Exhibit 10.6
FOURTH AMENDED AND RESTATED LOAN AGREEMENT
This Fourth Amended and Restated Loan Agreement made as August 7, 2000,
by and between Citizens Bank of Massachusetts (herein "BANK"), and The J. Jill
Group, Inc. (formerly DM Management Company), a Delaware corporation (herein
"BORROWER").
Reference is made to that certain Third Amended and Restated Loan
Agreement dated as of May 4, 1999 by and between BORROWER and BANK as amended by
First Amendment to Third Amended and Restated Loan Agreement dated as of
February 14, 2000 and by Second Amendment to Third Amended and Restated Loan
Agreement dated as of March 24, 2000 (collectively, the "LOAN AGREEMENT").
WITNESSETH:
WHEREAS, BORROWER and BANK are parties to the LOAN AGREEMENT; and
WHEREAS, as part of an expansion and reorganization of BORROWER's
business lines, BORROWER has created three wholly owned subsidiaries; and, on
the terms, provisions and conditions contained herein, BANK is willing to permit
BORROWER to effect such reorganization and creation of subsidiaries (the
"Reorganization");
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereby agree that effective as of the date hereof, the
LOAN AGREEMENT is hereby further amended and restated as follows:
ARTICLE I
DEFINITIONS
1.01 Capitalized words and phrases in this Agreement shall have the
meanings ascribed to them in this Article.
"ACCOUNTANTS" shall mean the independent certified public accountants
of recognized national standing, who are selected and engaged by the BORROWER
and its SPECIAL SUBSIDIARIES and who are reasonably satisfactory to the BANK.
Any one of the so-called "Big 5" national accounting firms shall be satisfactory
to the BANK.
"ADJUSTED LIBOR RATE" shall mean, for any INTEREST PERIOD, an interest
rate per annum determined by the BANK pursuant to the following formula:
ADJUSTED LIBOR RATE = LIBOR BASE RATE
-------------------
1.00 - RESERVE RATE
"ADVANCE(S)" shall mean the amounts loaned by the BANK to the BORROWER
under Section 2.01 which shall be either LIBOR RATE ADVANCES or PRIME RATE
ADVANCES.
"AVAILABILITY PERIOD" shall mean the period commencing on the CLOSING
DATE and ending on the TERMINATION DATE.
"BANK" shall mean Citizens Bank of Massachusetts and its successors and
assigns.
"BANK DEPOSITS" shall mean all sums of money on deposit to the credit
of the BORROWER and its SPECIAL SUBSIDIARIES at any bank, trust company,
national banking association, savings bank, savings and loan association or
similar institution.
"BANKING DAY" shall mean any BUSINESS DAY on which banks are open for
business in Boston, Massachusetts.
"BANK'S OFFICE" shall mean the office of the BANK located at 28 State
Street, Boston, Massachusetts 02109 or such other office of the BANK as the BANK
shall, from time to time, designate by notice to the BORROWER.
"BIRCH POND" shall mean THE BIRCH POND GROUP, INC., a Massachusetts
corporation, one hundred percent (100%) of whose capital stock is wholly owned
by BORROWER.
"BORROWER" is defined in the Recitals.
"BORROWING" shall mean the making of an ADVANCE.
"BORROWING DATE" shall mean that date on which an ADVANCE is made.
"BORROWING REQUEST" shall mean a request by the BORROWER for a
BORROWING.
-2-
"BUSINESS DAY" shall mean a calendar day other than (a) a Saturday,
Sunday or legal holiday in The Commonwealth of Massachusetts, and (b) a calendar
day on which banks are not authorized to be open for business in Boston,
Massachusetts.
"CAPITALIZED LEASE OBLIGATION(S)" shall mean all rental obligations
which, under GAAP, are required to be capitalized on the books of the BORROWER
and its SUBSIDIARIES in each case taken at the amount thereof accounted
for as indebtedness (net of interest expense) in accordance with GAAP.
"CATALOG(S)" shall mean the CATALOGS and other written offerings of
INVENTORY made by the BORROWER and the BORROWER'S SPECIAL SUBSIDIARIES to the
general public from time to time and all rights therein.
"CLOSING" is defined in Article XVI.
"CLOSING DATE" shall mean August 7, 2000.
"CODE" shall mean the Internal Revenue Code of 1986, as amended,
supplemented or modified from time to time, and all regulations issued
thereunder.
"COLLATERAL" shall mean all of BORROWER'S and BORROWER'S SPECIAL
SUBSIDIARIES' respective personal property, tangible or intangible, including
without limitation all accounts, BANK DEPOSITS, DOCUMENTS, INVENTORY, GENERAL
INTANGIBLES, contracts, CUSTOMER LISTS, INVESTMENT PROPERTY, LEASES,
EQUIPMENT, CATALOGS, property and interests described in the STOCK PLEDGE
AGREEMENT, rights to the trademark "J. Jill", and other property described in
the SECURITY AGREEMENTS, whether now existing or hereafter arising or
acquired and wherever located, and all proceeds thereof, including, without
limitation, all proceeds of fire and other insurance.
"CONTINGENT OBLIGATIONS" shall mean any undertaking by the BORROWER
or the BORROWER'S SUBSIDIARIES guaranteeing or in effect guaranteeing any
indebtedness, leases, dividends or other obligations for borrowed money
("PRIMARY OBLIGATIONS") of any other PERSON in any manner, whether directly
or indirectly, including, without limitation, any obligations, whether or not
contingent: (a) to purchase any such PRIMARY OBLIGATION or any property
constituting direct or indirect security therefor; (b) to advance or supply
funds(i) for the purchase or payment of any such PRIMARY OBLIGATIONS; or (ii)
to maintain working capital or equity capital of
-3-
such PERSON or otherwise to maintain the net worth or solvency of such PERSON;
(c) to purchase property, securities or services primarily for the purpose of
assuring the owner of any such PRIMARY OBLIGATION of the ability of such PERSON
to make payment of such PRIMARY OBLIGATION; or (d) otherwise to assure or hold
harmless the owner of such PRIMARY OBLIGATION against loss in respect thereof;
provided, however, that the term "CONTINGENT OBLIGATION" shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.
"CONVERSION DATE" shall mean any date on which pricing of the REAL
ESTATE LOAN shall change by reason of an election by the BORROWER or a provision
of this Agreement.
"COST OF FUNDS REDEPLOYMENT" is defined in Section 7.23.
"CREDIT BALANCE" shall mean the aggregate unpaid amount of ADVANCES
under Article II and L/C BALANCE outstanding from time to time.
"CURRENT FINANCIALS" are described in Section 9.10 hereof.
"CUSTOMER LISTS" shall mean each and all of the mailing lists to which
CATALOGS are sent from time to time which BORROWER represents to BANK are
proprietary to J. JILL DIRECT regardless of the media on which the same are
stored.
"DEBT SERVICE COVERAGE" shall hereafter mean the ratio of (A) the
aggregate of the consolidated net earnings of BORROWER and its SUBSIDIARIES
before interest expense, taxes, depreciation, amortization, rent and lease
expense, and special one-time charges related to the discontinuance of that
certain line of business known as, or referred to as, the "Nicole catalog
concept" and other restructuring charges approved in writing by the BANK in its
sole discretion, such net earnings specifically including interest income; less
(i) UNFINANCED CAPITAL EXPENDITURES, less (ii) SHAREHOLDER PAYMENTS, less (iii)
taxes paid in cash; to (B) the aggregate of (i) interest paid and (ii) the
amounts of all maturities of long-term debt falling due in the twelve (12) month
period succeeding the calculation date, including principal payments due on the
REAL ESTATE LOAN plus (iii) rent and lease expense. Long Term Debt is amounts
due in whole or in part more than 12 months after the incurring thereof;
however, for the purposes of calculating this covenant the REVOLVING LOANS are
specifically excluded from Long Term Debt.
-4-
"DEFAULT" shall mean the occurrence of an event which with the passage
of time or the requiring of the giving of notice, or both, may become an EVENT
OF DEFAULT.
"DOCUMENTS" shall mean a document of title as defined in the UCC.
"DOLLARS" or "$" shall mean lawful currency of the United States of
America.
"ENVIRONMENTAL LAW(S)" shall mean any and all present and future
federal, state and local laws, rules and regulations, and any orders and
decrees, in each case as now or hereafter in effect, relating to the regulation
or protection of the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or toxic (all as
defined in such applicable laws, rules and regulations) or HAZARDOUS MATERIAL
into the environment.
"EQUIPMENT" shall mean and include, without limitation, all of
BORROWER'S and the SPECIAL SUBSIDIARIES' respective tangible personal property
utilized in the conduct of BORROWER'S business, and the SPECIAL SUBSIDIARIES'
business(es), all replacements and substitutions therefor, and all accessions
thereto, and including, without in any way limiting the generality of the
foregoing, all of BORROWER'S and the SPECIAL SUBSIDIARIES' respective machinery,
equipment, furniture, trade fixtures and motor vehicles, but excluding therefrom
INVENTORY, as said term is defined in the CODE.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, supplemented or modified from time to time, and all regulations
issued thereunder.
"EVENT OF DEFAULT" is defined in Article XII.
"EXCESS CASH FLOW" shall mean funds obtained from sources other than
BORROWINGS.
"FINANCING AGREEMENTS" shall mean, collectively, this Fourth Amended
and Restated Loan Agreement, the THIRD REPLACEMENT REVOLVING NOTE, the REAL
ESTATE NOTE, the REAL ESTATE MORTGAGE, each L/C APPLICATION, the GUARANTIES,
the SECURITY AGREEMENTS, the STOCK PLEDGE AGREEMENT, all as amended from time
to time, and all other agreements executed and delivered by the BORROWER and
the SPECIAL SUBSIDIARIES hereunder, including any additional agreements
granting a LIEN, and all other agreements of every kind and nature now or
hereafter in force between the BANK and the
-5-
BORROWER or between the BANK and any SPECIAL SUBSIDIARY relating to the
OBLIGATIONS, as the same may have been or may, from time to time, be amended or
supplemented.
"FISCAL YEAR" shall mean the fiscal year of the BORROWER.
"GAAP" shall mean generally accepted accounting principles as in
effect from time to time and applied with respect to the preparation of
financial statements.
"GENERAL INTANGIBLES" shall mean the BORROWER'S and the SPECIAL
SUBSIDIARIES' general intangibles, as defined in the CODE, and all proceeds
thereof, and shall also include goodwill, trade secrets, computer programs,
CUSTOMER LISTS, trade names, trademarks, patents, rights to tax refunds of every
kind and nature and proceeds of each of the foregoing.
"GUARANTIES" shall mean joint and several unlimited guaranties of the
OBLIGATIONS by each of the SPECIAL SUBSIDIARIES pursuant to instruments in form
and substance satisfactory to the BANK which form is annexed as Exhibit 8.02.
"HAZARDOUS MATERIAL" shall mean any chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any ENVIRONMENTAL LAW.
"INDEBTEDNESS" shall mean, at any time, all items which would, in
conformity with GAAP, be classified as liabilities on a consolidated balance
sheet of BORROWER and the SUBSIDIARIES as at such time, and in any event
including (a) indebtedness arising under acceptance facilities, (b) CAPITALIZED
LEASE OBLIGATIONS, (c) CONTINGENT OBLIGATIONS and (d) liabilities secured by any
LIEN on any property even though the owner of such property has not assumed or
otherwise become liable for the payment thereof.
"INTEREST PAYMENT DATE" shall mean:
(a) With respect to PRIME RATE ADVANCES, the last day of each month,
commencing with the last day of the month in which the first PRIME RATE ADVANCE
is made.
(b) With respect to LIBOR RATE ADVANCES:
(i) the last day of each INTEREST PERIOD; and
-6-
(ii) if the applicable INTEREST PERIOD is more than three
months, the last day of each three-month period during such INTEREST PERIOD.
(c) With respect to the REAL ESTATE LOAN, the last day of each monthly
payment of principal, commencing with the first such payment.
"INTEREST PERIOD" shall mean:
(a) With respect to each LIBOR RATE ADVANCE: (i) initially, the period
(A) commencing on the BORROWING DATE of such ADVANCE, and (B) ending one, two,
three or six months thereafter, as the case may be, as determined in accordance
with the provisions of this Agreement; and (ii) thereafter, each subsequent
INTEREST PERIOD for such LIBOR RATE ADVANCE shall begin on the last day of the
immediately preceding INTEREST PERIOD and shall end one, two, three or six
months thereafter, as the BORROWER may select pursuant to Section 2.01; provided
that (A) any INTEREST PERIOD which would otherwise end on a day which is not a
BANKING DAY shall end and the next INTEREST PERIOD shall commence on the next
preceding day which is a BANKING DAY as determined conclusively by the BANK in
accordance with the then current bank practices in London, England, and (B) any
INTEREST PERIOD for a LIBOR RATE ADVANCE that would otherwise extend beyond the
TERMINATION DATE shall end on the TERMINATION DATE.
(b) With respect to each PRIME RATE ADVANCE: the entire period during
which such advance is unpaid.
(c) With respect to the REAL ESTATE LOAN with respect to any period
when LIBOR RATE PRICING is not in effect, the entire period during which any
pricing other than LIBOR RATE PRICING is in effect.
