservation and Recovery Act, the Federal
Water Pollution Act, the Toxic Substances Control Act, and the Occupational
Safety and Health Act, as such laws have been amended or supplemented, and any
similar Federal, state, or local statute, ordinance, rule or regulation in
effect.
(l) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
(m) "Event of Default" shall have the meaning ascribed to such term in
Section 11 of this Agreement.
(n) "Governmental Approval" shall mean any authorization, consent,
approval, license or exemption of, registration or filing with, or report or
notice to, a governmental unit.
(o) "Indebtedness" of any Person shall mean (i) all obligations of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) any obligation of another Person which is guaranteed by such
Person or, with respect to which, such Person is liable, contingently or
otherwise, (iii) the rental obligations of such Person under any leases, (iv)
all obligations of such Person to purchase securities or other property that
arise out of or in connection with the sale of the same or substantially similar
securities or property, (v) all non-contingent obligations of such Person to
reimburse any other Person in respect of amounts paid under a letter of credit
or similar instrument to the extent that such reimbursement obligations remain
outstanding after they become non-contingent, (vi) all obligations of such
Person with respect to interest rate and currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency, and (vii) any of the foregoing obligations secured
by a Lien on any asset of such Person.
(p) "Interest Payment Date" shall mean, with respect to any Loan, the
day on which accrued interest is payable on such Loan under Section 4 hereof.
Each Interest Payment Date shall come at the end of an Interest Period.
(q) "Interest Period" shall mean, with respect to any Loan, a period
commencing on the Business Day when the Loan is made and ending on the same day
in the first, third or sixth calendar month thereafter; provided that, (x) any
Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next Business Day unless such Business Day shall fall
in the next calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day, (y) any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month in which such Interest
Period ends) shall, subject to clause (z) below, end on the last Business Day of
a calendar month, and (z) any Interest Period that would otherwise end after the
Credit Facility Termination Date shall end on the Credit Facility Termination
Date.
(r) "LIBOR" shall mean, with respect to any Interest Period for a Loan,
the rate of interest per annum which appears on the Reuters Screen LIBO page as
the rate at which The Bank of Tokyo-Mitsubishi, Ltd., London Branch will offer
Dollar deposits of immediately available funds to first-class banks in the
London interbank market (in amounts comparable to the Loan for a period equal to
the relevant Interest Period) at 11:00 a.m. London time on the day which is two
Business Days before the first day of the relevant Interest Period for such
Loan.
(s) "Lien" shall mean with respect to any property or asset (or any
income or profits derived therefrom) of any Person, any mortgage, lien, pledge,
attachment, levy, charge or other security interest or encumbrance of any kind
upon or in respect of such property or asset (or upon or in respect of any
income or profits therefrom), in each case, whether the same is consensual or
nonconsensual or arises by contract, operation of law, legal process or
otherwise. For this purpose, a Person shall be deemed to own subject to a "Lien"
any property or asset that it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capitalized lease or
other title retention agreement relating to such property or asset.
(t) "Loan" shall mean any loan of Dollars made by the Bank to the
Borrower under Section 3 of this Agreement.
(u) "Materially Adverse Effect" shall mean, (i) with respect to any
Person, any materially adverse effect on such Person's assets, liabilities,
financial condition or results of operations, (ii) with respect to any contract,
agreement or other obligation (other than this Agreement or the Note), any
materially adverse effect, as to any party thereto, upon the binding nature
thereof or the validity or enforceability thereof and (iii) with respect to any
of this Agreement or the Note, any adverse effect, WHETHER OR NOT MATERIAL, on
the legality, binding nature, validity or enforceability thereof
(v) "Maximum Permissible Rate" shall mean, with respect to interest
payable on any amount, the rate of interest on such amount that, if exceeded,
could, under Applicable Law, result in (i) civil or criminal penalties being
imposed on the Bank or (ii) the Bank's being unable to enforce payment of (or,
if collected, retain) all or any part of such amount or the interest payable
thereon.
(w) "Overnight Fed Funds Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (and, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Bank from three federal funds brokers of recognized standing selected by the
Bank.
(x) "Person" shall mean any individual, sole proprietorship,
corporation, partnership, trust, unincorporated association, mutual company,
joint stock company, trade association or other business organization.
