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Exhibit 10.2
REVOLVING CREDIT AGREEMENT
     REVOLVING CREDIT AGREEMENT, dated as of December 30, 2008 (as the same may
be amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), between THE TALBOTS, INC., a corporation duly organized and validly
existing under the laws of the State of Delaware (the “Borrower”), and SUMITOMO
MITSUI BANKING CORPORATION (together with its successors and assigns, the
“Lender”).
     WHEREAS, the Borrower desires to borrow, and the Lender agrees to extend,
revolving credit loans to the Borrower during the period from and after the
Closing Date (as hereafter defined) in accordance with the terms and conditions
of this Credit Agreement.
     NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:
     1. Definitions. As used in this Credit Agreement, unless otherwise defined
herein, the following terms shall have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of the terms
defined):
     “Affiliate” shall mean, as to any Person, any corporation or other entity
that, directly or indirectly, controls, is controlled by or is under common
control with such Person. For purposes of this definition, the term “control”
(including “controlling,” “controlled by” and “under common control with”) of a
Person means the possession, direct or indirect, of the power to vote 10% or
more of the voting stock of such Person or to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting stock, by contract or otherwise.
     “Applicable Spread” shall mean a percentage determined by the Lender in its
sole discretion upon at the time of each borrowing of Revolving Loans; provided
that the Applicable Spread shall not be lower than 0.625% and shall not be
higher than 1.30%.
     “Base Rate” shall mean the rate, as determined by the Lender on a daily
basis, equal to the higher of (i) the rate per annum established by the Lender
from time to time as the reference rate for short-term commercial loans in
Dollars to domestic corporate borrowers (which the Borrower acknowledges is not
necessarily Lender’s lowest rate), and (ii) the overnight cost of funds of
Lender as determined solely by Lender plus 1/4 of 1% per annum.
     “Borrower” is defined in the preamble of this Credit Agreement.
     “Borrowing Date” shall mean the date on which a Revolving Loan is made by
the Lender in favor of the Borrower.
     “Business Day” shall mean any day other than a Saturday, Sunday or other
day on which commercial banks are required or authorized to be closed in New
York, New York.

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     “Capitalized Lease Obligations” shall mean obligations for the payment of
rent for any real or personal property under leases or agreements to lease that,
in accordance with GAAP, have been or should be capitalized on the books of the
lessee and, for purposes hereof, the amount of any such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
     “Closing Date” shall mean December 31, 2008, or such other date on which
the conditions precedent set forth in Section 5 hereof have been satisfied in
full or waived in accordance with the terms hereof.
     “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations and published interpretations thereof.
     “Commitment Fee” is defined in Section 2.9 hereof.
     “Commonly Controlled Entity” shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 414(b) or 414(c) of the Code.
     “Cost of Funds Rate” shall mean, with respect to each Interest Period, the
rate per annum determined by the Lender to be its effective cost of funding in
Dollars the applicable Revolving Loan for such Interest Period.
     “Default” means any event or circumstance that, with the giving of notice,
the lapse of time or both, would constitute an Event of Default.
     “Dollars” and the symbol “$” shall mean dollars in the lawful money of the
United States of America.
     “Environmental Action” shall mean any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication from any Governmental
Authority or any third party involving violations of Environmental Laws or
releases of Hazardous Materials (i) from any assets, properties or businesses of
the Borrower or any of its Subsidiaries or any predecessor in interest,
(ii) from properties or businesses adjoining any properties or businesses of the
Borrower or any of its Subsidiaries or any predecessor in interest, or
(iii) from or onto any facilities which received Hazardous Materials generated
by the Borrower or any of its Subsidiaries or any predecessor in interest.
     “Environmental Law” shall mean any present or future statute, ordinance,
rule, regulation, order, judgment, decree, permit, license or other binding
determination of any Governmental Authority imposing liability or establishing
standards of conduct for protection of the environment as the same may be
amended or supplemented from time to time.

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     “Environmental Liabilities and Costs” shall mean all liabilities, monetary
obligations, remedial actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigation and feasibility studies), fines, penalties, sanctions and interest
incurred as a result of (i) any claim or demand by any Governmental Authority or
any third party which relates to any environmental condition or a release of
Hazardous Materials, or (ii) any breach by the Borrower or any of its
Subsidiaries of any Environmental Law.
     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations and published
interpretations thereof.
     “Event of Default” is defined in Section 6 hereof.
     “FAX” is defined in Section 8.6 hereof.
     “GAAP” shall mean generally accepted accounting principles in the United
States consistent with those utilized in preparing the audited financial
statements referred to in Section 4(a) hereof.
     “Governmental Authority” shall mean any nation or government, any state or
other political subdivision thereof and any department, commission, board,
bureau, instrumentality, agency or other entity exercising legislative,
judicial, regulatory or administrative functions of, or pertaining to,
government.
     “Hazardous Materials” shall mean (a) petroleum and petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas, and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
     “Hedge Agreements” shall mean any interest rate, commodity or equity swap,
cap, floor or forward rate agreement or collar arrangements, interest rate
future or option contracts, currency swap agreements, currency future or option
contracts and other similar agreements or arrangements designed to protect
against fluctuations in interest rates or currency, commodity or equity values,
and any confirmation executed in connection with any such agreement or
arrangement.
     “Indebtedness” shall mean with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money, (ii) all obligations of
such Person for the deferred purchase price of assets or services which in
accordance with GAAP would be shown on the liability side of the balance sheet
of such Person, (iii) all obligations of such Person under or evidenced by
bonds, debentures, notes or other similar instruments or upon which interest
payments are customarily made, (iv) all obligations and liabilities secured by
any Lien on any property owned by such Person whether or not owing by such
Person and even though such Person has not assumed or become liable for payment
thereof, (v) all Capitalized Lease Obligations of such Person, (vi) all
obligations and liabilities of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
used and/or acquired by such Person, even though the rights and remedies of the
lessor, seller and/or lender thereunder are limited to repossession or sale of
such property, or agreements to pay a specified purchase price for goods or
services whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vii) all contingent obligations of such Person, including, without
limitation, the net liabilities of such Person under any Hedge Agreements, as
calculated on a basis satisfactory to the Lender and in accordance with accepted
practice, (viii) all indebtedness of others referred in this definition
guaranteed directly or indirectly in any manner by such Person, and (ix) all
obligations referred to in clauses (i) through (ix) of this definition of
another Person secured by (or for which the holder of such indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
any property owned by such Person; provided, however, that the term Indebtedness
shall not include trade payables and accrued expenses, in each case arising in
the ordinary course of business and not more than 60 days delinquent. The
Indebtedness of any Person shall include the Indebtedness of any partnership of
which such Person is a general partner and any joint venture to which such
Person is a party.

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     “Interest Period” shall mean, with respect to any Revolving Loan, such
period as is mutually agreed upon by the Borrower and the Lender; provided,
however, that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (ii) no
Interest Period shall be longer than six (6) months, and (iii) no Interest
Period shall end after the Maturity Date and any Interest Period which would,
but for this clause, end after the Maturity Date shall instead end on the
Maturity Date, and shall be subject to the payment of all break-funding and
other losses, costs and expenses incurred as a result thereof.
     “Lender” is defined in the preamble of this Credit Agreement.
     “Lien” shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien (statutory or otherwise), security
interest, charge or other encumbrance or security or preferential arrangement of
any nature whatsoever.
     “Loan Account” is defined in Section 2.7 hereof.
     “Loan Documents” shall mean each of this Credit Agreement, the Note, and
each other document, instrument and agreement executed and delivered pursuant to
or in connection herewith or therewith, as the same may be amended, supplemented
or otherwise modified from time to time.
     “Material Adverse Effect” shall mean a material adverse effect on any of
(a) the operations, business, assets, properties, prospects or condition
(financial or otherwise) of the Borrower, (b) the ability of the Borrower to
perform any of its obligations hereunder, under the Note or under any other Loan
Document to which it is a party, (c) the legality, validity or enforceability of
this Credit Agreement, the Note or any other Loan Document, or (d) the rights
and remedies of the Lender hereunder or under any other Loan Document.

