SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 30, 1997
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THE TALBOTS, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-12552 41-1111318
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
175 Beal Street, Hingham, Massachusetts 02043
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (781)749-7600
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 7. Exhibits.
The following exhibits are filed as part of this Report:
Exhibits
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(10) Material Contracts.
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10.34 Third Amendment to the Revolving Credit Agreement between
Talbots and The Sakura Bank, Limited, New York Branch, dated
as of January 28, 1998.
10.35 Revolving Credit Agreement between Talbots and The Dai-Ichi
Kangyo Bank, Limited, dated as of April 14, 1998.
10.36 Credit Agreement between Talbots and The Bank of
Tokyo-Mitsubishi, Ltd., New York Branch, dated as of April 17,
1998.
10.37 Fourth Amendment to the Revolving Credit Facility between
Talbots and The Sakura Bank, Limited, New York Branch, dated
as of April 17, 1998.
10.38 Third Amendment Agreement between Talbots and The Norinchukin
Bank, New York Branch, dated as of April 17, 1998.
10.39 Third Amendment to the Revolving Credit Agreement between
Talbots and The Dai-Ichi Kangyo Bank, Limited, dated as of
April 17, 1998.
10.52 Agreement and Release dated as of November 30, 1997 (C.
Hinkley).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 1, 1998
THE TALBOTS, INC.
EDWARD L. LARSEN
By:-------------------------------------
Edward L. Larsen
Senior Vice President, Finance
Chief Financial Officer and Treasurer
<PAGE>
EXHIBIT INDEX
(10) Material Contracts.
-------------------
10.34 Third Amendment to the Revolving Credit Agreement between
Talbots and The Sakura Bank, Limited, New York Branch, dated
as of January 28, 1998.
10.35 Revolving Credit Agreement between Talbots and The Dai-Ichi
Kangyo Bank, Limited, dated as of April 14, 1998.
10.36 Credit Agreement between Talbots and The Bank of
Tokyo-Mitsubishi, Ltd., New York Branch, dated as of April 17,
1998.
10.37 Fourth Amendment to the Revolving Credit Facility between
Talbots and The Sakura Bank, Limited, New York Branch, dated
as of April 17, 1998.
10.38 Third Amendment Agreement between Talbots and The Norinchukin
Bank, New York Branch, dated as of April 17, 1998.
10.39 Third Amendment to the Revolving Credit Agreement between
Talbots and The Dai-Ichi Kangyo Bank, Limited, dated as of
April 17, 1998.
10.52 Agreement and Release dated as of November 30, 1997 (C.
Hinkley).
Exhibit 10.34
THIRD AMENDMENT (this "Amendment"), dated as of January 28,
1998, to the Revolving Credit Agreement (as amended and modified to the date
hereof, the "Revolving Credit Agreement"), dated as of January 25, 1994, between
The Talbots, Inc. (the "Borrower"), and The Sakura Bank, Limited, New York
Branch (the "Bank").
WITNESSETH:
WHEREAS, the parties hereto are parties to the Revolving
Credit Agreement and wish to amend the Revolving Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
Unless otherwise indicated, capitalized terms used herein and
defined in the Revolving Credit Agreement shall have the respective meanings
ascribed thereto in the Revolving Credit Agreement.
ARTICLE II
AMENDMENT
Effective as of the Amendment Date (as defined in Section
4.01), the Revolving Credit Agreement shall be amended as follows:
SECTION 2.01. Extension of Revolving Credit Period. The
definition of "Revolving Credit Period" contained in Section 1 shall be amended
by replacing the date "January 28, 1996" with the date "January 28, 2000".
SECTION 2.02. Change in Base Interest Rate. (a) Section 1
shall be amended by deleting the definitions of "Adjusted London Interbank
Offered Rate", "Euro-Dollar Reserve Percentage", "LIBOR Reference Bank" and
"London Interbank Offered Rate".
(b) The definition of "Banking Day" in Section 1 shall be
amended by deleting the words "and for interbank deposits in the London
interbank market".
(c) The definition of "Term" in Section 1 shall be amended by
(i) deleting from clause (i) thereof all words after the words "Banking Day" and
(ii) deleting clause (ii) thereof.
(d) Section 1 shall be further amended by adding the following
new definition:
"Term Fed Funds Rate" means, for any Advance, the
rate of interest determined by the Bank to be its cost of
obtaining funds in U.S. dollars from U.S. Federal funds
brokers on the borrowing date for such Advance for amounts
comparable to the amount of such Advance and for a period
comparable to the Term of such Advance.
(e) The first sentence of Section 5(a) shall be amended by
replacing the words "Adjusted London Interbank Offered Rate" with the words
"Term Fed Funds Rate".
(f) The first sentence of Section 5(b) shall be amended to
read as follows:
Any overdue principal of and, to the extent permitted by law,
overdue interest on any Advance or any other overdue amount
payable hereunder shall bear interest, payable on demand, for
each day from and including the date payment thereof was due
to but excluding the date of actual payment, at a rate per
annum equal to 2-1/2% above the rate determined by the Bank to
be its cost of funding such overdue amount (except that the
interest rate applicable to an overdue amount of principal of
an Advance that became due prior to the date on which it was
scheduled to become due shall, for the period until such
scheduled due date, be equal to 2-1/2% above the rate that
would otherwise be applicable thereto during such period).
(g) Section 5 shall be further amended by deleting paragraph
(c) thereof.
(h) Section 7 shall be amended by deleting paragraph (c)
thereof.
SECTION 2.03. Increase in Interest Rate Margin. The last
sentence of Section 5(a) shall be amended by replacing the words "one-half of
one percent (0.5%)" with the words "five-eighths of one percent (0.625%)".
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. The Borrower represents and warrants to the Bank
as follows:
(a) the Borrower is a company incorporated with limited
liability duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the corporate power and authority to make and
perform this Amendment, and to perform the Revolving Credit Agreement as amended
hereby, and any of the certificates, instruments or agreements herein or therein
referred to insofar as they pertain to the Borrower and has taken all necessary
corporate actions to authorize the execution, delivery and performance of this
Amendment and all of the aforesaid documents;
(b) each officer or attorney-in-fact of the Borrower who has
executed and delivered this Amendment and the documents referred to in paragraph
(a) above was duly authorized to execute and deliver the same on behalf of the
Borrower;
(c) this Amendment has been duly executed and delivered by the
Borrower and this Amendment, and the Revolving Credit Agreement as amended
hereby, each constitute legal, valid and binding obligations of the Borrower
enforceable in accordance with its terms (subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles);
(d) neither the execution nor delivery of this Amendment, nor
the transactions herein contemplated, nor compliance with the terms, conditions
and stipulations hereof, nor performance or observance of the terms and
conditions of the Revolving Credit Agreement as amended hereby, will:
(i) contravene any provision of any law,
statute, decree, rule or regulation to which
the Borrower is subject, or any judgment,
decree, franchise, order or permit
applicable to either of them; or
(ii) conflict, or be inconsistent with, or result
in any breach of, any of the terms,
covenants, conditions or provisions of, or
constitute a default under, or result in the
creation or imposition of any lien, security
interest, charge or encumbrance upon any of
the property or assets of the Borrower,
pursuant to the terms of any indenture,
mortgage, deed of trust, agreement or other
instrument, to which the Borrower is a party
or subject, or by which the Borrower or its
assets may be bound; or
(iii) cause any limit or restriction on the
borrowings or chargings of the Borrower, or
any other limitation or restriction on the
Borrower (whether imposed by statute,
regulation, agreement, or otherwise) to be
exceeded or contravened; or
(iv) violate any provision of the Certificate of
Incorporation or By-laws of the Borrower;
(e) the Borrower has received or obtained every authorization,
consent and approval of, or exemption by, any governmental or public body or
authority required to authorize, or required in connection with, the execution,
delivery and performance of this Amendment or the taking of any action hereby
contemplated, or the performance of the Revolving Credit Agreement as amended
hereby, and every such authorization, consent and approval, or execution is in
full force and effect;
(f) it is not necessary under the laws of Japan, the United
States of America or any political sub-division or authority thereof or therein
in order to ensure the validity, effectiveness and enforceability of this
Agreement, and the Revolving Credit Agreement as amended hereby, as against all
persons and to make the same enforceable and admissible in evidence in the
courts of competent jurisdiction in Japan, the United States of America or any
political sub-division or authority thereof or therein, that this Agreement or
any other instrument relating thereto be filed, registered or recorded in any
public office or elsewhere in any manner.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Amendment Date. This Amendment shall become
effective as of the date first written above (the "Amendment Date").
SECTION 4.02. References. Commencing on the Amendment Date
each reference to the Revolving Credit Agreement contained in the Revolving
Credit Agreement and in any related documents shall be deemed to refer to the
Revolving Credit Agreement as amended hereby.
SECTION 4.03. Effectiveness of Revolving Credit Agreement.
Except as expressly amended hereby, the Revolving Credit Agreement shall remain
unmodified and in full force and effect.
SECTION 4.04. Expense. The Borrower agrees to pay on demand
all out-of-pocket costs and expenses incurred by the Bank in connection with the
administration, modification and amendment of this Amendment, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel to the
Bank with respect thereto and with respect to advising the Bank as to its rights
and responsibilities under this Amendment, and all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Amendment.
SECTION 4.05. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
SECTION 4.06. Governing Law; Jurisdiction; Severability. (a)
This Amendment shall be governed by and construed in accordance with the laws of
the State of New York.
(b) The Borrower hereby irrevocably agrees that any legal
action of proceedings arising out of or relating to this Amendment may be
brought against the Borrower in any New York State of Federal court located in
the Borough of Manhattan in New York City. The Borrower hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
in any such court of any such proceedings and hereby irrevocably submits to the
non-exclusive jurisdiction of each such court in any such proceedings. The
Borrower hereby irrevocably designates, appoints and empowers, in connection
with proceedings in any New York State of Federal court located in the Borough
of Manhattan in New York City, CT Corporation System of which address at the
date hereof is 1633 Broadway, New York, New York 10019 or such other address in
New York City as the Borrower may hereafter notify the Bank in writing, as its
authorized agent to accept and acknowledge on its behalf service of any and all
process which may be served in any such proceedings in any such court. Nothing
herein shall affect the right of the Bank to commence legal proceedings or
otherwise proceed against the Borrower in any other jurisdiction or to serve
process in any other manner permitted by law.
(c) In case one or more of the provisions contained in this
Amendment shall be deemed to be invalid, illegal or unenforceable in any respect
under any applicable law, the other provisions contained herein shall not in any
way be affected or impaired thereby.
SECTION 4.07. Titles and Headings. The titles and headings of
sections of this Amendment are intended for convenience only and shall not in
any way affect the meaning or construction of any provisions of this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE TALBOTS, INC.
By: EDWARD L. LARSEN
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Name: Edward L. Larsen
Title: Senior Vice President,
Finance and CFO
THE SAKURA BANK, LIMITED,
NEW YORK BRANCH
By: KEIJI KANAI
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Name: Keiji Kanai
Title: Vice President and
Senior Manager
Exhibit 10.35
U.S. $ 18,000,000
REVOLVING CREDIT AGREEMENT
between
THE TALBOTS, INC.
as Borrower
and
THE DAI-ICHI KANGYO BANK, LIMITED
as Lender
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS................................................................1
2. THE FACILITIES.............................................................4
3. UTILIZATIONS OF THE REVOLVING CREDIT FACILITY..............................4
4. REPAYMENT OF ADVANCES......................................................5
5. INTEREST...................................................................5
6. PAYMENTS AND ADVANCES......................................................6
7. CHANGES OF LAW, ETC........................................................7
8. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS...............................9
9. CONDITIONS OF DRAWDOWN....................................................11
10. COVENANTS.................................................................12
11. EVENTS OF DEFAULT.........................................................12
12. EXPENSES AND CHARGES......................................................14
13. ASSIGNMENT AND FACILITY OFFICES...........................................14
14. MISCELLANEOUS.............................................................15
<PAGE>
AGREEMENT
(REVOLVING CREDIT FACILITY)
THIS AGREEMENT, made as of the l4th day of April, 1998 by and
among:
(1) THE TALBOTS, INC., a corporation duly organized and
existing under the laws of the State of Delaware, and having its registered
office at Corporation Trust Center, 1209 Orange Street, Wilmington, County of
New Castle, Delaware, U.S.A. (hereinafter called the "Borrower"), of the first
part;
(2) THE DAI-ICHI KANGYO BANK, LIMITED, a banking corporation
duly organized and existing under the laws of Japan and acting through its New
York Branch at One World Trade Center, Suite 4911, New York, New York
(hereinafter called the "Bank"), of the second part.