(y) "Post-Default Rate" shall mean a rate of interest per annum equal
to the Prime Rate as in effect from time to time plus two percent (2%).
(z) "Prime Rate" shall mean on any day the higher of (i) the rate of
interest per annum determined by the Bank from time to time in the City of New
York to be its applicable prevailing "prime rate" and (ii) the Overnight Fed
Funds Rate plus one-half of one percent (0.5 %). The Prime Rate may not be the
lowest or best rate of interest offered by the Bank to any class of customers.
Each change in the Prime Rate shall result in a corresponding change in any
interest rate calculated on the basis of the Prime Rate on the day on which such
change in the Prime Rate takes effect.
(aa) "Subsidiary" shall mean, with respect to any Person, any other
Person (i) the securities of which having ordinary voting power to elect a
majority of the board of directors (or other persons having similar functions)
or (ii) the other ownership interests of which ordinarily constituting a
majority voting interest, are at the time, directly or indirectly, owned or
controlled by such first Person, or by one or more of its Subsidiaries, or by
such first Person and one or more of its Subsidiaries; unless otherwise
specified, "Subsidiary" means a Subsidiary of the Borrower.
(bb) "Tax" shall mean any federal, state or foreign tax, assessment or
other governmental charge or levy (including withholding tax) upon a Person or
upon its assets, revenues, income or profits.
Section 2. Terms of the Credit.
Upon the terms and conditions of this Agreement, and in reliance upon the
representations and warranties of the Borrower set forth in Section 8 hereof,
the Bank may in its discretion, from time to time during the period from the
Agreement Date to the Credit Facility Termination Date, extend credit to the
Borrower in the form of Loans on an uncommitted basis (the "Credit Facility ").
The aggregate principal amount of all outstanding Loans shall not at any time
exceed Twelve Million Dollars (U.S. $12,000,000.00). Within the foregoing
limits, the Borrower may request Loans and repay Loans on or after the Agreement
Date up to the Business Day before the Credit Facility Termination Date.
Section 3. The Loans.
(a) Each Loan shall be due and payable on a date to be selected by the
Borrower and agreed to by the Bank, which shall be the last day of an Interest
Period.
(b) For each Loan, the Borrower shall give the Bank written
confirmation of its telephone request to borrow (which notice shall be
irrevocable) no later than 2:00 p.m. (New York time) on the disbursement date
for such Loan. Each such notice shall specify (i) the requested disbursement
date of the proposed Loan, which disbursement date shall be a Business Day, (ii)
the amount of such proposed Loan and (iii) the proposed term for the Loan. Such
notice for the extension of a Loan shall be (i) executed by a purportedly duly
authorized officer of the Borrower and (ii) made by telecopier or telex, to be
confirmed in writing or by telephone. The Borrower shall notify the Bank in
writing of the names of the respective officers authorized to request Loans on
behalf of the Borrower and shall provide the Bank with a specimen signature for
each such officer. The proceeds of each Loan which the Bank makes shall be
disbursed by the Bank by crediting the Borrower's designated account at the
Bank's Office with immediately available funds or in such other manner as may be
acceptable to the Borrower and the Bank.
(c) Subject to Section 6 hereof, the Borrower may at any time and from
time to time, prepay Loans in whole or in part together with accrued interest,
except that any partial prepayment of a Loan shall be in an amount of at least
$1,000,000 and any prepayment of a Loan shall be made on the last day of an
Interest Period for the Loan.
Section 4. Interest.
Unless an Event of Default is continuing, each Loan shall bear interest
on the outstanding principal amount thereof at the applicable LIBOR rate of
interest plus 0.625%. Interest so accrued on each Loan shall be due and payable
in arrears to the Bank by the Borrower on the last day of each Interest Period,
commencing on the first such date after such Loan is made. Nothing contained in
this Agreement or in any other documentation for the Loans shall require the
Borrower at any time to pay interest at a rate exceeding the Maximum Permissible
Rate. If the interest payable to the Bank on any date would exceed the maximum
amount permitted by the Maximum Permissible Rate, such interest payment shall be
reduced automatically to such maximum permitted amount, and interest for any
subsequent period, to the extent less than the maximum amount permitted for such
period by the Maximum Permissible Rate, shall be increased by the unpaid amount
of such reduction. During a Default, each Loan (whether or not due) and, to the
maximum extent permitted by Applicable Law, each other amount due and payable
hereunder shall bear interest at the applicable Post-Default Rate, which
interest shall be payable on demand. Interest payable under this Agreement shall
be calculated on the basis of (i) a year of 360 days and paid on the actual
number of days elapsed in the cases of Loans and amounts bearing interest based
on the Overnight Fed Funds Rate and (ii) a year of 365 or 366 days, as the case
may be, and paid on the actual number of days elapsed in the cases of amounts
bearing interest at the Prime Rate.