(d) With respect to the REAL ESTATE LOAN with respect to any period
that LIBOR RATE PRICING is in effect: (i) initially, the period (A) commencing
on the BORROWING DATE of such period, and (B) ending one, two, three or six
months thereafter, as the case may be, as determined in accordance with the
provisions of this Agreement; and (ii) thereafter, each subsequent INTEREST
PERIOD for such LIBOR RATE PRICING shall begin on the last day of the
immediately preceding INTEREST PERIOD and shall end one, two, three or six
months thereafter, as the BORROWER may select pursuant to Section 2.01; provided
that (A) any INTEREST PERIOD which would otherwise end on a day which is not a
BANKING DAY shall end and the next INTEREST
-7-
PERIOD shall commence on the next preceding day which is a BANKING DAY as
determined conclusively by the BANK in accordance with the then current bank
practices in London, England, and (B) any INTEREST PERIOD during which LIBOR
RATE PRICING is in effect that would otherwise extend beyond the MATURITY DATE
of said loan shall end on the TERMINATION DATE.
"INVENTORY" shall mean all of BORROWER'S and the SPECIAL
SUBSIDIARIES' inventory, merchandise, finished inventory and all other
tangible personal property held by BORROWER and its SPECIAL SUBSIDIARIES for
sale or lease, furnished or to be furnished under contracts of service, or
used or consumed in BORROWER'S and its SPECIAL SUBSIDIARIES' respective
business(es).
"INVESTMENT PROPERTY" shall mean all of BORROWER'S and the SPECIAL
SUBSIDIARIES' securities, securities entitlements and securities accounts, and
all other INVESTMENT PROPERTY within the meaning of such term under the UCC.
"J. JILL DIRECT" shall mean J. JILL DIRECT, INC., a Massachusetts
corporation, one hundred percent (100%) of whose capital stock is wholly owned
by BORROWER.
"LEASE(S)" shall mean any right of BORROWER and the SPECIAL
SUBSIDIARIES to use real or personal property which property is owned by
another.
"L/C APPLICATION" shall mean the BANK'S form of letter of credit
application and reimbursement agreement (a current form of which is annexed as
Exhibit 3.01) in use from time to time, which may be submitted by electronic
means or by facsimile transmission.
"L/C BALANCE shall mean the aggregate undrawn, uncanceled portions of
all LETTER(S) OF CREDIT outstanding from time to time and at any time.
"LETTER(S) OF CREDIT" shall mean LETTER(S) OF CREDIT issued by the BANK
for the account of the BORROWER or any of the SPECIAL SUBSIDIARIES, payable on
sight to a beneficiary who is a supplier of goods to the BORROWER or any of the
SPECIAL SUBSIDIARIES, which, upon delivery to BORROWER or any of the SPECIAL
SUBSIDIARIES, will be INVENTORY and which LETTER(S) OF CREDIT require the
delivery and presentation to BANK at the BANK'S OFFICE of DOCUMENTS reflecting a
sale of such goods to the BORROWER or any of the SPECIAL SUBSIDIARIES, as a
condition of BANK'S payment thereon.
-8-
"LIBOR BASE RATE" shall mean, with respect to any LIBOR RATE ADVANCE
for any INTEREST PERIOD, the rate per annum determined by the BANK to be the
rate at which deposits in DOLLARS are offered to BANK in the London Interbank
Market at approximately 10:00 a.m. (Boston time) two BUSINESS DAYS prior to the
first day of such INTEREST PERIOD for delivery on the first day of such INTEREST
PERIOD for a period equal to such INTEREST PERIOD and in an amount substantially
equal to the principal amount of the BORROWING of which a LIBOR RATE ADVANCE or
LIBOR RATE election is a part.
"LIBOR MARGIN" shall mean one and one half percent 1.5% per annum.
"LIBOR RATE" shall mean, with respect to any INTEREST PERIOD for each
LIBOR RATE ADVANCE, an interest rate per annum equal at all times during such
INTEREST PERIOD to the sum of (i) the ADJUSTED LIBOR RATE and (ii) the LIBOR
MARGIN.
"LIBOR RATE ADVANCE(S)" shall mean any ADVANCE, the interest rate on
which is calculated by reference to the LIBOR RATE.
"LIBOR RATE PRICING" shall mean any election of the BORROWER to pay or
to continue to pay the LIBOR RATE for any INTEREST PERIOD with respect to the
REAL ESTATE LOAN.
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other) or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever including, without limitation, any conditional sale or other
title retention agreement, and any financing lease having substantially the same
economic effect as any of the foregoing.
"LOAN ACCOUNT" shall mean the account or accounts on the books of BANK
in which will be recorded REVOLVING LOANS, and any other extensions of credit
made by BANK to the BORROWER pursuant to Article II hereof, payments made on
such REVOLVING LOAN(S) and extensions of credit and any other appropriate debits
and credits as provided by the FINANCING AGREEMENTS, other than the REAL ESTATE
LOAN.
"LOAN AGREEMENT " shall mean the Loan Agreement as amended from time to
time, including by this instrument, unless otherwise specified herein.
-9-
"MARGIN-STOCK" shall have the meaning set forth in Regulation U (12 CFR
221) of the Board of Governors of the Federal Reserve System.
"MATURITY DATE" shall mean July 30, 2002.
"MULTIEMPLOYER PLAN" shall mean a PLAN which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"OBLIGATIONS" shall mean all LOANS, ADVANCES, indebtedness,
liabilities, and amounts, liquidated or unliquidated, owing from the BORROWER or
any SPECIAL SUBSIDIARY to the BANK, at any time, and arising under the FINANCING
AGREEMENTS, absolute or contingent, due or to become due, now existing or
hereafter arising or contracted. Said term shall also include all interest, fees
and other charges chargeable to the BORROWER and the SPECIAL SUBSIDIARIES or due
from the BORROWER and the SPECIAL SUBSIDIARIES to the BANK from time to time
hereunder and also all covenants, agreements or undertakings of the BORROWER and
the SPECIAL SUBSIDIARIES to the BANK whether for the payment of money or
otherwise arising under the FINANCING AGREEMENTS.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to ERISA.
"PERSON" shall mean any individual, corporation (including a business
trust), partnership, trust, unincorporated association, joint stock company or
other legal entity or organization and any government or agent or political
subdivision thereof.
"PLAN" shall mean any plan of a type described in Section 4021(a) of
ERISA in respect of which the BORROWER or the SPECIAL SUBSIDIARIES is an
"employer" as defined in Section 3(5) of ERISA.
"PLEDGE AGREEMENTS" is defined in Section 8.04.
"PRIMARY OBLIGATION(S)" shall have the meaning set forth in the
definition of CONTINGENT OBLIGATIONS above.
"PRIME RATE" shall mean the annual rate of interest announced by the
BANK in Boston from time to time, as its "Prime Rate".
"PRIME RATE ADVANCE(S)" shall mean an ADVANCE, the interest rate on
which is calculated by reference to the PRIME RATE.
-10-
"PRIME RATE PRICING" shall mean any election of the BORROWER to pay the
PRIME RATE for any INTEREST PERIOD with respect to the REAL ESTATE LOAN or
pricing at the PRIME RATE in default of such election.
"QUARTERLY PERIOD" shall mean any three (3) month period ending on or
about the last day of the third, sixth, ninth and twelfth months of BORROWER'S
and the SPECIAL SUBSIDIARIES' FISCAL YEAR.
"QT SERVICES" shall mean QT SERVICES GROUP, INC., a Massachusetts
corporation, one hundred percent (100%) of whose capital stock is wholly owned
by BORROWER.
"REAL ESTATE" shall mean the real property located in Meredith, N.H. at
which the BORROWER maintained a distribution facility and commonly known and
numbered as One Winterbrook Way.
"REAL ESTATE CLOSING" shall mean the date of the closing of the REAL
ESTATE LOAN which occurred on July 30, 1997.
"REAL ESTATE LOAN" shall mean the loan which was made by the BANK to
the BORROWER pursuant to Article VI hereof.
"REAL ESTATE LOAN BALANCE" shall mean the outstanding unpaid balance
from time to time owed with respect to the REAL ESTATE LOAN.
"REAL ESTATE MORTGAGE" shall mean a mortgage of the REAL ESTATE, as the
same may hereafter be amended from time to time, granted by the BORROWER to the
BANK securing repayment of the OBLIGATIONS including without limitation the REAL
ESTATE NOTE, which shall include without limitation:
(a) A first security interest in the BORROWER'S equipment and fixtures
from time to time located at the REAL ESTATE, and in addition to the foregoing,
all contract rights, accounts, general intangibles and other personal property
now owned or hereafter acquired relating thereto.
(b) A first lien by assignment of the rents, leases and profits which
may from time to time be realized in connection with the REAL ESTATE. This
assignment shall call for exercise by the BANK only upon the occurrence of an
EVENT OF DEFAULT by BORROWER.
"REAL ESTATE NOTE" shall mean the promissory note dated as at the date
of the REAL ESTATE CLOSING in the face amount provided in Section 6.02
-11-
hereof issued by the BORROWER to the order of BANK and evidencing the obligation
to repay the REAL ESTATE LOAN.
"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"RESERVE RATE" shall mean the rate (expressed as a decimal) at which
the BANK would be required to maintain reserves under Regulation D (or its
equivalent) of the Board of Governors of the Federal Reserve System against
Eurocurrency Liabilities if such liabilities were outstanding. The ADJUSTED
LIBOR RATE shall be adjusted automatically on and as of the effective date of
any change in the RESERVE RATE, and the rate of interest thereby effected shall
simultaneously change.
"REVOLVING CREDIT COMMITMENT AMOUNT" (sometimes the "REVOLVING
COMMITMENT AMOUNT") shall mean the sum of Thirty Million Dollars
($30,000,000.00) unless BORROWER delivers written notice to the BANK requesting
a lesser amount and BANK confirms same in writing.
"REVOLVING LOAN(S)" shall mean the ADVANCES under Article II hereof.
"SECURITY AGREEMENTS" shall mean (i) a Security Agreement dated June 5,
1997, duly executed and delivered by the BORROWER, to the BANK granting a
security interest in all of the assets of the BORROWER, including, without
limitation, the COLLATERAL and securing the payment and performance of the
OBLIGATIONS as provided in Article VIII hereof, as the same has been amended and
may hereafter be amended, from time to time, and (ii) those certain Security
Agreements of even date, duly executed and delivered by each of the SPECIAL
SUBSIDIARIES to the BANK granting a security interest in all of the assets of
each respective SPECIAL SUBSIDIARY, including, without limitation, the
COLLATERAL and securing the payment and performance of the OBLIGATIONS as
provided in Article VIII hereof, as each of such Security Agreements has been
amended and may hereafter be amended from time to time.
"SHAREHOLDER PAYMENTS" shall mean any payment or distribution to or for
the benefit of any holder of any class of capital stock of BORROWER with respect
to such capital stock, directly or indirectly, whether in cash or in kind,
including, without limitation, dividends or payments in redemption or retirement
of any stock.
-12-
"SPECIAL SUBSIDIARIES" shall mean individually and collectively each of
QT SERVICES, BIRCH POND, and J. JILL DIRECT.
"SUBSIDIARY" shall mean any PERSON in which fifty percent (50%) of the
ownership interests are owned, directly or indirectly, by the BORROWER.
"STOCK PLEDGE AGREEMENTS" is defined in Section 8.05.
"TANGIBLE NET WORTH" shall mean the consolidated net worth of the
BORROWER and its SUBSIDIARIES including any "Deferred Tax Asset" but excluding
all other GENERAL INTANGIBLES.
"TERMINATION DATE" shall mean June 1, 2001.
"THIRD REPLACEMENT REVOLVING NOTE" shall mean the promissory note dated
as of May 4, 1999 in the face amount of Thirty Million Dollars ($30,000,000.00)
issued by the BORROWER to the order of the BANK, and evidencing the obligation
to repay the REVOLVING LOAN, as the same is amended of even date, and as the
same may be amended, replaced or substituted hereafter.
"TREASURY BASE RATE" shall mean the annual rate of interest equal to
the yield of United States Treasury securities with a three (3) year maturity
with respect to the REAL ESTATE LOAN as determined by the BANK.
"TREASURY MARGIN" shall mean one and one-half percent (1.5%).
"TREASURY RATE" shall mean with respect to any INTEREST PERIOD an
interest rate per annum equal at all times during said INTEREST PERIOD to the
sum of (i) the TREASURY BASE RATE and (ii) the TREASURY MARGIN.
"TREASURY RATE PRICING" shall mean any election of the BORROWER to pay
the TREASURY RATE for any INTEREST PERIOD with respect to the REAL ESTATE LOAN.
"UCC" shall mean the Uniform Commercial Code as in effect in The
Commonwealth of Massachusetts, as amended from time to time.
"UNFINANCED CAPITAL EXPENDITURES" shall mean consolidated capital
expenditures minus new consolidated long term indebtedness issued during the
applicable period plus the aggregate amount of all long term indebtedness
prepaid during such period. The term "long term indebtedness" as
-13-
used in this definition shall include, but not be limited to, those items shown
on Schedule 1.01.
1.02 All terms defined in the UCC and used in this Agreement, and not
otherwise defined herein, shall have the meaning ascribed to them in the UCC.
1.03 All accounting terms used in this agreement, including, without
limitation, "net worth", "current assets", "current liabilities", "liabilities",
"net income", "income" and "expense" shall, except as otherwise specifically
provided herein, be determined in accordance with GAAP.
ARTICLE II
REVOLVING LOANS
2.01 Subject to, and upon the terms and conditions herein provided,
during the AVAILABILITY PERIOD, the BANK agrees to make ADVANCES to the BORROWER
including, without limitation, those ADVANCES provided for in Section 3.06
hereof which shall be deemed ADVANCES under this Section 2.01, so long as (A)
after giving effect to the making of each ADVANCE, the then CREDIT BALANCE does
not exceed the REVOLVING CREDIT COMMITMENT AMOUNT and (B) at the time of such
ADVANCE the conditions specified in Section 2.08 have been and remain fulfilled.