WHEREAS, the Bank has agreed to make available to the Borrower
a revolving credit facility in the aggregate principal amount of Eighteen
Million United States Dollars (U.S. $18,000,000), upon the terms and subject to
the conditions set forth below in order to assist the Borrower in its general
corporate requirements:
NOW, IT IS HEREBY AGREED as follows:
1. DEFINITIONS
(a) In addition to the terms defined elsewhere in this
Agreement, the following terms, except where the context otherwise requires,
shall have the following meanings in this Agreement and the Schedules hereto:
"Adjusted London Interbank Offered Rate" applicable to the
Term for any Advance means a rate per annum equal to the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of 1%) by dividing (i)
the applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage. The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
"Advance" means, save as otherwise provided herein, any
drawing (as from time to time reduced by repayment) made or to be made by the
Borrower under the Revolving Credit Facility.
"Advance Request" means a request for Advance made in
accordance with Section 3.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Authorized Signatory" in relation to the Borrower and any
communication to be made, or any document to be executed or certified, by the
Borrower means, at any time, any person:
(a) who is duly authorized to act on behalf of the Borrower in
such manner as may be acceptable to the Bank, to make such
communication, or to execute or certify such document, on
behalf of the Borrower; and
(b) in respect of whom the Bank has received a certificate of
another Authorized Signatory of the Borrower setting out the
name and signature of such person.
"Available Amount" for the calculation of the amount to be
available to the Borrower on any proposed Drawdown Date means, at any time
$18,000,000 less the aggregate amount of any outstanding Advances which will
have not fallen due for repayment or have fallen due but remain outstanding on
or before such Drawdown Date.
"Banking Day" means a day on which banks are open for business
and foreign exchange transactions in New York City and the city designated by
the Bank in accordance with Section 6(a)(i) and for interbank deposits in the
London interbank market.
"Commitment" in relation to the Bank means, save as otherwise
provided herein, the amount of Eighteen Million United States Dollars (U.S.
$18,000,000) or, where the context so requires, the obligation of the Bank to
advance up to the amount equivalent to such amount subject to the terms of this
Agreement.
"Drawdown Date" in relation to any Advance means the date for
the making thereof as specified in the Advance Request relating thereto.
"Dollars" and the sign "$" mean lawful currency for the time
being of the United States of America.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents).
"Event of Default" means any of those events specified in
Section 11.
"Facility Office" in relation to the Bank means the branch or
office as may from time to time become its facility office hereunder in
accordance with the provisions of Section 13.
"Jusco" means, Jusco Co., Ltd., a corporation duly organized
and existing under the laws of Japan and having its principle office at 1-5-1
Nakase Mihama-ku, Chiba, 261-8515, Japan.
"London Interbank Offered Rate" applicable to any Term for any
Advance means the rate per annum determined by the Bank in its sole discretion
to be the respective rate in the London interbank market at approximately 11:00
a.m. (London time) on the date two Banking Days in London prior to the first day
of such Term for the offering by the Bank in the London interbank market of
deposits in U.S. Dollars for a period equal to such Term in amounts comparable
to the principal amount of such Advance to which such Term applies, at the time
as of which the Bank makes such determination.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Repayment Date" in relation to any Advance means the last day
of the Term of such Advance subject to acceleration pursuant to Section 11(a).
"Requested Amount" in relation to an Advance Request means the
principal amount of the Advance therein requested.
"Revolving Credit Facility" means the revolving credit
facility of $18,000,000, as calculated in such manner as set forth herein,
granted to the Borrower by the Bank in this Agreement as the same may be reduced
from time to time in accordance with the provisions of this Agreement.
"Revolving Credit Period" means the period from April 17, 1998
to and including April 17, 2000, which can be extended any number of times for
one year each thereafter pursuant to Section 14(j).
"Term" in relation to any Advance means the period for which
such Advance is or is to be borrowed, as specified in the Advance Request
relating thereto; provided that:
(i) if any Term would otherwise end on a day that is not a Banking
Day, such Term shall be extended to the next succeeding
Banking Day unless such Banking Day falls in another calendar
month, in which case such Interest Period shall end on the
next preceding Banking Day; and
(ii) any Term which begins on the last Banking Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Term) shall end on the last Banking Day of a calendar month.
(iii) in no event shall the Term go beyond the expiry of the
Revolving Credit Period.
(iv) the Term is subject to acceleration pursuant to Section 11(a).
(b) In this Agreement, unless the context otherwise requires,
words denoting the singular shall include the plural and vice versa, words
denoting any gender shall include all other genders and references to a person
shall include a corporation.
(c) The headings in this Agreement are for convenience only
and shall not affect its construction.
(d) Unless provided otherwise, the terms "Section" or
"Sections" shall refer to a Section or Sections of this Agreement.
2. THE FACILITIES
(a) The Bank shall make available to the Borrower upon the
terms and subject to the conditions hereof an amount not exceeding the Available
Amount in Dollars. Within the foregoing limits, the Borrower may borrow
hereunder, repay, or to the extent permitted by Section 7, prepay the Advances
and re-borrow and draw Advances at any time during the Revolving Credit Period
under this Section 2(a).
(b) The Bank will participate through its Facility Office in
each Advance made hereunder.
3. UTILIZATIONS OF THE REVOLVING CREDIT FACILITY
(a) Save as otherwise provided herein, the Borrower may from
time to time request an Advance under the Revolving Credit Facility by delivery
to the Bank by telex not later than 12:00 noon (New York City time) on the fifth
Banking Day before the proposed Drawdown Date for such Advance, of a duly
completed Advance Request therefor signed by an Authorized Signatory
substantially in the form set out in the Schedule "A".
Notwithstanding the above, the Borrower may deliver an Advance
Request on the date of this Agreement for the Advance to be made on April 17,
1998.
(b) Each Advance Request delivered to the Bank pursuant to
subsection (a) above shall be irrevocable and shall specify:
(i) the proposed Drawdown Date, which shall be a
Banking Day falling during the Revolving
Credit Period;
(ii) the amount of the proposed Advance; and
(iii) the Term, which shall be a period of one,
three, or six months.
(c) The Bank shall, promptly after receipt by it of an Advance
Request, confirm whether the proposed Advance shall be not more than the
Available Amount. If the Bank determines that the proposed Advance exceeds the
Available Amount, the amount of the proposed Advance in the Advance Request
shall be deemed to have been reduced by such excess.
(d) The Bank shall, promptly after receipt by it of an Advance
Request and in any event no later than 3:00 p.m. (New York City time) on the
third Banking Day before the proposed Drawdown Date for such Advance notify the
Borrower by telex or cable of its receipt of such Advance Request specifying:
(i) the proposed Drawdown Date;
(ii) the amount of the proposed Advance
determined pursuant to subsection (c) above
and the Term of the proposed Advance; and
(iii) the account of the Borrower to which the
proposed Advance shall be transferred.
(e) The Borrower may not request under this Section 3 more
than one Advance to be made by the Bank on any one day and may not make any
Advance Request between the date of any other Advance Request made hereunder and
the Drawdown Date relating to such Advance Request.
(f) If the Borrower requests an Advance in accordance with
Section 3(a) and, on the proposed Drawdown Date for such Advance:
either:
(i) the representations and warranties set out
in Section 8 are true by reference to the
facts and circumstances then subsisting and
no event has occurred which is or may (with
the passage of time, the giving of notice or
the making of any determination or any of
them) become an Event of Default, or
(ii) the Bank agrees (notwithstanding that any of
the matters referred to in (a) above is not
satisfied) to the making of such Advance,
then, unless the Bank determines that any condition set out in Section 9 has not
been satisfied, the Bank will forthwith transfer the funds into the account of
the Borrower specified for this purpose in such Advance Request,
(iii) any Advance shall be evidenced by the
receipt duly executed on behalf of the
Borrower, substantially in form as set out
in Schedule "C" hereto.
4. REPAYMENT OF ADVANCES
(a) Subject to the provisions hereof, the Borrower shall repay
to the Bank the principal amount of each Advance in full on the Repayment Date
relating thereto.
(b) The Borrower shall not prepay all or any part of any
Advance outstanding hereunder except at the times and in the manner expressly
provided herein but, subject to the terms and conditions hereof, shall be
entitled to re-borrow any amount repaid.
5. INTEREST
(a) The Borrower agrees to pay to the Bank interest on each
Advance outstanding from time to time on the Repayment Date for such Advance in
respect of the Term for such Advance at the rate that is the Margin referred to
below above the Adjusted London Interbank offered Rate applicable for such Term.
Interest shall accrue under this paragraph (a) on the basis of actual number of
days elapsed during such Term and a year of 360 days and shall accrue from and
including the first day of such Term to but not including the last day of such
Term. The Margin shall be five-eighths of one percent (0.625%) per annum.
(b) Any overdue principal of and, to the extent permitted by
law, overdue interest on any Advance or any other overdue amount payable
hereunder shall bear interest, payable on demand, for each day from and
including the date payment thereof was due to but excluding the date of actual
payment, at a rate per annum equal to the sum of 2-1/2% plus the quotient
obtained (rounded upwards, if necessary, to the next higher 1/100 of 1%) by
dividing (i) the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which one day (or, if such amount
due remains unpaid more than three Banking Days, then for such other period of
time not longer than six months as the Bank may elect) deposits in Dollars in
which such overdue amount is payable in an amount approximately equal to such
overdue payment due to the Bank is offered to the Bank in the London Interbank
market for the applicable period determined as provided above by (ii) 1.00 minus
the Euro-Dollar Reserve Percentage (or, if the circumstances described in
Section 7(c) shall exist, at a rate per annum equal to the sum of 2-1/2% plus
the rate of interest publicly announced by The Dai-Ichi Kangyo Bank, Limited in
New York City from time to time as its Prime Rate). Interest payable pursuant to
this paragraph (b) shall accrue on the basis of actual number of days elapsed
and a year of 360 days.
(c) The Bank shall determine each interest rate applicable to
each Advance hereunder. The Bank shall give prompt notice to the Borrower by
telex or cable of each interest rate so determined, and its determination
thereof shall be conclusive in the absence of manifest error.
6. PAYMENTS AND ADVANCES
(a) All sums payable to the Bank hereunder or under any
document contemplated hereby, including but not limited to payments of principal
and interest and any costs or expenses, and all sums to be advanced by the Bank
to the Borrower hereunder, shall be payable as follows:
(i) to the Bank, by payment in Federal or other
immediately available funds not later than
11:00 a.m. (New York City time) on the day
in question to such account at such bank as
the Bank may designate; or
(ii) to the Borrower by payment to such account
as the Borrower may direct in writing to the
Bank from time to time.
The Books and records of the Bank with respect to any
repayment of principal of and any payment of interest on any Advance shall be
prima facie evidence of such repayment and payment, except for any manifest
error.
(b) Notwithstanding anything to the contrary in paragraph (a)
hereof, payments described therein may be made in such other manner as shall be
reasonably directed by the Bank with notice to the Borrower prior to the next
payment to which such instructions shall apply unless such other manner would
materially increase the cost to the Borrower of making payments hereunder and
the Borrower shall have given the Bank notice of its reasonable objection to
such manner.