Section 5. Payments by the Borrower.
(a) Time, Place and Manner. All payments due to the Bank under this
Agreement shall be made to the Bank at the Bank's Office or at such other
address in the City of New York as the Bank may designate. Except as otherwise
specified in this Agreement, a payment shall not be deemed to have been made on
any day unless such payment has been received at the required place of payment,
in Dollars and in funds immediately available, no later than 2:00 p.m. (New York
time) on such day.
(b) No Reductions. All payments due to the Bank under this Agreement
shall be made by the Borrower without any reduction or deduction whatsoever,
including any reduction or deduction for any set-off, recoupment, counterclaim
(whether sounding in tort, contract or otherwise) or Tax, except for any
withholding or deduction for Taxes required to be withheld or deducted under
Applicable Law.
(c) Taxes. If any Tax is required to be withheld or deducted from, or
is otherwise payable by the Borrower in connection with, any payment due to the
Bank under this Agreement, the Borrower (i) shall, if required, withhold or
deduct the amount of such Tax from such payment and, in any case, pay such Tax
to the appropriate taxing authority in accordance with Applicable Law and (ii)
shall pay to the Bank such additional amounts as may be necessary so that the
net amount received by the Bank with respect to such payment, after withholding
or deducting all Taxes required to be withheld or deducted, is equal to the full
amount payable under this Agreement. If any Tax is withheld or deducted from any
payment due to the Bank under this Agreement, the Borrower shall, within thirty
(30) days after the date of such payment, furnish to the Bank the original or a
certified copy of a receipt for such Tax from the applicable taxing authority.
(d) Extension of Payment Dates. Unless otherwise provided herein,
whenever any payment to the Bank under this Agreement shall be due (otherwise
than by reason of acceleration) on a day that is not a Business Day, the date of
payment thereof shall be extended to the next succeeding Business Day. If the
date for any payment under this Agreement is extended, such payment shall bear
interest for such extended time at the rate of interest applicable hereunder.
(e) Authorization to Charge Accounts. The Borrower hereby authorizes
the Bank, if and to the extent any payment due the Bank hereunder is not
otherwise made when due, to charge any amount so due against any or all of the
accounts of the Borrower with the Bank or any of its Affiliates (as if the Bank
and its Affiliates were one and the same entity), with the Borrower remaining
liable for any deficiency.
Section 6. Loan Repayment and Conversion Costs, LIBOR Funding.
(a) The Borrower shall pay to the Bank, upon request, such amount or
amounts as the Bank determines are necessary to compensate the Bank for any
loss, cost or expense incurred by it as a result of any payment or prepayment or
conversion of any amount due in respect of any Loan not being made on the date
therefor determined in accordance with the applicable provisions of this
Agreement. A certificate submitted by the Bank to the Borrower setting forth in
reasonable detail the Bank's method for calculating any such loss, cost or
expense shall be conclusive absent manifest error.
(b) Anything in this Agreement to the contrary notwithstanding, if the
Bank determines (which determination shall be binding and conclusive) that
quotations of interest rates for the relevant deposits in the definition of
LIBOR in Section 1 are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the rates of interest for Loans,
then the Bank shall give the Borrower prompt notice thereof, and so long as such
condition remains in effect, the Bank shall be under no obligation to make any
Loans based on such definition.
Section 7. Evidence of Indebtedness.