2.02 Whenever the BORROWER wishes to request the making of an ADVANCE
hereunder, the BORROWER shall make such BORROWING REQUEST in writing, which
shall be substantially in the form of Exhibit "2.02", and shall deliver the same
to the BANK not later than 12:00 noon (Boston time) two (2) BUSINESS DAYS prior
to the BORROWING DATE specified therein if the ADVANCE is to be a LIBOR RATE
ADVANCE, and not later than 12:00 noon (Boston time) on the BORROWING DATE
(followed by written certification within two (2) BUSINESS DAYS thereafter), if
the ADVANCE is to be a PRIME RATE ADVANCE).
2.03 Each BORROWING REQUEST for an ADVANCE pursuant to Section 2.02
shall specify the proposed BORROWING DATE, the aggregate amount of the proposed
ADVANCE, whether such ADVANCE will be a PRIME RATE ADVANCE or a LIBOR RATE
ADVANCE and, in the case of a LIBOR RATE ADVANCE, the initial INTEREST PERIOD
with respect thereto.
2.04 The BANK will credit the amount of each ADVANCE to a demand
deposit account maintained by the BORROWER.
-14-
2.05 The debit balance of the LOAN ACCOUNT shall reflect the amount of
the BORROWER'S indebtedness to the BANK from time to time by reason of ADVANCES
under this Article II and any other appropriate charges under the FINANCING
AGREEMENTS. At least once each month the BANK shall render to the BORROWER a
statement of account showing as of its date the debit balance on the LOAN
ACCOUNT which, unless within thirty (30) days of such date, notice to the
contrary is received by the BANK from the BORROWER, shall be considered correct
and accepted by the BORROWER and conclusively binding upon it absent manifest
error.
2.06 No ADVANCE under this Article II will be made on or after the
TERMINATION DATE.
2.07 All OBLIGATIONS arising under or by reason of this Article II
shall be paid in full, without notice or demand, on the TERMINATION DATE or upon
any earlier acceleration, notwithstanding any provisions of the THIRD
REPLACEMENT REVOLVING NOTE or other instrument evidencing any part of the
OBLIGATIONS.
2.08 No ADVANCES Under this Article II will be made, nor any LETTERS OF
CREDIT issued, unless each of the following conditions shall have been and
remain fulfilled as of the BORROWING DATE.
(a) All conditions precedent as set forth in Article XV shall have
been and remain fulfilled.
(b) No EVENT OF DEFAULT shall have occurred and be continuing, nor
shall a DEFAULT have occurred and be continuing.
(c) The warranties and representations set forth in Article IX
hereof shall be true and correct, in all material respects, as
of the date they were made, and, except to the extent that
written notice of a change thereof shall have been given by
the BORROWER to the BANK, and such change would not constitute
a DEFAULT or EVENT OF DEFAULT, on the date of the BORROWING
REQUEST.
2.09 All ADVANCES and repayments of principal of the PRIME RATE
ADVANCES shall be in integral multiples of Ten Thousand Dollars ($10,000.00).
All LIBOR RATE ADVANCES shall be in the minimum amount of Five Hundred Thousand
Dollars ($500,000.00) and in integral multiples of One Hundred Thousand Dollars
($100,000.00).
-15-
2.10 If at any time the CREDIT BALANCE exceeds the REVOLVING CREDIT
COMMITMENT AMOUNT, BORROWER shall forthwith pay to the BANK such amount as may
be necessary to reduce the CREDIT BALANCE to the REVOLVING CREDIT COMMITMENT
AMOUNT.
2.11 During the AVAILABILITY PERIOD, BORROWER may repay, in whole or in
part, without penalty, the outstanding principal of the PRIME RATE ADVANCES.
Such repayment may be effected by a new BORROWING subject to the provisions
hereof.
2.12 Notwithstanding the provisions of this Article II, the BANK, in
its discretion, may make ADVANCES in excess of the REVOLVING CREDIT COMMITMENT
AMOUNT.
2.13 The obligation of the BORROWER to repay the REVOLVING LOANS with
interest thereon is and shall be evidenced by the THIRD REPLACEMENT REVOLVING
NOTE.
2.14 Prior to the TERMINATION DATE, all LIBOR RATE ADVANCES shall be
repaid in full at the end of each applicable INTEREST PERIOD. Such repayment may
be effected by a new BORROWING.
2.15 A request by the BORROWER for a LIBOR RATE ADVANCE shall be
irrevocable.
2.16 The proceeds of all ADVANCES shall be applied to the working
capital needs of the BORROWER and its SPECIAL SUBSIDIARIES. BORROWER may use the
proceeds of any ADVANCE to fund the working capital needs of any of the SPECIAL
SUBSIDIARIES. In conjunction with an intercompany loan and cash management
agreement dated as of August 7, 2000, which shall be in form and substance
satisfactory to the BANK, BORROWER and each applicable SPECIAL SUBSIDIARY will
record on their respective books and records (i) all loans and advances from
BORROWER to any SPECIAL SUBSIDIARY of BORROWER and (ii) all loans and advances
from any SPECIAL SUBSIDIARY to BORROWER. Any security obtained by BORROWER from
such SPECIAL SUBSIDIARY for such loan or advance is hereby assigned to BANK as
additional security for the OBLIGATIONS.
2.17 At least once each consecutive thirteen (13) month period
commencing with the date hereof, the BORROWER shall fully repay the REVOLVING
LOANS which repayment shall not be effected by BORROWING, and BORROWER shall not
effect or permit any ADVANCE for a period of thirty (30) consecutive days
thereafter within said thirteen (13) month period, provided
-16-
however that the foregoing shall not apply to any issuances of LETTERS OF CREDIT
in the normal course of business during such period.
ARTICLE III
LETTERS OF CREDIT
3.01 Subject to and upon the terms and conditions herein provided,
during the AVAILABILITY PERIOD, the BANK shall issue LETTERS OF CREDIT on behalf
of BORROWER or one of the SPECIAL SUBSIDIARIES to purchase INVENTORY so long as:
(A) After giving effect to each such issuance, the CREDIT BALANCE does not
exceed the REVOLVING COMMITMENT AMOUNT; (B) All conditions specified in Section
2.08 shall have been fulfilled; (C) BORROWER shall have delivered to the BANK
for itself or on behalf of one of the SPECIAL SUBSIDIARIES (i) an L/C
APPLICATION, duly completed and executed, or a facsimile application followed up
by the original documents received by the BANK within Three (3) BUSINESS DAYS
thereafter, or by electronic transmission, which is not required to be followed
by additional submissions (the forms of all such written applications are
annexed hereto as Exhibit 3.01), (ii) such other accompanying documentation as
the BANK shall require, and (iii) an amount equal to BANK'S then customary
letter of credit application fee and other fees, which amounts shall be
non-refundable. The face amount of any LETTER OF CREDIT shall not exceed the
purchase price of the INVENTORY purchased therewith and covered by the document
relating thereto.
3.02 No LETTER OF CREDIT shall be issued after the TERMINATION DATE. No
LETTER OF CREDIT to be issued hereunder shall permit a draft to be presented
thereunder after the earlier of (A) 180 days after the date of issue thereof or
(b) three (3) BANKING DAYS before the TERMINATION DATE.
3.03 Each LETTER OF CREDIT shall be in such form, contain such terms
and support such transactions as shall be satisfactory to the BANK consistent
with its then current practices.
3.04 The BORROWER hereby agrees to indemnify and hold harmless the BANK
from and against any and all claims and damages, losses, liabilities, costs or
expenses which the BANK may incur (or which may be claimed against the BANK by
any PERSON whatsoever) by reason of or in connection with the execution and
delivery or transfer of, or payment or refusal to pay, under any LETTER OF
CREDIT; provided that the BORROWER shall not be required to indemnify the BANK
for any claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by (x) the willful
-17-
misconduct or gross negligence or bad faith of the BANK in determining whether a
request presented under any LETTER OF CREDIT complied with the terms of such
LETTER OF CREDIT or (y) the BANK'S failure to pay under any LETTER OF CREDIT
after the presentation to it of a draft and DOCUMENTS strictly complying with
the terms and conditions of such LETTER OF CREDIT. Nothing in this Section is
intended to limit the other obligations of the BORROWER, or the BANK under this
Agreement.
3.05 Notwithstanding the provisions of Section 3.01, BANK in its
discretion may issue LETTERS OF CREDIT such that the CREDIT BALANCE exceeds the
REVOLVING COMMITMENT AMOUNT.
3.06 If a draft shall be presented under a LETTER OF CREDIT and the
BANK shall honor the same, the BANK shall charge any demand deposit account of
the BORROWER or any SUBSIDIARY for whose benefit or on whose behalf the LETTER
OF CREDIT was issued and if the balance(s) of such account(s) is not sufficient,
such presentation, up to the full amount of the LETTER OF CREDIT, shall be
deemed to be a request of the BANK by the BORROWER for a PRIME RATE ADVANCE,
pursuant to Section 2.01 hereof without any notice to or from BORROWER being
required and the amount paid by the BANK with respect to such draft shall be
deemed to be a PRIME RATE ADVANCE provided however that if by virtue of such
ADVANCE, the CREDIT BALANCE shall exceed the REVOLVING COMMITMENT AMOUNT, the
excess shall be forthwith repaid by the BORROWER.
ARTICLE IV
TERM LOAN
INTENTIONALLY DELETED
ARTICLE V
THE INTERIM LOAN
INTENTIONALLY DELETED
ARTICLE V(A)
-18-
BRIDGE LOAN
INTENTIONALLY DELETED
ARTICLE V(B)
SHORT TERM REVOLVING LOAN
INTENTIONALLY DELETED
ARTICLE VI
REAL ESTATE LOAN
6.01 The terms, provisions and conditions hereof having been fulfilled,
no DEFAULT or EVENT OF DEFAULT having occurred and the provisions of Section
2.08(a) having been fulfilled, and those in Sections 2.08(b) and 2.08(c) having
been represented by the BORROWER to have been fulfilled, the BANK made the REAL
ESTATE LOAN to BORROWER in accordance with the terms, provisions and conditions
set forth below.
6.02 The amount of the REAL ESTATE LOAN was One Million Six Hundred
Fifty Thousand Dollars ($1,650,000.00).
6.03 Payment of the REAL ESTATE LOAN shall be effected in fifty-nine
(59) consecutive monthly payments in the principal amount of Nine Thousand One
Hundred Sixty-Seven Dollars ($9,167.00) and a final payment equal to the then
REAL ESTATE LOAN BALANCE.
6.04 The obligation of the BANK to make the REAL ESTATE LOAN was
subject to satisfaction by the BANK of each of the following:.
(a) The BANK having received an appraisal satisfactory to it.
-19-
(b) The BANK having been furnished with a satisfactory survey
of the REAL ESTATE depicting the following: that the bounds and measurements
shown on the plan are substantially correct, that the title lines and actual
lines of possession are the same; the location of all means of ingress to and
egress from the REAL ESTATE; the actual and/or plan location of all utilities
services from the REAL ESTATE to the nearest public road or right-of-way, and if
from the REAL ESTATE to the public right-of-way they pass over land owned by
others, said passage shall be by means of valid, recorded easement not subject
to divestiture; the bounds of any areas submitted to the Federal Flood Disaster
Protection Act and any other area restricting use; the location of all easements
and takings affecting the REAL ESTATE; and depicting that no encroachment over
any property lines or over any easements, servitudes or rights-of-way exist. The
survey having been certified to by a licensed professional engineer reasonably
acceptable to the BANK.
(c) The BANK having been furnished with a certificate of a
licensed professional engineer satisfactory to the BANK certifying to the
following: (1) That the utilities services, storm drainage and sewage facilities
are sufficient to adequately service the REAL ESTATE; (2) the REAL ESTATE and
its current use comply with all applicable zoning, building code, health, fire,
safety and environmental statutes, codes, bylaws and regulations.
(d) There having been delivered to the BANK the opinions of
BORROWER'S counsel relating to (i) due authorization, enforceability,
non-contravention absence of litigation; (ii) zoning and land use; (iii) such
other matters (not including compliance with ENVIRONMENTAL LAWS) as the BANK
shall reasonably require.
(e) The BANK having received satisfactory reports from
acceptable, qualified professionals indicating on the basis of soils tests and
other tests and inspections that the REAL ESTATE complies with ENVIRONMENTAL
LAWS and areas adjacent thereto are free from hazardous materials, hazardous
wastes, asbestos, PCB's or toxic substances and that the REAL ESTATE has not
been used as a dump site for oil, hazardous materials, hazardous wastes,
asbestos, PCB's or toxic substances or otherwise used in such a manner which
would cause the likelihood of incurring any liability under Federal or state
legal requirements regarding oil, hazardous materials, hazardous wastes or toxic
substances. Without limitation, the REAL ESTATE MORTGAGE shall contain a
provision whereby BORROWER shall be obligated to immediately contain and remove
any hazardous waste and toxic substances found on the REAL ESTATE. In addition,
it shall be an event of default under the REAL ESTATE MORTGAGE if BORROWER shall
fail to obtain a satisfaction of any "Notice of Violation"
-20-
("NOV") within 60 days after the issuance thereof or if any "Superlien" claim is
filed against the REAL ESTATE under the Superfund Act.