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     “Maturity Date” shall mean the Business Day immediately following the
Revolving Credit Termination Date, or such earlier date on which the Revolving
Loans are due and payable (whether at stated maturity, by mandatory prepayment,
by acceleration or otherwise) in accordance with the terms hereof.
     “Multiemployer Plan” shall mean a Plan described in Section 4001(a)(3) of
ERISA.
     “Note” shall mean the promissory note of the Borrower evidencing the
Revolving Loans, payable to the order of the Lender, substantially in the form
of Exhibit A hereto, as the same may be amended, supplemented or otherwise
modified from time to time, or any substitute therefor.
     “Notice of Borrowing” is defined in Section 2.1.2 hereof.
     “Other Taxes” is defined in Section 7.2(b) hereof.
     “Parent” shall mean AEON (U.S.A.), Inc.
     “PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
     “Person” shall mean an individual, corporation, partnership, limited
liability company or partnership, association, joint-stock company, trust,
unincorporated organization, joint venture, Governmental Authority or other
entity.
     “Plan” shall mean any pension plan that is covered by Title IV of ERISA and
in respect of which the Borrower or a Commonly Controlled Entity is an
“employer” as defined in Section 3(5) of ERISA.
     “Prohibited Transaction” shall mean any transaction set forth in
Section 406 of ERISA or Section 4975 of the Code.
     “Release” shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the outdoor or indoor environment.
     “Reportable Event” shall mean any of the events set forth in Section 4043
of ERISA.
     “Revolving Credit Termination Date” shall mean December 31, 2009, as such
date may be extended in the manner provided in Section 2.5(d) hereof, or such
earlier date on which the Revolving Loan Commitment is terminated in full
hereunder and the commitment of the Lender to make Revolving Loans hereunder has
been terminated or otherwise cancelled.
     “Revolving Loan” is defined in Section 2.1.1 hereof.
     “Revolving Loan Commitment” is defined in Section 2.1.1 hereof.

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     “Solvent” shall mean, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person is not less than
the total amount of its liabilities of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its existing debts as
they become absolute and matured, (c) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person’s
property would constitute unreasonably small capital.
     “Subsidiary” shall mean, as to any Person, any corporation or other entity
of which capital stock or other ownership interests having (in the absence of
contingencies) ordinary voting power to elect at least a majority of the board
of directors (or persons performing similar functions) of such corporation or
other entity is, at the time of determination, owned directly, or indirectly
through one or more intermediaries, by such Person.
     “Taxes” is defined in Section 7.2(a) hereof.
     “Ultimate Parent” shall mean AEON Co., Ltd., a Japanese corporation.
     “USA Patriot Act” is defined in Section 3(r) hereof.
     2. The Revolving Loans.
     2.1.1. The Revolving Loan Commitment. On the terms and subject to the
conditions of this Credit Agreement, the Lender agrees, from time to time on any
Business Day during the period commencing on the Closing Date up to but
excluding the Revolving Credit Termination Date, to make revolving loans (the
“Revolving Loans”) to the Borrower in an aggregate principal amount not to
exceed $50,000,000 at any time outstanding (the “Revolving Loan Commitment”).
The Revolving Loan Commitment shall be subject to extension, reduction and/or
termination as herein provided (including, without limitation, pursuant to
Sections 2.5 and 6.2 hereof). On the terms and subject to the conditions hereof,
the Borrower may from time to time borrow, prepay, and re-borrow the Revolving
Loans. Each Revolving Loan shall be denominated in Dollars and shall be in a
principal amount equal to $100,000 or an integral multiple of $100,000 in excess
thereof. On the Revolving Credit Termination Date the Revolving Loan Commitment
shall terminate and the Lender shall have no obligation whatsoever to make any
further Revolving Loans to the Borrower.
     2.1.2. Making the Revolving Loans. Each Revolving Loan shall be made upon
written notice, in form and substance satisfactory to the Lender (a “Notice of
Borrowing”), given by the Borrower to the Lender no later than 11:00 a.m. (New
York City time) on the proposed Borrowing Date thereof. Each Notice of Borrowing
shall be irrevocable and shall specify (A) the proposed Borrowing Date, which
shall be a Business Day, (B) the principal amount of the requested Revolving
Loan and (C) the duration of the initial Interest Period. Upon fulfillment of
the applicable conditions set forth in Section 5 hereof (or the waiver thereof
by the Lender as herein prescribed), the Lender will make the proceeds of such
Revolving Loan available to the Borrower in same day funds to the Borrower’s
account with the Lender maintained at the Lender’s New York Branch, or at such
other place as the Lender shall designate in writing to the Borrower. The Lender
shall notify the Borrower of the Applicable Spread with respect to such
Revolving Loan on or prior to the commencement of the first Interest Period with
respect to such Revolving Loan; provided that the Lender’s failure to notify the
Borrower of the Applicable Spread shall not affect the validity of such
Revolving Loan or any obligations of the Borrower hereunder or under any Loan
Document.

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     2.2. Interest.
          (a) Each Revolving Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the sum of
(i) the Cost of Funds Rate and (ii) the Applicable Spread.
          (b) Subject to Section 2.4 hereof, interest on each Revolving Loan
shall be payable, in arrears, (i) on the last day of each Interest Period,
(ii) on the date on which the principal amount of such Revolving Loan becomes
due and payable hereunder (whether at stated maturity, by mandatory prepayment,
optional prepayment by acceleration or otherwise), and (iii) in the case of any
Interest Period which is longer than three (3) months, on each successive date
three (3) months after the first day of such Interest Period.
          (c) Notwithstanding anything herein to the contrary, all accrued
interest shall be payable on each date principal is payable hereunder pursuant
to Sections 2.3 and 2.5 hereof or such earlier date as herein required.
          (d) Interest shall accrue from and including the first day of an
Interest Period to but excluding the last day of such Interest Period.
     2.3. Principal Repayment; Note. (a) The Borrower shall repay the
outstanding principal balance of all outstanding Revolving Loans together with
all other outstanding amounts due and owing hereunder or under the other Loan
Documents on the Maturity Date.
          (b) The Borrower’s obligations to the Lender with respect to the
payment of interest and principal with respect to the Revolving Loans shall be
evidenced by this Credit Agreement and the Note. The Lender is hereby authorized
by the Borrower to endorse on the schedule attached to the Note (or on a
continuation of such schedule attached to the Note and made a part thereof, or
any similar form designated by the Lender in its sole and absolute discretion
from time to time, which may be maintained in its internal records and shown on
a computer printout) an appropriate notation evidencing the date and amount of
each Revolving Loan, the date and amount of each principal payment and
prepayment with respect thereto and the interest rate applicable thereto;
provided, however, that the failure of the Lender to make any such notation (or
any error in such notation) shall not affect any obligations of the Borrower
hereunder or under the Note. The Note and the books and records of the Lender
shall be conclusive evidence of the information set forth therein absent
manifest error.

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     2.4. Default Interest. Any principal, interest or other amount which is not
paid when due, whether at stated maturity, by mandatory prepayment, by
acceleration or otherwise, shall bear interest from the day when due until such
principal, interest or other amount is paid in full, payable on demand, at a
rate equal at all times to the Base Rate plus 2% per annum.
     2.5. Termination, Reduction or Extension of Revolving Loan Commitment;
Prepayment.
          (a) The Borrower shall have the right at any time or from time to
time, without premium or penalty, upon not less than three (3) Business Days’
prior irrevocable written notice to the Lender, to terminate or reduce the
Revolving Loan Commitment. Any such reduction of the Revolving Loan Commitment
shall be in an amount equal to $100,000 or an integral multiple of $100,000 in
excess thereof. Any termination or reduction of the Revolving Loan Commitment
shall be permanent.
          (b) Prepayment. Upon three (3) Business Days’ prior irrevocable
written notice by the Borrower received by the Lender, the Borrower may (and if
such notice is given, shall), without penalty or premium, prepay all or any
portion of the principal amount outstanding of any Revolving Loans on the last
day of any Interest Period; provided, however, that (i) prepayments of Revolving
Loans prior to the Maturity Date shall not reduce the Revolving Loan Commitment;
(ii) any partial prepayment shall be in a principal amount equal to $100,000 or
an integral multiple of $100,000 in excess thereof; and (iii) prepayment is
accompanied by the payment of (x) accrued interest to the date of such
prepayment on the amount prepaid, (y) any and all payments required pursuant to
Section 7.1(d) hereof in respect of such prepayment, and (z) any other amounts
then due and owing hereunder.
          (c) If the Borrower receives notice from the Lender that the aggregate
principal amount of all Revolving Loans outstanding hereunder exceeds at any
time $50,000,000, the Borrower shall prepay Revolving Loans, together with all
accrued interest thereon and any amounts due under Section 7.1(d) hereof, as
necessary to eliminate such excess within two (2) Business Days after receipt of
such notice.
          (d) The Revolving Credit Termination Date may be extended any number
of times as follows:
          (i) The Borrower shall give the Lender an irrevocable written request
substantially in the form of Exhibit C hereto at least 30 days before the
Revolving Credit Termination Date then in effect.
          (ii) Upon receipt of such request the Lender shall consider and
determine whether to grant such request and shall give a written notice of its
decision on or prior to the day two weeks before the Revolving Credit
Termination Date then in effect.