(c) All amounts payable by the Borrower hereunder, whether of
principal or interest or otherwise, shall be paid in fall without set-off or
counterclaim and free and clear of and without any deduction or withholding for
or on account of any taxes, levies, imposts, duties, charges, fees, restrictions
or conditions of any nature now or hereafter imposed by the United States of
America or any other country, or any political subdivision or taxing authority
thereof or therein. The Borrower shall indemnify the Bank against any such
taxes, levies, imposts, duties, charges and fees (other than taxes on the
overall net income imposed by any taxing authority in the jurisdiction in which
the Bank's principal office or then actual Facility Office hereunder is located)
which may be assessed against the Bank or claimed or demanded from the Bank in
respect of any amount payable by the Borrower hereunder (including, without
limitation, all amounts paid pursuant to this paragraph (c) of this Section) or
in respect of the Bank's Commitment or any Advance, and against any costs,
charges, expenses or liability arising out of or in respect of such assessment,
claim or demand. In the event of the Borrower being compelled by the law of the
United States of America or any other country, or any political sub-division or
taxing authority thereof or therein to make any such deduction or withholding
from any payment to or for the account of the Bank, then:
(i) the Bank shall, after consultation with the
Borrower, use reasonable efforts to maintain
its Commitment hereunder, or to make or
maintain any Advance, through the
intervention of an office other than its
then Facility Office in order to avoid the
Borrower's being required to make any
payment of additional amounts under item
(ii) below; and
(ii) the Borrower will pay to the Bank for the
account of the Bank, such additional amount
as will result after such deduction or
withholding (and any further such deduction
or withholding on such additional amounts)
in the receipt by the Bank of the full
amount which it would have been entitled to
receive if the Borrower had not made such
deduction or withholding. In the event that
the Borrower is required as aforesaid to
make a deduction or withholding the Borrower
shall forward to the Bank, within fifteen
(15) days of each such deduction or
withholding, evidence satisfactory to the
Bank (including all relevant tax receipts),
that any amount so deducted or withheld has
been duly remitted to the appropriate
authority.
7. CHANGES OF LAW, ETC.
(a) If any change in any applicable law, regulation, treaty or
official directive of a competent authority (whether or not having the force of
law) or in the interpretation or application thereof by any governmental or
other authority charged with the administration thereof or by any court or if
compliance by the Bank with any applicable direction, request or requirement
(whether or not having the force of law) of any governmental or other authority:
(i) subjects the Bank to any form of duty or tax
(except for taxes on the overall net income
of the Bank imposed by any taxing authority
in the jurisdiction in which the Bank's
principal office or its then actual Facility
office hereunder is located) with respect to
its Commitment or any Advance, or any part
thereof, or
(ii) changes the basis of taxation to the Bank of
payments of principal of or interest on any
Advance or any other payment due or to
become due to it hereunder (except for a
change in the rate of taxes on the overall
net income of the Bank imposed by any taxing
authority in the jurisdiction in which the
Bank's principal office or its then actual
Facility Office hereunder is located), or
(iii) imposes, modifies or deems applicable any
reserve, special deposit or similar
requirement (including, without limitation,
any such requirement imposed by the Board of
Governors of the Federal Reserve System, but
excluding any such requirement included in
an applicable Euro-Dollar Reserve
Percentage) against assets of, deposits with
or for the account of, or credit extended
by, the Bank (or its Facility Office) or
shall impose on the Bank (or its Facility
Office) or on the London interbank market
any other condition affecting its Commitment
or its participation of any Advance;
and the result of any of the foregoing shall be directly (1) to increase the
cost to the Bank of maintaining its Commitment hereunder or making or
maintaining an Advance or any part thereof or (2) to reduce the amount of any
payment received or receivable by the Bank or any part thereof or (3) to require
the Bank to make any payment or forego any interest or other return on or
calculated by reference to the gross amount of any sum received or receivable by
it from the Borrower hereunder, in any such case by an amount which the Bank
shall consider to be material, then and in any such case:
(A) the Bank shall notify the Borrower of the happening of such
event promptly after becoming aware thereof and shall use
reasonable efforts to maintain its Commitment hereunder, or to
make or maintain an Advance through the intervention of an
office other than its then Facility Office in order to avoid
the Borrower's being required to make any payment of
additional amounts under item (B) below; and
(B) the Borrower shall pay to the Bank on demand from time to time
by the Bank, such amount as the Bank may certify, on
documentation setting forth the calculation thereof, to be
necessary to compensate the Bank for such increased cost,
reduction in the amount received or receivable, payment or
foregone interest or other return; and
(C) the Borrower shall be at liberty, on giving not less than
thirty (30) days prior written notice to the Bank, either to
prepay to the Bank, the whole (but not part only) of the
relevant Advance, and any other amounts due or payable to the
Bank hereunder together with such additional amounts as may be
necessary to compensate the Bank for any direct costs and
losses referred to in item (B) above or resulting from such
prepayment, or (if the Drawdown has not yet been made) to
cancel the obligation of the Bank to make the relevant Advance
hereunder whereupon such obligation shall cease.
The certificate of the Bank as to any amount payable to or for the account of
the Bank pursuant to item (B) or (C) above shall, save for any manifest error,
be conclusive and binding upon the Borrower.
(b) If, by reason of (i) the adoption of any applicable law,
regulation, treaty or official directive of a competent authority (whether or
not having the force of law) or (ii) any change therein or in the interpretation
or application thereof by any governmental or other authority charged with the
administration thereof or by any court or (iii) compliance by the Bank with any
applicable direction, request or requirement (whether or not having the force of
law) of any governmental or other authority, it becomes (or becomes apparent
that it is or will be) unlawful for the Bank to maintain or give effect to its
obligations as contemplated by this Agreement, the Bank may, by written notice
thereof to the Borrower declare that all of the Bank's obligations hereunder
shall be terminated forthwith, whereupon the obligation of the Bank to make any
Advance hereunder shall forthwith cease or, if any Advance has already been
made, the Borrower shall prepay in full to the Bank the whole (but not part
only) of its portion of any Advance and any other amounts payable hereunder
together with such additional amounts as may be necessary to compensate the Bank
for any costs and losses resulting from such prepayment, on such date on which
any such adoption, change or compliance requires repayment.
8. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
(a) The Borrower hereby represents and warrants for the
benefit of the Bank as of any Drawdown Date, and undertakes with the Bank as
follows:
(i) the Borrower is a company incorporated with
limited liability duly organized, validly
existing and in good standing under the laws
of the State of Delaware and has the
corporate power and authority to make and
perform this Agreement and any of the
certificates, instruments or agreements
herein referred to insofar as they pertain
to the Borrower and to borrow hereunder and
has taken all necessary corporate actions to
authorize the execution, delivery and
performance of this Agreement and all of the
aforesaid documents;
(ii) each officer or attorney-in-fact of the
Borrower who has executed and delivered this
Agreement and the documents referred to in
(i) above insofar as they pertain to the
Borrower was duly authorized to execute and
deliver the same on behalf of the Borrower;
(iii) this Agreement constitutes the legal, valid
and binding obligations of the Borrower
enforceable in accordance with its terms
(subject, as to enforcement to bankruptcy,
insolvency, reorganization and other laws of
general applicability relating to or
affecting creditors' rights and to general
equity principles), and the obligations of
the Borrower hereunder rank and will at all
times continue to rank at least pari passu
in right of payment and in all other
respects with all of its other unsecured
unsubordinated obligations;
(iv) save as disclosed in writing to the Bank
prior to the date of this Agreement, the
Borrower has not given or permitted to exist
any specific security on any property or
assets of the Borrower (by way of lien,
pledge, mortgage or other charge) for any
loan, debt, guarantee or other liability or
obligation contracted prior to the date of
this Agreement and now existing;
(v) the Borrower has no outstanding liabilities
or obligations whatsoever for borrowed
money, save as disclosed in writing to the
Bank prior to the date of this Agreement;
(vi) neither the execution nor delivery of this
Agreement, nor the transactions herein
contemplated, nor compliance with the terms,
conditions and stipulations hereof will:
(1) contravene any provision of any law,
statute, decree, rule or regulation
to which the Borrower is subject, or
any judgment, decree, franchise,
order or permit applicable to either
of them; or
(2) conflict, or be inconsistent with,
or result in any breach of, any of
the terms, covenants, conditions or
provisions of, or constitute a
default under, or result in the
creation or imposition of any lien,
security interest, charge or
encumbrance upon any of the property
or assets of the Borrower, pursuant
to the terms of any indenture,
mortgage, deed of trust, agreement
or other instrument, to which the
Borrower is a party or subject, or
by which the Borrower or its assets
may be bound; or
(3) cause any limit or restriction on
the borrowings or chargings of the
Borrower, or any other limitation or
restriction on the Borrower (whether
imposed by statute, regulation,
agreement, or otherwise) to be
exceeded or contravened; or
(4) violate any provision of the
Certificate of Incorporation or
By-laws of the Borrower;
(vii) the Borrower has, or will by the date of the
Drawdown have, received or obtained every
authorization, consent and approval of, or
exemption by, any governmental or public
body or authority required to authorize, or
required in connection with the execution,
delivery and performance of this Agreement
or the taking of any action hereby or
thereby contemplated, and every such
authorization, consent and approval, or
execution is in full force and effect;
(viii) the Borrower is not and would not with the
giving of notice or lapse of time or both be
in material default under any agreement to
which it is a party or subject or by which
it may be bound, and no action, suit,
arbitration proceeding, litigation or
administrative proceeding before any court,
board of arbitration or administrative body
is presently in course or pending, or
threatened, which default, litigation or
proceeding would have a material adverse
effect on the business, assets or financial
condition of the Borrower, or which would
adversely affect its ability to perform its
obligations under this Agreement;
(ix) it is not necessary under the laws of Japan,
the United States of America or any
political subdivision or authority thereof
or therein in order to ensure the validity,
effectiveness and enforceability of this
Agreement as against all persons and to make
the same enforceable and admissible in
evidence in the courts of competent
jurisdiction in Japan, the United States of
America or any political sub-division or
authority thereof or therein, that this
Agreement or any other instrument relating
thereto be filed, registered or recorded in
any public office or elsewhere in any
manner; and
(x) the Borrower has not incurred any obligation
for payment to any Affiliate, including
Jusco, except for obligations which by their
terms are subordinated to any and all claims
by the Bank for amounts owing from the
Borrower to the Bank under the Agreement.
(b) Fresh representations and warranties shall be deemed to
have been made by the Borrower in the terms of paragraph (a) of this Section as
of each Drawdown Date and also representations and warranties shall be deemed to
have been made as of such date (i) that no event constituting, or which with the
giving of notice or the passing of time or both would constitute, an Event of
Default has occurred, and (ii) that no material adverse change in the assets,
liabilities or financial condition of the Borrower or in the operations of the
Borrower has occurred since the date of such accounts.
9. CONDITIONS OF DRAWDOWN
(a) The obligations of the Bank to make the initial Advance
hereunder is, at the option of the Bank, subject to the fulfillment (as
determined solely by the Bank) of the following conditions prior to the
Drawdown:
(i) the Bank having received evidence
satisfactory to it of good standing of the
Borrower under the laws of the State of
Delaware together with an up-to-date copy of
its Articles of Incorporation and Bylaws (if
any) (certified to be true copies and then
currently in full force and effect by an
appropriate officer of the Borrower);
(ii) the Bank having received (1) a reasonable
number of copies (certified to be true
copies and then currently in full force and
effect by an appropriate officer of the
Borrower) of such evidence (in the form of a
resolution, by-law, or otherwise) as is
valid under the laws of the State of
Delaware to verify the authority of the
Borrower to make the borrowing on the terms
and conditions of this Agreement and the
authority of the Borrower to execute and
deliver this Agreement and (2) a power of
attorney, resolution or other evidence of
the authority of the person named therein to
sign this Agreement and any other document
required to be given by the Borrower
pursuant to this Agreement on behalf of the
Borrower legally to bind the Borrower;
(iii) the Bank having received specimen signature,
certified by an appropriate officer of the
Borrower, of the person referred to in
(ii)(2) above;
(iv) the Bank having received copies (certified
to be true copies and then currently in full
force and effect by an appropriate officer
of the Borrower) of all governmental
approvals, authorizations, consents and
licenses necessary, if any, in connection
with the execution or performance by the
Borrower of this Agreement or in connection
with the payment or remittance by the
Borrower of any amounts pursuant hereto or
thereto;
The obligation of the Bank to make any Advance hereunder is
subject to the further condition that:
(i) no Event of Default (and no event which with
the giving of notice, lapse of time or both
would constitute an Event of Default) has
occurred and is continuing as at the time of
request for and the time of the making of
the relevant Drawdown,
(ii) all of the representations and warranties
given by the Borrower herein are true and
correct in all respects as if made as at the
time of request for and the time of the
making of the relevant Drawdown; and
(iii) all the covenants of the Borrower contained
herein have been fully complied with at the
time of request for and the time of the
making of the relevant Drawdown.