(f) The REAL ESTATE MORTGAGE having been insured by a title
insurer acceptable to the BANK, which policy shall comply with the following: it
shall be in the standard ALTA form; there shall be no exceptions for survey,
easements or other use restrictions not shown on the survey which are acceptable
to the BANK; there shall be no inspection exceptions except in respect to
improvements thereafter added; the standard form so-called pending disbursement
exception shall be permitted; and there shall be no other exceptions which in
the opinion of counsel to the BANK may have an adverse effect upon the use of
all or any portion of the REAL ESTATE as contemplated.
(g) The conditions specified in Article XV and Section 2.08
having been, and remaining fulfilled.
(h) There having been delivered to the BANK an insurance
policy, including liability and extended coverage, in amounts satisfactory to
the BANK and first payable to the BANK as mortgagee. The BANK shall have been
furnished with evidence that flood insurance is not required for the REAL ESTATE
under the Federal Flood Disaster Protection Act. In the event that flood
insurance is required, flood insurance written by a company satisfactory to the
BANK and in an amount and form acceptable to the BANK shall also have been
disclosed.
(i) The BANK having received such other customary documents as
the BANK shall reasonably have requested.
6.05 All closing documents prepared to close the REAL ESTATE LOAN
contemplated hereby were in form and contain terms and provisions consistent
with this Article VI and as reasonably required by counsel to the BANK.
6.06 While the REAL ESTATE LOAN remains outstanding, no portion of the
REAL ESTATE PREMISES may be sold. While the REVOLVING LOAN(s) or REAL ESTATE
LOAN remain outstanding, there shall be no other liens on the REAL ESTATE
granted by the BORROWER except such as granted to the BANK hereunder.
6.07 (a) The REAL ESTATE LOAN shall bear interest at the rate of six
and 81/100 percent (6.81%) per annum from the date of the REAL ESTATE CLOSING
until August 31, 1999. Thereafter it shall bear interest at the PRIME RATE
unless there shall be an election as provided below.
-21-
(b) If, effective on or after September 1, 1999, the BORROWER
wishes to convert the REAL ESTATE LOAN from PRIME RATE PRICING or what would be
PRIME RATE PRICING but for an election as provided herein, to LIBOR RATE
PRICING, or if the BORROWER wishes to continue to pay interest at the LIBOR RATE
after the end of a current INTEREST PERIOD during which LIBOR RATE PRICING has
been elected, as the case may be, BORROWER shall give an irrevocable request to
the BANK which must be received by the BANK not later than 10:00 a.m., Boston
time, two (2) BANKING DAYS before (i) the CONVERSION DATE if PRIME RATE PRICING
is, or would be, in effect, or (ii) the last day of any current INTEREST PERIOD
during which LIBOR RATE PRICING is in effect, as the case may be, requesting
that interest rate be so converted, or continued, as the case may be, and notice
of the requested CONVERSION DATE if the request is to convert from PRIME RATE
PRICING. The request shall specify the duration of the INTEREST PERIOD
applicable to such conversion or continuance, subject to any requirements
elsewhere herein set forth.
(c) If the BORROWER wishes to convert the REAL ESTATE LOAN
from PRIME RATE PRICING or LIBOR RATE PRICING to TREASURY RATE PRICING, BORROWER
shall give an irrevocable request to the BANK which must be received by the BANK
not later than 10:00 a.m., Boston time, two (2) BANKING DAYS before (i) the
CONVERSION DATE if PRIME RATE PRICING is in effect or (ii) or the last day of
any current INTEREST PERIOD during which LIBOR RATE PRICING is in effect, as the
case may be, requesting that interest rate be so converted and notice of the
requested CONVERSION DATE if the request is to convert from PRIME RATE PRICING.
Notwithstanding any other provision hereof, once TREASURY RATE PRICING is
elected, it shall be for the balance of the term of the REAL ESTATE LOAN.
(d) No such election to pay any rate other than the PRIME RATE
shall be given effect if on the date of election or the date on which such
election would be given effect, there exists any DEFAULT or EVENT OF DEFAULT.
ARTICLE VII
INTEREST, FEES AND COMPUTATION
7.01 The BORROWER will pay interest on the daily outstanding unpaid
balance of principal of the ADVANCES at the following rates:
(a) On PRIME RATE ADVANCES, the PRIME RATE; and
(b) On LIBOR RATE ADVANCES, the LIBOR RATE.
-22-
7.02 Interest on the unpaid balance of the ADVANCES shall be paid on
each INTEREST PAYMENT DATE and upon the TERMINATION DATE or earlier upon
acceleration.
7.03 INTENTIONALLY DELETED.
7.04 INTENTIONALLY DELETED.
7.05 Intentionally Deleted.
7.06 The BORROWER will pay interest on the REAL ESTATE LOAN BALANCE at
the rates provided in Section 6.07(a) unless BORROWER shall have made an
election to pay at the TREASURY RATE or LIBOR RATE as permitted in said Section
6.07 in which case interest shall be payable at the rate so elected.
7.07 The BORROWER will also pay to the BANK on demand such standard and
regular charges as the BANK makes with respect to commercial letters of credit,
including, without limitation issuance, negotiation and amendment fees.
7.08 BORROWER shall pay to BANK a commitment fee (the "Commitment Fee")
for the period commencing on the date hereof, to and including the earlier of
the TERMINATION DATE or acceleration of the CREDIT BALANCE equal to one eighth
of one percent (.125%) per annum (computed daily on the basis of the actual
number of days elapsed over a 360 day year) on the amount by which the REVOLVING
CREDIT COMMITMENT AMOUNT exceeds CREDIT BALANCE. The Commitment Fee shall be
payable monthly in arrears and on the TERMINATION DATE.
7.09 In the event any payment of principal or interest, fee, or other
amount payable by the BORROWER under the FINANCING AGREEMENTS shall not be paid
when due and shall remain unpaid for ten (10) days thereafter, the BORROWER
shall pay interest with respect thereto commencing as of the date such payment
was initially due at a per ANNUM rate equal to the sum of (x) the rate of
interest in effect on the due date of such payment, and (y) four percent (4%)
per annum. In the event that BORROWER shall default under terms of the L/C
APPLICATION, amounts due from BORROWER shall bear interest at a rate equal to
(a) PRIME RATE plus (b) three percent (3%) per annum payable daily.
7.10 All rates of interest based on the PRIME RATE shall change
immediately upon the date upon which a change in the PRIME RATE shall become
effective.
-23-
7.11 Except as otherwise expressly provided in this Agreement, whenever
any payment to be made by the BORROWER hereunder shall be stated to be due on a
day other than a BANKING DAY, such payment shall be made on the next succeeding
BANKING DAY, and such extension of time shall in such case be included in the
computation of such payment.
7.12 All payments by the BORROWER under this Agreement shall be made
without set-off or counterclaim and free and clear of and without deduction for
any taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any country or any political subdivision thereof or taxing
or other authority therein unless the BORROWER is compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the BORROWER
with respect to any amount payable by it hereunder, the BORROWER will pay to the
BANK, on the date on which the said amount becomes due and payable hereunder,
such additional amount as shall be necessary to enable the BANK to receive the
same net amount which it would have received on such due date had no such
obligation been imposed upon the BORROWER. The BORROWER will deliver promptly to
the BANK certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the BORROWER hereunder.
7.13 The BORROWER agrees to pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges or similar
levies, excluding, in the case of the BANK, taxes imposed on it by the
jurisdiction under the laws of which the BANK is organized or any political
subdivision thereof and taxes imposed on its net income and franchise taxes
imposed on it, which arise from any payment made by the BORROWER hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this LOAN AGREEMENT, or any other of the FINANCING AGREEMENTS. The BORROWER will
indemnify the BANK on demand for the full amount of any such taxes, charges or
similar levies paid by the BANK or any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto.
7.14 Without prejudice to the survival of any other agreement of the
BORROWER hereunder, the agreements and obligations of the BORROWER contained in
Sections 7.13 AND 7.14 shall survive the payment in full of principal of and
interest on the LOANS. The BANK agrees to give to the BORROWER notice of any
such taxes, charges or similar levies paid by it and for which demand for
payment may be made hereunder, and the BORROWER shall have the right to contest
the validity or legal assertion thereof; provided, however, that
-24-
the foregoing shall in no way limit the BORROWER'S obligation to indemnify the
BANK as in this Agreement provided.
7.15 All interest, fees or other charges payable by BORROWER to BANK
shall be computed on the basis of a year of three hundred sixty (360) days and
for the actual number of days elapsed.
7.16 INTENTIONALLY DELETED.
7.17 Interest not paid when due shall become a portion of the loans to
which they relate and bear interest at the applicable rate until paid in full.
7.18 Upon the occurrence and during the continuance of an EVENT OF
DEFAULT, BORROWER for itself and on behalf of its SPECIAL SUBSIDIARIES hereby
authorizes BANK to charge any account maintained by each of them with BANK for
any payment due from BORROWER or its SUBSIDIARIES under any of the FINANCING
AGREEMENTS. In any of such cases, such authorization, however, does not obligate
BANK so to charge nor does it limit BORROWER'S or its SUBSIDIARIES' obligation
to make such payment when due.
7.19 Each payment to be made by BORROWER hereunder, whether principal,
interest, fees, or of any other kind, shall be paid not later than 2:00 p.m.
(Boston time) on the day when due to the BANK at the BANK'S OFFICE in DOLLARS
and in immediately available funds.
7.20 The BANK shall calculate all interest rates arising and all
interest and fees due hereunder.
7.21 In the event that the BORROWER shall, before the due date
therefor, prepay all or any portion of the REAL ESTATE LOAN which is subject to
TREASURY RATE PRICING, whether by reason of voluntary prepayment or
acceleration, BORROWER shall pay a prepayment charge equal to the BANK'S COST OF
FUNDS REDEPLOYMENT unless such prepayment is made from BORROWER'S EXCESS CASH
FLOW.
7.22 In addition to and not in limitation of any other provision of
this Agreement, BORROWER will, on demand by the BANK at any time, indemnify the
BANK against COST OF FUNDS REDEPLOYMENT as a consequence of:
(a) The breach by the BORROWER of its OBLIGATIONS to borrow a
LIBOR RATE ADVANCE on the BORROWING DATE thereof;
-25-
(b) The failure by the BORROWER to pay, punctually on the due date
thereof, any amount payable hereunder with respect to a LIBOR
RATE ADVANCE;
(c) The repayment or prepayment of any principal of any LIBOR RATE
ADVANCE of the REAL ESTATE LOAN at a time when the said
obligation is subject to LIBOR RATE PRICING, on a date other
than the due date of such principal, whether due to
acceleration or otherwise.
7.23 COSTS OF FUNDS REDEPLOYMENT shall mean the following:
(i) any costs incurred by the BANK in carrying funds
which were to have been borrowed by the BORROWER or
in carrying funds to cover the amount of any overdue
principal of or overdue interest thereon;
(ii) any interest payable by the BANK to lenders of the
funds borrowed by the BANK in order to carry the
funds referred to in the immediately preceding
sub-clause (i); and
(iii) any losses incurred by the BANK in liquidating or
re-employing funds acquired from third parties to
effect or maintain the same. The amount (and the
computations thereof) of any such losses, costs and
expenses shall be determined reasonably by the BANK
and set forth in a certificate signed by an officer
of the BANK, which certificate shall, save for
manifest error, be conclusive and binding upon the
BORROWER.
7.24 Without prejudice to any other rights it may have, the BANK may
collect a "late charge" equal to five (5%) percent of any OBLIGATION not paid
within fifteen (15) days of the due date thereof.
7.25 If at any point, during the term of the REVOLVING LOAN or the REAL
ESTATE LOAN, the LIBOR BASE RATE shall cease to be available then, thereafter,
during such period of unavailability, LIBOR RATE ADVANCES and LIBOR RATE PRICING
shall cease to be available hereunder with respect thereto.
-26-
ARTICLE VIII
SECURITY, GUARANTIES AND SUBORDINATION
8.01 Any and all deposits or other sums at any time credited by or due
from BANK to BORROWER or BORROWER'S SUBSIDIARIES shall, at all times constitute
security for all OBLIGATIONS and upon and during the continuance of an EVENT OF
DEFAULT may be set off against any of the OBLIGATIONS at any time when due
whether or not other security held by BANK is deemed to be adequate.
8.02 The OBLIGATIONS shall at all times be guaranteed, jointly and
severally, in full, by GUARANTIES of each of the SPECIAL SUBSIDIARIES, by
separate instruments in form and substance satisfactory to the BANK.
8.03 The OBLIGATIONS shall be secured by security interests granted by
the BORROWER and by each of the SPECIAL SUBSIDIARIES pursuant to the SECURITY
AGREEMENTS, as well as by all of the other FINANCING AGREEMENTS, which shall be
subject to no LIENS except those permitted under Section 11.06.
8.04 Pursuant to the SECURITY AGREEMENTS, the OBLIGATIONS shall be
secured by a pledge and security interest in and to all loans or advances,
whether or not secured, from BORROWER to any SPECIAL SUBSIDIARY, and by a
pledge and security interest in and to all loans or advances, whether or not
secured, from any SPECIAL SUBSIDIARY to BORROWER. The BANK reserves the right
from and after the date hereof to require execution and delivery to it of
pledge agreements in form and substance satisfactory to it from BORROWER and
each SUBSIDIARY and the taking of all action necessary or required by BANK to
effect more securely the BANK'S rights with respect thereto.