(a) The Borrower shall issue to the Bank a promissory note (the "Note")
in the form of Exhibit A hereto. The Bank may, and is hereby authorized by the
Borrower to, endorse on the schedule attached to the Note (or on a continuation
of such schedule) appropriate notations evidencing the date, applicable interest
rate and amount of each Loan as well as the date and the amount of each
principal payment and prepayment with respect thereto and to make similar
notations in its internal books and records; provided that, the failure of the
Bank to make such a notation on the Note shall not affect any obligation of the
Borrower in respect of any Loan.
(b) The Borrower's obligation to make payments in respect of the Loans
with interest in accordance with the terms of this Agreement shall be evidenced
by the Note, this Agreement and the other documents and records of the Bank. The
Note, this Agreement and the other documents and records of the Bank shall be
prima facie evidence of all extensions of credit made by the Bank hereunder.
Section 8. Representations and Warranties of the Borrower.
In order to induce the Bank to enter into this Agreement and to extend the
Credit Facility to the Borrower, the Borrower hereby represents and warrants the
following to the Bank as of the Agreement Date:
(a) The Borrower (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, (ii) has all
requisite corporate power, authority and legal right to conduct its business as
now conducted and as contemplated by its certificate of incorporation and
by-laws, to make borrowings hereunder, to execute, deliver and perform this
Agreement and the Note, and (iii) is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the properties
owned or leased by it or in which the transaction of its business makes such
qualifications necessary, except that this Section (a)(iii) shall not apply to
qualifications the lack of which, singly or in the aggregate, has not had and
will not have a Materially Adverse Effect on the Borrower.
(b) The Borrower is not in violation of its by-laws or certificate of
incorporation or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any material contract,
indenture, mortgage, loan agreement or lease to which the Borrower is a party or
by which it may be bound. The execution and delivery of either this Agreement or
the Note and the incurrence of the obligations and the consummation of the
transactions herein and therein contemplated will not conflict with, or
constitute a breach of or default under, the Borrower's by-laws or certificate
of incorporation or any material contractual restriction, instrument, indenture,
mortgage, agreement or lease to which the Borrower is a party or by which it may
be bound, or any law, administrative rule or regulation or court decree.
(c) Each of this Agreement and the Note has been duly authorized,
executed and delivered by the Borrower, and each of this Agreement and the Note
constitutes a legal, valid and binding obligation of the Borrower enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity.
(d) No consent, approval, authorization, order, registration or
qualification of or with any court, any regulatory authority or other
governmental agency or body is required for the execution or delivery of this
Agreement or the Note by the Borrower or for the consummation of the
transactions contemplated by this Agreement or the Note.
(e) No Default has occurred and is continuing.
(f) As of the date hereof, no material litigation, arbitration,
administrative proceeding or any other proceeding or claim before any court,
tribunal, governmental authority or any body or Person with judicial or
quasi-judicial authority is presently pending or, or to the best of the
Borrower's knowledge, threatened against it or any of its assets which has a
significant possibility of having a Materially Adverse Effect on the Borrower or
its ability to perform under this Agreement or the Note.
(g) Except as disclosed to the Bank, or except as would not, either
singly or in aggregate, reasonably be expected to have a Materially Adverse
Effect on the Borrower, the Borrower has not violated or failed to comply with
ERISA or any Environmental Laws.
(h) The Borrower is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
Section 9. Conditions Precedent.
(a) The Bank's disbursement of the initial Loan is subject to its
receipt of duly executed originals of this Agreement and the Note, each of which
shall be in form and substance satisfactory to the Bank.
(b) The making of each Loan (including the initial Loan) shall be
subject to, among other things, the Bank's determination that each of the
following conditions has been fulfilled: (i) the Bank shall have received a
notice of borrowing prepared and delivered in accordance with the terms of
Section 3(b) hereof; (ii) the Bank shall have received all applicable documents,
information and other items required by this Agreement; (iii) each
representation and warranty contained in Section 8 hereof shall be true and
correct at and as of the date any Loan is made; (iv) no Default shall have
occurred and be continuing at the time any Loan is to be made; and (v) such Loan
shall not contravene any Applicable Law. Each notice of borrowing shall
constitute a representation and warranty by the Borrower made as of the time of
the making of the requested Loan that the conditions specified in clauses (iii)
and (iv) have been fulfilled as of such time.
Section 10. Additional Covenants of the Borrower.
