Exhibit 10.2
February 23, 2007
The Talbots, Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President, Finance
Chief Financial Officer and Treasurer
Re: Uncommitted Line of Credit
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Ladies and Gentlemen:
We are pleased to advise you that BANK OF AMERICA, N.A. (the "Lender")
has established for THE TALBOTS, INC., a Delaware corporation (the "Borrower"),
an uncommitted line of credit with aggregate advances ("Loans") outstanding
thereunder not at any time to exceed $5,000,000. The terms and conditions of
such discretionary credit facility are as follows:
Loans
Discretionary: All Loans hereunder shall be at the sole discretion
of the Lender. This letter is not a commitment by the
Lender to extend credit.
Principal: The outstanding principal of each Loan shall be due
and payable on the earlier of (a) the maturity date
for such Loan agreed to by the Lender and the
Borrower at time such Loan is made, and (b) the
Maturity Date.
Interest: Each Loan shall bear interest at the rate of interest
agreed to by the Lender and the Borrower at the time
such Loan is made. Accrued and unpaid interest on
each Loan shall be due and payable on the date that
such Loan is payable. No Loan shall have a maturity
of more than 180 days. If the term of a Loan is more
than 90 days, interest on such Loan shall also be
payable on the 90th day after the making of such
Loan.
Maturity Date: February 23, 2008.
Requests for Loans: Any request for a Loan must be received by the Lender
at the address, telephone number or facsimile number
listed below the Lender's signature not later than
11:00 a.m., California time, on the date of the
requested Loan (which must be a day on which the
Lender is open to conduct substantially all of its
business). Any request for a Loan must be for an
amount of not less than $1,000,000.
Documentation: The Loans shall be evidenced by a promissory note
satisfactory in form and substance to the Lender
executed by the Borrower. The Borrower shall also
execute and deliver to the Lender such other
documents as the Lender may reasonably request from
time to time.
The Talbots, Inc.
February 23, 2007
Page 2
Notice: The Lender hereby notifies the Borrower that pursuant
to the requirements of the USA PATRIOT Act (Title III
of Pub.L. 107-56 (signed into law October 26, 2001))
(the "Act"), the Lender is required to obtain, verify
and record information that identifies the Borrower,
which information includes the name and address of
the Borrower and other information that will allow
the Lender to identify the Borrower in accordance
with the Act.
Please indicate your acknowledgment of the foregoing by signing and
returning to the Lender the enclosed copy of this letter at the address shown on
the first page hereof.
Very truly yours,
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-2405
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
ACKNOWLEDGED AND AGREED:
THE TALBOTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President, Finance,
Chief Financial Officer and Treasurer
MASTER PROMISSORY NOTE
$5,000,000.00 February 23, 2007
FOR VALUE RECEIVED, the undersigned, THE TALBOTS, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of BANK OF
AMERICA, N.A. (the "Lender"), at its office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-2405 (or at such other place as the Lender may designate from time to
time), in lawful money of the United States of America and in immediately
available funds, the principal amount of Five Million Dollars ($5,000,000.00) or
such lesser amount as shall equal the aggregate unpaid principal amount of the
advances (the "Loans") made by the Lender to the Borrower under this Master
Promissory Note (this "Note"), and to pay interest on the unpaid principal
amount of each such Loan at the rates per annum and on the dates specified
below.
Each Loan hereunder shall be at the sole discretion of the Lender. Each
Loan shall have a maturity date and shall bear interest at the rate per annum
quoted to the Borrower by the Lender and accepted by the Borrower prior to the
making of such Loan (which acceptance shall in any event be deemed to occur upon
receipt by the Borrower of the proceeds of any Loan). Each Loan, and accrued and
unpaid interest thereon, shall be due and payable, on the earlier of (a) the
maturity date of such Loan, or (b) February 23, 2008. No Loan shall have a
maturity of more than 180 days. If the term of a Loan is more than 90 days,
interest on such Loan shall also be payable on the 90th day after the making of
such Loan. The Lender may, if and to the extent any payment is not made when due
hereunder, charge from time to time against any or all of the Borrower's
accounts with the Lender any amount so due.
The date, amount, interest rate, and maturity date of each Loan, and
each payment of principal and interest hereon, shall be recorded by the Lender
on its books, which recordations shall, in the absence of manifest error, be
conclusive as to such matters; provided that the failure of the Lender to make
any such recordation or any error therein shall not limit or otherwise affect
the obligations of the Borrower hereunder.
The Borrower may not prepay any Loan in whole or in part without the
Lender's prior written consent; provided, however, that if any such prepayment
is made the Borrower shall at the time of prepayment compensate the Lender for
any loss, cost, or expense that the Lender incurs as a result of such
prepayment. In addition, the Borrower shall compensate the Lender for any loss,
cost or expense that the Lender incurs as a result of a prepayment by reason of
acceleration of the indebtedness hereunder.
Interest shall be computed on the basis of a year of 360 days and the
actual days elapsed (including the first day but excluding the last day).
Overdue principal and, to the extent permitted by applicable law, interest shall
bear interest, payable upon demand, for each day from and including the due date
to but excluding the date of actual payment at a rate per annum equal to the sum
of 2% plus the rate of interest publicly announced by the Lender from time to
time as its prime rate. The Lender's prime rate is a rate set by the Lender
based upon various factors including the Lender's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Whenever any payment under this Note is due on a day that is not a day the
Lender is open to conduct substantially all of its business, such payment shall
be made on the next succeeding day on which the Lender is open to conduct
substantially all of its business, and such extension of time shall in such case
be included in the computation of the payment of interest.