8.05 The OBLIGATIONS shall be secured at all times by a pledge by
BORROWER of all of the issued and outstanding stock of each of the SPECIAL
SUBSIDIARIES, subject to no LIEN, pursuant to pledge agreements in form and
substance satisfactory to the BANK (collectively, the "STOCK PLEDGE AGREEMENT"),
together with the delivery of stock powers each executed in blank.
ARTICLE IX
WARRANTIES AND REPRESENTATIONS
9.01 The BANK has entered into this Agreement in reliance upon the
warranties and representations of the BORROWER and the warranties and
representations relating to the SPECIAL SUBSIDIARIES set forth in this Article,
-27-
each of which is acknowledged to be continuing and material. Each such warranty
and representation shall be deemed to have been newly made on each day BORROWER
requests an ADVANCE except to the extent that written notice of a change thereof
shall have been given by the BORROWER to the BANK, and such change would not
constitute a default or event of default pursuant to Section 12.01(e).
9.02 The BORROWER and each of the SPECIAL SUBSIDIARIES is a duly
organized and existing corporation under the laws of its state of incorporation
and is in good standing under the laws thereof.
9.03 The BORROWER and each of the SPECIAL SUBSIDIARIES is duly
qualified to do business and is in good standing as a foreign corporation in
each state or other jurisdiction where the failure to so qualify would have a
material adverse effect on the BORROWER and each of the SPECIAL SUBSIDIARIES as
a group of entities. All such jurisdictions, if any, are listed on Exhibit
"9.03" to this instrument.
9.04 The BORROWER and each of the SPECIAL SUBSIDIARIES has good title
to all properties and assets which it purports to own, as reflected in the
CURRENT FINANCIALS, free and clear of all mortgages, liens, pledges, security
interests and encumbrances except as set forth on Exhibit 9.04 or permitted by
Section 11.06 to this instrument.
9.05 The BORROWER and each of the SPECIAL SUBSIDIARIES owns or leases
and holds all real and personal property necessary or incidental to the conduct
of its businesses, including without limitation, patents, trademarks, service
marks, trade names, copyrights and licenses and other rights with respect to the
foregoing.
9.06 All books and records of the BORROWER and each of the SPECIAL
SUBSIDIARIES, including, but not limited to, minute books, by-laws and books of
account fairly reflect all matters and transactions which should currently be
reflected therein.
9.07 J. JILL DIRECT's business consists principally of the sale of
personal property through CATALOGS, outlet stores and internet sales. BIRCH
POND's business consists principally of the sale of personal property through
retail stores. QT SERVICES's business consists principally of providing
administrative services with respect to the activities of BORROWER, J. JILL
DIRECT and BIRCH POND. BORROWER's business consists principally of providing
executive management with respect to the activities of the SPECIAL SUBSIDIARIES
and related business activities.
-28-
9.08 Except as set forth in Exhibit 9.08 to this instrument and except
for the SPECIAL SUBSIDIARIES, the BORROWER has no subsidiaries nor any
investments in the stock or securities of any other corporation, firm, trust or
other entity, except Birch Pond Realty Corp.
9.09 Except as set forth in Exhibit 9.09 to this instrument, there are
no actions, suits, proceedings, or investigations pending or, to the knowledge
of BORROWER, threatened against the BORROWER, the SPECIAL SUBSIDIARIES, or any
of its or their properties in any court, before any governmental authority,
arbitration board, or any other tribunal which, singly or in the aggregate, if
decided adversely to BORROWER or any one or more of the SPECIAL SUBSIDIARIES,
would materially and adversely affect the business, properties or condition
(whether financial or otherwise) of the BORROWER and the SPECIAL SUBSIDIARIES as
a group of entities. BORROWER is not, nor by execution and delivery of the
FINANCING AGREEMENTS and performance of the OBLIGATIONS (with or without the
passage of time or the giving of notice), will be, in default with respect to
any order of any court, governmental authority, arbitration board or other
tribunal.
9.10 BORROWER has furnished to the BANK the financial statements at
June 30, 2000 for the prior six (6) month period. Said statements, the "CURRENT
FINANCIALS," fairly present the condition of the BORROWER and the SPECIAL
SUBSIDIARIES on a consolidated and consolidating basis at the dates thereof, all
in conformity with GAAP except, in respect of interim statements, with respect
to footnotes, and subject to customary year end adjustments.
9.11 Except to the extent reflected or reserved against in the CURRENT
FINANCIALS or as set forth on Exhibit "9.11" to this instrument, if any,
BORROWER and the SPECIAL SUBSIDIARIES, as of the date of said financial
statements, had no material liabilities of any nature, whether accrued,
absolute, contingent or otherwise, including, without limitation, tax
liabilities, due or to become due, or arising out of transactions entered into
or any state of facts existing prior thereto, of a type required by GAAP to be
reflected or reserved against on financial statements.
9.12 Since the date of the CURRENT FINANCIALS and through the date
hereof, and except as shown on Exhibit "9.12" to this instrument, there has not
been:
(a) any change in the condition of the BORROWER'S or the SPECIAL
SUBSIDIARIES' assets or liabilities, other than changes in the
-29-
ordinary course of business, none of which has been materially
adverse.
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the BORROWER'S
or the SPECIAL SUBSIDIARIES' property(ies) or business(es);
(c) any declaration of, setting aside of, or making of a payment
or any dividend or other distribution with respect to the
BORROWER'S or any of the SPECIAL SUBSIDIARIES' capital stock
or any direct or indirect redemption, purchase or other
acquisition of any such stock;
(d) any materially adverse:
(i) controversy with any labor organization or
employees;
(ii) claim or controversy involving any federal,
state or local government agencies; or
(iii) other event or condition affecting the
businesses of or properties of the BORROWER
or the SPECIAL SUBSIDIARIES.
9.13 The BORROWER and each of the SPECIAL SUBSIDIARIES has filed all
federal and state income tax returns, excise tax returns and all other tax
returns of every kind and nature which are required to be filed by it and
each has paid all taxes shown to be due on said returns, except where in the
future such taxes are being contested in good faith by appropriate
proceedings. Notwithstanding the foregoing to the extent the BORROWER has not
filed tax returns required to be filed by it with respect to the period prior
to the date of execution of this Agreement, such failure would not have a
material adverse effect on the condition of each of the BORROWER and the
SPECIAL SUBSIDIARIES as a group of entities. To BORROWER's knowledge, no
audit or other investigation is presently being conducted with respect to any
tax obligation of BORROWER or its SUBSIDIARIES.
9.14 INTENTIONALLY DELETED
9.15 The execution and delivery of the FINANCING AGREEMENTS, the
borrowing by BORROWER as herein provided, the execution and delivery by BORROWER
and the SPECIAL SUBSIDIARIES of all instruments, agreements and documents of
every kind and nature pursuant to this instrument and the
-30-
performance by the BORROWER and the SPECIAL SUBSIDIARIES of the OBLIGATIONS have
been duly authorized by the respective Boards of Directors of the BORROWER and
the SPECIAL SUBSIDIARIES and, to the extent required by law or otherwise, by
stockholders of each, and the FINANCING AGREEMENTS and all instruments,
agreements and documents executed pursuant thereto are valid and binding
obligations of the BORROWER and the SPECIAL SUBSIDIARIES to the extent they are
parties thereto, enforceable in accordance with their terms, except to the
extent that such enforceability may be limited by laws of general application
affecting the rights of creditors.
9.16 There is no provision in the charter, the by-laws, or other
charter documents of BORROWER or any of the SPECIAL SUBSIDIARIES, or any other
indenture, contract or agreement to which BORROWER or the SPECIAL SUBSIDIARIES
is a party or by which any of them is bound, which prohibits the execution and
delivery of the FINANCING AGREEMENTS or the performance by the BORROWER or any
of the SPECIAL SUBSIDIARIES of the OBLIGATIONS to which they are bound.
9.17 No DEFAULT or EVENT OF DEFAULT exists. Neither the nature of
BORROWER'S or the SPECIAL SUBSIDIARIES' business(es) or properties, nor any
relationships in connection with the execution or delivery of the FINANCING
AGREEMENTS is such as to require a consent, approval, license, permit or
authorization of, or filing, registration, or qualification with, any
governmental authority on the part of BORROWER or the SPECIAL SUBSIDIARIES as a
condition to the execution and delivery of the FINANCING AGREEMENTS or any
instrument, agreement or document contemplated hereby, or the performance by the
BORROWER or any of the SPECIAL SUBSIDIARIES of the OBLIGATIONS.
9.18 Exhibit "9.18" to this instrument sets forth a full list of all
patents, patent applications, registered copyrights, and registered trademarks
and service marks currently used by the BORROWER and the SPECIAL SUBSIDIARIES.
9.19 Exhibit "9.19" to this instrument contains a description of all
real property and material personal property which the BORROWER and each of the
SPECIAL SUBSIDIARIES holds under a term of a LEASE, including a description of
the property, the date of the LEASE and the identity of the lessor.
-31-
ARTICLE X
AFFIRMATIVE COVENANTS
10.01 BORROWER and each of its SUBSIDIARIES shall furnish to BANK, in
form and detail acceptable to BANK:
(a) As soon as practicable and in any event within one hundred
twenty (120) days after the end of each fiscal year,
consolidated and consolidating statements, on an
unqualified audit basis, of income, retained earnings and
cash flow of the BORROWER and its SUBSIDIARIES for such
year, and audited balance sheets of the BORROWER and its
SUBSIDIARIES as at the end of such year, setting forth in
each case in comparative form corresponding figures for the
preceding fiscal year from the preceding annual audit, all
in reasonable detail and reasonably satisfactory in scope
to the BANK and certified by the ACCOUNTANTS whose
certificate shall be on an unqualified, audited basis
representing an unqualified opinion, all in scope and
substance satisfactory to the BANK, and such financial
statements shall be prepared in accordance with GAAP.
(b) As soon as practicable and in any event within forty-five
(45) days after the end of each of the first three
quarterly period in each FISCAL YEAR, consolidated and
consolidating statements of income and cash flow of the
BORROWER and its SUBSIDIARIES for the period from the
beginning of the current FISCAL YEAR to the end of such
quarterly period, and balance sheet of the BORROWER and its
SUBSIDIARIES as at the end of such quarterly period,
setting forth in each case commencing one year from the
date hereof, in comparative form, figures for the
corresponding period in the preceding FISCAL YEAR, all in
reasonable detail, and such financial statements shall be
prepared in accordance with GAAP subject to customary year
end adjustments and the absence of footnotes. Such
quarterly statements may be prepared internally.
(c) At the time of delivery of the reports required by Sections
10.01(a) and 10.01(b); a certificate of the Chief Financial
Officer, Vice President of Finance or Controller of the
BORROWER (i) stating that, in his or her opinion, if such be
the case, there has been and is existing no DEFAULT or EVENT
OF DEFAULT hereunder, or if that not be the case, setting
forth the details of all such DEFAULT
-32-
or EVENT OF DEFAULT, and (ii) showing appropriate calculations
indicating compliance (or non-compliance) with the covenants
set forth in Article XI and XII.
(d) Periodically, promptly after filed, copies of all notices to
shareholders, all proxies, reports and any other publicly
available materials filed with the Securities Exchange
Commission and all press releases.
(e) With reasonable promptness, such other financial data and/or
operating data as the BANK may reasonably request in such form
as the BANK may reasonably request.
10.02 The BORROWER will, and will cause its SPECIAL SUBSIDIARIES, duly
and punctually, to pay all interest, principal and all other amounts of money
becoming due from such party to the BANK and will duly and punctually perform
all things on their part to be done or performed under the FINANCING AGREEMENTS.
10.03 The BORROWER shall, and shall cause its SPECIAL SUBSIDIARIES to,
at all times, keep proper books of account which shall at all times fairly
reflect their financial condition and in which entries will be made of their
transactions in accordance with GAAP to the extent applicable thereto.
10.04 The BORROWER shall, and shall cause its SPECIAL SUBSIDIARIES to,
make its books and records available, in its offices, for inspection,
examination and copying by the BANK and the BANK'S representatives and at all
reasonable times (and, prior to a DEFAULT or EVENT OF DEFAULT, upon reasonable
notice), permit inspection of its books and records and properties by the BANK
and the BANK'S representatives.
10.05 The BORROWER shall, and shall cause its SPECIAL SUBSIDIARIES to,
maintain its corporate existence in good standing. The BORROWER shall, and shall
cause its SPECIAL SUBSIDIARIES to, comply with all laws and regulations of the
United States, or any state or states thereof, of any political subdivision
thereof and of any governmental authority which may be applicable to it or them
or to its or their business including, without limitation, the ENVIRONMENTAL
LAWS; provided, however, that a failure so to comply which does not materially
and adversely affect its or their businesses or financial condition shall not be
a breach hereof.
10.06 The BORROWER shall, and shall cause its SPECIAL SUBSIDIARIES to,
pay all real and personal property taxes, assessments and
-33-
charges and all franchise, income, unemployment, old age benefit, withholding,
sales and other taxes assessed against it or them or payable by it or them at
such times and in such manner to prevent any penalty from accruing or any lien
or charge from attaching to its or their properties. The provisions of this
section, however, shall not preclude BORROWER or any of its SPECIAL SUBSIDIARIES
from contesting in good faith any such tax, nor shall there be a default
hereunder, by reason of the existence of a lien for taxes not then due provided
that the BORROWER or applicable SUBSIDIARY(IES) shall have set aside on its
books reserves certified by the BORROWER to be adequate for the timely
satisfaction of such obligations.