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          (iii) In the event the Lender grants the Borrower’s request the
Revolving Credit Termination Date then in effect shall be extended for one year.
Otherwise the Revolving Credit Termination Date shall remain unchanged.
     2.6. Method of Payment.
          (a) All sums payable by the Borrower to the Lender hereunder or under
the Note shall be payable in New York, New York, in Dollars, in immediately
available funds and without any defense, set-off or counterclaim no later than
12:00 noon (New York time) on the day when due, for the account of and as
directed by the Lender. Any payments made after 12:00 noon (New York time) on
any day shall be deemed to have made on the immediately following Business Day.
          (b) Any payments shall be applied first to default charges,
indemnities, expenses and other non-principal and interest amounts owed under
any of the Loan Documents, if any, then to interest due and payable on the
Revolving Loans, and thereafter to the principal amount of the Revolving Loans
due and payable.
          (c) All computations of interest and fees shall be made by the Lender
on the basis of a year of 360 days for the actual number of days elapsed during
the period for which such amount is payable (including the first day but
excluding the last day); provided, however, that if a Revolving Loan is repaid
on the Borrowing Date thereof, one day’s interest shall be paid on such
Revolving Loan. Each change in the Base Rate shall immediately and
simultaneously result in a corresponding change in the Default Rate.
          (d) Whenever any payment to be made hereunder or under the Note or any
other instrument delivered hereunder shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of the payment of interest; provided, however, that if such
extension would cause such payment to be made in the next calendar month or
beyond the Maturity Date, such payment shall be made on the next preceding
Business Day or on the Maturity Date, as applicable.
          (e) The Borrower hereby authorizes the Lender, if and to the extent
payment is not made when due under any Loan Document, to charge from time to
time against any account of the Borrower with the Lender or any of its
affiliates any amount so due. The Lender agrees to promptly notify the Borrower
of any such charge made by the Lender; provided, however, that the Lender shall
incur no liability for failing to do so and the failure of the Lender to so
notify the Borrower shall in no event diminish the Lender’s right to make such
charge under this Section 2.6(e).
     2.7. Loan Account. The Lender maintains on its books a loan account in the
Borrower’s name (the “Loan Account”), showing the Revolving Loans, prepayments,
the computation and payment of interest, and any other amounts due and sums paid
hereunder and under the other Loan Documents. The entries made by the Lender in
the Loan Account shall be conclusive and binding on the Borrower and the Lender
as to the amount at any time due from the Borrower, absent manifest error.

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     2.8. Use of Proceeds. The Borrower shall apply the proceeds of the
Revolving Loans towards working capital; provided, however, that no proceeds of
any of the Revolving Loans may be used to acquire or carry any equity security
of a class which is registered pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended and as in effect from time to time, or any “Margin
Stock”, as defined in Federal Reserve Board Regulation U or otherwise be used in
a manner which would violate or be inconsistent with Section 7 of the Securities
Exchange Act of 1934, as amended and as in effect from time to time, or any
regulations issued pursuant thereto, or any regulations issued pursuant thereto
or the provisions of the regulations of the Federal Reserve Board or any
Governmental Authority.
     2.9. Commitment Fee. The Borrower shall pay to the Lender on the last
Business Day of each June and December while the Revolving Loan Commitment is in
effect, commencing on June 30, 2009, a non-refundable commitment fee in arrears
in an amount equal to 0.3125% per annum of the average daily unadvanced amount
of the Revolving Loan Commitment from time to time in effect from (and
including) the date hereof to (but excluding) the Maturity Date.
     3. Representations and Warranties. The Borrower hereby represents and
warrants to the Lender as follows:
          (a) Organization of Borrower. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
          (b) Power and Authority. The Borrower has full legal right, power and
authority to carry on its present business, to own its property and assets and
to execute, deliver and perform this Credit Agreement, the Note and each other
Loan Document to which it is a party. The Borrower is duly qualified or licensed
as a foreign corporation authorized to conduct its activities and is in good
standing in all jurisdictions in which the character of the properties owned or
leased by it or the nature of the activities conducted by it makes such
qualification or licensing necessary except where the failure to be so qualified
or licensed could not reasonably be expected to have a Material Adverse Effect.
          (c) Authorization of Borrowing. All appropriate and necessary
corporate, shareholder and other actions and approvals (including any
governmental or regulatory approvals) have been taken or obtained by the
Borrower to authorize the execution and delivery of this Credit Agreement, the
Note and the other Loan Documents to which it is a party and to authorize the
performance and observance of the terms of each.
          (d) Agreement Binding; No Conflicts. This Credit Agreement
constitutes, and the Note and each other Loan Document when executed and
delivered pursuant hereto will constitute, the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws and general equity
principles affecting the enforcement of creditor’s rights generally. The
execution, delivery and performance of this Credit Agreement, the Note and each
other Loan Document to which the Borrower is a party and the use of the proceeds
of any Revolving Loan do not and will not (i) violate or conflict with any
provisions of law or any order, rule, directive or regulation of any court or
other Governmental Authority, the charter, by-laws or other organizational
documents of the Borrower or any agreement, document or instrument to which the
Borrower is a party or by which its assets or properties are bound,
(ii) constitute a default or an event or circumstance that, with the giving of
notice or the passing of time, or both, would constitute a default under any
such agreement, document or instrument, (iii) result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
assets or properties of the Borrower, or (iv) result in any suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to its operations or any of its properties.

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          (e) Compliance with Law. The Borrower is not in conflict with or
violation or breach of any law or any regulation, order, writ, injunction or
decree of any court or other Governmental Authority.
          (f) Taxes. The Borrower has filed all tax returns (federal, state and
local) required to be filed and has paid all taxes, assessments, fees and other
governmental charges due by the Borrower with respect to the conduct of its
operations or otherwise the failure of which could reasonably be expected to
have a Material Adverse Effect.
          (g) Governmental Consents. No consent, approval, authorization or
order of, notice to or declaration or filing with, any administrative body or
agency or other Governmental Authority on the part of the Borrower is required
for the valid execution, delivery and performance by the Borrower of this Credit
Agreement, the Note or any other Loan Document to which the Borrower is a party.
          (h) Litigation. There are no pending or, to the knowledge of the
Borrower, threatened legal actions, suits, claims or administrative, arbitration
or other proceedings against the Borrower that, either individually or in the
aggregate, if adversely determined, could reasonably be expected to have a
Material Adverse Effect, or result in a Default or an Event of Default.
          (i) Other Obligations. The Borrower is not in default in any material
respect in the performance, observance or fulfillment of any obligation,
covenant or condition in any agreement, document or instrument to which it is a
party or by which it is bound which could be reasonably likely to result in a
Material Adverse Effect.
          (j) Financial Information. (i) All financial information provided to
the Lender by or on behalf of the Borrower and its Subsidiaries has been
prepared in accordance with GAAP and fairly presents, in accordance with GAAP
consistently applied, the consolidated financial condition of the Borrower and
its Subsidiaries as at the respective dates thereof and the consolidated results
of operations of the Borrower and its Subsidiaries for the fiscal periods ended
on such respective dates. Except as fully disclosed in such financial
information, there were no liabilities or obligations with respect to the
Borrower of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
could reasonably be expected to have a Material Adverse Effect on the Borrower.