10. COVENANTS
In addition to other covenants and undertakings herein
contained, the Borrower hereby covenants with the Bank that so long as this
Agreement is in effect:
(a) as soon as practicably possible after the end of each of
the fiscal years of the Borrower, the Borrower will furnish the Bank with such
financial statements and the related notes and schedules certified by
independent public accountants, and copies, if any, (certified to be true copies
by the Secretary or other appropriate officer of the Borrower) of the
resolutions of its Board of Directors and/or the resolutions of its
shareholders, if any, approving such financial statements as well as any reports
made available to its Board of Directors or to its shareholders relating to such
financial statements or to the business of the preceding fiscal year. The
Borrower will also furnish the Bank with such additional financial information
as the Bank may from time to time reasonably require;
(b) the Borrower will pay and discharge duly and punctually
all taxes, assessments and governmental charges upon it or against any of its
property prior to the date upon which penalties attach as a result of failure
thereof, except to the extent that such taxes, assessments and governmental
charges are being contested in good faith by appropriate proceedings, and
adequate reserves shall have been set aside for the payment therefor,
(c) the Borrower will not, without the prior written consent
of the Bank, dissolve, merge into or consolidate with any corporation or convey,
transfer, lease or otherwise dispose of any substantial part of its assets to
any other person, firm or corporation;
(d) the Borrower shall not create, assume or suffer to exist
any mortgage, lien, pledge, charge, security interest or encumbrance of any kind
("Lien") on any asset now owned or hereafter acquired by it; other than (i) any
Lien created on property, at the time of purchase thereof, solely as security
for the payment of the purchase price thereof, (ii) any Lien arising merely by
operation of law in the ordinary course of the business currently conducted by
the Borrower and (iii) any Lien securing indebtedness maturity within one year
after the date on which it is originally incurred; and
(e) the Borrower will not incur any obligation to any
Affiliate, including Jusco, except for obligations which by their terms shall be
subordinated to any and all claims by the Bank for amounts owing from the
Borrower to the Bank under the Agreement.
11. EVENTS OF DEFAULT
(a) If any one of the following events shall occur:
(i) the Borrower fails to make payment when due
and payable under this Agreement (whether at
maturity or by acceleration) of any amount
of the principal of or interest on any
Advance or any other amount payable
hereunder or, if such failure is caused
solely by reasons of administrative or
technical difficulties affecting money
transfers and outside the control of the
Borrower, such failure continues for five
(5) days; or
(ii) any representation or warranty of the
Borrower made or deemed to have been made
herein or in any certificate, instrument or
agreement delivered or to be delivered
hereunder proves to have been untrue or
incorrect when made or deemed to have been
made in any material respect; or
(iii) any indebtedness of the Borrower contracted
or incurred otherwise than under this
Agreement is not paid at its stated maturity
(as extended by any allowable grace period),
or by reason of default on the part of the
Borrower becomes due, or capable of being
declared due by the holder or holders
thereof (assuming the giving of notice or
lapse of time or both, if required), prior
to its stated maturity, provided that the
aggregate of any such indebtedness so unpaid
and/or subject to acceleration exceeds
$500,000 or the equivalent thereof, or
(iv) any governmental approval, authorization,
consent or license necessary in connection
with the execution or performance of this
Agreement or any other document required to
be delivered by the Borrower pursuant to
this Agreement is modified, revoked or
withdrawn in a way materially prejudicial to
the rights or remedies of the Bank
hereunder; or
(v) the Borrower suspends or threatens to
suspend its business operation, or the
Borrower transfers or disposes of all or
substantially all its assets; or
(vi) this Agreement ceases to constitute the
legal, valid and binding obligations of the
Borrower enforceable in accordance with its
terms; or
(vii) the Borrower commences any proceedings
relating to any substantial portion of its
property under any reorganization,
arrangement, readjustment of debt,
dissolution, winding up, adjustment,
composition or liquidation law or statute of
any jurisdiction, whether now or hereafter
in effect ("Proceeding"), or there is
commenced against the Borrower any
Proceeding and such Proceeding remains
undismissed for a period of forty-five (45)
days or such longer period as the Bank, or
any receiver, trustee, liquidator or
sequestrator of, or for, the Borrower or any
substantial portion of its property is
appointed and is not discharged within a
period of forty-five (45) days or such
longer period as the Bank may agree, or the
Borrower consents to or acquiesces in any
Proceeding or the appointment of any
receiver, trustee, liquidator or
sequestrator of, or for, the Borrower or any
substantial portion of its property; or
(viii) it becomes unlawful for the Borrower to
perform any of its obligations under this
Agreement
then, and in any such event, and at any time thereafter if any such event shall
then be continuing, the Bank may by written notice to the Borrower, terminate
its obligations under this Agreement and/or declare to be forthwith due and
payable the entire principal amount of the Advances then outstanding, together
with accrued interest thereon, any fees and commissions, and all other amounts
payable hereunder, whereupon the Bank's obligations under this Agreement shall
terminate forthwith and the entire principal amount of the Advances then
outstanding, together with accrued interest thereon, any fees and commissions,
and any other amounts payable hereunder shall become immediately due and payable
without demand or other notice of any kind, all of which are hereby expressly
waived by the Borrower.
(b) Without prejudice to the foregoing provisions of this
Section, the Borrower shall indemnify the Bank against any and all losses or
expenses which the Bank may sustain or incur as a direct consequence of any
default in payment of the principal amount of any Advances or any part thereof
or interest thereon or any other amount due hereunder or as a direct consequence
of the occurrence any Event of Default hereunder, including but not limited to,
any and all losses or expenses sustained or incurred in liquidating or employing
deposits from third parties acquired to effect or maintain the Bank's portion of
any Advances or any part thereof.
12. EXPENSES AND CHARGES
(a) The Borrower shall pay to the Bank a commitment fee in
Dollars computed at the rate of 0.3125% per annum on the daily undrawn Dollar
amount of the Commitment as of the close of business of the day in respect of
the period commencing on the date hereof and up to the last day of the Revolving
Credit Period as amended or extended. The accrued commitment fee shall be
payable in arrears on the last day of March and September in each year, and the
last day of the Revolving Credit Period as amended or extended. The commitment
fee shall accrue from day to day and be calculated on the basis of a year of
three hundred and sixty (360) days and for the actual number of days elapsed.
(b) The Borrower shall upon demand reimburse the Bank, for its
own account, for all reasonable out-of-pocket costs and expenses incurred by the
Bank in connection with the negotiation, preparation and execution of this
Agreement and any other certificate, instrument or agreement delivered or to be
delivered hereunder, including but not limited to, fees, expenses and
disbursements of legal counsel for the Bank incurred in the negotiation and
preparation of this Agreement.
(c) The Borrower shall upon demand also reimburse the Bank,
for its own account, for all reasonable charges and expenses, including but not
limited to, fees, expenses and disbursements of legal counsel for the Bank,
incurred in connection with the enforcement of or the preservation of, any
rights under this Agreement following any default hereunder and any other
certificate, instrument or agreement delivered or to be delivered hereunder.
(d) The Borrower shall pay or indemnify the Bank against any
and all stamp, documentary, registration and other transaction duties, taxes or
charges (if any) imposed by any governmental authorities to which this Agreement
or any other certificate, instrument or agreement delivered or to be delivered
hereunder may be subject or give rise or which may be payable or determined to
be payable in connection with the execution, delivery, performance or
enforcement of this Agreement and any other certificate, instrument or agreement
delivered or to be delivered hereunder. The Borrower shall indemnify the Bank
also against any and all liabilities directly resulting from delay or omission
on the part of the Borrower to pay such duties, taxes or charges.
13. ASSIGNMENT AND FACILITY OFFICES
(a) This Agreement shall be binding upon, and inure to the
benefit of, the Bank, the Borrower and their respective successors and assigns.
(b) The Borrower shall not assign or transfer any of its
rights and/or obligations under this Agreement.
(c) The Bank shall act initially through the branch or office
of the Bank at the address set forth in section 14(b) hereof and subsequently
through any other branch or office of the Bank hereafter selected from time to
time by the Bank and notified to the Borrower as being the branch or office
through which the Bank wishes to act for the purposes of this Agreement;
provided, however, that the Bank shall not, without the prior written consent of
the Borrower, select such other branch or office if the effect of such selection
would be to obligate the Borrower to make any payment under Section 6(c) or
Section 7(a) which it would not otherwise be required to make.
(d) The Bank may at any time transfer all or any part of its
rights, benefits or obligations under this Agreement (including in particular
the rights and benefits provided in Sections 6(c) and (7) by assigning to any
one or more banks or other lending institutions (each of which is hereinafter in
this Section called an "Assignee") all or any part of the Bank's rights and
benefits and/or obligations hereunder. Any such assignment of all or part of the
Bank's obligations may only be effected if the Assignee becomes bound by the
terms of this Agreement.
(e) If the Bank transfers its rights, benefits or obligations
in accordance with paragraph (d) of this Section and so notifies the Borrower in
writing, all relevant references in this Agreement to the Bank shall thereafter
be construed as references to the Bank and/or its Assignee(s) to the extent of
their respective assignment interests as so notified by the Bank and, in the
case of any assignment of all or part of the Bank's obligations, the Borrower
shall thereafter look only to such Assignee in respect of that proportion of the
Bank's obligations hereunder as corresponds to the assignment interests assumed
by such Assignee.
14. MISCELLANEOUS
(a) No failure to exercise and no delay in exercising on the
part of the parties hereto any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege hereunder. The rights and
remedies of the parties herein provided are cumulative and not exclusive of any
rights or remedies as provided by law.
(b) All notices, requests, demands or other communications to
or upon the respective parties hereto (unless otherwise expressly stipulated in
this Agreement and without prejudice to the provisions of paragraph (i) of this
Section) shall be deemed to have been duly given or made if addressed as
follows:
(i) if to the Bank, to The Dai-Ichi Kangyo Bank,
Limited, New York Branch at One World Trade
Center, Suite 4911, New York, New York
10048, U.S.A. (Telex Number: 420720;
Answerback: DKB UI; Facsimile: (212)
524-0579);
(ii) if to the Borrower, at the address set forth
above (Telex Number: 948059; Answerback:
TALBOTS HIHM; Facsimile: (617) 749-0865);
or to such other address or such other person as any of the parties hereto may
from time to time hereafter specify to the others in the manner provided herein.
(c) Any notice, request, demand or other communication to be
given or made hereunder shall be given or made by registered mail (if overseas
mail, by registered airmail, postage prepaid), telex, cable or facsimile
(confirmed by registered mail (if overseas mail, by registered airmail, postage
prepaid) within twenty-four (24) hours of the dispatch of such telex, cable or
facsimile) and shall be deemed to have been given or made, in the case of notice
by domestic mail, three (3) days after posting, in the case of notice by
overseas mail, seven (7) days after posting, in the case of notice by telex,
when dispatched (provided the answerback relating thereto has been received), in
the case of notice by cable, twenty-four (24) hours after dispatch and in the
case of notice by facsimile, upon receipt at the facsimile number specified
herein.
(d) Except as otherwise agreed by the Bank, all documents,
instruments, statements or reports to be delivered or disclosed under this
Agreement shall be in the English language or accompanied with certified English
translations thereof.
(e) If for the purpose of obtaining judgment in any court in
any country it becomes necessary to convert into any other currency any amount
of Dollars (the "Specified Currency") due hereunder, then the conversion shall
be made at the rate of exchange prevailing either on the date of default or on
the Banking Day before the day on which the judgment is given, whichever shall
be more favorable to the Bank. For this purpose "rate of exchange" means the
spot rate at which the Bank is, in accordance with its normal practice, able on
the relevant date to purchase the Specified Currency for the currency in which
judgment is given. In the event that there is a change in the rate of exchange
prevailing between the Banking Day before the day on which the judgment is given
and the date of payment of the amount due, or in the event that there is a
change between the rate of exchange used for obtaining such judgment and the
rate of exchange prevailing on the date of payment, the Borrower will pay such
additional amounts, if any, as may be necessary to ensure that the amount paid
on such date is the amount in the currency in which the judgment was given
which, when converted at the rate of exchange prevailing on the date of payment,
is the amount then due under this Agreement in the Specified Currency.
(f) In case one or more of the provisions contained in this
Agreement shall be deemed to be invalid, illegal or unenforceable in any respect
under any applicable law, the other provisions contained herein shall not in any
way be affected or impaired thereby.