10.07 The BORROWER shall, and shall cause its SPECIAL SUBSIDIARIES to,
maintain its properties in good repair, working condition and order, reasonable
wear and tear excepted, and from time to time, make all needful and proper
repairs, renewals and replacements.
10.08 The BORROWER shall, and shall cause its SPECIAL SUBSIDIARIES to,
maintain insurance covering such risks and in such minimum amounts as BANK may
reasonably require, all such insurance to be in such form and for such periods
and written by such companies as shall be reasonably acceptable to BANK. The
BANK shall be named as an additional "loss payee" as elsewhere herein provided
and the BANK shall receive certified copies of such original policies, if
available, and upon the occurrence of an EVENT OF DEFAULT the BANK shall
forthwith be provided with and hold the originals of each such policy.
10.09 The BORROWER shall, and shall cause each of its SPECIAL
SUBSIDIARIES to, punctually and promptly make when due, after the expiration of
all applicable periods of grace or notice, all payments and perform all other
obligations which may be required of it with respect to any indebtedness
(whether for money borrowed, goods purchased, services rendered or however such
indebtedness may arise) owing to persons, firms or corporations other than the
BANK, including, without limitation, indebtedness which may be secured by a
security interest in assets of the BORROWER, its SPECIAL SUBSIDIARIES or their
property(ies) and all obligations under the terms of any Leases. The provisions
of this Section shall not preclude the BORROWER or its SPECIAL SUBSIDIARIES from
contesting in good faith any such indebtedness or obligation. The BORROWER or
its SPECIAL SUBSIDIARIES may accept extended payment terms regularly offered by
any creditor selling goods to the BORROWER or its SPECIAL SUBSIDIARIES or
furnishing services to the BORROWER or its SPECIAL SUBSIDIARIES.
-34-
10.10 The BORROWER shall, and shall cause each of its SPECIAL
SUBSIDIARIES to, pay or cause to be paid when due all amounts necessary to fund
in accordance with its terms any deferred compensation and/or other employee
benefit plans, whether now in existence or hereafter created and whether subject
to the applicable provisions of ERISA and all regulations thereunder, and
neither BORROWER nor any of its SPECIAL SUBSIDIARIES may withdraw from
participation in, permit the termination or partial termination of, or permit
the occurrence of any other event with respect to any deferred compensation plan
maintained for the benefit of employees under circumstances that could result in
any liability to "PBGC", or any of its successors or assigns, or to the entity
which provides funds for such deferred compensation plan. To the extent that
BORROWER or any SPECIAL SUBSIDIARY becomes subject to the provision of the
ERISA, BORROWER will, promptly upon obtaining knowledge thereof, notify the BANK
of (i) the occurrence of any "reportable event" described in Section 4043 of
ERISA, (ii) receipt of notice of an application by the PBGC to institute
proceedings to terminate an employee benefit plan, and (iii) receipt of notice
of any liability pursuant to Section 4202 of ERISA. Neither the BORROWER nor any
SPECIAL SUBSIDIARY is a party to a MULTI-EMPLOYER PLAN.
10.11 The BORROWER shall, and shall cause each of its SPECIAL
SUBSIDIARIES promptly to give notice to BANK of the commencement of any suit or
proceedings against the BORROWER or any SPECIAL SUBSIDIARY, in which the amount
claimed exceeds Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00)
unless such liability is fully covered by insurance in effect and the insurer is
defending such action without reservation of rights against the BORROWER or any
of its SPECIAL SUBSIDIARIES.
10.12 Upon the occurrence of any DEFAULT or EVENT OF DEFAULT, BORROWER
shall, and shall cause its SPECIAL SUBSIDIARIES promptly to give the BANK notice
thereof.
10.13 The BORROWER will give the BANK not less than thirty (30) days'
prior notice of any proposed change in the principal places of business or chief
executive offices of the BORROWER or any SPECIAL SUBSIDIARY or the establishment
of any other location of COLLATERAL, other than as currently shown on Exhibit
10.13 to this instrument.
10.14 The BORROWER will give the BANK not less than thirty (30) days'
prior notice of any intended change by the BORROWER or any SPECIAL SUBSIDIARY in
its corporate name or the adoption of any trade name.
-35-
10.15 In the event of any change in the identification of the directors
and statutory officers of the BORROWER and each SPECIAL SUBSIDIARY as reflected
on Exhibit "10.15" to this instrument, the BORROWER shall, within thirty (30)
days thereafter, give notice thereof to BANK.
10.16 The BORROWER shall, and shall cause each SPECIAL SUBSIDIARY to
continue to maintain its primary deposit accounts with BANK, from which payments
due on LOANS may be deducted.
ARTICLE XI
NEGATIVE COVENANTS
11.01 Except as permitted by Section 2.16, the BORROWER will not,
and will not permit any SPECIAL SUBSIDIARY to, issue evidences of
INDEBTEDNESS nor create, assume, become contingently liable for, nor suffer
to exist INDEBTEDNESS for borrowed money in addition to indebtedness to the
BANK; provided, however, that BORROWER and each SPECIAL SUBSIDIARY (a) may
incur liabilities other than for money borrowed which are incurred or arise
in the ordinary course of the BORROWER'S or the SPECIAL SUBSIDIARY'S
business(es), and (b) may in any fiscal year of the BORROWER or such SPECIAL
SUBSIDIARY grant purchase money security interests in connection with the
purchase of property with a purchase price not to exceed Five Hundred
Thousand Dollars ($500,000.00) in the aggregate, and (c) has been given
permission to incur such INDEBTEDNESS as is shown on Schedule 1.01.
11.02 Except for loans from BORROWER to any of its SPECIAL
SUBSIDIARIES and except for loans from any SPECIAL SUBSIDIARY to BORROWER, to
the extent permitted by Section 2.16 hereof, neither BORROWER nor any SPECIAL
SUBSIDIARY shall make or continue any loans to any individual, firm or
corporation, including, without limitation, BORROWER'S and said SPECIAL
SUBSIDIARIES' officers and employees except for loans or advances to
employees and officers in the ordinary course of business not to exceed Two
Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate at any time.
11.03 Except as described in Section 9.08, BORROWER shall not, and
shall not permit any SPECIAL SUBSIDIARY to, invest in or purchase any stock or
securities of any individual, firm, partnership, joint venture or corporation
without the BANK'S prior written consent; provided, however, that the BORROWER
and any SPECIAL SUBSIDIARY, without the BANK'S consent may invest in direct
obligations of or securities guaranteed by the United States of America or any
agency thereof, certificates of deposit or other obligations of the BANK or any
other member bank of the Federal Reserve System having assets of
-36-
not less than One Hundred Million Dollars, prime banker's acceptances,
money-market funds, commercial paper of a domestic issue rated either A1 by
Standard & Poor's Corporation or P1 by Moody's Investor Service, Inc., and
other securities the cost to BORROWER or such SPECIAL SUBSIDIARY of which do
not exceed One Hundred Thousand Dollars ($100,000.00) in the case of any
single issuer.
11.04 The BORROWER shall not, and shall not permit any SPECIAL
SUBSIDIARY to, merge or consolidate or be merged or consolidated with or into
any other corporation or entity.
11.05 Except for sales of INVENTORY in the ordinary course of business,
the BORROWER shall not, and shall not permit any SPECIAL SUBSIDIARY to, sell or
dispose of any of its assets except for any sale or disposition of EQUIPMENT
which is no longer needed by it for the conduct of its business.
11.06 Except with respect to the BANK as provided herein and except as
provided in Section 2.16 hereof, or as previously consented to in writing by the
BANK, the BORROWER shall not, and shall not permit any SPECIAL SUBSIDIARY to,
grant or suffer to exist, any mortgage, pledge, title retention agreement,
security interest, lien or encumbrance with respect to any of its assets,
tangible or intangible, whether now owned or hereafter acquired including, but
not limited to, the BORROWER's ownership interests, and any other of its
interests, in Birch Pond Realty Corporation, or subject any of their assets to
the prior payment of any indebtedness, or transfer in any manner any of such
assets with the intent or purpose, directly or indirectly, of subjecting such
assets to the payment of INDEBTEDNESS except (i) landlords', carriers',
warehousemans', mechanics' and other similar liens arising by operation of law
in the ordinary course of business; (ii) liens arising out of pledge or deposits
under worker's compensation, unemployment insurance, old age pension, social
security, retirement benefits or other similar legislation; (iii) liens in favor
of the BANK; (iv) liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings and for which appropriate reserves are
maintained (reasonably approved by the BANK) in respect thereto; (v) judgment or
prejudgment liens with respect to which there has issued a stay of execution
pending appeal or otherwise and as to which appropriate reserves are maintained
in respect thereto (reasonably approved by the BANK); (vi) easements, rights of
way, restrictions and other similar charges or liens relating to real property
and not interfering in a material way with the ordinary conduct of business;
(vii) liens securing the payment of INDEBTEDNESS permitted under Section 11.01
hereof; and (viii) encumbrances on the BORROWER'S property or assets created in
connection with the refinancing of INDEBTEDNESS secured by liens on such
property permitted hereunder that do not extend to property and assets of the
BORROWER not encumbered prior to such refinancing.
-37-
11.07 The BORROWER shall not, and shall not permit any SPECIAL
SUBSIDIARY to, engage in any business other than the business in which it is
currently engaged or a business reasonably allied thereto including, without
limitation, those businesses permitted in Section 9.07.
11.08 Except for the GUARANTIES, the BORROWER shall not, and shall
not permit any SPECIAL SUBSIDIARY to, guaranty, endorse, contingently agree
to purchase or otherwise become liable for obligations for borrowed money of
any other person, firm, partnership, joint venture, corporation or other
entity except that BORROWER may execute guaranties in the ordinary course of
business of obligations of the SPECIAL SUBSIDIARIES to third parties not
involving indebtedness for borrowed money; provided, however, that the
provisions of this Section 11.08 shall not preclude the BORROWER or any
SPECIAL SUBSIDIARY from endorsing checks, drafts or other similar items for
collection in the ordinary course of business.
11.09 Except for the intercompany loan and cash management agreements
between the BORROWER and each of the SPECIAL SUBSIDIARIES, neither the BORROWER
nor any SPECIAL SUBSIDIARY will make or enter into any so-called management
agreement whereby management, supervision or control of its business or any of
its principal functions shall be delegated to any persons other than its duly
elected officers and directors.
11.10 Neither the BORROWER nor any SUBSIDIARY will change its FISCAL
YEAR.
11.11 The BORROWER will not, for any QUARTERLY PERIOD, permit its ratio
of consolidated INDEBTEDNESS to TANGIBLE NET WORTH to exceed 1.50 to 1.
11.12 The BORROWER will not at the end of any QUARTERLY PERIOD permit
its ratio of current assets to current liabilities to be less than 1.50 to 1.
11.13 The BORROWER will not, for any four (4) consecutive fiscal
quarters, permit DEBT SERVICE COVERAGE to be less than 1.50 to 1. Such covenant
shall be calculated quarterly based upon the preceding 12 months of operations
commencing with the twelve-month period ending March 25, 2000. Notwithstanding
the foregoing, the calculation made as of each of March 25, 2000, June 24, 2000,
September 23, 2000 and December 30, 2000 shall be made without any deduction for
UNFINANCED CAPITAL EXPENDITURES to the extent that capital expenditures during
such 12-month period do not exceed Twenty Million Dollars ($20,000,000).
Further, the calculation made as of each of March 31, 2001, June 30, 2001 and
September 29, 2001 shall be made without any deduction for UNFINANCED CAPITAL
EXPENDITURES made during fiscal
-38-
year 2000 to the extent that capital expenditures during fiscal year 2000 do not
exceed Twenty Million Dollars ($20,000,000).
11.14 Neither BORROWER nor any SPECIAL SUBSIDIARY owns or has any
present intention of acquiring any MARGIN STOCK. None of the funds advanced to
the BORROWER nor any funds obtained by any SPECIAL SUBSIDIARY from BORROWER nor
any funds obtained by BORROWER from any SUBSIDIARY will be used to purchase or
carry any MARGIN STOCK. Neither BORROWER, nor any agent acting on its behalf,
has taken any action which might cause this Agreement or either of the Notes to
violate Regulation G, Regulation T, Regulation U, Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Securities Exchange Act of 1934, as now in effect.
11.15 Without obtaining the BANK'S prior written consent, the BORROWER
shall not permit capital expenditures for the 12-month period ending December
31, 2000 to exceed Twenty Million Dollars ($20,000,000).
ARTICLE XII
EVENTS OF DEFAULT
12.01 The occurrence of any of the following events shall be an EVENT
OF DEFAULT hereunder and under each of the FINANCING AGREEMENTS:
(a) The REVOLVING LOAN(S) and all accrued interest thereon shall
not be paid in full on the TERMINATION DATE.
(b) The BORROWER shall fail to make a payment of interest or
principal on account of the REAL ESTATE LOAN or any other fee
or charge arising under the FINANCING AGREEMENTS within five
(5) days of when such payment is due, (or if within any grace
period provided therein).
(c) The BORROWER shall fail to observe or perform any covenants
contained in this Agreement other than with respect to the
payment of money within TEN (10) days of notice from the BANK
or such earlier date as may be necessary to protect the
interests of the BANK.
(d) The BORROWER or any SPECIAL SUBSIDIARY shall fail to observe
any other covenant or agreement contained in any FINANCING
AGREEMENT or in any instrument, document or
-39-
agreement executed pursuant thereto when required or within
any grace period provided therein.
(e) Any written warranty, representation or statement made or
furnished to BANK by or on behalf of the BORROWER or any
SPECIAL SUBSIDIARY proves to have been false in any material
respect when made or furnished.