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          (ii) Since February 2, 2008, there has been no material adverse change
in the operations, condition (financial or otherwise), business, assets or
prospects of the Borrower and its Subsidiaries, taken as a whole, or of the
Borrower or any of its Subsidiaries, on an individual basis.
          (k) Accuracy of Information. All factual information heretofore or
contemporaneously furnished by or on behalf of the Borrower to the Lender for
purposes of, or in connection with, this Credit Agreement, any other Loan
Document or any transaction contemplated hereby or thereby (true and complete
copies of which were furnished to the Lender in connection with its execution
and delivery hereof) is, and all other factual information hereafter furnished
by or on behalf of the Borrower to the Lender will be, true and accurate in
every material respect on the date as of which such information is dated or
certified and, in respect of such information heretofore or contemporaneously
furnished to the Lender, as of the date of the execution and delivery of this
Credit Agreement by the Lender, and such information is not, or shall not be, as
the case may be, incomplete by omitting to state any material fact necessary to
make such information not misleading.
          (l) Seniority. The obligations of the Borrower under this Credit
Agreement and the other Loan Documents to which it is a party rank, and at all
times shall rank, at least pari passu in priority of payment and in all other
respects with all other unsecured and unsubordinated Indebtedness of the
Borrower.
          (m) Investment Company Acts. Neither the Borrower nor any of its
Subsidiaries is an “investment company” or an “affiliated person” or “promoter”
of, or “principal underwriter” of or for, an “investment company”, as such terms
are defined in the Investment Company Act of 1940, as amended.
          (n) Permits, Etc. The Borrower has all permits, consents, licenses,
authorizations, approvals, entitlements and accreditations required for it
lawfully to own, lease, manage or operate, or to acquire each business currently
owned, leased, managed or operated, or to be acquired, by it. No condition
exists or event has occurred which, in itself or with the giving of notice or
lapse of time or both, would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such permit, consent, license, authorization,
approval, entitlement or accreditation and which could reasonably be expected to
have a Material Adverse Effect, and there is no claim that any such permit,
consent, license, authorization, approval, entitlement or accreditation is not
in full force and effect.
          (o) Environmental Matters. Except to the extent not reasonably
expected to result in a Material Adverse Effect or a Default or Event of
Default, (i) none of the operations of the Borrower or any of its Subsidiaries
violates any Environmental Law, (ii) no Environmental Action has been asserted
against the Borrower or any of its Subsidiaries in writing nor does the Borrower
have any knowledge of any threatened or pending Environmental Action against the
Borrower, any of its Subsidiaries or any predecessor in interest, (iii) neither
the Borrower nor any of its Subsidiaries has incurred any Environmental
Liabilities and Costs, and (iv) to the Borrower’s knowledge, neither the
Borrower nor any of its Subsidiaries has any contingent liability in connection
with any release of any Hazardous Material into the environment.

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          (p) ERISA. The Borrower and each of its Subsidiaries are in compliance
in all material respects with all applicable provisions of ERISA. Neither a
Reportable Event nor a Prohibited Transaction has occurred and is continuing
with respect to any Plan; no notice of intent to terminate a Plan has been
filed, nor has any Plan been terminated; no circumstances exist which constitute
grounds entitling the PBGC to institute proceedings to terminate, or appoint a
trustee to administer, a Plan, nor has the PBGC instituted any such proceedings;
neither the Borrower nor any Commonly Controlled Entity has completely or
partially withdrawn from a Multiemployer Plan; the Borrower and each Commonly
Controlled Entity have met their minimum funding requirements under ERISA with
respect to all of their Plans; and neither the Borrower nor any Commonly
Controlled Entity has incurred any liability to the PBGC under ERISA.
          (q) Solvency. The Borrower and its Subsidiaries, on both an individual
and a consolidated basis, are Solvent and will be Solvent after giving effect to
the transactions contemplated by this Credit Agreement and the other Loan
Documents.
          (r) USA PATRIOT Act Compliance. The Borrower shall, and shall cause
each of its Subsidiaries and Affiliates to, provide such information and take
such actions as are reasonably requested by the Lender in order to assist the
Lender in maintaining compliance with the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 or similar laws and the rules and regulations promulgated thereunder, in
each case, as the same may be in effect from time to time (the “USA Patriot
Act”).
     4. Covenants. The Borrower hereby covenants to the Lender that during the
term of this Credit Agreement or so long as (i) any amounts owed hereunder or
under any other Loan Document are outstanding, or (ii) the Revolving Loan
Commitment has not been permanently reduced to zero, the Borrower shall perform
the following obligations, unless otherwise agreed by the Lender:
          (a) Financial Statements. The Borrower shall deliver to the Lender as
soon as available and in any event within one hundred and twenty (120) days
after the end of each fiscal year of the Borrower a consolidated balance sheet
as of the end of such fiscal year and the related statements of income, expenses
and cash flows of the Borrower and its Subsidiaries, setting forth in
comparative form the corresponding figures from the immediately preceding fiscal
year of the Borrower which shall be in reasonable detail and shall be audited by
independent certified public accountants selected by the Borrower and reasonably
satisfactory to the Lender, and as to which such accountants shall have
expressed a written opinion that such statements fairly present the financial
position of the Borrower and its Subsidiaries for the period then ended and have
been prepared in accordance with GAAP consistently applied, and that the
examination of such accounts was made in accordance with generally accepted
auditing standards, as in effect from time to time, and accordingly included
such tests of the accounting records and such other auditing procedures as were
considered necessary under the circumstances.

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          (b) Proxy Statements, etc. Promptly after the sending or filing
thereof, the Borrower shall deliver to the Lender copies of all proxy
statements, financial statements, and reports which the Borrower sends to its
stockholders, and copies of all regular, periodic, and special reports, and all
registration statements which the Borrower files with the Securities and
Exchange Commission or any other Governmental Authority which may be substituted
therefor, or with any national securities exchange.
          (c) ERISA Reports. As soon as possible, and in any event within thirty
(30) days after the Borrower knows or has reason to know that any circumstances
exist that constitute grounds entitling the PBGC to institute proceedings to
terminate a Plan subject to ERISA with respect to the Borrower or any Commonly
Controlled Entity, and promptly but in any event within two (2) Business Days of
receipt by the Borrower or any Commonly Controlled Entity of notice that the
PBGC intends to terminate a Plan or appoint a trustee to administer the same,
and promptly but in any event within five (5) Business Days of the receipt of
notice concerning the imposition of withdrawal liability in excess of $250,000
with respect to the Borrower or any Commonly Controlled Entity, the Borrower
will deliver to the Lender a certificate of the chief financial officer of the
Borrower setting forth all relevant details and the action which the Borrower
proposes to take with respect thereto.
          (d) Additional Information. The Borrower shall make available and
provide to the Lender such further information and documents concerning its
business and affairs including, without limitation, budgets and business plans
of the Borrower and its Subsidiaries as the Lender may from time to time
reasonably request.
          (e) Notices. The Borrower shall promptly notify the Lender of:
          (i) any investigation by, or proceeding in or before, any court,
arbitrator, administrative body or agency or other Governmental Authority (other
than routine inquiries by a governmental agency), including, without limitation,
any Environmental Action which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect, a Default or an
Event of Default and, upon request, provide the Lender with all material
documents and information furnished by the Borrower in connection therewith;
          (ii) the occurrence of any Default or Event of Default or any other
development which could reasonably be expected to result in a Material Adverse
Effect, which notice shall be provided to the Lender as soon as possible, but in
no event later than five (5) days after the Borrower becomes aware of the same
and shall include a statement as to what action the Borrower has taken and/or
proposes to take with respect thereto; and
          (iii) any change in the Borrower’s key management personnel, including
without limitation, its President, Controller or Treasurer.
          (f) Compliance with Laws, Etc. The Borrower shall comply in all
material respects with the requirements of all applicable laws and maintain and
preserve its corporate existence, rights and privileges.