(g) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(h) The Borrower hereby irrevocably agrees that any legal
action or proceedings arising out of or relating to this Agreement may be
brought against the Borrower in any New York State or Federal court located in
the Borough of Manhattan in New York City. The Borrower hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
in any such court of any such proceedings and hereby irrevocably submits to the
non-exclusive jurisdiction of each such court in any such proceedings. The
Borrower hereby irrevocably designates, appoints and empowers, in connection
with proceedings in any New York State or Federal court located in the Borough
of Manhattan in New York City, CT Corporation System of which address at the
date hereof is 1633 Broadway, New York, New York 10019 or such other address in
New York City as the Borrower may hereafter notify the Bank in writing, as its
authorized agent to accept and acknowledge on its behalf service of any and all
process which may be served in any such proceedings in any such court. Nothing
herein shall affect the right of the Bank to commence legal proceedings or
otherwise proceed against the Borrower in any other jurisdiction or to serve
process in any other manner permitted by law. The Borrower agrees that so long
as this Agreement is in effect, it will maintain an agent for service of process
in New York City and give prompt notice to the Bank of any change of address of
such agent and of the name and address of any new agent appointed by it, as
appropriate. The Borrower further agrees that the failure of its agent for
service of process to give to it notice of any service of process will not
impair or affect the validity of such service or of any judgment based thereon.
(i) This Agreement may be executed in any number of
counterparts, each of which shall be an original but such counterparts shall
together constitute but one and the same instrument. Any provision of this
Agreement may be amended or waived it but only if, such amendment or waiver is
in writing and is duly signed on behalf of the Borrower, and the Bank.
<PAGE>
(j) The Revolving Credit Period may be extended any number of
times in the following manner:
(i) If the Borrower desires to extend the
Revolving Credit Period then effective, the
Borrower shall give the Bank an irrevocable
written request for extension in the form of
Schedule "B" attached hereto at least one
year and 30 days before each date on which
the Revolving Credit Period then effective
expires.
(ii) Upon receipt of such request the Bank will
consider and decide whether the aforesaid
request will be accepted and will give a
written notice as to whether such request
has been accepted or not on or prior to the
day one year before the expiration of the
Revolving Credit Period then effective.
(iii) When the Bank gives the Borrower a written
notice of the acceptance for such request
pursuant to the preceding item (ii), the
Revolving Credit Period then effective will
be extended for one year from the last day
of such Revolving Credit Period. Otherwise,
the Revolving Credit Period will expire on
the last day of the Revolving Credit Period
then effective.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers or attorney-in-fact
thereunto duly authorized as of the day and year first above written.
BORROWER: THE TALBOTS, INC.
By: EDWARD L. LARSEN
-----------------------------------------
Name: Edward L. Larsen
Title: Senior Vice President,
Finance and CFO
THE BANK: THE DAI-ICHI KANGYO BANK, LIMITED
By: HIRONOBU SHIRAISHI
------------------------------------------
Name: Hironobu Shiraishi
Title: Vice President &
Department Head
<PAGE>
SCHEDULE A
FORM OF ADVANCE REQUEST
To: The Dai-Ichi Kangyo Bank, Limited
From: The Talbots, Inc.
Dear Sirs,
1. We refer to the Revolving Credit Agreement dated April 14,
1998 (the "Facility Agreement") and made between The Talbots, Inc. as borrower,
and The Dai-Ichi Kangyo Bank, Limited. Terms defined in the Facility Agreement
shall bear the same meaning herein.
2. We hereby give you notice that we wish an Advance to be
made to the account in our name with (account number: under Section 3 of the
Facility Agreement as follows:
(i) Amount in Dollars
(ii) Drawdown Date
(iii) Term
3. We confirm that the borrowing to be effected by the
aforesaid Drawdown Date will be within our corporate powers and will not cause
any limit on our borrowings (whether imposed by our laws, regulations, agreement
or otherwise) to be exceeded and that the representations and warranties, set
out in Section 8 of the Facility Agreement are true as of the date hereof and
will be true as of the Drawdown Date by reference to the facts and circumstances
now subsisting and no event which is or may (with the passage of time, the
giving of notice and the making of any determination under the Facility
Agreement or any of them) become an Event of Default has occurred.
Yours faithfully,
THE TALBOTS, INC.
By:
--------------------------------------
Name:
Title:
<PAGE>
SCHEDULE B
(Date)
FORM OF REQUEST FOR EXTENSION
To: The Dai-Ichi Kangyo Bank, Limited
New York Branch
Re: Revolving Credit Agreement dated as of April 14, 1998
among The Talbots, Inc. as borrower, and The Dai-Ichi
Kangyo Bark Limited (the "Agreement")
--------------------------------------------------------
Dear Sirs:
Pursuant to Section 146)(i) of Agreement, we hereby
irrevocably request to you the one year extension of the Revolving Credit Period
(as defined in the Agreement) so that the Revolving Credit Period if extended
pursuant to this request would expire on April 17, .
We would appreciate it if such extension would be accepted.
Very truly yours,
THE TALBOTS, INC.
By:
--------------------------------------
<PAGE>
SCHEDULE C
(Date)
To: The Dai-Ichi Kangyo Bank, Limited
New York Branch
One World Trade Center
Suite 4911
New York, New York 10048
U.S.A.
Dear Sirs:
U.S. $18,000,000
Revolving Credit Agreement dated April 14, 1998
We hereby acknowledge receipt of made available by the Bank
pursuant to Section 3 of the Revolving Credit Agreement dated April 14, 1998
(the "Facility Agreement") by and among ourselves as Borrower and The Dai-Ichi
Kangyo Bank, Limited, New York Branch.
Terms defined in the Facility Agreement are used herein as
therein defined.
THE TALBOTS, INC.
By:
--------------------------------------
Name:
Title:
<PAGE>
THE TALBOTS, INC.
PROMISSORY NOTE
U.S. $18,000,000.00 April 17, 1998
New York, New York
FOR VALUE RECEIVED, The Talbots, Inc., a Delaware corporation
(the "Company") hereby promises to pay to the order of The Dai-Ichi Kangyo Bank
Limited, a banking corporation duly organized and existing under the laws of
Japan and acting through its New York Branch (the "Bank") the principal amount
of Eighteen Million United States Dollars (U.S. $18,000,000.00) or, if less, the
unpaid principal amount of the Loans of the Bank outstanding under the Credit
Agreement referred to below (the "Loans") on the dates and in the amounts, and
to pay interest thereon on the dates and at the rates, specified in the Credit
Agreement. All payments due to the Bank hereunder shall be made to the Bank at
the place, in the type of funds and in the manner specified in the Credit
Agreement.
Each holder hereof is authorized to endorse on the grid
attached hereto, or on a continuation thereto the Loans and each payment or
prepayment with respect thereto.
Presentation, demand, protest, notice of dishonor and notice
of intent to accelerate are hereby waived by the Borrower. No delay or omission
by the bank in exercising its rights under this Note shall operate as a waiver
of such rights, nor shall the exercise of any right with respect to this Note
waive or preclude the later exercise of such right or any other right.
This Note evidences the Loans made under, and is entitled to
the benefits of, the Revolving Credit Agreement dated April 14, 1998 as the same
may be amended from time to time (the "Credit Agreement"). Reference is made to
the Credit Agreement for provisions relating to the prepayment and the
acceleration of the maturity hereof.
This Note shall be governed by and construed in accordance
with the law of the State of New York.
THE TALBOTS, INC.
By: EDWARD L. LARSEN
-------------------------------------
Name: Edward L. Larsen
Title: Senior Vice President,
Finance and CFO
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 Americas, New York, New York 10020-1104.
(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., 175 Beal Street, Hingham,
Massachusetts 02043, Telephone: (781) 749-7600, Facsimile: (781) 749-0865; (ii)
if to the Bank, at The Bank of Tokyo-Mitsubishi, Ltd., New York Branch, 1251
Avenue of the Americas, New York, New York 10020-1104, Attention: Mr. M.
Yoshioka, Telephone: (212) 782-4463, Telecopier: (212) 782-6435; 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).
<PAGE>
(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/ Edward L. Larsen
------------------------------------------
Name: Edward L. Larsen
Title: Senior Vice President, Finance and CFO
THE BANK OF TOKYO-MITSUBISHI, LTD.,
New York Branch
By:
------------------------------------------
Name:
Title:
<PAGE>
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: EDWARD L. LARSEN
-----------------------------------------
Name: Edward L. Larsen
Title: Senior Vice President, Finance & CFO
Exhibit 10.37
FOURTH AMENDMENT (this "Amendment"), dated as of April 17
1998, to the Revolving Credit Agreement (as amended and modified to the date
hereof, the "Revolving Credit Agreement"), dated as of January 25, 1994, between
The Talbots, Inc. (the "Borrower"), and The Sakura Bank, Limited, New York
Branch (the "Bank").
WITNESSETH:
WHEREAS, the parties hereto are parties to the Revolving
Credit Agreement and wish to amend the Revolving Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
Unless otherwise indicated, capitalized terms used herein and
defined in the Revolving Credit Agreement shall have the respective meanings
ascribed thereto in the Revolving Credit Agreement.
ARTICLE II
AMENDMENT
Subject to the satisfaction of the conditions set forth in
Article IV, the Revolving Credit Agreement shall be amended as follows:
SECTION 2.01. Amendment to Recital. The Recital is amended by
replacing the words "Ten Million United States Dollars (U.S. $10,000,000)" with
the words "Sixteen Million United States Dollars (U.S. $16,000,000)".
SECTION 2.02. Amendments to Section 1. Section 1 is amended by
(a) replacing the amount "$10,000,000" with the amount "$16,000,000" in the
definition of "Available Amount" and (b) replacing the words "Ten Million United
States Dollars (U.S. $10,000,000)" with the words "Sixteen Million United States
Dollars (U.S. $16,000,000)" in the definitions of Commitment and Revolving
Credit Facility.
SECTION 2.03. Amendment to Schedule C. Schedule C is amended
by replacing the amount "$10,000,000" with the amount "$16,000,000".
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. The Borrower represents and warrants to the Bank
as follows:
(a) the Borrower is a company incorporated with limited
liability duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the corporate power and authority to make and
perform this Amendment, and to perform the Revolving Credit Agreement as amended
hereby, and any of the certificates, instruments or agreements herein or therein
referred to insofar as they pertain to the Borrower and has taken all necessary
corporate actions to authorize the execution, delivery and performance of this
Amendment and all of the aforesaid documents;
(b) each officer or attorney-in-fact of the Borrower who has
executed and delivered this Amendment and the documents referred to in paragraph
(a) above was duly authorized to execute and deliver the same on behalf of the
Borrower;
(c) this Amendment has been duly executed and delivered by the
Borrower and this Amendment, and the Revolving Credit Agreement as amended
hereby, each constitute legal, valid and binding obligations of the Borrower
enforceable in accordance with its terms (subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles);
(d) neither the execution nor delivery of this Amendment, nor
the transactions herein contemplated, nor compliance with the terms, conditions
and stipulations hereof, nor performance or observance of the terms and
conditions of the Revolving Credit Agreement as amended hereby, will:
(i) contravene any provision of any law,
statute, decree, rule or regulation to which
the Borrower is subject, or any judgment,
decree, franchise, order or permit
applicable to either of them; or
(ii) conflict, or be inconsistent with, or result
in any breach of, any of the terms,
covenants, conditions or provisions of, or
constitute a default under, or result in the
creation or imposition of any lien, security
interest, charge or encumbrance upon any of
the property or assets of the Borrower,
pursuant to the terms of any indenture,
mortgage, deed of trust, agreement or other
instrument, to which the Borrower is a party
or subject, or by which the Borrower or its
assets may be bound; or
(iii) cause any limit or restriction on the
borrowings or chargings of the Borrower, or
any other limitation or restriction on the
Borrower (whether imposed by statute,
regulation, agreement, or otherwise) to be
exceeded or contravened; or
(iv) violate any provision of the Certificate of
Incorporation or By-laws of the Borrower;
(e) the Borrower has received or obtained every authorization,
consent and approval of or exemption by, any governmental or public body or
authority required to authorize, or required in connection with, the execution,
delivery and performance of this Amendment or the taking of any action hereby
contemplated, or the performance of the Revolving Credit Agreement as amended
hereby, and every such authorization, consent and approval, or execution is in
full force and effect;
(f) it is not necessary under the laws of Japan, the United
States of America or any political sub-division or authority thereof or therein
in order to ensure the validity, effectiveness and enforceability of this
Agreement, and the Revolving Credit Agreement as amended hereby, as against all
persons and to make the same enforceable and admissible in evidence in the
courts of competent jurisdiction in Japan, the United States of America or any
political sub-division or authority thereof or therein, that this Agreement or
any other instrument relating thereto be filed, registered or recorded in any
public office or elsewhere in any manner.