(f) Any event which results in the acceleration of the maturity of
the indebtedness of the BORROWER or any SPECIAL SUBSIDIARY (i)
to the BANK, or (ii) to any other party under any indenture,
agreement, undertaking or otherwise if the same relates to
aggregate INDEBTEDNESS, in excess of Two Hundred Fifty
Thousand Dollars ($250,000.00).
(g) Any levy or seizure of any property of the BORROWER or any
SPECIAL SUBSIDIARY in which the amount involved exceeds in the
aggregate Two Hundred Fifty Thousand Dollars ($250,000.00) and
which levy or seizure is not stayed within thirty (30) days
and if reasonably required by the BANK adequate security is
imposed.
(h) Any attachment of any property of the BORROWER which
attachment secures a claim in the aggregate of more than Two
Hundred and Fifty Thousand and 00/100 Dollars ($250,000.00) or
more and is not discharged within thirty (30) days.
(i) Dissolution, termination of existence, as the case may be of
the BORROWER or any SPECIAL SUBSIDIARY.
(j) Failure by any GUARANTOR to pay, perform or observe its
OBLIGATIONS pursuant to any GUARANTY or other instrument in
force between it and BANK.
(k) The BORROWER or any SPECIAL SUBSIDIARY shall: (i) cease, be
unable, or admit in writing its inability to pay its debts as
they mature or make a general assignment for the benefit of,
or enter into any composition, trust mortgage or other
arrangement with creditors; (ii) apply for, or consent (by
admission of material allegations of a petition or otherwise)
to the appointment of a receiver, trustee or liquidator of the
BORROWER or any such SPECIAL SUBSIDIARY or of a substantial
part of its assets, or authorize such application or consent,
or proceedings seeking such appointment shall be commenced
against the BORROWER or any
-40-
SPECIAL SUBSIDIARY and continue unstayed and undismissed for
sixty (60) days; or (iii) apply for, or consent (by admission
of material allegations of a petition or otherwise) to the
application of any bankruptcy, reorganization, readjustment of
debt, insolvency, dissolution, liquidation or other similar
law of any jurisdiction, or authorize such application or
consent, or proceedings to such end shall be instituted
against the BORROWER or any SPECIAL SUBSIDIARY and remain
unstayed and undismissed for sixty (60) days, be approved as
properly instituted or result in adjudication of bankruptcy or
insolvency.
(l) Birch Pond Realty Corporation, a SUBSIDIARY, shall grant or
suffer to exist, any mortgage, pledge, title retention
agreement, security interest or, lien other than a mortgage to
John Hancock Real Estate Finance, Inc. with respect to that
real estate in Tilton, New Hampshire originally subject to a
mortgage to the BANK and subsequently conveyed to Birch Pond
Realty Corporation with the written consent of the BANK or
shall, as to itself, fail to comply with any covenant provided
in Sections 10.05, 10.06, 10.07, 10.08, 10.10, 10.11, 11.03,
11.04, 11.05 and 11.08 hereof within a period of time extended
by a period equal to any notice and grace period provided
herein for an equivalent obligation of BORROWER, if
applicable, or shall fail to engage only in those businesses
now permitted by its Articles of Organization.
12.02 Upon the occurrence of any EVENT OF DEFAULT, all OBLIGATIONS
including, without limitation, the REVOLVING LOAN, and/or the REAL ESTATE LOAN,
shall, at the BANK'S option, become immediately due and payable without notice
or demand and the BANK shall have all such rights and remedies as are provided
herein or under the other FINANCING AGREEMENTS or at law or in equity.
ARTICLE XIII
NOTICES
13.01 All communications herein provided shall be in writing and shall
be sufficient if (i) sent by United States mail, registered or certified,
postage prepaid, (ii) delivered by national courier service which requires
receipt evidencing delivery or (iii) sent by confirmed telephone facsimile and
addressed as provided in this Article.
-41-
13.02 The addresses to which such communications shall be sent are as
follows:
a) If intended for the BORROWER, to:
The J. Jill Group, Inc.
4 Batterymarch Park
Quincy, MA 02169
Fax: (617) 769-0177
Attn: Olga L. Conley, Chief Financial Officer
with courtesy copies to:
Foley, Hoag & Eliot, LLP
One Post Office Square
Boston, MA 02109
Fax: (617) 832-7000
Attn: David R. Pierson, Esq.
b) If intended for BANK to:
Citizens Bank of Massachusetts
28 State Street
Boston, MA 02109
Fax: (617) 725-5690
Attn: Lori B. Leeth, Senior Vice President
with courtesy copies to:
Schnader Harrison Goldstein & Manello
265 Franklin Street
Boston, MA 02110
Fax: 617-946-8100
Attn: Richard J. Snyder, Esq.
Paul J. Levenson, Esq.
13.03 The addresses set forth herein may be changed by notice to the
other party hereunder.
13.04 Any notice sent in accordance with the provisions and this
Article XIII shall be effective (i) if mailed, on the second BUSINESS DAY, (ii)
if delivered by courier service, upon receipt or (iii) if sent by confirmed
telephone facsimile, upon transmission.
-42-
ARTICLE XIV
MISCELLANEOUS
14.01 The BORROWER shall, and shall cause its SPECIAL SUBSIDIARIES to,
from time to time, execute and deliver to the BANK all such other and further
reasonable instruments and documents and take or cause to be taken all such
other and further action as the BANK may reasonably request in order to effect
and confirm more securely in the BANK all rights contemplated in this Agreement,
and in any other of the FINANCING AGREEMENTS and in the event that any other
party which is a bank, trust company or other institutional lender shall acquire
an interest in the BANK's right hereunder, such of the same instruments as such
party may reasonably require which is a bank, trust company or other
institutional lender.
14.02 The BORROWER may take any action herein prohibited or omit to
perform any act required to be performed by the BORROWER if the BORROWER shall
obtain the BANK's prior written consent to each such action, or omission to act.
No waiver on the BANK's part on any one occasion shall be deemed a waiver on any
other occasion. The BANK shall not be deemed to have waived any of its rights
hereunder unless such waiver shall be in writing and duly signed by an
authorized officer of the BANK.
14.03 This Agreement may be amended only by an instrument in writing
and duly signed by the BORROWER and an authorized officer of the BANK.
14.04 All covenants, agreements, representations and warranties
contained in this Agreement shall bind the BORROWER and its successors and
assigns, and shall inure to the BANK'S benefit and the benefit of the BANK'S
successors and assigns, whether expressed or not; provided, however, that the
BORROWER may not assign its rights or benefits hereunder.
14.05 All rights of the BANK hereunder shall be cumulative. The BANK
shall not be required to have recourse to any COLLATERAL or other security
before enforcing its rights or remedies against the BORROWER. BORROWER hereby
waives presentment and protest of any instrument and any notice thereof.
14.06 If any provisions of this Agreement shall be held to be illegal
or unenforceable, such illegality or unenforceability shall relate solely to
such provision and shall not affect the remainder of this Agreement.
-43-
14.07 This Agreement shall be construed and enforced as an instrument
under seal in accordance with the laws of The Commonwealth of Massachusetts.
14.08 The captions herein contained are inserted as a matter of
convenience only and such captions do not form a part of this Agreement and
shall not be utilized in the construction hereof.
14.09 In the event the BORROWER fails to make any payment, or BORROWER
or any SUBSIDIARY fails to take any action required by this Agreement or
any other of the FINANCING AGREEMENTS, BANK may, but shall not be required to,
upon prior notice to the BORROWER make such payment or, upon prior notice to
BORROWER or such SUBSIDIARY, take, or cause to be taken, such action. If the
BANK chooses to make any such payment or to take or cause to be taken any such
action, the amount of such payment and the cost of such action shall become part
of the OBLIGATIONS, shall be payable upon demand and, until paid in full, shall
bear interest at the rate set forth in Section 7.09 hereof.
14.10 The BORROWER and its SUBSIDIARIES shall pay on demand all
reasonable out-of-pocket costs and expenses of every kind and nature, including
reasonable attorneys' fees and costs, incurred or expended by the BANK in
connection with the preparation of the FINANCING AGREEMENTS, the making of LOANS
hereunder, the collection or sale or attempted collection or sale of the
COLLATERAL and the protection or supervision thereof and the protection or
enforcement of the BANK'S rights hereunder. The BORROWER acknowledges that such
supervision will include audits of the BORROWER'S and its SPECIAL SUBSIDIARIES'
business(es), records, and assets by employees, agents, or other representatives
of the BANK but the BORROWER shall not be required to pay for such audits unless
undertaken after an EVENT OF DEFAULT shall have occurred and while the same
shall be continuing.
14.11 The BANK, the BORROWER and each SPECIAL SUBSIDIARY irrevocably
waives all right to a trial by jury in any proceeding hereafter instituted by
or against the BANK or the BORROWER in respect of this Agreement or arising
out of any FINANCING AGREEMENTS. BANK hereby confirms that it was notified
in advance of the Reorganization and consented to the actions taken to effect
the Reorganization and in connection with the Reorganization including
without limitation the formation and capitalization of the SPECIAL
SUBSIDIARIES, the transfer of assets to the SPECIAL SUBSIDIARIES and the
execution by BORROWER of guarantees in the ordinary course of business of
obligation of the SPECIAL SUBSIDIARIES to third parties not involving
indebtedness for borrowed money and such actions did not constitute Events of
Default under the Loan Agreement prior to the date hereof.
-44-
ARTICLE XV
CONDITIONS PRECEDENT
15.01 Unless each of the following conditions are satisfied at the
CLOSING, and until each of the following conditions are satisfied, no ADVANCES
will be made, and the BANK shall have no obligation under this Agreement:
(a) All instruments and documents required to be executed on or
prior to the CLOSING pursuant to the terms hereof shall have
been duly executed and delivered.
(b) The BANK shall hold a valid and perfected security interest in
the COLLATERAL, including, without limitation, all of the
capital stock of each of the SPECIAL SUBSIDIARIES, subject to
no other lien, charge, encumbrances or security interest of
any kind or nature except as otherwise explicitly provided in
this Agreement.
(c) The BANK shall have received from counsel to the BORROWER
opinions satisfactory in form and substance to the BANK.
(d) The BANK shall have received a certificate from the Clerk or
other appropriate recording officer of each of the BORROWER
and each SPECIAL SUBSIDIARY in form and substance satisfactory
to the BANK and its counsel, showing the authority of the
BORROWER and each such SUBSIDIARY (as the case may be) to
enter into and amend and restate this Agreement and, without
limitation, the FINANCING AGREEMENTS, to perform the
OBLIGATIONS to which each such party is bound, and the
specific authority of the persons executing this Agreement and
all instruments and documents pursuant hereto so to execute.
The BANK shall have received any amendments, certified copies
of the Articles of Organization (or other charter documents)
and By-Laws of the BORROWER and each SPECIAL SUBSIDIARY since
the same were last submitted to it.
(e) All policies of insurance described herein or in any other of
the FINANCING AGREEMENTS, have been obtained, be in full force
and effect, and shall show BANK as an additional loss payee.
The BANK shall have received a binder with respect to each
such policy showing compliance herewith. Such policies shall
not be canceled except upon thirty (30) days' advance written
notice to BANK.
-45-
(f) The BANK shall have received such certificates from public
officials with respect to the corporate existence of the
BORROWER and each SPECIAL SUBSIDIARY and the qualification to
do business and good standing of each, as the BANK may
reasonably require.
(f) BANK shall have received such other and further documents and
instruments as BANK may reasonably require.
ARTICLE XVI
CLOSING
16.01 All instruments and documents then to be executed pursuant hereto
shall be executed and delivered at a CLOSING to be held on the CLOSING DATE at
the offices of Schnader Harrison Goldstein & Manello, 265 Franklin Street,
Boston, Massachusetts.
ARTICLE XVII
TERMINATION
17.01 Upon the TERMINATION DATE, all obligations of BANK to make
ADVANCES shall terminate, and the CREDIT BALANCE shall become immediately due
and payable in full without notice or demand.
17.02 Notwithstanding the passage of the TERMINATION DATE, and the
payment of the CREDIT BALANCE, until all OBLIGATIONS shall have been fully paid,
performed and satisfied, all rights of BANK arising under this Agreement and
other FINANCING AGREEMENTS shall continue, and all obligations of BORROWER and
its SPECIAL SUBSIDIARIES arising under this Agreement and the other FINANCING
AGREEMENTS shall continue.
17.03 BANK in its sole discretion, from time to time may extend the
TERMINATION DATE by written notice to BORROWER. BANK may condition any such
extension on such matters that it determines appropriate. BANK is in no way
obligated to extend or to consider extending the TERMINATION DATE.
ARTICLE XVIII
INCONSISTENCY IN FINANCING AGREEMENTS
-46-
18.01 In the event that any provision of the other FINANCING
AGREEMENTS, is inconsistent with a provision of this Fourth Amended and Restated
Loan Agreement, then and in such event, the provisions of this instrument shall
control.
18.02 The existence of a provision in the other FINANCING AGREEMENTS
which is not present in this Fourth Amended and Restated Loan Agreement shall
not be deemed to be an inconsistency.
-47-
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the date first above written.
THE J. JILL GROUP, INC.
By: /s/ Peter J. Tulp
-----------------------------------
Peter J. Tulp, Corporate Controller
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Lori B. Leeth
------------------------------------
Lori B. Leeth, Senior Vice President
-48-
SCHEDULE 1.01
EXISTING INDEBTEDNESS
$9,500,000 loan from Citizens Leasing Corporation
$980,000 loan from the Belknap County Economic Development Council, Inc.