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          (g) Books and Records. The Borrower shall keep and maintain adequate
records and books of account, with complete entries made in accordance with
GAAP, consistently applied.
          (h) Inspection Rights. The Borrower shall permit the Lender or any
agents and representatives of the Lender at any time and from time to time
during reasonable business hours and, so long as no Default or Event of Default
has occurred and is continuing, on reasonable prior notice to the Borrower, to
examine and make copies of and abstracts from its records and books of account,
to visit and inspect its properties, to conduct audits and make examinations and
discuss its affairs, finances, prospects, accounts and such other matters as it
reasonably requests, including, without limitation, any event or circumstance
which may result in a Material Adverse Effect, with any of its directors,
officers, employees, accountants or other professional advisors or
representatives (collectively, the “Financial Persons”). This provision shall
serve as an authorization and direction by the Borrower to all such Financial
Persons to reasonably cooperate with the Lender in connection with any such
inquiry or examination on the part of the Lender or its representatives.
          (i) Insurance. The Borrower shall maintain and cause each of its
Subsidiaries to maintain (in each case in the Borrower’s name or in the name of
such Subsidiary, as the case may be), with responsible, financially sound and
reputable insurance companies insurance with respect to its properties and
business against such casualties and contingencies and of such types and in such
amounts as is customary in the case of similar businesses.
          (j) Taxes. The Borrower shall pay and discharge all taxes,
assessments, levies and governmental charges upon it or against any of its
properties, assets or income prior to the date after which penalties attach for
failure to pay except to the extent that (i) the Borrower shall be contesting in
good faith its obligation to pay such taxes, assessments, levies and charges and
the Borrower has adequately accrued for such payments, or (ii) the failure to
pay such taxes shall not have a Material Adverse Effect or result in any Default
or Event of Default.
          (k) Further Assurances. The Borrower shall do, execute, acknowledge
and deliver at the sole cost and expense of the Borrower, all documents,
instruments and agreements and take such further acts and deeds as the Lender
may reasonably require from time to time to carry out the intention or
facilitate the performance of the terms of this Credit Agreement or any other
Loan Document.
          (l) Merger, Consolidation, etc. The Borrower shall not:
          (i) merge, consolidate or amalgamate with or into any other Person
unless: (A) the Borrower is the surviving entity, (B) the Borrower provides the
Lender with at least 20 days (calendar days) prior written notice thereof,
(C) the documentation in connection therewith is reasonably satisfactory in form
and substance to the Lender, (D) the Borrower provides the Lender with such
documents, certificates and opinions as the Lender may reasonably request, in
form and substance reasonably satisfactory to the Lender, including, without
limitation, a legal opinion given by counsel reasonably satisfactory to the
Lender regarding the legal, valid and binding nature of the Loan Documents and
the enforceability thereof and such other matters as the Lender may reasonably
request, and (E) no Default or Event of Default shall occur and be continuing
both immediately before and immediately after such merger, consolidation or
amalgamation, and no Material Adverse Effect may result;

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          (ii) dissolve, wind-up or liquidate;
          (iii) purchase or otherwise acquire all or substantially all of the
assets, liabilities or properties of any other Person to the extent a Material
Adverse Effect or any Default or Event of Default may result; or
          (iv) sell, lease, transfer or otherwise dispose of all or
substantially all of its assets or properties whether in any single transaction
or one or more transactions in the aggregate.
          (m) Change in Nature of Business. The Borrower shall not make any
changes in the nature of its business activities as presently conducted except
to the extent not reasonably likely to have a Material Adverse Effect.
          (n) Transactions with Affiliates. The Borrower shall not enter into
any transaction with any of its Affiliates unless such transaction is otherwise
permitted hereunder or is in the ordinary course of business of the Borrower and
the applicable Affiliate and upon fair and reasonable terms no less favorable to
the Borrower than it would obtain in a comparable arm’s length transaction with
a Person which is not an Affiliate.
          (o) Corporate Documents. The Borrower shall not amend any of its
organizational documents in any manner which is reasonably likely to materially
adversely affect the Lender’s rights under any of the Loan Documents or its
ability to enforce any such rights.
          (p) Fiscal Year. The Borrower shall not permit its fiscal year to end
on a day other than the first Saturday between and including January 28th and
February 3rd of any given year.
          (q) Working Capital Financing. The Parent shall for any reason cease
to provide working capital financing for the Borrower in a maximum principal
amount of at least $50,000,000.00.
     5. Conditions Precedent to the Initial Revolving Loan.
          (a) The obligation of the Lender to make the initial Revolving Loan is
subject to the prior fulfillment of the following conditions:
          (i) Documents. The Lender shall have received the following, each in
form and substance satisfactory to the Lender:

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               (A) Executed Agreement. This Credit Agreement, duly executed by
an authorized officer of the Borrower.
               (B) Note. The Note, duly executed by an authorized officer of the
Borrower.
               (C) Officer’s Certificate. A certificate of an authorized officer
of the Borrower, substantially in the form of Exhibit B hereto, certifying,
among other things, as to (w) the organizational documents of the Borrower, a
copy of which is attached thereto, (x) resolutions of the board of directors of
the Borrower authorizing the Borrower to execute, deliver and perform this
Credit Agreement, the Note and any other Loan Documents to which it is a party,
a copy of which is attached thereto, (y) the names and signatures of the
officers of the Borrower authorized to execute this Credit Agreement, the Note
and the other Loan Documents to which it is a party, and (z) the fact that there
have been no changes in the organizational documents or by-laws (or the
equivalent thereof), if any, of the Borrower since the date of the most recent
certification thereof.
               (D) Notice of Borrowing. A Notice of Borrowing duly executed by
an authorized officer of the Borrower as required under Section 2.1.2 hereof.
The submission by the Borrower of such Notice of Borrowing to the Lender and the
Borrower’s acceptance of the proceeds of such Revolving Loan shall be deemed to
be a representation and warranty by the Borrower that all of the applicable
conditions precedent set forth herein have been satisfied.
               (E) Other Items. Such other agreements, instruments, approvals,
opinions and documents as the Lender may reasonably request.
          (ii) Fees and Expenses. The Lender shall have received all of the
fees, costs and expenses that are then due and payable hereunder and under the
other Loan Documents.
          (iii) Legality. The making of the Revolving Loan shall not contravene
any law, rule or regulation applicable to the Lender or the Borrower.
          (iv) Representations and Warranties. All of the representations and
warranties contained in Section 3 of this Credit Agreement, in each other Loan
Document and in each certificate and other writing delivered to the Lender
pursuant hereto or thereto on or prior to the date of such Revolving Loan shall
be true and correct in all material respects as though made on and as of such
date. The acceptance by the Borrower of the proceeds of such Revolving Loan
shall be deemed to be a representation and warranty by the Borrower to the
Lender to such effect.
          (v) Defaults; Material Adverse Effect. No Default, Event of Default or
event that may have a Material Adverse Effect shall have occurred and be
continuing on the date of such Revolving Loan or could reasonably be expected to
result from making such Revolving Loan. The acceptance by the Borrower of the
proceeds of such Revolving Loan shall be deemed to be a representation and
warranty by the Borrower to the Lender to such effect.

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          (b) Subsequent Loans. The obligation of the Lender to make subsequent
Revolving Loans shall, in addition to the fulfillment of the conditions set
forth in paragraph (a) above, be subject to the following:
          (i) Notice of Borrowing. The Lender shall have received a Notice of
Borrowing, duly executed by an authorized officer or authorized representative
of the Borrower as required under Section 2.1.2 hereof. The submission by the
Borrower of such Notice of Borrowing to the Lender and the Borrower’s acceptance
of the proceeds of such Revolving Loan shall be deemed to be a representation
and warranty by the Borrower that all of the applicable conditions precedent set
forth herein have been satisfied.
          (ii) Fees and Expenses. The Lender shall have received all of the
fees, costs and expenses that are then due and payable hereunder and under the
other Loan Documents.
          (iii) Legality. The making of such Revolving Loans shall not
contravene any law, rule or regulation applicable to the Lender or the Borrower.
          (iv) Representations and Warranties. All of the representations and
warranties contained in Section 3 of this Credit Agreement, in each other Loan
Document and in each certificate and other writing delivered to the Lender
pursuant hereto or thereto on or prior to the date of such Revolving Loans shall
be true and correct as though made on and as of such date.
          (v) Defaults. No Default, Event of Default or event that may have a
Material Adverse Effect shall have occurred and be continuing on the date of
such Revolving Loans or would result from making of such Revolving Loans.
          (vi) Other Items. The Lender shall have received such other
agreements, instruments, approvals, opinions and documents as the Lender may
reasonably request.
     6. Events of Default
     6.1. Events of Default. Each of the following events and occurrences shall
constitute an “Event of Default” under this Credit Agreement:
          (a) The Borrower shall fail to pay when due and payable any amount
that the Borrower, as the case may be, is obligated to pay under (i) this Credit
Agreement or the Note in the case of the Borrower, and, in the case of any such
amounts other than the principal amount of any Revolving Loan, such failure
shall continue for a period of three (3) Business Days, (ii) any other Loan
Document to which it is a party, or (ii) any other note, instrument or agreement
evidencing Indebtedness of the Borrower, as the case may be to the Lender,
subject to any applicable grace period provided for therein; or