ARTICLE IV
CONDITIONS TO EFFECTIVENESS
SECTION 4.01. Conditions. The amendments contemplated by
Article II hereof shall be effective on the date (the "Amendment Date") when the
Bank has received all of the following documents, each of which shall be in form
and substance satisfactory to the Bank:
(a) counterparts of this Amendment duly executed and delivered
by the Borrower;
(b) such evidence (in the form of a resolution, by-law or
otherwise) as is valid under the laws of the State of Delaware to verify the
authority of the Borrower to executed and deliver this Amendment and a power of
attorney, resolutions or other evidence of the authority of the person named
therein to sigh this Amendment and any other document required to be given by
the Borrower pursuant to this Amendment on behalf of the Borrower legally to
bind the Borrower;
(c) specimen signature, certified by an appropriate officer of
the Borrower, of the person referred to in paragraph (b) above;
(d) copies (certified to be true copies and then currently in
full force and effect by an appropriate officer of the Borrower) of all
governmental approvals, authorizations, consents and licenses necessary, if any,
in connection with the execution or performance by the Borrower of this
Amendment or the performance by the Borrower of the Revolving Credit Agreement,
as amended hereby, or in connection with the payment or remittance by the
Borrower of any amounts pursuant thereto;
(e) an opinion of counsel to the Borrower with respect to such
matters as the Bank shall reasonably request;
(f) a certificate, signed by an officer of the Borrower
stating that each of the conditions specified in this Section 4.01 have been
met;
(g) a certificate signed by an officer of the Borrower stating
that (i) immediately after giving effect to this Amendment, no Event of Default,
an no event which with notice or the passing of time or both would constitute an
Event of Default, shall have occurred and be continuing, (ii) the
representations and warranties contained in this Amendment and Section 8 of the
Revolving Credit Agreement are true and correct on and as of the Amendment Date
as if made on and as of the Amendment Date, and (iii) Borrower has paid all
costs, accrued and unpaid fees and expenses referred to in Section 5.03 hereof;
and
(h) such other documents as the Bank shall reasonably request
in writing.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. References. Commencing on the Amendment Date
each reference to the Revolving Credit Agreement contained in the Revolving
Credit Agreement and in any related documents shall be deemed to refer to the
Revolving Credit Agreement as amended hereby.
SECTION 5.02. Effectiveness of Revolving Credit Agreement.
Except as expressly amended hereby, the Revolving Credit Agreement shall remain
unmodified and in full force and effect.
SECTION 5.03. Expenses . The Borrower agrees to pay on demand
all out-of-pocket costs and expenses incurred by the Bank in connection with the
administration, modification and amendment of this Amendment, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel to the
Bank with respect thereto and with respect to advising the Bank as to its rights
and responsibilities under this Amendment, and all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Amendment.
SECTION 5.04. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
SECTION 5.05. Governing Law, Jurisdiction; Severability. (a)
This Amendment shall be governed by and construed in accordance with the laws of
the State of New York.
(b) The Borrower hereby irrevocably agrees that any legal
action of proceedings arising out of or relating to this Amendment may be
brought against the Borrower in any New York State of Federal court located in
the Borough of Manhattan in New York City. The Borrower hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
in any such court of any such proceedings and hereby irrevocably submits to the
non-exclusive jurisdiction of each such court in any such proceedings. The
Borrower hereby irrevocably designates, appoints and empowers, in connection
with proceedings in any New York State of Federal court located in the Borough
of Manhattan in New York City, CT Corporation System of which address at the
date hereof is 1633 Broadway, New York, New York 10019 or such other address in
New York City as the Borrower may hereafter notify the Bank in writing, as its
authorized agent to accept and acknowledge on its behalf service of any and all
process which may be served in any such proceedings in any such court. Nothing
herein shall affect the right of the Bank to commence legal proceedings or
otherwise proceed against the Borrower in any other jurisdiction or to serve
process in any other manner permitted by law.
(c) In case one or more of the provisions contained in this
Amendment shall be deemed to be invalid, illegal or unenforceable in any respect
under any applicable law, the other provisions contained herein shall not in any
way be affected or impaired thereby.
SECTION 5.06. Titles and Headings. The titles and headings of
sections of this Amendment are intended for convenience only and shall not in
any way affect the meaning or construction of any provisions of this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE TALBOTS, INC.
By: EDWARD L. LARSEN
--------------------------------------------------------
Name: Edward L. Larsen
Title: Sr. Vice President, Finance & CFO
THE SAKURA BANK, LIMITED,
NEW YORK BRANCH
By: KEIJI KANAI
--------------------------------------------------------
Name: Keiji Kanai
Title: Vice President and
Senior Manager
Exhibit 10.38
THIRD AMENDMENT AGREEMENT
THIS THIRD AMENDMENT AGREEMENT (this "Amendment") is made as
of April 17, 1998 between The Talbots, Inc. (the "Borrower") and The Norinchukin
Bank, New York Branch (the "Bank").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to the Revolving
Credit Agreement, dated as of January 25, 1994, as amended by the First
Amendment, dated as of November 21, 1995, and further amended by the Second
Amendment, dated as of April 18, 1996 (as so amended, the "Revolving Credit
Agreement"; Capitalized terms which are used herein but not otherwise defined
shall have the respective meanings ascribed thereto in the Revolving Credit
Agreement); and
WHEREAS, the parties hereto desire to make certain amendments
to the Revolving Credit Agreement as hereinafter set forth;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Amendments to the Revolving Credit Agreement. The Bank and
the Borrower hereby agree to amend the Revolving Credit Agreement as follows:
(a) The following sections of the Revolving Credit Agreement
are hereby amended by deleting each reference contained therein to "Fourteen
Million United States Dollars (U.S. $14,000,000)" and inserting in lieu thereof
a reference to "Twenty-Eight Million United States Dollars (U.S. $28,000,000)":
(i) The recital contained in Page 1;
(ii) The definition of "Commitment" contained in
Page 2; and
(iii) The definition of "Revolving Credit
Facility" contained in Page 4.
(b) The following sections of the Revolving Credit Agreement
are hereby amended by deleting each reference contained therein to "$14,000,000"
and inserting in lieu thereof a reference to $28,000,000":
(i) The definition of "Available Amount"
contained in Page 2; and
(ii) Schedule C.
(c) Section 11 of the Revolving Credit Agreement is hereby
amended as follows:
(i) Subsection (viii) contained in Page 18 is
amended by inserting "; or" to the end
thereof; and
(ii) New Subsections "(ix)" and "(x)" are
inserted in Page 18 immediately following
Subsection (viii), as follows:
"(ix) JUSCO (U.S.A.), Inc. shall not own
directly, beneficially and of record,
51 % or more of the issued and
outstanding capital stock of the
Borrower; or
"(x) the Borrower shall default in the
performance or observance of any
term, covenant, condition or
agreement contained in this Agreement
or in any other agreements, documents
or instruments delivered under, or in
connection with, this Agreement"
2. Revolving Credit Period. The parties hereto agree that the
current Revolving Credit Period shall mean a period to and including April 17,
2000.
3. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
4. Expenses. The Borrower agrees to pay all reasonable
out-of-pocket expenses incurred by the Bank in connection with the preparation
of this Assignment or with any amendments, modifications or waivers of the
provisions hereof or of the Revolving Credit Agreement or incurred by the Bank
in connection with the enforcement or protection of its rights in connection
with this Amendment or the Revolving Credit Agreement or in connection with any
pending or threatened action, proceeding or investigation relating to the
foregoing, including, but not limited to, the reasonable fees and disbursements
of counsel for the Bank.
5. Further Assurances. Each parties hereto shall promptly
execute and deliver all such other agreements, certificates, instruments or
documents and do and perform or cause to be done and performed all such further
acts and things as may be reasonably requested by the other party in order to
carry out the intent and purposes of this Amendment.
6. Full Force and Effect; Ratification. (a) All references to
the Revolving Credit Agreement shall be deemed to refer to the Revolving Credit
Agreement as amended by this Amendment, and the term "this Agreement" and the
words "hereof", "herein", "hereunder" and words of similar import, as used in
the Revolving Credit Agreement, shall mean the Revolving Credit Agreement as
amended hereby.
(b) Except as expressly set forth herein, this Amendment shall
not constitute an amendment, waiver or consent with respect to any provision of
the Revolving Credit Agreement, and the Revolving Credit Agreement, as amended
hereby, remain in full force and effect and is hereby ratified, approved and
confirmed in all respects.
<PAGE>
7. Counterparts. This Amendment may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed by the authorized officers.
THE TALBOTS, INC.
By: EDWARD L. LARSEN
------------------------------------------
Name: Edward L. Larsen
Title: Sr. Vice President, Finance & CFO
THE NORINCHUKIN BANK
NEW YORK BRANCH
By: ICHIRO UCHIDA
------------------------------------------
Name: Ichiro Uchida
Title: Joint General Manager
Exhibit 10.39
THIRD AMENDMENT (this "Amendment"), dated as of April 17, 1998, to the
Revolving Credit Agreement (as amended and modified to the date hereof, the
"Revolving Credit Agreement"), dated as of January 25, 1994, between The
Talbots, Inc. (the "Borrower"), and The Dai-Ichi Kangyo Bank Limited, New York
Branch (the "Bank").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to the Revolving Credit
Agreement and wish to amend the Revolving Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise indicated, capitalized terms used herein and defined
in the Revolving Credit Agreement shall have the respective meanings ascribed
thereto in the Revolving Credit Agreement.
ARTICLE II
AMENDMENT
Section 2.01. Change in Base Interest Rate (a) Section 1 shall be
amended by deleting the definition of "LIBOR Reference Bank"
(b) The definition of "London Interbank Offered Rate" shall be
amended to read as follows:
"London Interbank Offered Rate" applicable to any Term for any
Advance means the rate per annum determined by the Bank in its sole discretion
to be the respective rate in the London interbank market at approximately 11:00
a.m. (London time) on the date two Banking Days in London prior to the first day
of such Term for the offering by the Bank in the London interbank market of
deposits in U.S. Dollars for a period equal to such Term in amounts comparable
to the principal amount of such Advance to which such Term applies, at the time
as of which the Bank makes such determination.
(c) Section 5 shall be amended by deleting paragraph (c)
thereof.
(d) Section 7 shall be amended by deleting paragraph ((c)
thereof.
Section 2.02. Change in Interest Margin On and after the Amendment Date
(as defined in Section 4.01), Section 5(a) of the Revolving Credit Agreement
shall be amended by deleting "one-half of one percent (0.5%)" in the last
sentence and replacing it with "five-eighths of one percent (0.625%)".