$12,000,000 loan to Birch Pond Realty Corp. by John Hancock Real Estate Finance,
Inc.
EXHIBIT 9.03
FOREIGN QUALIFICATION
BORROWER is qualified to do business as a foreign corporation in
Massachusetts, New Hampshire and Pennsylvania.
BIRCH POND is qualified to do business as a foreign corporation in
California, Colorado, Florida, Illinois, Michigan, Minnesota, New York, North
Carolina, Oregon, Rhode Island, Virginia and Washington.
J. JILL DIRECT is qualified to do business as a foreign corporation in
New Hampshire and Pennsylvania.
QT Services is qualified to do business as a foreign corporation in New
Hampshire.
EXHIBIT 9.04
LIENS
Liens have been filed by:
1. Citizens Leasing Corporation against financed equipment and proceeds
assigned in part to BancBoston Leasing, Inc.);
2. Robert Abel & Co., Inc. against leased equipment and proceeds;
3. Steelcase Financial Services, Inc. against leased fixtures and
equipment and proceeds; and
4. Belknap County Economic Development Council, Inc. against financed
equipment and proceeds.
EXHIBIT 9.08
SUBSIDIARIES AND INVESTMENTS
None.
EXHIBIT 9.09
LITIGATION
None.
EXHIBIT 9.11
UNDISCLOSED LIABILITIES
None.
EXHIBIT 9.12
CERTAIN EVENTS SINCE 6/30/00
None.
EXHIBIT 9.18
INTELLECTUAL PROPERTY
BORROWER's registered marks and applications for registration of marks
are listed on the attached Schedule A.
SCHEDULE A
WEDNESDAY, AUGUST 02, 2000 COUNTRY LIST PAGE: 1
COUNTRY: HK HONG KONG
CASE APPLICATION FILING REGISTRATION REGISTRATION RENEWAL
TRADEMARK CLIENT STATUS NUMBER NUMBER DATE NUMBER DATE DATE ATTORNEY
J.JILL JJILL Pending 006456 98/08777 06-Jul-1998 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 25 AXK
DRP
WEDNESDAY, AUGUST 02, 2000 COUNTRY LIST PAGE: 2
COUNTRY: IL ISRAEL
CASE APPLICATION FILING REGISTRATION REGISTRATION RENEWAL
TRADEMARK CLIENT STATUS NUMBER NUMBER DATE NUMBER DATE DATE ATTORNEY
J. JILL JJILL Registered 006396 119493 07-May-1998 119493 07-Sep-1999 07-May-2005 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 25 AXK
DRP
WEDNESDAY, AUGUST 02, 2000 COUNTRY LIST PAGE: 3
COUNTRY: SG SINGAPORE
CASE APPLICATION FILING REGISTRATION REGISTRATION RENEWAL
TRADEMARK CLIENT STATUS NUMBER NUMBER DATE NUMBER DATE DATE ATTORNEY
J. JILL JJILL Pending 006446 T98/06509G 30-Jun-1998 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 25 AXK
DRP
WEDNESDAY, AUGUST 02, 2000 COUNTRY LIST PAGE: 4
COUNTRY: US UNITED STATES OF AMERICA
CASE APPLICATION FILING REGISTRATION REGISTRATION RENEWAL
TRADEMARK CLIENT STATUS NUMBER NUMBER DATE NUMBER DATE DATE ATTORNEY
AUNT ABIGAIL'S ATTIC JJILL Registered 001579 73/3088720 5-May-1981 1210611 28-Sep-1982 28-Sep-2002 CEW
(STYLIZED)
OWNER: The J. Jill Group, Inc. CLASSES: 25 AXK
PMR
CATALOG ACCOUNT JJILL Registered 005186 74/6469821 5-Mar-1995 2003781 24-Sep-1996 24-Sep-2006 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 36 AXK
PMR
DESIGN (FOX) JJILL Registered 001160 73/503383 11-Oct-1984 1337374 21-May-1985 21-May-2005 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 42 AXK
PMR
HONORS JJILL Registered 003275 73/299034 27-Feb-1981 1182329 15-Dec-1981 15-Dec-2001 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 28 AXK
J. JILL JJILL Pending 066937 76/070768 13-Jun-2000 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 18 AXK
DRP
J. JILL LTD. JJILL No renew 001158 74/442660 30-Sep-1993 1859770 25-Oct-1994 25-Oct-2004 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 25 AXK
PMR
J. JILL LTD. (AND DESIGN) JJILL Registered 001451 73/3088710 5-May-1981 1204106 03-Aug-1982 03-Aug-2002 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 42 AXK
PMR
J.JILL JJILL Registered 006179 75/436142 18-Feb-1998 2226071 23-Feb-1999 23-Feb-2009 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 25 AXK
DRP
WEDNESDAY, AUGUST 02, 2000 COUNTRY LIST PAGE: 5
COUNTRY: US UNITED STATES OF AMERICA
CASE APPLICATION FILING REGISTRATION REGISTRATION RENEWAL
TRADEMARK CLIENT STATUS NUMBER NUMBER DATE NUMBER DATE DATE ATTORNEY
J.JILL JJILL Registered 006180 75/436143 18-Feb-1998 2286599 12-Oct-1999 12-Oct-2009 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 25 AXK
DRP
J.JILL JJILL Registered 006181 75/436141 18-Feb-1998 2234098 23-Mar-1999 23-Mar-2009 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 42 AXK
DRP
J.JILL JJILL Pending 066936 76/070767 13-Jun-2000 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 14 AXK
DRP
JENIFER HOUSE (STYLIZED) JJILL Registered 001576 73/308873 05-May-1981 1244857 05-Jul-1983 05-Jul-2003 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 42 AXK
PMR
NICOLE SUMMERS (AND JJILL No renew 001570 73/485540 18-Jun-1984 1323907 05-Mar-1985 05-Mar-2005 CEW
DESIGN)
OWNER: The J. Jill Group, Inc. CLASSES: 42 AXK
PMR
NICOLE SUMMERS (AND JJILL No renew 001573 73/490575 19-Jul-1984 1329522 09-Apr-1985 09-Apr-2005 CEW
DESIGN)
OWNER: The J. Jill Group, Inc. CLASSES: 16 AXK
PMR
PURE JILL JJILL Pending 066938 76/070769 13-Jun-2000 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 42 AXK
DRP
PURE JILL JJILL Pending 066939 76/070772 13-Jun-2000 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 3 AXK
DRP
WEDNESDAY, AUGUST 02, 2000 COUNTRY LIST PAGE: 6
COUNTRY: US UNITED STATES OF AMERICA
CASE APPLICATION FILING REGISTRATION REGISTRATION RENEWAL
TRADEMARK CLIENT STATUS NUMBER NUMBER DATE NUMBER DATE DATE ATTORNEY
PURE JILL JJILL Pending 066940 76/070771 13-Jun-2000 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 14 AXK
DRP
PURE JILL JJILL Pending 066941 76/070773 13-Jun-2000 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 18 AXK
DRP
PURE JILL JJILL Pending 066943 76/070770 13-Jun-2000 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 25 AXK
DRP
SETH AND JED (STYLIZED) JJILL Registered 001589 73/308870 05-May-1981 1204105 03-Aug-1982 03-Aug-2002 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 42 AXK
PMR
WINTERBROOK JJILL Registered 001596 73/413842 17-Feb-1983 1276579 01-May-1984 01-May-2004 CEW
OWNER: The J. Jill Group, Inc. CLASSES: 42 AXK
PMR
EXHIBIT 9.19
LEASED PROPERTY
REAL PROPERTY
DESCRIPTION DATE OF LEASE LESSOR
----------- ------------- ------
Quincy, MA corporate office 09/21/98 National Fire Protection
Association
Bedford, MA outlet 02/14/95 Great Road Shopping Center
North Conway, NH outlet 09/09/96 O.V.P. Realty Trust
Tilton, NH operations and 03/01/99 Birch Pond Realty
corporate fulfillment center
Outlet in Lakes Region Factory 04/19/99 RR Laconia Inc.
Stores, Tilton, NH
Outlet in North Conway, NH 05/13/99 Settlers' RI, Inc.
Outlet in Tanger Factory Outlet 10/23/98 Tanger Properties Ltd.
Center, Lancaster, PA Partnership
Outlet in Wrentham Village 10/05/98 Chelsea GCA Realty
Partnership Premium
Outlets, Wrentham, MA
See attached list of Retail stores
PERSONAL PROPERTY
None.
THE BIRCH POND GROUP, INC.
D/B/A J. JILL - THE STORE
STORE LISTING - ACTUAL & PROJECTED OPENINGS
CURRENT
REVISED @ 8-2-00 PROJECTED ACTUAL
OPENING OPENING
CENTER - LOCATION DATES DATE
STORES OPEN AS OF @ 5-30-00
STORE # 20 NATICK MALL 11/99
1245 WORCESTER RD
NATICK, MA. 01760
STORE # 21 PROVIDENCE PLACE 11/99
100 FRANCIS ST
PROVIDENCE, RI. 02903
STORE # 22 WATER TOWER 4-2-00
845 N. MICHIGAN AVE.
CHICAGO, IL.
STORE # 23 MALL OF AMERICA 4-11-22
145 SOUTH BOULIVARD
BLOOMINGTON, MN. 55425
STORE # 24 PACIFIC PLACE 4-19-00
600 PINE ST.
SEATTLE, WA. 98101
STORES OPENED SINCE 5-30-00 REVISION
STORE # 25 Westchester 5-25-00
125 Westchester Ave.
White Plains, NY 10601
STORE # 26 Tysons Corner 6-8-00
8070 Tysons Corner Ctr.
McLean, VA 22102
THE BIRCH POND GROUP, INC.
D/B/A J. JILL - THE STORE
STORE LISTING - ACTUAL & PROJECTED OPENINGS
CURRENT
REVISED @ 8-2-00 PROJECTED ACTUAL
OPENING OPENING
CENTER - LOCATION DATES DATE
STORES SCHEDULED TO OPEN ( AS OF 5/30-00 REVISION)
STORE # 28 Flatiron Crossing 8-11-00
#1 W. Flatiron Circle
Broomfield, CO 80021
STORE # 29 Galleria @ Roseville
1151 Galleria Blvd. 8-25-00
Roseville, CA 95678
STORE # 36 Ridgedale Center 8-31-00
12325 Wayzata Blvd.
Minnetonka, MN 55305
STORE # 40 Pioneer Place 9-21-00
Revised address 340 SW Morrison st.
Portland, OR 97204
STORE # 39 Old Orchard 9-14-00
275 Old Orchard Rd.
Skokie, IL 60077
STORE # 27 Somerset Collection 10-19-00
2801 W. Big Beaver Rd.
Troy, MI 48084
STORE # 41 Walt Whitman 10-5-00
revised address 160 Walt Whitman Rd
Huntington Sta., NY 11746
STORE # 42 South Park Mall 10-28-00
4400 Sharon Road
Charlotte, NC 28211
STORE # 43 Southshore Plaza 11-16-00
250 Granite Street
Braintree, MA 02184
STORE # 37 Burlington Mall March,1,2001
One Burlington Mall
Burlington, MA 01803
STORE # 38 Town Center-Boca Raton 11-3-00
6000 W. Glades Rd.
Boca Raton, FL 33431
STORE # 44 Crabtree Valley Mall 11-13-00
4325 Glenwood Ave.
Raleigh, NC. 27612
THE BIRCH POND GROUP, INC.
D/B/A J. JILL - THE STORE
STORE LISTING - ACTUAL & PROJECTED OPENINGS
CURRENT
REVISED @ 8-2-00 PROJECTED ACTUAL
OPENING OPENING
CENTER - LOCATION DATES DATE
ADDITIONAL STORES SCHEDULED TO OPEN (ADDED SINCE 5-30-00 REVISION)
STORE # 46 Riverchase Galleria 10-26-00
200-223 Riverchase Galleria
Birmingham, AL. 35244
STORE # 47 Main Place 10-26-00
address not available Space 320
Santa Ana, CA.
STORE # 48 Walden Galleria 11-2-00
One Walden Galleria
Buffalo, NY.
STORE # 49 Perimeter Mall 11-9-00
4400 Ashford Dunwood Rd.
Atlanta, GA. 30346
EXHIBIT 10.13
LOCATION OF COLLATERAL
The COLLATERAL is kept at the REAL ESTATE and the facilities described
in Exhibit 9.19.
EXHIBIT 10.15
DIRECTORS AND STATUTORY OFFICERS
BORROWER:
Directors:
Gordon R. Cooke
William E. Engbers
Brett D. Heffes
Thomas J. Litle
Ruth M. Owades
Samuel L. Shanaman
Statutory Officers:
President: Gordon R. Cooke
Treasurer: Olga L. Conley
Secretary: David R. Pierson
BIRCH POND:
Directors:
Dennis J. Adomaitis
Bradley Eckhart
Statutory Officers:
President: Dennis Adomaitis
Treasurer: Stephen Barcello
Clerk: Bradley Eckhart
Assistant
Clerk: David R. Pierson
J. JILL DIRECT:
Directors:
John J. Hayes
Faythe Shortelle-Valenzon
Statutory Officers:
President: John J. Hayes
Treasurer: John J. Hayes
Clerk: David R. Pierson
QT SERVICES:
Directors:
Gordon R. Cooke
Olga L. Conley
Officers:
President: Gordon R. Cook
Treasurer: Olga L. Conley
Clerk: David R. Pierson