From the date hereof until the Credit Facility shall have been terminated or
have expired and all amounts due hereunder are paid in full:
(a) The Borrower shall (i) preserve and maintain its corporate
existence and all of its franchises, licenses, rights and privileges required
for the conduct of business, (ii) preserve, protect and obtain all intellectual
property, and preserve and maintain in good repair, working order and condition
all other properties, required for the conduct of its business, (iii) comply in
all material respects with all Applicable Law (including ERISA and Environmental
Laws), (iv) pay or discharge when due all Taxes and all Indebtedness that can be
reasonably expected to become a Lien on any of its properties, and (v) take all
action and obtain all consents and Governmental Approvals required so that its
obligations hereunder and under the Note will at all times be legal, valid and
binding and enforceable in accordance with their respective terms.
(b) The Borrower shall maintain insurance with responsible insurance
companies against at least such risks and in at least such amounts as
customarily maintained by similar businesses, or as may be required by
Applicable Law or reasonably requested by the Bank.
(c) The Borrower shall not merge or consolidate with any Person, except
that, if after giving effect thereto no Default would exist, this Section 10(c)
shall not apply to any merger or consolidation of the Borrower with any one or
more Persons, provided that the Borrower shall be the continuing Person.
(d) The Borrower shall not effect any transaction with any Affiliate on
a basis less favorable than would at the time be obtainable for a comparable
transaction in arms-length dealing with an unrelated third party.
(e) The Borrower will compensate the Bank for any loss, cost or expense
resulting from the imposition by any government, governmental or regulatory
agency or authority or court of reserve requirements, additional reserve
requirements, special deposit requirements, capital adequacy requirements,
insurance charges, taxes or other assessments or charges (whether or not having
the force of law) with respect to the Loans (or with respect to any deposits or
other funds acquired to fund the Loans, any other requirement or condition with
respect to the Loans, or any such deposits or other funds), the result of which
shall be to (A) increase the cost to the Bank of extending credit in respect of
the Loans or the transactions contemplated hereunder, (B) reduce the amount of
any sum received or receivable by the Bank with respect to the Loans or the
return to be earned by the Bank with respect to the Loans or (C) reduce the rate
of return on the capital of the Bank allocated to the Loans. A certificate
submitted by the Bank to the Borrower setting forth in reasonable detail the
Bank's method for calculating any such loss, cost or expense shall be conclusive
absent manifest error.
(f) The Borrower covenants and agrees that this Agreement and the Note
will at all times constitute direct, binding and enforceable obligations of the
Borrower.
(g) Promptly upon becoming aware of the existence of any condition or
event which could have a Materially Adverse Effect on, or constitute a default
or Default under, this Agreement or the Note, the Borrower will provide written
notice to the Bank specifying the nature and period of existence thereof and the
action the Borrower is taking or propose(s) to take with respect thereto.
(h) The Borrower shall use the proceeds of the Loans only as working
capital and for capital expenditures. None of the proceeds of the Loans shall be
used to purchase or carry, or to reduce, retire or refinance any credit incurred
to purchase or carry, any margin stock (within the meaning of Regulations G, T,
U and X of the Board of Governors of the Federal Reserve System) or to extend
credit to others for the purpose of purchasing or carrying any margin stock. If
requested by the Bank, the Borrower will furnish to the Bank statements in
conformity with the requirements of Federal Reserve Form U-1 referred to in
Federal Reserve Board Regulation U.
(i) From the Agreement Date, the Borrower shall furnish to the Bank as
soon as available and in any event within 120 days after the end of each fiscal
year of the Borrower the audited balance sheets of the Borrower as at the end of
such fiscal year and the related statements of income, retained earnings and
cash flows of the Borrower for such fiscal year. The Borrower shall also provide
to the Bank promptly upon its request such data, certificates, reports,
statements and other information as the Bank may reasonably request.
Section 11. Events of Default.