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. The Borrower represents and warrants to the Bank as
follows:
(a) the Borrower is a company incorporated with limited
liability duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the corporate power and authority to make and
perform this Amendment, and to perform the Revolving Credit Agreement as amended
hereby, and any of the certificates, instruments or agreements herein or therein
referred to insofar as they pertain to the Borrower and has taken all necessary
corporate actions to authorize the execution, delivery and performance of this
Amendment and all of the aforesaid documents;
(b) each officer or attorney-in-fact of the Borrower who has
executed and delivered this Amendment and the documents referred to in paragraph
(a) above was duly authorized to execute and deliver the same on behalf of the
Borrower;
(c) this Amendment has been duly executed and delivered by the
Borrower and this Amendment, and the Revolving Credit Agreement as amended
hereby, each constitute legal, valid and binding obligations of the Borrower
enforceable in accordance with its terms (subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles);
(d) neither the execution nor delivery of this Amendment, nor
the transactions herein contemplated, nor compliance with the terms, conditions
and stipulations hereof, nor performance or observance of the terms and
conditions of the Revolving Credit Agreement as amended hereby, will:
(i) contravene any provision of any law,
statute, decree, rule or regulation to which
the Borrower is subject, or any judgment,
decree, franchise, order or permit
applicable to either of them; or
(ii) conflict, or be inconsistent with, or result
in any breach of, any of the terms,
covenants, conditions or provisions of, or
constitute a default under, or result in the
creation or imposition of any lien, security
interest, charge or encumbrance upon any of
the property or assets of the Borrower,
pursuant to the terms of any indenture,
mortgage, deed of trust, agreement or other
instrument, to which the Borrower is a party
or subject, or by which the Borrower or its
assets may be bound; or
(iii) cause any limit or restriction on the
borrowings or chargings of the Borrower, or
any other limitation or restriction on the
Borrower (whether imposed by statute,
regulation, agreement, or otherwise) to be
exceeded or contravened; or
<PAGE>
(iv) violate any provision of the Certificate of
Incorporation or By-laws of the Borrower;
(e) the Borrower has received or obtained every authorization,
consent and approval of, or exemption by, any governmental or public body or
authority required to authorize, or required in connection with, the execution,
delivery and performance of this Amendment or the taking of any action hereby
contemplated, or the performance of the Revolving Credit Agreement as amended
hereby, and every such authorization, consent and approval, or execution is in
full force and effect;
(f) it is not necessary under the laws of Japan, the United
States of America or any political sub-division or authority thereof or therein
in order to ensure the validity, effectiveness and enforceability of this
Agreement, and the Revolving Credit Agreement as amended hereby, as against all
persons and to make the same enforceable and admissible in evidence in the
courts of competent jurisdiction in Japan, the United States of America or any
political sub-division or authority thereof or therein, that this Agreement or
any other instrument relating thereto be filed, registered or recorded in any
public office or elsewhere in any manner.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Amendment Date. This Amendment shall become effective as
of the date first written above (the "Amendment Date").
SECTION 4.02. References. commencing on the Amendment Date each
reference to the Revolving Credit Agreement contained in the Revolving Credit
Agreement and in any related documents shall be deemed to refer to the Revolving
Credit Agreement as amended hereby.
SECTION 4.03. Effectiveness of Revolving Credit Agreement. Except as
expressly amended hereby, the Revolving Credit Agreement shall remain unmodified
and in full force and effect.
SECTION 4.04. Expenses. The Borrower agrees to pay on demand all
out-of-pocket costs and expenses incurred by the Bank in connection with the
administration, modification and amendment of this Amendment, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel to the
Bank with respect thereto and with respect to advising the Bank as to its rights
and responsibilities under this Amendment, and all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Amendment.
SECTION 4.05. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
<PAGE>
SECTION 4.06. Governing Law; Jurisdiction; severability. (a) This
Amendment shall be governed by and construed in accordance with the laws of the
State of New York.
(b) The Borrower hereby irrevocably agrees that any legal
action or proceedings arising out of or relating to this Amendment may be
brought against the Borrower in any New York State or Federal court located in
the Borough of Manhattan in New York City. The Borrower hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
in any such court of any such proceedings and hereby irrevocably submits to the
non-exclusive jurisdiction of each such court in any such proceedings. The
Borrower hereby irrevocably designates, appoints and empowers, in connection
with proceedings in any New York State or Federal court located in the Borough
of Manhattan in New York City, CT Corporation System of which address at the
date hereof is 1633 Broadway, New York, New York 10019 or such other address in
New York City as the Borrower may hereafter notify the Bank in writing, as its
authorized agent to accept and acknowledge on its behalf service of any and all
process which may be served in any such proceedings in any such court. Nothing
herein shall affect the right of the Bank to commence legal proceedings or
otherwise proceed against the Borrower in any other jurisdiction or to serve
process in any other manner permitted by law.
(c) In case one or more of the provisions contained in this
Amendment shall be deemed to be invalid, illegal or unenforceable in any respect
under any applicable law, the other provisions contained herein shall not in any
way be affected or impaired thereby.
SECTION 4.07. Titles and Headings. The titles and headings of section
of this Amendment are intended for convenience only and shall not in any way
affect the meaning or construction of any provisions of this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE TALBOTS, INC.
By:---------------------------------------------
Name: Edward L. Larsen
Title: Sr. Vice President, Finance & CFO
THE DAI-ICHI KANGYO BANK, LIMITED
NEW YORK BRANCH
By:---------------------------------------------
Name: Hironobu Shiraishi
Title: Vice President & Department Head
Exhibit 10.52
AGREEMENT AND RELEASE
AGREEMENT AND RELEASE (collectively, this "Agreement"), dated
as of November 30, 1997, between CLARK J. HINKLEY (the "Executive") and THE
TALBOTS, INC., a Delaware corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the Executive and the Company heretofore have entered
into an Employment Agreement dated as of October 22, 1993, as amended as of May
11, 1994 and as further amended as of July 31, 1997 (collectively, the
"Employment Agreement"); and
WHEREAS, the Executive and the Company each desire to
terminate the Employment Agreement and enter into this Agreement in its place
and stead.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and understandings set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:
1. The Employment Agreement. The Executive and the Company
agree that the Employment Agreement shall be terminated as of the date hereof
and, except as provided in paragraph 15 thereof, shall have no further force or
effect. Notwithstanding the foregoing, the Executive and the Company agree that
paragraph 12 of the Employment Agreement shall have no further force or effect.
2. Continuing Employment. The Company hereby agrees to employ
the Executive and the Executive hereby accepts employment with the Company,
until the earlier of: (a) two (2) years from the date hereof; (b) the Executive
obtaining other employment (including consulting or other self-employment); or
(c) the Executive's death. The Executive agrees to notify the Company promptly
if and when he obtains any such other employment.
3. Salary and Benefits. (A) Salary. During the Executive's
employment hereunder the Company shall pay him a salary, in accordance with the
Company's standard payroll practices, at the rate of $610,900, per year. If the
Executive's employment shall terminate pursuant to paragraphs 2(b) or 2(c)
above, the Company shall pay the Executive ( or the Executive's estate, if
applicable), in a single lump-sum payment within thirty (30) days from the
effective date of such termination, the difference between $1,221,800 and the
amount paid to the Executive under this paragraph 3(A) to the date of such
termination.
(B) Benefits. The Executive shall continue to participate, on
the same terms and conditions as in effect immediately prior to the date hereof,
in the long-term disability insurance benefit program provided to the Executive
pursuant to paragraph 4(A) of the Employment Agreement, the medical insurance
program, the dental insurance program and the Company's Paid Life Insurance
program provided to the Executive pursuant to paragraph 4(B) of the Employment
Agreement and the Company's Executive Automobile Program (the "EAP") provided to
the Executive pursuant to paragraph 4(C) of the Employment Agreement (it being
understood, however, that notwithstanding the terms of the EAP, the Executive
shall not be entitled to a replacement for the vehicle currently being furnished
to him thereunder), from the date hereof until the earlier of: (1) two (2) years
from the date hereof; (2) such time as the Executive is eligible to be covered
by a comparable program of a subsequent employer; or (3) with respect to the
EAP, the Executive's becoming an employee of, or a consultant to, a
"Competitor," which for purposes of this Agreement is any entity which either
(a) is, at the time the Executive becomes an employee of, or a consultant to,
such entity, a women's apparel and/or women's accessories catalog or specialty
store retailer selling merchandise similar to that sold by the Company, or (b)
employs the Executive in connection with the establishment of a women's apparel
and/or women's accessories catalog or specialty store business selling or to be
selling the merchandise described above. The Executive also agrees that his
right to participate in the EAP shall end if, during the two (2) year period
referenced to above, he shall directly or indirectly solicit or induce any
employee(s) of the Company to terminate their employment with the Company (such
activities are hereinafter collectively referred to as "Solicitation"). The
Executive agrees to notify the Company if and when he becomes eligible to
participate in any benefit plans, programs or arrangements of another employer.
Upon termination of group health benefits under this paragraph, the Executive
shall be entitled to continue such benefits pursuant to applicable law.
(C) 1993 Executive Stock Based Incentive Plan. The Executive
agrees that he shall no longer be eligible to receive any additional awards
pursuant to the Company's 1993 Executive Stock Based Incentive Plan (the
"Plan"). The Executive also agrees that, notwithstanding the terms of the Plan,
the Restricted Stock Agreement between the Executive and the Company dated
November 18, 1993 (the "1993 Agreement"), and the Nonqualified Stock Option
Agreements between the Executive and the Company dated November 19, 1995 and
November 17, 1996 respectively: (1) the Executive shall vest not later than
November 18, 1998 in the 6864 shares of restricted stock awarded to him pursuant
to the 1993 Agreement which are scheduled to vest on November 18, 1998 without
regard to his employment status on that date or any other provision of the 1993
Agreement; (2) the Executive shall not vest in the options awarded pursuant to
the 1995 and 1996 Agreements referred to above that shall not have vested on or
before November 30, 1997; and (3) the Executive's right to exercise any stock
options heretofore awarded to him by the Company which shall have vested on or
before November 30, 1997 shall expire on November 30, 2000. The Executive agrees
that, until May 31, 1998, the Executive shall not, during any "Quiet Period"
applicable to the Company's Management Committee employees, including without
limitation, the Company's senior executive officers: (1) be entitled to exercise
any vested stock options; or (2) engage in the purchase or sale of the Company's
Common Stock. A copy of the Company's current "Quiet Period" calendar (the
"Calendar") is attached as Exhibit A. The Executive acknowledges that the
Company reserves the right to amend the Calendar from time-to-time in its sole
discretion. To the extent practicable, the Company agrees to provide the
Executive with notice of Quiet Periods and changes thereto at the time it
provides such notice to the Company's employees. In addition, the Executive
agrees to notify the Company's General Counsel prior to exercising any options
or trading in the Company's Common Stock to ascertain whether such transaction
would violate any Quiet Period covered by this paragraph 3(C).
(D) Retirement Benefits. (a) Pursuant to the terms of each
such plan, the Executive shall continue to be eligible to accrue benefits under
the Company's Pension Plan for Salaried Employees (the "Pension Plan") and
Supplemental Retirement Plan (the "Supplemental Pension Plan"), and shall
continue to be eligible to make salary deferral contributions and receive
Company contributions/credits under the Retirement Savings Voluntary Plan and
Supplemental Savings Plan, until the earlier of: (i) two (2) years from the date
hereof; (ii) the Executive obtaining other employment (including consulting or
other self-employment); or (iii) the Executive's death. Except as otherwise set
forth in this paragraph 3(D), the Executive is not entitled to other pension
benefits pursuant to any other arrangements or plans established or maintained
by the Company, whether such arrangements or plans are tax-qualified or
nonqualified. Nothing herein is intended to limit the Executive's right to
participate in the Company's Employee Discount and Retiree Health programs in
accordance with the terms and conditions of those programs as they may be
amended from time-to-time.
(b) In determining the actual benefits that will be due the
Executive under the Pension and Supplemental Pension Plans pursuant to this
Agreement, the generally applicable terms of such plans shall control. The
approximate value of such benefit accruals under the Pension and Supplemental
Pension Plans, calculated throughout the two (2) year period described in
paragraph 3(D)(a)(i) above, is set forth in Exhibit B to this Agreement. In the
event the Executive's continued accrual of benefits under the Pension and
Supplemental Pension Plans cannot be effectuated by reason of governmental
interpretation (including without limitation a regulatory position, audit
position, or ruling), the Executive shall be entitled to, and the Company shall
pay, a benefit of equivalent value to the benefit that, but for such
interpretation, the Executive would have accrued under such plans pursuant to
this Agreement. Additionally, in the event the Executive's receipt of Company
contributions/credits under the Retirement Savings Voluntary Plan and
Supplemental Savings Plan cannot be effectuated by reason of governmental
interpretation (including without limitation a regulatory position, audit
position, or ruling), the Executive shall be entitled to, and the Company shall
pay, a benefit equal to the amount of Company contributions/credits that, but
for such interpretation, the Executive would have received under such plans
pursuant to this Agreement.