The Borrower shall furnish the Lender from time to time with such
business records and other information relating to the obligations evidenced by
this Note as the Lender may require. All such information shall be true and
correct and fairly represent the financial condition and the operating results
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of the Borrower as of the date and for the periods for which the same are
furnished. The Borrower shall permit representatives of the Lender to inspect
its properties and its books and records, and to make copies or abstracts
thereof. The Borrower authorizes the Lender to release and disclose to its
affiliates, agents and contractors any financial statements and other
information relating to the Borrower provided to or prepared by or for the
Lender in connection with this Note. The Borrower will notify the Lender
promptly of the existence or upon the occurrence of any Event of Default or
event which, with the giving of notice or the passage of time or both, would
become an Event of Default.
Each of the following shall constitute an Event of Default hereunder:
(a) the Borrower shall fail to pay when due any principal of or interest on any
Loan; (b) a default or event of default shall occur under the terms of any other
indebtedness for which the Borrower or any of its subsidiaries is liable,
whether as principal obligor, guarantor, or otherwise; (c) any representation,
warranty, certification, or statement made or deemed made by the Borrower to the
Lender shall prove to have been incorrect or misleading in any material respect;
(d) the Borrower shall fail to furnish to the Bank promptly on request with
financial information about, or to permit inspection by the Bank of any books,
records and properties of, the Borrower; (e) any merger, consolidation, sale of
all or substantially all of the assets or change in control of the Borrower; (f)
the Borrower shall dissolve, liquidate, or terminate its legal existence or
shall convey, transfer, lease, or dispose of (whether in one transaction or a
series of transactions) all or substantially all of its assets to any person or
entity; (g) a petition shall be filed by or against the Borrower or any of its
subsidiaries under any law relating to bankruptcy, reorganization, or
insolvency; or (h) the Borrower or any of its subsidiaries shall make an
assignment for the benefit of creditors or fail generally to pay its debts as
they become due, or a receiver, trustee, or similar official shall be appointed
over the Borrower or any of its subsidiaries or a substantial portion of any of
their respective assets. If an Event of Default shall have occurred and be
continuing, the Lender may declare the outstanding principal of and accrued and
unpaid interest on this Note, together with all other amounts payable hereunder,
to be immediately due and payable without presentment, protest, demand, or other
notice of any kind, all of which are hereby waived by the Borrower; provided,
however, that upon the occurrence with respect to the Borrower of any event
specified in clause (g) of the preceding sentence, the outstanding principal and
accrued and unpaid interest on this Note, together with all other amounts
payable hereunder, shall become immediately due and payable without presentment,
protest, demand, or other notice of any kind, all of which are hereby waived by
the Borrower.
The request of the Borrower for any Loan and the receipt by the
Borrower of the proceeds thereof shall be deemed a representation by the
Borrower as of the date of each such request or receipt that no Event of Default
has occurred and that the Borrower is duly authorized to incur such indebtedness
hereunder.
No failure or delay by the Lender in exercising, and no course of
dealing with respect to, any right, power, or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise of any right,
power, or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power, or privilege. The rights and remedies of
the Lender provided herein shall be cumulative and not exclusive of any other
rights or remedies provided by law. If any provision of this Note shall be held
invalid or unenforceable in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof. No provision
of this Note may be modified or waived except by a written instrument signed by
the Lender and the Borrower.
The Lender shall incur no liability to the Borrower in acting upon any
telephone, telex, or other communication that the Lender in good faith believes
has been given by an authorized representative of the Borrower.
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The Lender may assign to one or more banks or other entities all or any
part of, or may grant participations to one or more banks or other entities in
or to all or any part of, this Note or any Loan or Loans hereunder.
The Borrower shall pay on demand all costs and expenses (including
reasonable attorneys' fees and the allocated costs of internal counsel) incurred
by the Lender in connection with the preparation, administration, waiver or
amendment of this Note, or in connection with any Event of Default or the
enforcement or attempted enforcement of this Note.
Notwithstanding anything to the contrary contained herein, the interest
paid or agreed to be paid hereunder shall not exceed the maximum rate of
non-usurious interest permitted by applicable law (the "Maximum Rate"). If the
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excessive interest shall be applied to the principal of this Note or, if it
exceeds the unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Lender exceeds the
Maximum Rate, the Lender may, to the extent permitted by applicable law, (a)
characterize any payment that is not principal as an expense, fee, or premium
rather than interest, (b) exclude voluntary prepayments and the effects thereof,
and (c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the stated term of this Note.
This Note shall be governed by and construed in accordance with the
laws of the State of New York. The Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court and each state court in the
County and City of New York for the purposes of all legal proceedings arising
out of or relating to this Note. The Borrower irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum. The Borrower and the Lender by acceptance of this Note
hereby irrevocably waive any and all right to trial by jury in any legal
proceeding arising out of or relating to this Note.
THIS NOTE AND ANY OTHER DOCUMENTS EXECUTED IN CONNECTION ▇▇▇▇▇▇▇▇
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
THE TALBOTS, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title Senior Vice President, Finance
Chief Financial Officer and Treasurer
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