If any of the following events (each individually referred to herein as an
"Event of Default") shall occur:
(a) the Borrower shall fail to pay in full in the manner provided
herein, any principal, interest or other amount due hereunder; or
(b) the Borrower shall fail to perform, comply with or observe any of
its obligations under any of Sections 10(a)(i) (insofar as corporate existence
is concerned) and 10(c) through (h) of this Agreement; or
(c) the Borrower shall fail to perform, comply with or observe any of
its obligations under any of Sections 10(a)(i) (insofar as franchises, licenses,
rights and privileges are concerned), 10(a)(ii) or 10(j) of this Agreement,
which failure continues for a period of thirty (30) days or more after notice
thereof to the Borrower from the Bank; or
(d) the Borrower shall fail to perform, comply with or observe any of
its obligations under Section 10(b) of this Agreement, which failure continues
for a period of five (5) days or more after notice thereof to the Borrower from
the Bank: or
(e) the Borrower shall fail to perform, comply with or observe any of
its obligations under this Agreement (other than obligations covered in Sections
11 (a), 11 (b), 11 (c) or 1 l(d)), which failure continues for a period of ten
(10) days or more after notice thereof to the Borrower from the Bank; or
(f) any representation or warranty of the Borrower contained herein or
in any certificate or document furnished to the Bank shall prove to be incorrect
or misleading in any material respect when made; or
(g) an order shall be made, or an effective resolution passed, for the
winding up of the Borrower, or the Borrower shall cease to conduct its
businesses substantially in the manner conducted as of the date hereof, or any
action approving, initiating or facilitating any of the foregoing in any manner
shall be taken by the Borrower; or
(h) the Borrower: (i) shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as such debts mature; or
(ii) shall make an assignment for the benefit of its creditors; (iii) shall
petition or apply to any tribunal or other body for the appointment of a
custodian, receiver, trustee or the like for it or for a substantial part of its
assets, whether domestic or foreign; or (iv) shall commence any proceeding under
any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution
or liquidation law or statute of any jurisdiction, whether now or hereafter in
effect and whether domestic, international or foreign; or (v) shall have had any
such petition or application filed or any such proceeding shall have been
commenced against it, in which an adjudication or appointment is made or order
for relief is entered; or (vi) shall be the subject of any proceeding under
which a material portion of its assets may be subject to seizure, forfeiture, or
divestiture; or (vii) by any act or omission shall indicate its consent to,
approval of, or acquiescence in, any such petition, application, proceeding,
order for relief, or appointment of a custodian, receiver, trustee or the like;
or (viii) shall suffer any such custodianship, receivership, trusteeship, or
comparable status; or (ix) shall take any corporate, partnership or other action
approving, initiating or facilitating any of the foregoing in any manner; or
(i) any authorization, consent, approval, registration or license now
or hereafter necessary to enable the Borrower to comply with its obligations
hereunder or under the Note shall expire, be revoked, be withheld or otherwise
be ineffective; or
(j) (i) any of the Borrower shall fail to pay when due and payable
(whether at maturity, by acceleration or otherwise) any principal, premium or
interest on any Indebtedness and any such failure(s) to pay shall in the
aggregate exceed $50,000 or (ii) the maturity of any such Indebtedness exceeding
$50,000 in aggregate shall, in whole or in part, have been accelerated or have
been required to be prepaid prior to the stated maturity date thereof in
accordance with the terms of any agreement or instrument evidencing, providing
for the creation of, or concerning, such Indebtedness; or
(k) one or more judgments, decrees or orders for the payment of money
in excess of $50,000 in the aggregate shall be rendered against the Borrower and
such judgments, decrees or orders shall continue unsatisfied and in effect for a
period of 30 consecutive days without being vacated, discharged, satisfied or
stayed pending appeal; or
(l) any event, condition or circumstance shall have a Materially
Adverse Effect on the Borrower;
THEREUPON, the Bank may, in addition to enforcing all other rights and remedies
available to it under Applicable Law or any contract, agreement or instrument ,
(i) upon notice to the Borrower, declare the Bank's agreement to make Loans
hereunder to be terminated, whereupon the same shall forthwith terminate, and
(ii) upon notice to the Borrower declare all amounts, if any, not otherwise
immediately due under this Agreement or in respect of any Loan to be, and all
such amounts shall thereupon become, due and payable to the Bank. Upon the
occurrence, of an Event of Default specified in Section 11 (h), automatically
and without any notice to the Borrower, the agreements of the Bank to make Loans
hereunder shall be terminated and all amounts, if any, not otherwise immediately
due under this Agreement or in respect of any Loan shall be immediately due and
payable to the Bank. Presentment, demand, protest or notice of any kind (other
than the notice provided for in the immediately preceding sentence) are
expressly waived, anything in this Agreement to the contrary notwithstanding.