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          (b) Any representation or warranty made or deemed made by the Borrower
in any Loan Document or any certificate, report or other document delivered to
the Lender pursuant to any Loan Document shall have been incorrect or misleading
in any material respect when made, deemed made or confirmed; or
          (c) The Borrower shall fail to perform or shall violate any provision,
covenant, condition or agreement in paragraph (l) of Section 4 of this Credit
Agreement; or
          (d) The Borrower shall fail to perform or shall violate any provision,
covenant, condition or agreement of this Credit Agreement or any other Loan
Document on its part to be performed or observed (other than those set forth in
paragraphs (a), (b) and (c) of this Section 6.1) and such failure or violation
is not remediable or, if remediable, continues unremedied for a period of
fifteen (15) days after the earlier of (i) notice from the Lender, or (ii) such
time as the Borrower, the Parent, or the Ultimate Parent becomes aware of the
same; or
          (e) Any event or condition shall occur that results in the
acceleration of the maturity of any Indebtedness of the Borrower or any of its
Subsidiaries under any agreement, document or instrument with respect to an
amount of Indebtedness equal to or greater than $1,000,000 (or the equivalent
thereof in any foreign currency) in the aggregate for the Borrower and its
Subsidiaries, or that enables the holder of such Indebtedness or any Person
acting on such holder’s behalf to accelerate the maturity thereof; or
          (f) The Borrower, any of its Subsidiaries, the Parent, or the Ultimate
Parent is adjudicated to be bankrupt or insolvent, or admits in writing its
inability to pay its debts as they become due or makes an assignment for the
benefit of creditors, or ceases doing business as a going concern or applies for
or consents to the appointment of any receiver or trustee, or such receiver,
trustee or similar officer is appointed with the application or consent of the
Borrower, any of its Subsidiaries, the Parent, or the Ultimate Parent, as the
case may be, or bankruptcy, dissolution, liquidation or reorganization
proceedings (or proceedings similar in purpose and effect) are instituted by the
Borrower, any of its Subsidiaries, the Parent, or the Ultimate Parent are
instituted against (and not vacated or discharged within 30 days) the Borrower,
any of its Subsidiaries, the Parent, or the Ultimate Parent; or
          (g) Any money judgment or warrant of attachment or similar process
involving, individually or in the aggregate for the Borrower, its Subsidiaries,
the Parent and/or the Ultimate Parent, in excess of $1,000,000 (or the
equivalent thereof in any foreign currency) shall be entered or filed against
such party or parties, and shall remain undischarged, unvacated or unbonded for
a period of 30 days; or
          (h) The validity or enforceability of this Credit Agreement or any
other Loan Document, or any provisions thereof, shall be contested by or on
behalf of the Borrower; or a proceeding shall be commenced by any Governmental
Authority having jurisdiction over the Borrower seeking to establish the
invalidity thereof; or the Borrower shall deny that it has any further liability
or obligation under any Loan Document to which it is a party; or

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          (i) Any of the following events shall occur or exist with respect to
the Borrower: any Reportable Event shall occur; complete or partial withdrawal
from any Multiemployer Plan shall take place; any Prohibited Transaction shall
occur; a notice of intent to terminate a Plan shall be filed, or a Plan shall be
terminated; or circumstances shall exist which constitute grounds entitling the
PBGC to institute proceedings to terminate a Plan, or the PBGC shall institute
such proceedings; and in each case above, such event or condition, together with
all other events or conditions, if any, could subject the Borrower to any tax,
penalty, or other liability which in the aggregate may exceed $1,000,000; or
          (j) The Ultimate Parent shall cease to own, directly or indirectly, a
majority of the issued and outstanding shares of capital stock of the Borrower,
or to control the board of directors of the Borrower through the ownership of
voting securities having the power to elect a majority of the board; or
          (k) A event has occurred and is continuing or condition exists that
has had or is reasonably likely to have a Material Adverse Effect.
     6.2. Consequence of Default. Upon the occurrence of any Event of Default
(i) described in subsection (f) of Section 6.1, the outstanding amount of the
Revolving Loan Commitment shall automatically be reduced to zero and the
outstanding amount of all Revolving Loans and all other amounts payable
hereunder, under the Note and under any other Loan Document shall automatically
become immediately due and payable, without presentment, demand, protest or
other requirement of any kind, all of which are hereby expressly waived by the
Borrower, or (ii) described in any other subsection of Section 6.1 and during
the continuance thereof, the Lender may, by notice of default given to the
Borrower, terminate the Revolving Loan Commitment and declare all of the
outstanding principal amount of all Revolving Loans and all other amounts
payable hereunder, under the Note and under any other Loan Document to be
immediately due and payable, whereupon the Revolving Loan Commitment shall be
terminated and the unpaid principal amount of the Note, together with accrued
interest thereon, and all such other amounts, shall be immediately due and
payable without presentment, protest, demand or other requirement of any kind,
each of which is hereby expressly waived by the Borrower. The rights and
remedies of the Lender under this Credit Agreement are in addition to, and not
in substitution of, the rights and remedies the Lender is entitled to exercise
at law, in equity and under any other Loan Document.
     7. Additional Costs and Expenses; Indemnity.

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     7.1. (a) The Borrower shall pay to Lender on demand all reasonable
out-of-pocket costs and expenses of the Lender actually incurred in connection
with: (i) the preparation, execution, delivery and enforcement of, and the
preservation or protection of the Lender’s rights under, this Credit Agreement,
the Note and any other Loan Documents, (ii) the negotiation of any
restructuring, work-out or renegotiation of any terms of this Credit Agreement,
the Note or any other Loan Document or the obligations of the Borrower or the
Ultimate Parent hereunder or thereunder, as the case may be, and (iii) the
response to any subpoena or similar process compelling the production of
documents or other response in connection with this Credit Agreement, the Note
or any other Loan Document, including without limitation, in each case, the
reasonable and actual fees and expenses of outside counsel for the Lender, and
the Borrower further agrees to indemnify the Lender and its officers, directors
and employees against any losses, damages, claims and expenses arising out of
the use or proposed use by the Borrower of the proceeds of any Revolving Loan
hereunder including, without limitation, to acquire equity securities of any
business or entity. In addition, the Borrower agrees to defend, indemnify and
hold harmless the Lender and its officers, directors and employees from and
against any losses, damages, liabilities, obligations, penalties, fees, costs
and expenses, including without limitation the reasonable and actual fees and
expenses of outside counsel for the Lender, arising out of or relating to the
negotiation, preparation, execution, delivery, performance, administration or
enforcement of this Credit Agreement and the other Loan Documents and any
amendment, supplement, modification or waiver with respect hereto or thereto and
any claim, litigation, investigation or proceeding relating to any of the
foregoing including, without limitation, all Environmental Liabilities and Costs
arising from or in connection with: (i) the past, present or future operations
of the Borrower or any of its Subsidiaries involving any damage to real or
personal property or natural resources or harm or injury alleged to have
resulted from any release of Hazardous Materials, (ii) any Environmental Action,
or (iii) a breach by the Borrower any of its Subsidiaries of any Environmental
Law; provided, however, that none of the foregoing indemnity obligations of the
Borrower shall extend to any liability, obligation, loss, damage, penalty,
claim, action, suit, cost, expense or disbursement to the extent resulting from
the willful misconduct or gross negligence of the Lender as determined by a
final judgment of a court of competent jurisdiction.
          (b) If any future applicable law, regulation or directive, or any
change of any existing law, regulation or directive or in the interpretation
thereof, or compliance by the Lender with any request or requirement (whether or
not having the force of law) of any relevant central bank or other comparable
agency, imposes, modifies or deems applicable any reserve, special deposit,
premium, assessment or similar requirement against assets held by, or deposits
in or for the account of, or advances or loans by, or any other acquisition of
funds by the Lender, any capital adequacy standard or other condition with
respect to this Credit Agreement, the Note or any other Loan Document, and the
result of any of the foregoing is to increase the cost to the Lender of
maintaining advances or credit or to reduce any amount receivable in respect
thereof, then the Lender may notify the Borrower, and the Borrower shall pay
within five (5) Business Days of the date of such notice such amount as the
Lender may specify to be necessary to compensate the Lender for such reduced
receipt, together with interest on such amount from the date demanded until
payment in full thereof at the same rate applicable to the Revolving Loans. The
determination by the Lender of any amount due under this Section 7.1(b) as set
forth in a certificate setting forth the calculation thereof in reasonable
detail, shall, in the absence of manifest error, be conclusive evidence thereof.