(c) Upon cessation of benefit accruals under the Pension and
Supplemental Pension Plans pursuant to paragraph 3(D)(a)(i) above, the Executive
shall be entitled to, and the Company shall pay, a lump-sum payment equal to the
agreed upon value of $88,733, representing payment for the difference between:
(i) the lump-sum value of the Executive's aggregate benefits under the Pension
and the Supplemental Pension Plans to which he will be entitled at that time;
and (ii) the lump-sum value of the Executive's aggregate benefits under such
plans had he been credited with an additional two (2) years of age and service
under those plans, using the same rate of salary as set forth in paragraph 3(A)
of this Agreement during the additional two (2) years.323185A01042898
(d) If benefit accruals under the Pension and Supplemental
Pension Plans cease pursuant to paragraph 3(D)(a)(ii) above, the Executive shall
be entitled to, and the Company shall pay, a lump-sum payment, to be made two
(2) years from the date hereof, equal to the agreed upon value as set forth in
Exhibit B to this Agreement, representing payment for the difference between:
(i) the lump-sum value of the Executive's benefits under the Pension and the
Supplemental Pension Plans had his benefit accruals ceased under such plans four
(4) years from the date hereof; and (ii) the lump-sum value of the benefits
under plans that the Executive will be entitled to at the time his benefit
accruals actually terminate; provided, however, that the Executive's entitlement
to such payment and the Company's obligation to make such payment shall lapse in
the event the Executive has obtained employment at a Competitor or engaged in
Solicitation prior to the date such payment is to be made.
(e) Upon cessation of benefit accruals under the Pension and
Supplemental Pension Plans pursuant to paragraph 3(D)(a)(iii) above, in addition
to any payments due under the terms of each such plan as a consequence of the
Executive's death, the Company shall pay to the Executive's surviving spouse, or
if his spouse does not survive him, to his estate, a lump-sum payment equal to
the amount set forth in paragraph 3(D)(d) above.
4. Taxes and Benefits Withholdings. Federal, state and local
tax withholdings will be made from the payments and benefits provided for in
this Agreement as may be required by law and/or in accordance with the Company's
benefit plans. The Executive shall be solely responsible for the federal, state
and local and other taxes normally paid by employees relating to these payments
and benefits.
5. Release. In consideration of the payments and benefits
provided for in this Agreement, the Executive agrees on his own behalf and on
behalf of his heirs, successors, agents, executors, administrators and assigns
(collectively, the "Releasors") to release the Company and its present and
former parent(s), subsidiaries, divisions, branches, agencies, and other offices
and its and their respective present and former successors, assigns, officers,
agents, representatives, attorneys, fiduciaries, administrators, directors,
stockholders and employees (collectively, the "Releasees") from any and all
liability to the Releasors arising from any and all acts including, but not
limited to, those arising out of the Executive's employment relationship with
the Releasees or under any contract, tort, federal, state or local fair
employment practices or civil rights law including, but not limited to, Title
VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of
1967, the Older Workers Benefit Protection Act of 1990, the Civil Rights Act of
1991, the Americans with Disabilities Act of 1990, the Civil Rights Act of 1866,
42 U.S.C. Section 1981, the Employee Retirement Income Security Act of 1974, the
Family and Medical Leave Act of 1993, the Massachusetts fair employment
practices statue or any claim for physical or emotional distress or injuries, or
any other duty or obligation of any kind or description up until the date of the
Executive's execution of this Agreement. This release shall apply to all known,
unknown, unsuspected and unanticipated claims, liens, injuries and damages,
including, but not limited to, claims of employment discrimination or claims
sounding in tort or contract. For the avoidance of doubt, this release shall not
apply to any claims the Executive may have relating to the Company's performance
of its obligations under this Agreement or under paragraphs 7 through 11 and 13
through 18 of the Employment Agreement.
6. Arbitration. Any dispute, controversy or claim between the
parties hereto arising out of or relating to this Agreement either during or
after the term thereof, shall be settled by arbitration conducted in the
Commonwealth of Massachusetts, in accordance with the Commercial Rules of the
American Arbitration Association then in force. The decision of the arbitrator
or arbitrators conducting any such arbitration proceedings shall be in writing,
shall set forth the basis therefor and such arbitrator's or arbitrators'
decision or award shall be final and binding upon the parties hereto. The
parties hereto shall abide by all awards rendered in such arbitration
proceedings, and all such awards may be enforced and executed upon in any court
having jurisdiction over the party against whom or which enforcement of such
award is sought.
7. Enforceability. It is the intention of the parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies of each state and jurisdiction in which such
enforcement is sought, but that the unenforceability (or the modification to
conform with such laws or public policies) of any provisions hereof, shall not
render unenforceable or impair the remainder of this Agreement. Accordingly, if
any provision of this Agreement shall be determined to be invalid or
unenforceable, either in whole or in part, this Agreement shall be deemed
amended to delete or modify, as necessary, the offending provisions and to alter
the balance of this Agreement in order to render the same valid and enforceable
to the fullest extent permissible.
8. Assignment and Binding Effect. This Agreement is personal
in nature and neither of the parties hereto shall, without the consent of the
other, assign or transfer this Agreement or any rights or obligations hereunder.
This Agreement and all of the provisions hereof shall be binding upon, and inure
to the benefit of, the parties hereto, and their successors (including
successors by merger, consolidation or similar transactions), permitted assigns,
executors, administrators, personal representatives, heirs and distributees.
9. Trade Secrets. The Executive shall not, at any time during
or following the period of employment, disclose, use, transfer or sell, except
in the course of such employment, any confidential information or proprietary
data of the Company and its subsidiaries so long as such information or data
remains confidential and has not been disclosed or is not otherwise in the
public domain, except as required by law or pursuant to legal process or in
connection with an administrative proceeding before a governmental agency.
10. No Conflict. The Executive and the Company each hereby
represents and warrants to the other that the execution, delivery and
performance of this Agreement by him or it (as the case may be) shall not
violate any agreement or other obligation of any kind, written or oral, to which
he or it (as the case may be) is subject.
11. Miscellaneous.
(A) Notices. All notices hereunder shall be given in writing
by personal delivery (which shall include delivery by overnight couriers such as
Federal Express) , telex, telecopy or prepaid registered or certified mail,
return receipt requested, to the addresses of the proper parties as set forth
below:
TO THE EXECUTIVE:
Clark J. Hinkley
154 Washington Street
Duxbury, Massachusetts 02332
TO THE COMPANY:
The Talbots, Inc.
175 Beal Street
Hingham, Massachusetts 02043
Attn: President
Any notice given as aforesaid shall be deemed received upon actual delivery. Any
party hereto (or any person designated to receive a copy of any notice) may
change his or its (as the case may be) designated address by notice served as
herein set forth upon the other party designated to receive notice.
(B) Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts
applicable to contracts made and to be wholly performed in that state without
regard to its conflicts of laws provisions.
(C) Headings. The paragraph headings contained in this
Agreement are for convenience of reference only and are not intended to
determine, limit or describe the scope or intent of any provision of this
Agreement.
(D) Number and Gender. Whenever in this Agreement the singular
is used, it shall include the plural if the context so requires, and whenever
the masculine gender is used in this Agreement, it shall be construed as if the
masculine, feminine or neuter gender, respectively, has been used where the
context so dictates, with the rest of the sentence being construed as if the
grammatical and terminological changes thereby rendered necessary have been
made.
(E) Entire Agreement. This Agreement contains the entire
understanding between and among the parties with respect to the Executive's
employment with the Company and, except as provided for herein, supersedes any
prior or contemporaneous understandings and agreements, written or oral, between
and among them respecting such subject matter.
(F) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but both of which taken
together shall constitute one instrument.
(G) Amendments. This Agreement may not be amended except by a
writing executed by the party against whom or which such amendment is to be
enforced.
(H) Expenses. The Company agrees that it shall pay all
reasonable legal fees and expenses incurred by the Executive in negotiating and
entering into this Agreement. In the event a dispute arises regarding the
validity, interpretation or enforcement of this Agreement or the right of the
Executive to receive or retain any benefit or payment contemplated hereby, all
legal fees and expenses incurred by the Executive in seeking to obtain, enforce
or retain any right, benefit or payment provided for in this Agreement or in
otherwise pursuing or settling any claim hereunder will be paid by the Company,
to the extent permitted by applicable law; provided, however, that, if the
Executive does not prevail at least in whole or in part in any proceeding
brought by the Executive to enforce a provision of this Agreement, the Executive
shall be responsible for the legal fees and expenses incurred by him in
connection with such proceeding.
(I) Waiver. The failure of the Executive or the Company to
insist upon strict adherence to any term of this Agreement on any occasion shall
not be considered a waiver thereof or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Agreement.
(J) Non-Disparagement. The Executives agrees not to make any
written or oral statements about the Company or its personnel that may disparage
or in any way injure the Company.
(K) Legal Process and Litigation. The Executive agrees that,
in the event that he is served with legal process or other request purporting to
require him to testify and/or produce documents at a legal proceeding involving
the Company, he will: (1) refuse to provide testimony or documents absent a
subpoena, court order or similar process from a regulatory agency; (2) within
three (3) business days or as soon thereafter as practical, provide oral
notification to the Company's Senior Vice-President/Human Resources of his
receipt of such process or request to testify or produce documents; and (3)
provide by overnight delivery a copy of all legal papers and documents served
upon him. The Executive further agrees that in the event he is served with such
process, he will meet and confer with the Company's designee(s) in advance of
giving such testimony or information. The Executive also agrees to cooperate
fully with the Company in connection with any existing or future litigation
against the Company, whether administrative, civil or criminal in nature, in
which and to the extent the Company deems the Executive's cooperation necessary.
The Company agrees to reimburse the Executive for the Executive's reasonable
out-of-pocket expenses incurred in connection with the performance of the
Executive's obligations under this paragraph 11(K).
(L) Confidentiality. The Executive agrees that to the maximum
extent permitted by law, neither he nor anyone acting on his behalf will discuss
or disclose the terms, contents or execution of this Agreement or the facts and
circumstances underlying it, except in the following circumstances: (1) to his
immediate family provided the person (s) to whom the information is to be
disclosed are informed of this paragraph and agree to be bound by it; (2) to the
extent necessary (a) to his accountant or bona fide tax advisors provided such
persons agree in writing to be bound by this paragraph, (b) to taxing
authorities, if requested by such authorities and so long as they are advised in
writing of the confidential nature of the Agreement, or (c) to his legal
counsel; (3) pursuant to subpoena or court order after notice as provided in
paragraph 11(K) above; or (4) in a legal proceeding concerning the enforcement
or interpretation of the provisions of this Agreement.
(M) Indemnification. The Company shall indemnify, defend and
hold the Executive harmless, to the maximum extent permitted by law, against all
judgments, fines, amounts paid in settlement and all reasonable expenses,
including attorneys' fees incurred by the Executive, in connection with the
defense of, or as a result of any action or proceeding (or any appeal from any
action or proceeding) in which the Executive is made or is threatened to be
made a party by reason of the fact that the Executive is or was an employee of
the Company under this Agreement, regardless of whether such action or
proceeding is one brought by or in the right of the Company to procure a
judgment in its favor (or other than by or in the right of the Company). Each of
the parties hereto shall give prompt notice to the other of any action or
proceeding from which the Company is obligated to indemnify, defend or hold
harmless the Executive of which it or he (as the case may be) gains knowledge.
The Executive agrees that the Company shall have the right, in its sole
discretion, to select the Executive's counsel in any action or proceeding
covered by this paragraph 11(M) and to adjust, compromise or settle any such
action or proceeding. The Company and the Executive agree that the foregoing
indemnity shall apply to actions or proceedings involving facts alleged to have
occurred from the date hereof until the first to occur of the events described
in paragraph 2 above. The Executive agrees that this indemnity shall not apply
to any action or proceeding in which it is alleged that the Executive engaged in
conduct in violation of the securities laws of the U.S. or any other
jurisdiction with respect to any transaction involving the Company's common
stock.
(N) Right to Counsel and Effective Date. The Executive hereby
acknowledges that he has up to twenty-one (21) days from the date he receives
this Agreement within which to consider its terms, and that he has been advised
that during such period he should consult an attorney regarding its terms. The
Executive further acknowledges that his signature below indicates that he is
entering into this Agreement freely, knowingly and voluntarily with a full
understanding of its terms. Further, the terms of this Agreement shall not
become effective or enforceable until seven (7) days following the date of its
execution by the Executive, during which time he may revoke the Agreement by so
notifying the Company in writing.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
CLARK J. HINKLEY THE TALBOTS, INC.
/s/ Clark J. Hinkley By:/s/ Arnold B. Zetcher
- ------------------------------ --------------------------------------
Clark J. Hinkley Name: Arnold B. Zetcher
Title: President and CEO