Section 12. Illegality.
If, after the date of this Agreement, the adoption of any Applicable
Law, any change therein or any change in the interpretation or administration
thereof by any government, governmental agency or authority, court, tribunal,
central bank or other comparable body charged with the interpretation or
administration thereof or compliance by the Bank with any subsequently adopted
interpretation, request, guideline or directive (whether or not having the force
of law) of any such government, governmental agency or authority, court,
tribunal, central bank or other comparable body shall make it unlawful or
impossible for the Bank to maintain this Agreement or any Loan, then the Bank
shall so notify the Borrower and no Loans not permitted under Applicable Law
shall be made and all outstanding Loans not permitted under Applicable Law shall
become due and payable, without premium or penalty, immediately upon the
Borrower's receipt of such notice (or on such earlier date as may be required by
such Applicable Law, interpretation, guideline, request or directive). To the
extent permitted under Applicable Law, Loans so accelerated shall be converted
to Loans bearing interest based on a different rate available hereunder.
Section 13. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial.
This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York without regard to conflicts of law or
choice of law principles. The Borrower irrevocably agrees that any Credit
Agreement Related Claim may be brought in any Federal or New York State court
located in the City of New York, and, by the execution and delivery of this
Agreement, the Borrower hereby irrevocably accepts and submits to the
jurisdiction of each of the aforesaid courts. The Borrower also hereby waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of venue of any such action or proceeding brought
in any such court and any claim that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. THE BANK AND THE
BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE
BOTH PARTIES INVOLVING ANY CREDIT AGREEMENT RELATED CLAIM.
Section 14. Miscellaneous.
(a) The Borrower shall, on demand, pay or reimburse the Bank for all
reasonable fees, costs and expenses (including fees and disbursements of legal
counsel and other experts employed or retained by the Bank) incurred, and all
payments made, and indemnify and hold the Bank harmless from and against all
losses suffered, by the Bank in connection with, arising out of, or in any way
related to (i) protecting, preserving, exercising or enforcing any of the rights
of the Bank under or related to this Agreement or the Note or (ii) any Credit
Agreement Related Claim (whether asserted by the Bank or any other Person except
the Borrower and whether asserted before or after the date hereof); provided,
that, the Borrower shall not be responsible for any fees, costs, expenses or
other liabilities which, are determined by a court of competent jurisdiction to
be a direct result of the Bank's gross negligence or willful misconduct.
(b) Unless otherwise provided herein, any notice or communication
required to be delivered under this Agreement, or any agreement or instrument
required to be delivered hereunder (the "Notices") shall be in writing and shall
be sent by registered or certified U.S. mail (postage prepaid and return receipt
requested) by a reliable hand-delivery or overnight courier service or by
telecopier, to be confirmed immediately by sending the original documentation by
registered or certified U.S. mail or by a reliable hand-delivery or overnight
courier service. Notwithstanding the foregoing sentence, Notices may be given by
telephone if confirmed in writing within twenty-four (24) hours by sending a
written version thereof by a reliable hand-delivery or overnight courier
service. In the event of a discrepancy between any telephonic Notice and any
written confirmation thereof, such written confirmation shall be deemed
effective notice except to the extent that the Bank has acted in reliance on
such telephonic Notice. All Notices shall be delivered or otherwise conveyed to
the parties at their respective addresses and telephone and telecopier numbers
as follows: (i) if to the Borrower, at Talbots, Inc., 000 Xxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000, Telephone: (000) 000-0000, Facsimile: (000) 000-0000; (ii)
if to the Bank, at The Bank of Tokyo-Mitsubishi, Ltd., New York Branch, 1251
Avenue of the Americas, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xx. X.
Xxxxxxxx, Telephone: (000) 000-0000, Telecopier: (000) 000-0000; or (iii) at
such other addresses and telephone and telecopier numbers as either party shall
designate to the other party in writing. Except as otherwise expressly set forth
herein, all Notices shall be effective as against the Bank only upon the receipt
thereof.
