Exhibit 10.1
WAIVER AND AMENDMENT No. 1
TO CREDIT AGREEMENT
WAIVER AND AMENDMENT No. 1,
dated as of November 26, 2007 (the “ Amendment
”), to the Credit Agreement referred to below by and among
The Talbots, Inc., a corporation duly organized and validly
existing under the laws of the State of Delaware (the “
Borrower ”), the lenders from time to time party
thereto (each a “ Lender ” and collectively,
the “ Lenders ”), and Mizuho Corporate
Bank, Ltd., a corporation organized and existing under the laws of
Japan (“ Mizuho ”), as arranger and
administrative agent for the Lenders (in such capacities,
the “ Agent ”).
WHEREAS, the Borrower, the Agent and
the Lenders are parties to the Credit Agreement dated as of
July 24, 2006 (the “ Credit Agreement ”),
pursuant to which the Lenders have made term loans (collectively,
the “ Term Loans ”) to the Borrower in the
aggregate principal amount of the Total Term Loan Commitment (as
defined in the Credit Agreement) set forth therein;
WHEREAS, the Borrower has requested
that the Lenders amend the Credit Agreement to, among other things,
modify (i) the Leverage Ratio covenant set forth in
Section 4.2(a) of the Credit Agreement and (ii) the Fixed
Charge Coverage Ratio covenant set forth in Sections 4.2(c) of
the Credit Agreement; and
WHEREAS, the Lenders are willing to
so amend the Credit Agreement, subject to the payment of certain
fees and the other terms and conditions set forth herein;
NOW, THEREFORE, in consideration of
the premises and other good and valuable consideration, the parties
hereto hereby agree as follows:
1. Definitions;
Amendments .
(a) Any
capitalized term used herein and not defined shall have the meaning
assigned to it in the Credit Agreement.
(b) Section 4.2(a)
of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
“(a) Leverage Ratio .
Permit the Leverage Ratio of the Borrower and its Subsidiaries as
of the last day of any period of (A) four consecutive fiscal
quarters ending after July 24, 2006 and on or prior to the
fourth fiscal quarter 2006, to exceed 2.50 to 1, (B) four
consecutive fiscal quarters ending with the first fiscal quarter
2007, to exceed 2.57 to 1, (C) four consecutive fiscal
quarters ending with the second fiscal quarter 2007, to exceed 2.50
to 1, and (D) four consecutive fiscal
quarters
ending on a date set forth below to exceed the applicable ratio set
forth below opposite such date:
| |
|
|
|
Fiscal Quarter End |
|
Leverage
Ratio |
|
Third fiscal
quarter 2007 through fourth fiscal quarter 2008
|
|
4.00 to 1.00 |
| |
|
First fiscal
quarter 2009 through fourth fiscal quarter 2009
|
|
3.50 to 1.00 |
| |
|
First fiscal
quarter 2010 and each fiscal quarter thereafter
|
|
3.00 to 1.00 |
(c) Section 4.2(c)
of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
“ Fixed Charge Coverage
Ratio . Permit the Fixed Charge Coverage Ratio of the Borrower
and its Subsidiaries as of the last day of any period of four
consecutive fiscal quarters (A) ending after July 24,
2006 and on or prior to August 4, 2007, to be less than 1.60 to 1.0
and (B) ending on a date set forth below to be less than the
applicable ratio set forth below opposite such date:
| |
|
|
|
Fiscal Quarter End |
|
Fixed Charge Coverage Ratio |
|
Third fiscal
quarter 2007 through fourth fiscal quarter 2008
|
|
1.25 to 1.00 |
| |
|
First fiscal
quarter 2009 through fourth fiscal quarter 2009
|
|
1.40 to 1.00 |
| |
|
First fiscal
quarter 2010 and each fiscal quarter thereafter
|
|
1.60 to 1.00 |
2. Conditions to
Effectiveness . This Amendment shall become effective as of
November 26, 2007 (the “ Amendment Effective Date
”), only upon satisfaction in full, in a manner reasonably
satisfactory to the Agent, of the following conditions
precedent:
(a) The
representations and warranties of the Borrower contained herein, in
Section 3 of the Credit Agreement and in each other Loan
Document, certificate or other writing delivered to the Agent or
the Lenders pursuant hereto or thereto on or prior to the Amendment
Effective Date shall be true and correct in all material respects
on and as of the Amendment Effective Date as though made on and as
of such date; and no Default or Event of Default that is not
expressly waived by the Agent pursuant to this Amendment shall
have
-2-
occurred
and be continuing on the Amendment Effective Date or would result
from this Amendment becoming effective in accordance with its
terms.
(b) The
Agent shall have executed this Amendment and shall have received
counterparts to this Amendment which bear the signature of the
Borrower and the Required Lenders.
(c) On
or prior to the Amendment Effective Date, the Borrower shall have
paid to the Agent for the account of each Lender that has duly
executed and delivered a copy of this Amendment to the Agent on or
prior to November 23, 2007, a non-refundable amendment fee
(the “ Amendment Fee ”) equal to 0.075% of the
Term Loan of such Lender, which shall be deemed fully earned when
paid.
(d) All
legal matters incident to this Amendment shall be satisfactory to
the Agent and its counsel.
3. Representations and
Warranties . The Borrower hereby represents and warrants to the
Agent as follows:
(a)
Representations and Warranties; No Event of Default . The
representations and warranties of the Borrower herein and in
Section 3 of the Credit Agreement and in each other Loan
Document, certificate or other writing delivered to the Agent or
the Lenders pursuant hereto or thereto on or prior to