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          (c) If, by reason of any applicable present or future law or
regulation or regulatory requirement or the interpretation or application
thereof, it shall be unlawful or otherwise prohibited for the Lender to make or
maintain any Revolving Loan or give effect to any of its obligations or benefits
as contemplated by this Credit Agreement and the other Loan Documents, the
obligation of the Lender to make, fund and maintain any Revolving Loans under
this Credit Agreement shall be suspended until the Lender shall notify the
Borrower that the circumstances causing such suspension no longer exist and the
Borrower shall forthwith prepay to the Lender the principal amount of all
Revolving Loans then outstanding, together with interest accrued thereon and all
other amounts owed with respect thereto, including, without limitation, amounts
owed pursuant to Section 7.1(d) hereof.
          (d) If, due to any prepayment or repayment at a time other than as
provided herein, including any prepayment pursuant to Section 2.5 or
Section 7.1(c) or the acceleration of the maturity of any Revolving Loan
pursuant to Section 6 hereof, the Lender incurs funding costs or suffers loss of
earnings, the Borrower shall, promptly after demand by the Lender, pay to the
Lender any amounts required to compensate the Lender for any such losses, costs
or expenses, including, without limitation, any loss, cost or expense incurred
by reason of liquidation or reemployment of deposits or other funds acquired by
the Lender to fund or maintain any Revolving Loan. A certificate setting forth
the amount of such additional losses, costs or expenses submitted to the
Borrower by the Lender shall, in the absence of manifest error, be conclusive
evidence thereof.
          (e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 7.1 shall survive the payment in full of the principal, interest
and all other amounts under this Credit Agreement and under any other Loan
Document and the termination of this Credit Agreement and each other Loan
Document.
     7.2 Taxes.
          (a) Any and all payments made by the Borrower hereunder shall be made
free and clear of, and without deduction for, any present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto (all such taxes, levies, imposts, deductions, charges,
withholdings and liabilities, being hereinafter referred to as “Taxes”). If and
to the extent the laws of the United States or any political subdivision thereof
require that Taxes on the income of the Lender be withheld from any payment of
interest, (i) the amount of such payment of interest shall be increased to the
extent necessary to cause the Lender to receive (after the withholding of such
Taxes) an amount equal to the amount it would have received had the withholding
of such Taxes not been required, and (ii) the Borrower shall withhold such Taxes
from such increased payment of interest and pay such Taxes to the relevant
taxation authority or other authority for the account of the Lender in
accordance with applicable law.
          (b) In addition, the Borrower agrees to pay all present and future
stamp, documentary, excise and property taxes, and all other taxes, charges and
similar levies which arise from any payment made hereunder or under any other
Loan Document or from the execution, delivery, registration, consummation or
administration of, or otherwise with respect to, this Credit Agreement or any
other Loan Document or any amendment, supplement or modification of, or waiver
with respect to, this Credit Agreement or such other Loan Document, excluding,
in each case, taxes on the overall net income of the Lender (hereinafter
referred to as “Other Taxes”).

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          (c) The Borrower shall indemnify the Lender for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 7.2) paid by
the Lender or any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment with respect to this indemnification
shall be made within five (5) days after the date the Lender makes written
demand therefor.
          (d) Within 30 days after the date of payment of any Taxes with respect
to any payment due hereunder or under any other Loan Document, the Borrower will
furnish to the Lender, at its address referred to in Section 8.6 hereof, the
original or a certified copy of a receipt evidencing payment thereof.
          (e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 7.2 shall survive the payment in full of the principal, interest
and all other amounts under this Credit Agreement and under any other Loan
Document and the termination of this Credit Agreement and each other Loan
Document.
     8. Miscellaneous.
     8.1. Entire Agreement. This Credit Agreement, the other Loan Documents and
the documents referred to herein and therein constitute the entire agreement of
the parties hereto with respect to the subject matter hereof and shall supersede
any prior expressions of intent or understanding with respect to the
transactions herein and therein contemplated.
     8.2. No Waiver; Cumulative Rights. The failure or delay of the Lender to
require performance by the Borrower of any provision of this Credit Agreement
shall not operate as a waiver thereof, nor shall it affect the Lender’s rights
to require performance of such provision at any time thereafter, nor shall it
affect or impair any of the remedies, powers or rights of the Lender with
respect to any other or subsequent failure, delay or default. Each and every
right granted to the Lender hereunder or under any other Loan Document or in
connection herewith or therewith shall be cumulative and may be exercised at any
time.
     8.3. Assignment; Binding Effect.
          (a) This Credit Agreement shall be binding upon and shall be
enforceable by the Borrower and the Lender and their respective successors and
assigns.
          (b) The Lender shall be permitted to assign and participate any
Revolving Loan and all of its other rights and obligations hereunder or under
the other Loan Documents without the requirement of any consent or approval by
the Borrower.
          (c) The Borrower shall not be permitted to assign or otherwise
transfer, in whole or in part, its rights and obligations hereunder or under any
other Loan Document without the prior written consent of the Lender and any such
assignment or transfer without the Lender’s prior written consent shall be null
and void.

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     8.4. GOVERNING LAW; JURY TRIAL. THIS CREDIT AGREEMENT SHALL BE GOVERNED BY,
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. THE BORROWER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY ACTION
RELATED TO THIS CREDIT AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT.
     8.5. Submission to Jurisdiction.
          (a) The Borrower hereby irrevocably agrees that any legal action or
proceedings against it with respect to this Credit Agreement, the Note or any
other Loan Document may be brought in any court of the State of New York or any
Federal Court of the United States of America located in the City or State of
New York, or both, as the Lender may elect, and by execution and delivery of
this Credit Agreement the Borrower hereby submits to and accepts with regard to
any such action or proceeding service of process by the mailing of copies
thereof by registered or certified airmail, postage prepaid, to the Borrower at
its address set forth in Section 8.6 hereof.
          (b) The Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Credit Agreement, the Note or any
other Loan Document in the State of New York and hereby further irrevocably
waives any claim that the State of New York is not a convenient forum for any
such suit, action or proceeding.
     8.6. Notices. Any notice hereunder shall be in writing and shall be
personally delivered, transmitted by postage prepaid, registered or certified
mail or by overnight mail, or transmitted by telephonic facsimile (“FAX”) to the
parties as follows:

     
To the Borrower:
  THE TALBOTS, INC.
 
  175 Beal Street
 
  Hingham, Massachusetts 02043
 
  Telephone: (617) 749-7600
 
  FAX: (617) 749-0865
 
  Attention: Carol Stone,
 
  Senior Vice President of Finance
 
   
To the Lender:
  SUMITOMO MITSUI BANKING CORPORATION
 
  277 Park Avenue
 
  New York, NY 10172
 
  Telephone: (212) 224-4000
 
  FAX: (212) 593-9514
 
  Attention: CBDA1

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All notices and other communications shall be deemed to have been duly given on
(i) the date of receipt if delivered personally, (ii) the date five (5) days
after posting if transmitted by registered or certified mail, (iii) the Business
Day after having been sent if transmitted by overnight mail with a reputable
courier, or (iv) the date of transmission if transmitted by FAX and receipt is
confirmed.
     8.7. Amendments, Etc. No amendment or waiver of any provision of this
Credit Agreement and the other Loan Documents, and no consent to any departure
by the Borrower therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Lender and, in the case of an amendment, the
Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.
     8.8. Usury. Anything in this Credit Agreement to the contrary
notwithstanding, the obligation of the Borrower to pay interest on any Revolving
Loan and the Note or any other amount due and owing hereunder or under any other
Loan Document shall be subject to the limitation that no payment of such
interest shall be required to the extent that receipt of such payment would be
contrary to applicable usury laws.
     8.9. Counterparts; Facsimile Signature. This Credit Agreement may be signed
in any number of counterparts. Either a single counterpart or a set of
counterparts when signed by all the parties hereto shall constitute a full and
original agreement for all purposes. Delivery of any executed signature page
hereof or of any amendment, waiver or consent to this Credit Agreement by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart thereof.
     8.10. Severability. Any provision of this Credit Agreement or any other
Loan Document that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or thereof
or affecting the validity or enforceability of such provision in any other
jurisdiction.
     8.11. Right of Set-Off. Upon the occurrence and during the continuance of
any Event of Default, the Lender is hereby authorized at any time and from time
to time, without notice to the Borrower (any such notice being expressly waived
by the Borrower) and to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other Indebtedness at any time owing by the Lender
or any of its Affiliates (including any branch or agency of the Lender or any of
its Affiliates) to or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower now or hereafter existing hereunder
or under any other Loan Document, irrespective of whether or not the Lender
shall have made any demand hereunder or thereunder and although such obligations
may be unmatured. The Lender agrees promptly to notify the Borrower after any
such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application or any obligations
of the Borrower to the Lender hereunder or under any other Loan Document or
otherwise. The rights of the Lender under this Section 8.11 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Lender may have under law, equity or otherwise.