(c) No modification or waiver of any provision of this Agreement, the
Note or any other instrument or agreement required hereunder, 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 parties hereto, and then in each
such event such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on the
Borrower in any case shall, of itself, entitle the Borrower to any other or
further notice or demand in similar or other circumstances.
(d) The terms and provisions of this Agreement shall be binding upon,
and the benefits thereof shall inure to, the parties hereto and their respective
successors and assigns; provided. however, that the Borrower shall not assign
any interest in this Agreement or any of the Borrower's rights, duties, or
obligations hereunder or thereunder.
(e) No delay or omission to exercise any right, power, or remedy
accruing to the Bank upon any breach or default of the Borrower under this
Agreement or any instrument or agreement required hereunder shall impair any
such right, power, or remedy of the Bank, nor shall it be considered to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; and no waiver by the Bank of
any single breach or default shall be deemed a waiver of any other breach or
default theretofore and thereafter occurring. Any waiver, permit, consent, or
approval of any kind or character on the part of the Bank of any breach or
default under this Agreement or any waiver on the part of the Bank of any
provision or condition of this Agreement must be in writing specifically set
forth. No remedy herein conferred upon the Bank is intended to be exclusive of
any other remedy and each and every such remedy either under this Agreement or
by law or otherwise afforded to the Bank, shall be cumulative and not
alternative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute or otherwise.
(f) Nothing in this Agreement shall be deemed a waiver or prohibition
of the Bank's rights of banker's lien or setoff.
(g) This Agreement may be executed in any number of counterparts and on
separate counterparts, each of which shall be deemed to be an original and but
all of which taken together shall constitute one and the same Agreement.
(h) The Bank may assign or grant a participation interest in all or any
portion of this Agreement, the Loans or the Note to any Person upon such terms
and conditions as the Bank may determine. The Borrower shall, from time to time
at the request of the Bank, execute and deliver to the Bank or to such party or
parties as the Bank may designate, any and all further instruments as may in the
opinion of the Bank be necessary or advisable to give full force and effect to
any transfer contemplated by this Section 14(h).
(i) Unless otherwise specified herein, all accounting determinations
hereunder and all computations utilized by the Borrower in complying with terms
used herein shall be interpreted, and all financial statements required to be
delivered hereunder shall be prepared, in accordance with the accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board.
IN WITNESS WHEREOF, the Borrower and the Bank, acting through their
duly authorized representatives, have caused this Credit Agreement to be duly
executed in duplicate counterparts in the English language and signed in their
respective names the day and year first above written.
TALBOTS, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President, Finance and CFO
THE BANK OF TOKYO-MITSUBISHI, LTD.,
New York Branch
By:
------------------------------------------
Name:
Title:
Exhibit A to
Credit Agreement
TALBOTS, INC.
Promissory Note
April 17, 1998
FOR VALUE RECEIVED, TALBOTS, INC. (the "Borrower") hereby promises to
pay to the order of The Bank of Tokyo-Mitsubishi, Ltd., New York Branch (the
"Bank") the principal amount of Twelve Million lawful U.S. dollars (U.S.
$12,000,000.00), or, if less, the principal amount of all Loans outstanding, on
the dates and in the amounts specified in the Credit Agreement referred to
below, and to pay interest on such principal amount on the dates and at the
rates specified in such Credit Agreement. All payments due the Bank hereunder
shall be made to the Bank at the place, in the type of money and funds, and in
the manner specified in such Credit Agreement.
Each holder hereof is authorized to endorse on the grid attached
hereto, or on a continuation thereof, each Loan and each payment and prepayment
with respect thereto.
Presentment, demand, protest, notice of dishonor and notice of intent
to accelerate are hereby waived by the undersigned.
This Note evidences Loans made under, and is entitled to the benefits
of, the Credit Agreement, dated as of April 17, 1998, between the Borrower and
the Bank, as the same may be amended from time to time. Reference is made to
such Credit Agreement, as so amended, for provision relating to the prepayment
and the acceleration of the maturity hereof.
This Note shall be construed in accordance with and governed by the
laws of the State of New York.
TALBOTS, INC.
By: XXXXXX X. XXXXXX
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President, Finance & CFO