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     8.12. No Party Deemed Drafter. The Borrower and the Lender agree that no
party hereto shall be deemed to be the drafter of this Credit Agreement.
     8.13. USA Patriot Act Notification. The following notification is provided
to the Borrower pursuant to Section 326 of the USA Patriot Act:
     IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help
the government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit or other financial services product. WHAT THIS MEANS FOR THE
BORROWER: When the Borrower opens an account, the Lender will ask the Borrower
for certain information, including, without limitation, the Borrower’s name, tax
identification number, business address and other information that will allow
the Lender to identify the Borrower. The Lender may also seek to see the
Borrower’s legal organizational documents or other identifying documents, among
other things. The Borrower agrees to cooperate with the Lender and provide true,
accurate complete information to the Lender in response to any such request.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
executed by their duly authorized representatives as of the date first written
above.

            THE TALBOTS, INC.
      By:   /s/ Edward L. Larsen         Name:   Edward L. Larsen       
Title:   Senior Vice President, Finance Chief Financial Officer and Treasurer   
    SUMITOMO MITSUI BANKING CORPORATION
      By:   /s/ Manabu Hirabayashi         Name:   Manabu Hirabayashi       
Title:   Senior Vice President     

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EXHIBIT A
NOTE

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NOTE
US$50,000,000.00
December 31, 2008
FOR VALUE RECEIVED, The Talbots, Inc. (the “Borrower”) unconditionally promises
to pay to the order of Sumitomo Mitsui Banking Corporation (the “Lender”), to
and for any account designated by the Lender, the principal sum of Fifty Million
Dollars ($50,000,000) or such lesser amount as may be outstanding from time to
time hereunder and to pay interest thereon at such rates and according to such
methods of calculation as are provided pursuant to the Revolving Credit
Agreement dated as of December 30, 2008, between the Borrower and the Lender (as
the same may be amended, supplemented, or otherwise modified from time to time,
the “Credit Agreement”). The Borrower hereby authorizes the Lender to enter on
the schedule attached hereto the dates, amounts, denomination, maturities,
interest rates and interest periods applicable to each borrowing and absent
manifest error such notations shall be binding and conclusive upon the Borrower;
provided, however, that failure by the Lender to make any notation on such
schedule or any error in such notations shall in no way affect the Borrower’s
obligation to repay outstanding amounts under this Note.
     The outstanding principal of this Note and any accrued interest thereon
shall be repaid as set forth in the Credit Agreement, with final payment on the
Maturity Date (as defined in the Credit Agreement).
     All payments of principal and interest on this Note shall be payable in
lawful money of the United States of America in immediately available funds
without set-off, defense or counterclaim.
     This Note is issued pursuant to the terms of the Credit Agreement and is
subject to the terms and conditions and entitled to the benefits therein
provided. Upon the occurrence of an Event of Default (as defined in the Credit
Agreement), the principal of and the accrued interest on this Note may become
due and payable in the manner and with the same effect as provided in the Credit
Agreement, without presentment, demand, protest or notice of any kind unless
otherwise expressly required therein.
     Failure or delay of the holder of this Note to enforce any provision of
this Note shall not be deemed a waiver of any such provision, nor shall the
holder of this Note be estopped from enforcing any such provision at a later
time. Any waiver of any provision hereof must be in writing. This Note shall be
governed by and interpreted in accordance with the laws of the State of New York
without regard to the conflict of law provisions thereof.

            THE TALBOTS, INC.
      By:             Name:           Title:      

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SCHEDULE TO NOTE
CUSTOMER: THE TALBOTS, INC.
LINE AMOUNT: U.S.$50,000,000.00

                                                                               
                      Unpaid     Name of       Our                            
Amount of     Balance of     Person   Date Made   Reference     Amount          
  Interest     Principal     Revolving     Making   or Paid   Number     of Loan
    Due Date     Rate     Paid     Credit     Notation  
 
                                                       

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OFFICER’S CERTIFICATE OF BORROWER
     I, _________, the ____________ of The Talbots, Inc., a Delaware corporation
(the “Borrower”) do hereby certify that:
     1. The Borrower has full corporate power and authority to execute, enter
into and deliver the Revolving Credit Agreement, dated as of December 30, 2008,
between the Borrower and Sumitomo Mitsui Banking Corporation (the “Lender”) (the
“Credit Agreement”; terms defined in the Credit Agreement shall have the same
meaning in this certificate) together with the Note and each other Loan Document
to which it is a party.
     2. All corporate action necessary to authorize the execution, delivery and
performance of the Credit Agreement, the Note and each other Loan Document to
which it is a party has been taken by resolutions of the Board of Directors of
the Borrower [at a meeting duly called at which a majority was present and
acting throughout] or [adopted by unanimous written consent] and such
resolutions have not been modified or amended in any respect and are in full
force and effect on the date hereof.
     3. Attached hereto as Exhibit A is a true, correct and complete copy of the
Borrower’s Certificate of Incorporation, together with all amendments thereto,
as in effect on and as of the date hereof.
     4. Attached hereto as Exhibit B is a true, correct and complete copy of the
Borrower’s By-laws, together with all amendments thereto, as in effect on and as
of the date hereof.
     5. Attached hereto as Exhibit C is a true, correct and complete copy of the
resolutions of the Board of Directors of the Borrower approving and authorizing
the execution, delivery and performance of the Credit Agreement, the Note, and
each other Loan Document, which minutes remain in full force and effect without
modification or amendment on and as of the date hereof.
     6. Attached hereto as Exhibit D is a good standing certificate from the
office of the Secretary of State of Delaware dated as of a recent date.
     7. All representations and warranties contained in the Credit Agreement are
true and correct in all material respects on and as of the date hereof.
     8. No Default or Event of Default or event that may have a Material Adverse
Effect has occurred and is continuing on and as of the date hereof or would
result from the Credit Agreement becoming effective in accordance with its
terms, both immediately before and immediately after giving effect to the
Revolving Loans.
     9. The Borrower has performed in all material respects all agreements and
satisfied in all material respects all conditions, which the Credit Agreement
provides shall be performed by it on or before the date hereof.

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     10. The following persons are, and have been at all times since a date
prior to December 30, 2008, duly qualified and acting officers of the Borrower
duly elected or appointed to the offices set forth opposite the name, and such
person who, as an officer of the Borrower, signed the Credit Agreement, the Note
and any other Loan Documents to which the Borrower is a party was duly elected
or appointed, qualified and acting as such officer at the time of such signing
and delivery, and the signature of such person appearing on such documents is
such person’s genuine signature.

              Name   Office   Signature    
 
           
 
       
 
       
 
       

     11. No proceeding for the winding-up, liquidation, dissolution or sale of
all, or substantially all, of the assets of the Borrower is pending or
contemplated.

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IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Borrower.
Dated: December 30, 2008
I, _________, the _________ of The Talbots, Inc. (the “Borrower”) hereby certify
that I am the duly elected, qualified and acting _________ of the Borrower and
that such person’s signature above is the true and genuine signature of such
person.

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EXHIBIT C
FORM OF EXTENSION REQUEST
To: Sumitomo Mitsui Banking Corporation
Re: Revolving Loan Credit Agreement dated as of December 30, 2008, by and
between The Talbots, Inc. and Sumitomo Mitsui Banking Corporation (the “Credit
Agreement”)
Dear Sir or Madam,
     Pursuant to Section 2.5 (d) of the Credit Agreement, we hereby irrevocably
request that the Revolving Credit Termination Date (as defined in the Credit
Agreement) be extended to December ___,                     , the date that is
not more than one year beyond the Revolving Credit Termination Date in effect at
present.

            Very truly yours,

THE TALBOTS, INC.
      By:           Name:           Title: