SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 30, 1994.
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
Commission File No. 33-28522
ANNTAYLOR, INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0297083
(State of other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
142 West 57th Street, New York, NY 10019
(Address of principal executive offices) (Zip Code)
(212) 541-3300
(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
Indicate the number of shares outstanding of each of the
issuer's classes of common stock as of the latest practicable
date.
Outstanding as of
Class July 30, 1994
Common Stock, $1.00 par value 1
The registrant meets the conditions set forth in General
Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing
this form with the reduced disclosure format.
<PAGE>
INDEX TO FORM 10-Q
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations
for the Quarters and Six Months Ended July 30,
1994 and July 31, 1993 3
Condensed Consolidated Balance Sheets at
July 30, 1994 and January 29, 1994 4
Condensed Consolidated Statements of Cash Flows
for the Six Months Ended July 30, 1994 and
July 31, 1993 5
Notes to Condensed Consolidated Financial Statements 6
Condensed Consolidated Statement of Operations
for the period from August 1, 1993 to July 30, 1994 9
Notes to Condensed Consolidated Statement of
Operations for the period from August 1, 1993 to
July 30, 1994 10
Item 2. Management's Discussion and Analysis of Operations 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ANNTAYLOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarters and Six Months Ended July 30, 1994 and July 31,
1993
(unaudited)
Quarters Ended Six Months Ended
------------------- -------------------
July 30, July 31, July 30, July 31,
1994 1993 1994 1993
-------- -------- --------- -------
(in thousands)
Net sales $159,936 $124,837 $305,219 $245,012
Cost of sales 87,991 68,720 164,394 134,072
------- ------ ------- -------
Gross profit 71,945 56,117 140,825 110,940
Selling, general and
administrative expenses 50,836 40,811 97,809 80,847
Amortization of goodwill 2,376 2,377 4,753 4,754
------- ------- ------- -------
Operating income 18,733 12,929 38,263 25,339
Interest expense 3,117 5,108 6,573 10,077
Other (income) expense, net 186 (159) 326 (109)
------- ------- ------ -------
Income before income taxes and
extraordinary loss 15,430 7,980 31,364 15,371
Income tax provision 7,507 4,350 15,381 8,451
------- ------- ------- -------
Income before extraordinary loss 7,923 3,630 15,983 6,920
Extraordinary loss (net of
income tax benefit
of $654,000 and $5,652,000,
respectively) (868) (10,496) (868) (10,496)
------- ------- ------- -------
Net income (loss) $7,055 $(6,866) $15,115 $ (3,576)
====== ===== ===== ======
See accompanying notes to condensed consolidated financial
statements.
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ANNTAYLOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
July 30, 1994 and January 29, 1994
July 30, 1994 January 29, 1994
------------- ----------------
(unaudited)
(in thousands)
ASSETS
Current assets
Cash $ 1,257 $ 292
Accounts receivable,
net of allowances of $778,000 and
$787,000, respectively 54,953 49,279
Merchandise inventories 68,308 60,890
Prepaid expenses and other
current assets 6,253 7,184
Deferred income taxes 3,750 3,750
------- ------
Total current assets 134,521 121,395
Property and equipment, net of
accumulated depreciation of
$31,342,000 and $28,703,000,
respectively 63,877 48,053
Deferred financing costs, net of
accumulated amortization of
$591,000 and $643,000,
respectively 2,977 4,990
Goodwill, net of accumulated
amortization of $52,466,000 and
$47,713,000, respectively 327,784 332,537
Deferred income taxes 1,500 1,500
Investment in CAT 2,939 2,245
Other assets 2,425 2,679
-------- --------
Total assets $536,023 $513,399
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable $40,657 $37,564
Accrued expenses 18,169 18,656
Accrued income taxes 1,737 1,180
Accrued interest 1,946 1,955
Current portion of long-term debt 0 8,757
------ -------
Total current liabilities 62,509 68,112
Long-term debt 160,566 180,243
Other liabilities 5,777 5,773
Commitments and contingencies
Stockholder's equity
Common stock, $1.00 par value;
1,000 shares authorized;
1 share issued and outstanding 1 1
Additional paid-in capital 308,811 276,026
Accumulated deficit (1,641) (16,756)
------- -------
Total stockholder's equity 307,171 259,271
------- -------
Total liabilities and
stockholder's equity $536,023 $513,399
======= =======
See accompanying notes to condensed consolidated financial
statements.
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<PAGE>
ANNTAYLOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended July 30, 1994 and July 31, 1993
(unaudited)
Six Months Ended
------------------------------
July 30, 1994 July 31, 1993
------------- -------------
(in thousands)
Operating activities:
Net income (loss) $15,115 $(3,576)
Adjustments to reconcile net income
(loss) to net cash provided
by operating activities:
Extraordinary loss 1,522 16,148
Equity earnings in CAT (694) (249)
Provision for loss on accounts
receivable 811 631
Depreciation and amortization 5,278 4,160
Amortization of goodwill 4,753 4,754
Accretion of original issue discount --- 2,864
Amortization of deferred financing costs 613 679
Amortization of deferred compensation 250 139
Loss on disposal of property and
equipment 759 148
(Increase) decrease in:
Receivables (6,485) (3,745)
Merchandise inventories (7,418) (8,911)
Prepaid expenses and other
current assets 931 (4,352)
Increase (decrease) in:
Accounts payable 3,093 11,105
Accrued expenses 61 (2,790)
Other non-current assets and
liabilities, net 258 184
------ ------
Net cash provided by operating activities 18,847 17,189
Investing activities:
Purchases of property and equipment (21,861) (6,516)
Investment in CAT --- (1,640)
------- ------
Net cash used by investing activities (21,861) (8,156)
Financing activities:
Decrease in bank overdrafts --- (2,361)
Repayments under line of credit agreement --- (5,500)
Payments of long-term debt --- (96,969)
Parent company contribution 32,535 7,798
Repurchase of Debt Securities --- (93,689)
Net proceeds from 8-3/4% Notes --- 107,387
Payments of financing costs (122) (3,523)
Proceeds from (payment of) bank term loan (56,000) 80,000
Borrowing under revolving credit facility 26,000 ---
Net borrowing on receivables facility 1,566 ---
------ ------
Net cash provided by (used by)
financing activities 3,979 (6,857)
------ ------
Net increase in cash 965 2,176
Cash, beginning of period 292 226
------ ------
Cash, end of period $ 1,257 $ 2,402
====== ======
Supplemental Disclosures of Cash
Flow Information:
Cash paid during the period for interest $ 5,969 $ 5,280
====== ======
Cash paid during the period for
income taxes $14,169 $ 1,607
======= =======
See accompanying notes to condensed consolidated financial
statements.
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<PAGE>
ANNTAYLOR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation
The condensed consolidated financial statements are unaudited
but, in the opinion of management, contain all adjustments (which
are of a normal recurring nature) necessary to present fairly the
financial position, results of operations and cash flows for the
periods presented. All significant intercompany accounts and
transactions have been eliminated.
The results of operations for the 1994 interim period shown in
this report are not necessarily indicative of results to be
expected for the fiscal year.
The January 29, 1994 condensed consolidated balance sheet
amounts have been derived from the previously audited
consolidated balance sheet of AnnTaylor, Inc.
Certain fiscal 1993 amounts have been reclassified to conform
to the 1994 presentation.
It is not considered necessary to include detailed footnote
information as of July 30, 1994 and July 31, 1993. The financial
information set forth herein should be read in conjunction with
the Notes to the Company's Consolidated Financial Statements
contained in the AnnTaylor, Inc. 1993 Annual Report on Form 10-K.
2. Long-term Debt
In May 1994, the Company applied $30,000,000 of the net
proceeds from the public stock Offering referred to in Note 3
below, to reduce the amount of the Term Loan outstanding under
the Company's then-existing bank credit agreement.
In July 1994, the Company completed the refinancing of its
outstanding bank debt by entering into a new credit agreement
(the "Revolving Credit Agreement") providing for a revolving loan
facility of $75,000,000. The Company borrowed funds under this
revolving credit facility to prepay in full its outstanding Term
Loan and other obligations under its then-existing bank credit
agreement.
The Revolving Credit Agreement has an initial term of three
years. There are no amortization payments required to be made
under the agreement during its term, although the Company is
required to reduce the outstanding loan balance under the facility
to $50,000,000 or less for thirty consecutive days
-6-
<PAGE>
during fiscal 1994, to $40,000,000 or less for thirty consecutive
days during fiscal 1995, and to $30,000,000 or less for thirty
consecutive days in each fiscal year thereafter. The revolving
credit facility bears interest at a rate per annum equal to, at
the Company's option, Bank of America's (1) Base Rate, or (2)
Eurodollar rate plus .75%. The effective rate of interest on
funds borrowed under the Revolving Credit Agreement is 1% lower
than the interest rate on borrowings under the bank credit
agreement that it replaced. The Revolving Credit Agreement
contains financial and other covenants, including limitations on
indebtedness, liens and investments, restrictions on dividends or
other distributions to stockholders and maintaining certain
financial ratios and specified levels of net worth.
The following summarizes long-term debt outstanding at July
30, 1994:
(in thousands)
Revolving Credit Facility $ 26,000
8-3/4% Notes 100,000
Receivables Facility 34,566
--------
Total Long-Term Debt $160,566
=======
3. Extraordinary Item
On May 18, 1994, AnnTaylor Stores Corporation ("ATSC"), the
parent of the Company, completed a public offering of its common
stock (the "Offering") in which it issued and sold 1,000,000
shares of common stock at a price of $32.00 per share, resulting
in aggregate net proceeds of $30,414,000 (after payment of
expenses of the Offering). As required by the Company's then-
existing bank credit agreement, $30,000,000 of the net proceeds
of the Offering were used to reduce the amount of the Term Loan
outstanding under that agreement. The non-cash charge associated
with the payment on the Term Loan with the proceeds of the
Offering and refinancing of long term debt (see Note 2)
resulted in an extraordinary loss during the quarter of
$1,522,000 ($868,000 net of taxes).
The Offering was consummated concurrently with the public
offering and sale by certain affiliates of Merrill Lynch Capital
Partners (the "Selling Stockholders") of 4,075,000 shares of
ATSC's Common Stock held by them. Neither ATSC nor the Company
received any of the proceeds of the shares sold by the Selling
Stockholders. After giving effect to this sale, the Selling
Stockholders and other affiliates of Merrill Lynch Capital
Partners held shares representing approximately 32.5% of ATSC's
Common Stock.
-7-
<PAGE>
4. Supplementary Data
The following unaudited pro forma condensed consolidated
operating data for the quarter and six months ended July 30, 1994
have been presented to reflect the Offering as if it had occurred
at the beginning of such period.
Quarter Ended Six Months Ended
July 30, 1994 July 30, 1994
------------------- --------------------
Actual Pro Forma Actual Pro Forma
------ --------- ------ ---------
(in thousands)
Interest expense $3,117 $3,017 (a) $ 6,573 $ 6,073 (b)
Income before
extraordinary loss 7,923 7,974 15,983 16,238
-------------
(a) Reflects interest expense savings of $100,000 related
to the reduction of the term loan with the net proceeds of
the Offering.
(b) Reflects interest expense savings of $500,000 related
to the reduction of the term loan with the net proceeds of
the Offering.
-8-
<PAGE>
In accordance with Section 11(a) of the Securities Act of
1933, as amended, and Rule 158 promulgated thereunder, set forth
below is the Company's consolidated earnings statement
(unaudited) for the twelve-month period ended July 30, 1994.
ANNTAYLOR, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Period from August 1, 1993 to July 30, 1994
(unaudited, in thousands)
Period Ended
July 30, 1994
-------------
Sales $561,856
Cost of sales 302,071
-------
Gross profit 259,785
Selling, general and administrative expenses 186,333
Distribution center restructuring charge 2,000
Amortization of goodwill 9,507
-------
Operating income 61,945
Interest expense 14,192
Other expense, net 241
-------
Income before income taxes and
extraordinary loss 47,512
Income tax provision 24,119
-------
Income before extraordinary loss 23,393
Extraordinary loss (net of income tax
benefit of $1,125) (1,493)
-------
Net income $21,900
======
See accompanying footnotes to Condensed Consolidated Statement of
Operations for the period from August 1, 1993 to July 30, 1994.
-9-
<PAGE>
ANNTAYLOR, INC.
NOTES TO CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Period from August 1, 1993 to July 30, 1994
(unaudited)
1.Basis of Presentation
The Condensed Consolidated Statement of Operations is
unaudited but, in the opinion of management, contains all
adjustments (which are of a normal recurring nature) necessary to
present fairly the result of operations for the period presented.
2. Restructuring
The Company recorded a $2,000,000 pre-tax restructuring charge
in January of 1994 in connection with the announced relocation of
its distribution center from New Haven, Connecticut to
Louisville, Kentucky. The primary components of the
restructuring charge are approximately $1,100,000 for employee
related costs, principally for severance and job training
benefits, and approximately $900,000 for the write-off of the
estimated net book value of assets at the time of relocation.
3. Extraordinary Items
In January of 1994, the Company transferred its proprietary
credit card accounts receivable to a wholly owned subsidiary
which used the receivables to secure borrowings under a new
$40,000,000 receivables financing facility arranged by PNC Bank,
N.A. Initial borrowings under the receivables facility were
$33,000,000, which were used to prepay $23,000,000 of the term
loan outstanding, and to reduce borrowings under the revolving
credit facility, under the Company's then-existing bank credit
agreement. During January 1994, the Company also purchased
$10,000,000 principal amount of its 8-3/4% Notes in open market
transactions. The early retirement of indebtedness led to an
extraordinary charge of $1,096,000 ($625,000 net of taxes).
On May 18, 1994, AnnTaylor Stores Corporation ("ATSC")
completed a public offering of its common stock (the "Offering")
in which it issued and sold 1,000,000 shares of common stock at a
price of $32.00 per share, resulting in aggregate net proceeds of
$30,414,000 (after payment of expenses of the Offering). As
required by the Company's then-existing bank credit agreement,
$30,000,000 of the net proceeds of the Offering were used to
reduce the amount of the term loan outstanding under that
agreement. In July 1994, the Company completed the refinancing
of its outstanding bank debt by entering into a new credit
agreement (the "Revolving Credit Agreement") providing for a
-10-
<PAGE>
revolving loan facility of $75,000,000. The Company borrowed
funds under this revolving credit facility to prepay in full
its outstanding Term Loan and other obligations under its
then-existing bank credit agreement. The non-cash charge
associated with the payment on the term loan with the proceeds
of the Offering and refinancing of long term debt resulted in
an extraordinary loss during May of 1994 of $1,522,000 ($868,000
net of taxes).
The Offering was consummated concurrently with the public
offering and sale by certain affiliates of Merrill Lynch Capital
Partners (the "Selling Stockholders") of 4,075,000 shares of
ATSC's Common Stock held by them. Neither ATSC nor the Company
received any of the proceeds of the shares sold by the Selling
Stockholders. After giving effect to this sale, the Selling
Stockholders and other affiliates of Merrill Lynch Capital
Partners held shares representing approximately 32.5% of ATSC's
Common Stock.
-11-
<PAGE>
Item 2. Management's Discussion and Analysis of Operations
Results of Operations
Six Months Ended July 30, 1994 Compared to Six Months Ended
July 31, 1993
The Company's net sales increased to $305,219,000 in the first
six months of 1994, from $245,012,000 in the first six months of
1993, an increase of $60,207,000, or 24.6%. The increase in net
sales was attributable to the inclusion of the sales of 12 new
stores and nine expanded stores opened during the last two
quarters of 1993, four new Ann Taylor stores, 12 expanded Ann
Taylor stores, four new Ann Taylor Factory Stores and one
expanded Ann Taylor Factory Store opened during the first six
months of 1994, and a 10.6% increase in comparable store sales.
The increase in comparable store sales was due primarily to
positive customer response to the Company's merchandise assortments.
The increase in net sales was partially offset by the closing of
four stores during the first six months of 1994. The Company operated
235 stores at July 30, 1994, compared to 219 stores at July 31, 1993.
Gross profit as a percentage of net sales increased to 46.1%
in the first six months of 1994, from 45.3% in the first six
months of 1993. The increase in gross margin reflected a higher
level of full price selling and lower levels of promotional
activity.
Selling, general and administrative expenses represented 32.0%
of net sales in the first six months of 1994, compared to 33.0%
of net sales in the first six months of 1993. The decrease in
selling, general and administrative expenses as a percentage of
net sales was primarily attributable to an increase in net sales
at a rate greater than the rate of increase in selling, general
and administrative expenses; an increase in sales from the
Company's factory stores, which have lower store operating
expenses than full price Ann Taylor stores; and improved expense
management.
As a result of the foregoing, operating income increased to
$38,263,000, or 12.5% of net sales, in the first six months of
1994, from $25,339,000, or 10.3% of net sales, in the first six
months of 1993. Amortization of goodwill was $4,753,000 in the
first six months of 1994 and $4,754,000 in the first six months
of 1993. Operating income, without giving effect to such
amortization in either year, was $43,016,000, or 14.1% of net
sales, in the 1994 period and $30,093,000, or 12.3% of net sales,
in the 1993 period.
Interest expense was $6,573,000, including $613,000 of non-
cash interest expense, in the first six months of 1994 and
$10,077,000, including $3,543,000 of non-cash interest expense,
in the first six months of 1993. The decrease in interest
expense is primarily attributable to lower interest rates
applicable to the Company's debt obligations in the 1994 period,
resulting principally from refinancing transactions entered into
in the fall of 1993 and the decrease in May 1994 in the Company's
total debt outstanding as a result of the reduction of the
Company's term loan with the net proceeds from the Offering.
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<PAGE>
The income tax provision was $15,381,000, or 49.0% of income
before income taxes and extraordinary loss, in the 1994 period,
compared to $8,451,000, or 55.0% of income before income taxes
and extraordinary loss, in the 1993 period. The effective income
tax rate for both periods was higher than the statutory rate
primarily because of non-deductible goodwill amortization.
As a result of the foregoing factors, the Company had net
income before extraordinary loss of $15,983,000, or 5.2% of net
sales, for the first six months of 1994, compared to net income
before extraordinary loss of $6,920,000, or 2.8% of net sales,
for the first six months of 1993.
In connection with the debt refinancing activities described
above (see Financial Statements Notes 2 and 3), the Company
incurred an extraordinary loss of $868,000 net of taxes, in the
second quarter of 1994. The Company also incurred an
extraordinary loss of $10,496,000, net of taxes, in the second
quarter of 1993 as a result of debt refinancing activities
undertaken in the second quarter of 1993. After giving effect to
these extraordinary losses, the Company had net income of
$15,115,000 in the first six months of 1994 compared to a net
loss of $3,576,000 in the first six months of 1993.
-13-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.4 Credit Agreement, dated as of July 29, 1994,
between AnnTaylor, Inc., Bank of America National
Trust and Savings Association ("Bank of America"),
Fleet Bank, the financial institutions party
thereto, and Bank of America, as Agent.
10.5 Guaranty, dated as of July 29, 1994, made by ATSC
in favor of Bank of America, as Agent.
10.6 Pledge Agreement, dated as of July 29, 1994, made
by the Company in favor of Bank of America, as
Agent.
10.7 Pledge Agreement, dated as of July 29, 1994, made
by ATSC in favor of Bank of America, as Agent.
27 Financial Data Schedule for the six months ended
July 30, 1994.
(b) Reports on Form 8-K:
None
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AnnTaylor, Inc.
Date: September 12, 1994 By: /s/ Paul E. Francis
------------------- ----------------------------
Paul E. Francis
Executive Vice President -
Finance and Administration
(Chief Financial Officer)
Date: September 12, 1994 By: /s/ Walter J. Parks
------------------- ----------------------------
Walter J. Parks
Vice President - Finance
(Principal Accounting
Officer)
EXHIBIT 10.4
[CONFORMED COPY]
CREDIT AGREEMENT
Dated as of July 29, 1994
among
ANNTAYLOR, INC.,
as Borrower
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
FLEET BANK, NATIONAL ASSOCIATION, as Co-Agents
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Agent
$75,000,000
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
1.01. Certain Defined Terms 1
1.02. Computation of Time Periods 22
1.03. Accounting Terms 22
1.04. Other Definitional Provisions 22
ARTICLE II
Amounts and Terms of Loans
2.01. The Revolving Loan Facility 23
(a) Availability 23
(b) Notice of Borrowing 24
(c) Making of Loans 24
(d) Loan Accounts 24
(e) Termination or Reduction of Commitments 25
(f) Extension of Commitments 25
2.02. Interest on the Loans 26
(a) Rate of Interest 26
(b) Interest Payments 27
(c) Conversion or Continuation 27
(d) Default Interest 28
(e) Computation of Interest 29
(f) Changes; Legal Restrictions 29
2.03. Fees 30
(a) Arrangement Fee 30
(b) Commitment Fee 30
(c) Agency Fee 31
(d) Letter of Credit Fees 31
(e) Payment of Fees 31
2.04. Prepayments 31
(a) Voluntary Prepayments 31
(b) Mandatory Prepayments 32
2.05. Payments 32
(a) Manner and Time of Payment 32
(b) Apportionment of Payments 33
(c) Payments on Non-Business Days 34
(d) Payments by Lenders to the Agent 34
2.06. Interest Periods 35
2.07. Special Provisions Governing
Eurodollar Rate Loans 35
(a) Determination of Interest Rate 35
(b) Interest Rate Unascertainable,
Inadequate or Unfair 36
(c) Illegality 36
(d) Compensation 37
<PAGE>
(e) Quotation of Eurodollar Rate 37
(f) Booking of Eurodollar Rate Loans 37
2.08. Taxes 38
2.09. Increased Capital 41
2.10. Use of Proceeds of the Loans 42
2.11. Authorized Officers of the Borrower 42
2.12. Replacement of Lender in
Event of Adverse Condition 42
ARTICLE III
Letters of Credit
3.01. Obligation to Issue 44
3.02. Types and Amounts 44
3.03. Conditions 45
3.04. Issuance of Letters of Credit 45
3.05. Reimbursement Obligations;
Duties of the Issuing Bank 47
3.06. Participations 48
3.07. Payment of Reimbursement Obligations 50
3.08. Compensation for Letters of Credit 51
(a) Letter of Credit Fees 51
(b) Issuing Bank Charges 52
3.09. Indemnification; Exoneration 52
ARTICLE IV
Conditions To Loans and Letters of Credit
4.01. Conditions Precedent to the Initial Funding 54
(a) Certain Documents and Other Items 54
(b) Fees and Expenses Paid 56
4.02. Conditions Precedent to all Loans
and Letters of Credit 56
(a) Notice of Borrowing 56
(b) Additional Matters 56
(c) Supplemental Documentation 56
ARTICLE V
Representations and Warranties
5.01. Representations and Warranties
on the Initial Funding Date 58
(a) Organization; Corporate Powers 58
(b) Authority 58
(c) No Conflict 59
(d) Governmental Consents 59
<PAGE>
(e) Governmental Regulation 59
(f) Financial Position 59
(g) Permitted Indebtedness 60
(h) Litigation; Adverse Effects 60
(i) No Material Adverse Change 60
(j) Payment of Taxes 60
(k) Material Adverse Agreements 61
(l) Securities Activities 61
(m) Disclosure 61
(n) Patents, Trademarks, Permits, Etc. 61
(o) Environmental Matters 62
(p) ERISA 62
(q) Net Worth 62
5.02. Subsequent Funding Representations and Warranties 63
ARTICLE VI
Reporting Covenants
6.01. Financial Statements 64
ARTICLE VII
Affirmative Covenants
7.01. Corporate Existence, Etc. 68
7.02. Corporate Powers, Etc. 68
7.03. Compliance with Laws 68
7.04. Payment of Taxes and Claims 68
7.05. Maintenance of Properties; Insurance 68
7.06. Inspection of Property;
Books and Records; Discussions 69
7.07. Labor Matters 69
7.08. Maintenance of Permits 69
7.09. ERISA 69
ARTICLE VIII
Negative Covenants
8.01. Indebtedness 71
8.02. Sales of Assets; Liens 72
(a) Sales 72
(b) Liens 73
8.03. Investments 73
8.04. Accommodation Obligations 74
8.05. Restricted Payments 75
8.06. Conduct of Business 76
<PAGE>
8.07. Transactions with Affiliates 76
8.08. Restriction on Fundamental Changes 76
8.09. ERISA 76
8.10. Sales and Leasebacks 77
8.11. Subordinated Indebtedness 77
(a) No Change 77
(b) Notices 78
8.12. Margin Regulations 78
8.13. Change of Fiscal Year 78
8.14. Subsidiaries 78
ARTICLE IX
Financial Covenants
9.01. Minimum Net Worth 79
9.02. Funded Debt to Total Capitalization Ratio 79
9.03. Minimum Fixed Charge Coverage Ratio 79
ARTICLE X
Events of Default; Rights and Remedies
10.01. Events of Default 80
(a) Failure to Make Payments When Due 80
(b) Breach of Certain Covenants 80
(c) Breach of Representation or Warranty 80
(d) Other Defaults 80
(e) Default as to Other Indebtedness 80
(f) Involuntary Bankruptcy;
Appointment of Receiver, Etc 81
(g) Voluntary Bankruptcy;
Appointment of Receiver, Ed. 81
(h) Judgments and Attachments 82
(i) Dissolution 82
(j) Collateral Documents;
Failure of Security or Subordination 82
(k) Change in Control 82
(l) ERISA Liabilities 82
10.02. Rights and Remedies 83
(a) Acceleration 83
(b) Deposit for Letters of Credit 83
(c) Rescission 83
<PAGE>
ARTICLE XI
The Agent
11.01. Appointment and Authorization 85
11.02. Delegation of Duties 85
11.03. Liability of Agent 85
11.04. Reliance by Agent 86
11.05. Notice of Default 86
11.06. Credit Decision 87
11.07. Indemnification 87
11.08. Agent in Individual Capacity 88
11.09. Successor Agent 88
11.10. The Arranger 89
11.11. Co-Agents 89
11.12. Collateral Matters 89
11.13. Relations Among Lenders 90
ARTICLE XII
Miscellaneous
12.01. Assignments and Participations 91
12.02. Assignments to Federal Reserve Banks 94
12.03. Expenses 94
(a) Generally 94
(b) After Default 94
12.04. Indemnity 95
12.05. Change in Accounting Principles 96
12.06. Setoff 96
12.07. Ratable Sharing 97
12.08. Amendments and Waivers 97
12.09. Independence of Covenants 98
12.10. Notices 98
12.11. Survival of Warranties and Agreements 99
12.12. Failure or Indulgence Not Waiver;
Remedies Cumulative 99
12.13. Marshalling; Recourse to Security;
Payments Set Aside 100
12.14. Severability 100
12.15. Headings 100
12.16. Governing Law 100
12.17. Successors and Assigns 100
12.18. Consent to Jurisdiction and
Service of Process; Waiver of Jury Trial 101
12.19. Counterparts; Effectiveness; Inconsistencies 101
<PAGE>
EXHIBITS
Exhibit 2.01 -- Form of Notice of Borrowing
Exhibit 2.02 -- Form of Notice of Conversion/
Continuation
Exhibit 4.01(a)(iii) -- Form of Borrower Pledge Agreement
Exhibit 4.01(a)(iv) -- Form of ATSC Guaranty
Exhibit 4.01(a)(v) -- Form of ATSC Pledge Agreement
Exhibit 4.01(a)(xi) -- Form of Opinion of Skadden, Arps,
Meagher & Flom to be dated the
Initial Funding Date
Exhibit 6.01 -- Form of Compliance Certificate
Exhibit 12.01 -- Form of Assignment and Acceptance
<PAGE>
SCHEDULES
Schedule 1.01(a) -- Lending Offices
Schedule 1.01(b) -- Commitments
Schedule 3.01 -- Existing Letters of Credit
Schedule 8.02(b) -- Permitted Existing Liens
Schedule 8.07 -- Transactions with Affiliates
<PAGE>
CREDIT AGREEMENT
Credit Agreement dated as of July 29, 1994 (as amended, supplemented or
modified from time to time, this "Agreement") among ANNTAYLOR, INC., a
Delaware corporation (the "Borrower"), BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION and FLEET BANK, NATIONAL ASSOCIATION, as Co-Agents (the
"Co-Agents") and each other financial institution signatory hereto or which
from time to time becomes a party hereto in accordance with Section 12.01(a)
(together with its respective successors and assigns, individually, a
"Lender" and, collectively, the "Lenders"), BA SECURITIES, INC., as Arranger
(the "Arranger") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
in its separate capacity as administrative agent for the Lenders hereunder
(in such capacity, the "Agent").
ARTICLE I
Definitions
1.01. Certain Defined Terms
The following terms used in this Agreement shall have the following
meanings (such meanings to be applicable, except to the extent otherwise
indicated in a definition of a particular term, both to the singular and the
plural forms of the terms defined):
"Accommodation Obligation", as applied to any Person, shall mean
any contractual obligation, contingent or otherwise, of that Person with
respect to any Indebtedness or other obli gation or liability of another,
including any such Indebtedness, obligation or liability directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit in
the ordinary course of business), co-made or discounted or sold with recourse
by that Person, or in respect of which that Person is otherwise directly or
indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or
otherwise acquire such Indebtedness, obligation or liability or any security
therefor, or to provide funds for the payment or discharge thereof (whether
in the form of loans, advances, stock purchases, capital contributions or
otherwise), or to maintain solvency, assets, level of income, or other
financial condition, or to make payment other than for value received.
"Affiliate", as applied to any Person, shall mean any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled
by" and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to vote 5% or more of the
Securities having voting power for the election of directors of such Person
or otherwise to direct or cause the direction of the management and policies
of that Person, whether through the ownership of voting Securities or by
contract or otherwise; provided that no
<PAGE>
financial institution, mutual fund or investment banking firm shall be an
Affiliate of the Borrower unless it owns, directly or indirectly, at least
20% of such Securities of the Borrower.
"Agent" shall have the meaning ascribed to such term in the
preamble and shall include any successor Agent appointed pursuant to Section
11.09.
"Agent-Related Person" shall mean Bank of America and any
successor agent pursuant to Section 11.09, together with their respective
Affiliates, and the officers, directors, employees, agents and attorneys-in-
fact of such Persons and Affiliates.
"Agent's Payment Office" shall mean the address for payments set
forth on the signature page hereto relating to the Agent or such other
address as the Agent may from time to time specify in accordance with Section
12.10.
"Agreement" shall have the meaning ascribed to such term in the
preamble hereto.
"Applicable Lending Office" shall mean, with respect to each
Lender, such Lender's Domestic Lending Office, in the case of a Base Rate
Loan, and such Lender's Eurodollar Lending Office, in the case of a
Eurodollar Rate Loan.
"Arranger" shall have the meaning ascribed to such term in the
preamble.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit 12.01 (with blanks appropri ately filled
in) delivered to the Agent and the Borrower in connection with an assignment
of a Lender's interest under this Agreement pursuant to Section 12.01.
"ATSC" shall mean AnnTaylor Stores Corporation, a Delaware
corporation.
"ATSC Guaranty" shall mean a Guaranty dated as of the Initial
Funding Date substantially in the form of, and on the terms set forth in,
Exhibit 4.01(a)(iv), as the same may be amended, supplemented or otherwise
modified from time to time.
"ATSC Pledge Agreement" shall mean a Pledge Agreement dated as of
the Initial Funding Date substantially in the form of, and on the terms set
forth in, Exhibit 4.01(a)(v), as the same may be amended, modified or
otherwise modified from time to time.
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<PAGE>
"Bank of America" shall mean Bank of America National Trust and
Savings Association, a national banking association.
"Bankruptcy Code" shall mean Title 11 of the United States Code
(11 U.S.C Sec. 101 et seq.), as amended from time to time, or any successor
statute.
"Base Rate" shall mean, for any day a fluctuating interest rate
per annum equal to the higher of (a) the Reference Rate in effect on such day
and (b) the sum of the Federal Funds Rate plus 0.50%.
"Base Rate Loans" shall mean all Loans outstanding which bear
interest at a rate determined by reference to the Base Rate as provided in
Section 2.02(a)(i).
"Benefit Plan" shall mean a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which
the Borrower or an ERISA Affiliate is, or within the immediately preceding
six years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower" shall have the meaning ascribed to such term in the
preamble hereto.
"Borrower Pledge Agreement" shall mean a Pledge Agree ment dated
as of the Initial Funding Date substantially in the form of, and on the terms
set forth in, Exhibit 4.01(a)(iii), as the same may be amended, supplemented
or otherwise modified from time to time.
"Borrowing" shall mean, except as otherwise provided in Section 2.07(c)(ii),
a borrowing consisting of Loans of the
same type, having the same Interest Period and made on the same day by the
Lenders.
"Business Day" shall mean (a) for all purposes other than as
covered by clause (b) below, any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or the
State of California, or is a day on which banking institutions located in
either of those states are required or authorized by law or other
governmental action to close and (b) with respect to all notices,
determinations, fundings and payments in connection with the Eurodollar Rate,
any day which is a Business Day described in clause (a) and which is also a
day for trading by and between banks in the London inter bank market.
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<PAGE>
"Capital Expenditures" shall mean, for any period, on a
consolidated basis for the Borrower and its Restricted Subsidiaries, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
during that period and including that portion of Capital Leases (except any
capitalized interest) which is capitalized on the consolidated balance sheet
of the Borrower and its Restricted Subsidiaries) made by the Borrower or any
Restricted Subsidiary during such period that, in conformity with GAAP, are
required to be included in or reflected by property, plant or equipment,
licenses and permits, or other similar fixed asset accounts as reflected in
such balance sheet (including expenditures for equipment purchased
simultaneously with the trade-in of existing equipment owned by the Borrower
or any such Restricted Subsidiary to the extent the gross amount of such
purchase price exceeds the book value of the equipment being traded in, but
excluding expenditures made in connection with the replacement or restoration
of assets, to the extent reimbursed or financed from insurance proceeds or
condemnation awards).
"Capital Lease", as applied to any Person, shall mean any lease
of any property (whether real, personal, or mixed) by that Person as lessee
which, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Cash Equivalents" shall mean (a) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or
issued by an agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within one year after the
date of acquisition thereof; (b) marketable direct obligations issued by any
state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within 90 days
after the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either S&P
or Moody's (or, if at any time neither S&P nor Moody's shall be rating such
obligations, then from such other nationally recognized rating services
acceptable to the Requisite Lenders) and not listed in Credit Watch published
by S&P; (c) commercial paper, other than commercial paper issued by the
Borrower or any Subsidiary of the Borrower or any of their Affiliates,
maturing no more than 90 days after the date of creation thereof and, at the
time of acquisition, having a rating of at least A-1 or P-1 from either S&P
or Moody's (or, if at any time neither S&P nor Moody's shall be rating such
obligations, then the highest rating from other nationally recognized rating
services acceptable to the Requisite Lenders); and (d) domestic and
Eurodollar certificates of deposit or time deposits or bankers' acceptances
maturing within 90 days after the date of acquisition thereof issued by any
commercial bank organized under the laws of the United States of America or
any state thereof or the District of Columbia having combined capital and
surplus of not less than $500,000,000.
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<PAGE>
"Cash Interest Expense" shall mean, for any period, all Interest
Expense for such period payable in cash.
"CAT Joint Venture" shall mean the joint venture entered into
between the Borrower, Cygne Designs, Inc., Cygne Design F.E., Limited, CAT US
Inc. and C.A.T. (Far East) Ltd. in accordance with the CAT Joint Venture
Agreement.
"CAT Joint Venture Agreement" shall mean (a) the agreement dated
July 13, 1993 among the Borrower, Cygne Designs, Inc., Cygne Design F.E.,
Limited, CAT US Inc. and C.A.T. (Far East) Ltd., as from time to time amended
or modified and (b) any agreement related to the CAT Joint Venture replacing
the agreement referred to in clause (a).
"Change in Control" shall have the meaning ascribed to such term
in the Subordinated Note Indenture.
"Claim" shall mean any claim or demand, by any Person, of
whatsoever kind or nature for any actual or alleged Liabilities and Costs,
whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute, Permit, ordinance or regulation, common
law or otherwise.
"Cleandown Period" shall have the meaning ascribed to such term
in Section 2.01(a)(v).
"Cleandown" shall have the meaning ascribed to such term in
Section 2.01(a)(v).
"Collateral" shall mean all property and interests in property
now owned or hereafter acquired in or upon which a security interest, pledge,
lien or mortgage is granted or of which a collateral assignment is made under
the Collateral Documents.
"Collateral Documents" shall mean the ATSC Guaranty, the ATSC
Pledge Agreement and the Borrower Pledge Agreement.
"Commercial Letter of Credit" shall mean any Letter of Credit
which is drawable upon presentation of documents eviden cing the sale or
shipment of goods purchased by the Borrower in the ordinary course of its
business.
"Commission" shall mean the Securities and Exchange Commission.
"Commitment" shall mean, with respect to each Lender as the
context may require, (a) the amount set out opposite such Lender's name under
the heading "Commitment" in Schedule 1.01(b) or assigned to it in accordance
with Section 12.01(a), as such amount may be reduced or otherwise adjusted
from time to time pursuant to the terms of this Agreement or (b) the
obligation of such Lender to make Loans hereunder and participate in Letters
of Credit up to the amount specified in the immediately preceding clause (a),
and "Commitments" shall mean the aggregate amount of the Commitments of all
Lenders.
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<PAGE>
"Commitment Letter" shall mean the letter dated June 29, 1994
from Bank of America and the Arranger to the Borrower reflecting the
commitment of Bank of America to make the Loans upon the terms and subject to
the conditions stated therein and the agreement of the Arranger, on a best
efforts basis, to syndicate the Credit Facility among a group of lenders, as
accepted by the Borrower on June 30, 1994.
"Common Stock" shall mean the common stock of ATSC the par value
of which is set forth in ATSC Certificate of Incorporation, as such
certificate may be amended, restated or otherwise modified from time to time.
"Compliance Certificate" shall mean a certificate in
substantially the form of Exhibit 6.01 delivered to the Agent by Borrower
pursuant to Section 6.01(f) and covering the Borrower's compliance with the
covenants contained in Article IX and certain of the covenants contained in
Article VIII.
"Contaminant" shall mean any pollutant, hazardous substance,
hazardous chemical, toxic substance, hazardous waste or special waste, as
those terms are defined in federal, state or local laws and regulations,
radioactive material, petroleum, including crude oil or any petroleum-derived
substance, or breakdown or decomposition product thereof, or any constituent
of any such substance or waste, including polychlorinated biphenyls and
asbestos.
"Contractual Obligation", as applied to any Person, shall mean
any provision of any Securities issued by that Person or any indenture,
mortgage, deed of trust, contract, undertaking, document, instrument or other
agreement or instrument to which that Person is a party or by which it or any
of its properties is bound, or to which it or any of its properties is
subject (including any restrictive covenant affecting such Person or any of
its properties).
"Credit Facility" shall mean the loan and letter of credit
facility provided to the Borrower pursuant to this Agreement.
"Current Assets" shall mean, as at any date of determination, the
consolidated assets of the Borrower and its Restricted Subsidiaries which may
properly be classified as current assets in conformity with GAAP.
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<PAGE>
"Current Liabilities" shall mean, as at any date of
determination, the consolidated liabilities of the Borrower and its
Restricted Subsidiaries which may properly be classified as current
liabilities in conformity with GAAP.
"Customary Permitted Liens" shall mean
(a) Liens (other than Environmental Liens and any
Lien imposed under ERISA) for claims, taxes, assessments or charges of any
Governmental Authority not yet due or which are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with GAAP;
(b) statutory Liens of landlords, bankers, carriers,
warehousemen, mechanics, materialmen and other Liens (other than any Lien
imposed under ERISA or any Environmental Lien) imposed by law, arising in the
ordinary course of business and for amounts which (i) are not yet due, (ii)
are not more than 30 days past due as long as no notice of default has been
given or other action taken to enforce such Liens, or (iii)(A) are not more
than 30 days past due and a notice of default has been given or other action
taken to enforce such Liens, or (B) are more than 30 days past due, and, in
the case of clause (A) or (B), are being contested in good faith by
appropriate proceedings which are sufficient to prevent imminent foreclosure
of such Liens and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP;
(c) Liens (other than any Lien imposed under ERISA or any
Environmental Lien) incurred or deposits made in the ordinary course of
business (including surety bonds and appeal bonds) in connection with
workers' compensation, unemployment insurance and other types of employment
benefits or to secure the performance of tenders, bids, leases, contracts
(other than for the repayment of Indebtedness), statutory obligations and
other similar obligations or arising as a result of progress payments under
government contracts; _
(d) easements (including reciprocal easement agreements and
utility agreements), rights-of-way, covenants, consents, rights of landlords,
reservations, encroachments, variations and other restrictions, charges or
encumbrances (whether or not recorded) affecting the use of real property,
which do not materially interfere with the ordinary conduct of the business
of the Borrower; and
(e) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods.
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<PAGE>
"Debt Rating" shall mean the rating assigned to the Borrower's
senior secured long-term debt by Moody's or S&P, as the case may be, or in
the event Moody's or S&P has not assigned an actual rating to the Borrower's
senior secured long-term debt, the rating which is two rating categories
above the rating assigned by Moody's or S&P, as the case may be, to the
Subordinated Notes; provided, however, that if there is a difference in the
ratings (determined as provided above) assigned by Moody's and S&P, or if
only one of either Moody's or S&P has assigned a rating, then the Debt Rating
shall be determined as follows: _
(a) if the Debt Rating is based on the actual rating assigned to the
Borrower's senior secured long-term debt (i) if there is a difference in the
ratings assigned by Moody's and S&P, the Debt Rating shall automatically be
deemed to be the rating that is one rating category below the higher of the
ratings assigned by Moody's and S&P and (ii) if only one of either Moody's or
S&P has assigned a rating, then the Debt Rating will be one rating category
below such rating; and
(b) if the Debt Rating is based on the Subordinated
Notes (i) if there is a difference in the ratings assigned by Moody's and
S&P, the Debt Rating shall automatically be deemed to be the rating that is
one rating category above the higher of the ratings assigned by Moody's and
S&P and (ii) if only one of either Moody's or S&P has assigned a rating,
then the Debt Rating will be one rating category above such rating.
"Distribution Center" shall mean the new distribution center,
fulfillment facility and related systems and equipment, to be built,
purchased or leased by the Borrower for the purpose of replacing the
Borrower's existing distribution facilities.
"DOL" shall mean the United States Department of Labor and any
successor department or agency.
"Dollars" and "$" shall mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" in Schedule
1.01(a) or on the Assignment and Acceptance by which it became a Lender or
such other office of such Lender as such Lender may from time to time specify
to the Borrower and the Agent.
"EBITDA" shall mean, for any period, the sum of the amounts for
such period, of (a) Net Income, plus (b) to the extent Net Income is reduced
thereby (i) all charges for amortization of intangibles and depreciation,
(ii) Interest Expense, (iii) income tax expense and (iv) extraordinary
losses, minus (c) extraordinary gains (net of taxes).
-8-
<PAGE>
"Effective Date" shall mean the date on which this Agreement
shall become effective in accordance with Section 12.19.
"Eligible Assignee" means (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political subdivision
of any such country, and having a combined capital and surplus of at least
$100,000,000, provided that such bank is acting through a branch or agency
located in the United States of America; and (c) a Person that is primarily
engaged in the business of commercial banking and that is (i) a Subsidiary of
a Lender, (ii) a Subsidiary of a Person of which a Lender is a Subsidiary, or
(iii) a Person of which a Lender is a Subsidiary.
"Environmental Lien" shall mean a Lien in favor of any
Governmental Authority for (a) any liability of the Borrower or any
Subsidiary of the Borrower under federal or state environmental laws or
regulations, or (b) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (a) corporation which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the IRC) as the Borrower
or any of its Subsidiaries, (b) partnership or other trade or business
(whether or not incorporated) under common control (within the meaning of
Section 414(c) of the IRC) with the Borrower or any of its Subsidiaries, and
(c) member of the same affiliated service group (within the meaning of
Section 414(m) of the IRC) as the Borrower or any of its Subsidiaries, any
corporation described in clause (a) above or any partnership or trade or
business described in clause (b) above.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" in
Schedule 1.01(a) or on the Assignment and Acceptance by which it became a
Lender (or, if no such office is specified, its Domestic Lending Office) or
such other office of such Lender as such Lender may from time to time specify
by written notice to the Borrower and the Agent.
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<PAGE>
"Eurodollar Rate" shall mean, with respect to any Interest Period
applicable to a Borrowing of Eurodollar Rate Loans, an interest rate per
annum obtained by dividing (a) the rate of interest determined by the Agent
to be the arithmetic mean (rounded upward to the nearest whole multiple of
1/16%) of the rates of interest per annum notified to the Agent by each
Reference Bank at which deposits in Dollars for such Interest Period and in
an amount of the Eurodollar Rate Loan of such Reference Bank during such
Interest Period would be offered by such Reference Bank to major banks in the
London eurodollar interbank market at approximately 11:00 a.m. (London time)
on the second Business Day prior to the commencement of such Interest Period,
by (b) a percentage equal to 1 minus the Eurodollar Reserve Percentage.
"Eurodollar Rate Loans" shall mean those Loans out standing which
bear interest at a rate determined by reference to the Eurodollar Rate as
provided in Section 2.02(a)(ii).
"Eurodollar Reserve Percentage" shall mean with respect to any
Interest Period for any Eurodollar Rate Loan, that percentage (expressed as a
decimal rounded upwards to the nearest 1/100%) which is in effect on the date
the Eurodollar Rate for such Interest Period is determined as prescribed by
the Federal Reserve Board, for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System with deposits exceeding
$5,000,000,000 in respect of "Eurocurrency liabilities" having a term equal
to such Interest Period (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Eurodollar
Rate Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any bank to
United States residents).
"Event of Default" shall mean any of the occurrences set forth in
Section 10.01 after the expiration of any applicable grace period expressly
provided therein.
"Existing Credit Agreement" means the Credit Agreement dated as
of June 28, 1993 among AnnTaylor, Inc., Bank of America and Bank of Montreal,
as Co-Agents, Bank of America, as Agent, and the financial institutions party
thereto, as amended.
"Existing Letter of Credit" shall mean each Letter of Credit
identified in Schedule 3.01.
"FDIC" shall mean the Federal Deposit Insurance
Corporation or any successor thereto.
"Federal Funds Rate" shall mean, for any day, the rate set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30
p.m. Quotation") for such day under the caption "Federal Funds Effective
Rate". If on any relevant day the appropriate rate for such previous day is
not yet published in either H.15(519) or the Composite 3:30 p.m. Quotations,
the rate for such day will be the arithmetic mean as determined by the Agent
of the rates for the last transaction in overnight Federal funds arranged
prior to 9:00 a.m. (New York time) on that day by each of three leading
brokers of Federal funds transactions in New York City selected by the Agent.
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<PAGE>
"Federal Reserve Board" shall mean the Board of Gover nors of the
Federal Reserve System or any Governmental Authority succeeding to its
functions.
"Fee Letter" shall mean the fee letter dated June 29, 1994
between the Borrower, Bank of America and the Arranger.
"Final Maturity Date" shall mean July 29, 1997, as such date may
be extended pursuant to Section 2.01(f).
"Fiscal Year" shall mean the fiscal year of the Borrower, which
shall be the twelve-month period ending on the Saturday closest to January 31
in each year or such other period as the Borrower may designate and the
Requisite Lenders may approve in writing.
"Fixed Charge Coverage Ratio" shall mean, for any period, the
quotient obtained by dividing (a) EBITDA by (b) the sum of (i) Capital
Expenditures paid or accrued during such period excluding any Capital
Expenditures made in respect of the Distribution Center, plus (ii) scheduled
payments made since the Initial Funding Date for principal on Indebtedness
excluding any payment made upon termination of a Receivables Transaction plus
(iii) Cash Interest Expense during such period plus (iv) income tax expense
during such period.
"Funded Debt" shall mean, as at any date of determina tion, all
Indebtedness then outstanding (a) for the principal of Loans under this
Agreement and (b) for money borrowed or under any debt Securities issued by
ATSC, the Borrower or any Restricted Subsidiary (whether or not subordinated,
and specifically including the Subordinated Notes).
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<PAGE>
"Funding Date" shall mean the date of borrowing any Loan.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Cer tified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant
segments of the accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" shall mean any nation, state, sovereign,
or government, any federal, regional, state, local or political subdivision
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Indebtedness", as applied to any Person, shall mean any
obligation for the payment of money which is a Contractual Obligation, and
shall include, but without duplication, (a) all indebtedness, obligations or
other liabilities of such Person for borrowed money or under any debt
Securities, whether or not subordinated, (b) all obligations with respect to
redeemable stock and redemption or repurchase obligations under any equity
securities or profit payment agreements, (c) all reimbursement obligations
and other liabilities of such Person with respect to letters of credit issued
for such Person's account, (d) all obligations of such Person to pay the
purchase price of property or services, except trade payables incurred by
such Person in the ordinary course of business as presently conducted, (e)
all obligations in respect of Capital Leases of such Person, (f) all
Accommodation Obligations of such Person, (g) all indebtedness, obligations
or other liabilities of such Person or others secured by a Lien on any asset
of such Person, whether or not such indebtedness, obligations or liabilities
are assumed by or are a personal liability of such Person, all as of such
time, and (h) all indebtedness, obligations or other liabilities in respect
of Interest Rate Contracts and foreign currency exchange agreements.
"Initial Funding" shall mean the funding of Loans on the Initial
Funding Date.
"Initial Funding Date" shall mean the date on which all
conditions precedent set forth in Section 4.01 have been satisfied or waived.
"Initial Loans" shall have the meaning ascribed to such term in
Section 4.01.
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"Interest Expense" shall mean, for any period for ATSC, the
Borrower and its Restricted Subsidiaries on a consolidated basis, total
consolidated interest expense, whether paid or accrued (including any
amortization of discount and the interest component of Capital Leases), for
such period, including to the extent included in interest expense, all
commissions, discounts and other fees and charges owed with respect to the
letters of credit, the fees payable under this Agreement and net costs under
Interest Rate Contracts, all as determined in conformity with GAAP, plus
(without duplication) all capitalized interest.
"Interest Payment Date" shall mean with respect to any Eurodollar
Rate Loan, the last day of each Interest Period applicable to such Loan;
provided that in the case of an Interest Period of six months or longer,
"Interest Payment Date" shall also include each date that is a three-month
anniversary of the first day of such Interest Period.
"Interest Period" shall have the meaning ascribed to such term in
Section 2.06.
"Interest Rate Contracts" shall mean interest rate exchange,
collar, cap or similar agreements providing interest rate protection, entered
into by the Borrower or ATSC.
"Investment" shall mean, as applied to any Person, any direct or
indirect purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, of any other Person, and any direct or
indirect loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, advances to employees
and similar items made or incurred in the ordinary course of business), or
capital contribution by such Person to any other Person, including all
Indebtedness and accounts owed by that other Person which are not current
assets or did not arise from sales of goods or services to that Person in the
ordinary course of business. The amount of any Investment shall be
determined in conformity with GAAP.
"Investor Group" shall mean Merrill Lynch Capital Partners, Inc.
and its Affiliates.
"IRC" shall mean the Internal Revenue Code of 1986, as amended
from time to time hereafter, and any successor statute.
"IRS" shall mean the Internal Revenue Service of the United
States or any Governmental Authority succeeding to the functions thereof.
"Issuing Bank" shall mean Bank of America, BankAmerica
International or any other Lender mutually acceptable to the Agent and the
Borrower. _
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"Lender" shall have the meaning ascribed to such term in the
preamble and shall include Bank of America, in its individual capacity, the
Issuing Bank and each Person which at any time becomes a Lender pursuant to
Section 12.01(a).
"Letter of Credit" shall mean any Commercial Letter of Credit or
any Standby Letter of Credit issued by the Issuing Bank for the account of
the Borrower pursuant to Article III and includes each Existing Letter of
Credit.
"Letter of Credit Fee" shall have the meaning
ascribed to such term in Section 2.03(d).
"Letter of Credit Obligations" shall mean, at any particular
time, the sum of (a) Reimbursement Obligations and (b) the aggregate maximum
amount then available for drawing under the Letters of Credit.
"Level I Status" exists at any date if (subject to the proviso of
the definition of "Debt Rating") at such date, the Debt Rating is BBB- (or
the equivalent) or higher by S&P and Baa3 (or the equivalent) or higher by
Moody's.
"Level II Status" exists at any date if (subject to the proviso
of the definition of "Debt Rating") at such date, the Debt Rating is BB+ (or
the equivalent) or higher by S&P and Ba1 (or the equivalent) or higher by
Moody's and Level I Status does not exist.
"Level III Status" exists at any date if (subject to the proviso
of the definition of "Debt Rating") at such date, the Debt Rating is BB (or
the equivalent) or higher by S&P and Ba2 (or the equivalent) or higher by
Moody's and neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if (subject to the proviso
of the definition of "Debt Rating") at such date, the
Debt Rating is BB- (or the equivalent) or higher by S&P and Ba3 (or the
equivalent) or higher by Moody's and neither Level I Status nor Level II
Status nor Level III Status exists.
"Level V Status" exists at any date if (subject to the proviso of
the definition of "Debt Rating") at such date, the Debt Rating is lower than
BB- (or the equivalent) by S&P or lower than Ba3 (or the equivalent) by
Moody's.
"Liabilities and Costs" shall mean all liabilities, claims,
obligations, responsibilities, losses, damages, punitive damages,
consequential damages, treble damages, charges, costs and expenses (including
attorney's, expert's and consulting fees and costs of investigation and
feasibility studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present
or future.
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"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest,
encumbrance (including, but not limited to, easements, rights of way and the
like), lien (statutory or other), Environ mental Lien, security agreement or
transfer intended as security, including any conditional sale or other title
retention agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement (other than a financing
statement filed pursuant to Section 9-408 of the Uniform Commercial Code not
intended as security).
"Loan" shall have the meaning ascribed to such term in Section 2.01(a).
"Loan Account" shall have the meaning ascribed to such term in
Section 2.01(d).
"Loan Documents" shall mean this Agreement, the Collateral
Documents and the Letters of Credit and all other agreements delivered to the
Agent, the Issuing Bank or any Lender by or on behalf of the Borrower in
satisfaction of the requirements of this Agreement.
"Margin Stock" shall have the meaning ascribed to such term in
Regulation G and Regulation U.
"Material Adverse Effect" shall mean, with respect to the
Borrower or ATSC, a material adverse effect upon the busi ness, assets or
other properties, liabilities or condition (finan cial or otherwise), results
of operations or prospects of the Borrower and its Restricted Subsidiaries
taken as a whole or ATSC and its Subsidiaries taken as a whole, as the case
may be, upon the ability of the Borrower to repay the Loans, or upon the
benefits provided to the Agent or the Lenders under the Collateral Documents.
"Maximum Loan Amount" shall mean, at any time, (a) the
Commitments at such time (as reduced pursuant to Section 2.01(e)) less (b)
the sum of (i) the then aggregate outstanding Letter of Credit Obligations
and (ii) if applicable, the amount of any Cleandown.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA which is, or within the immediately preceding
six years was, contributed to by
either the Borrower or any ERISA Affiliate.
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"Net Income" shall mean, for any period on a consolidated basis
for ATSC, the Borrower and its Restricted Subsidiaries, the consolidated net
income (or loss) of the Borrower and its Restricted Subsidiaries for such
period taken as a single accounting period, after adding or deducting the
amount of any extraordinary gain and extraordinary loss net of taxes,
determined in conformity with GAAP.
"Net Worth" shall mean, as at any date of determi nation, the
amount by which (a) the total consolidated assets of ATSC, the Borrower and
its Restricted Subsidiaries exceed (b) the total consolidated liabilities of
ATSC, the Borrower and its Restricted Subsidiaries, as determined in
conformity with GAAP but excluding, for purposes of this definition,
unrealized foreign exchange translation gains and losses from Investments in
foreign Subsidiaries.
"Notice of Borrowing" shall mean, with respect to a proposed
Borrowing pursuant to Section 2.01(b), a notice substantially in the form of
Exhibit 2.01.
"Notice of Conversion/Continuation" shall mean, with respect to a proposed
conversion or continuation of a Loan pursuant to Section 2.02(c), a notice
substantially in the form of Exhibit 2.02.
"Obligations" shall mean the principal of and all interest on all
Loans and Reimbursement Obligations, all fees, expense reimbursements, taxes,
compensation and indemnities payable by the Borrower to the Agent, the
Issuing Bank, or any Lender pursuant to this Agreement and all other present
and future Indebtedness and other liabilities of the Borrower owing to the
Agent, the Issuing Bank, any Lender, or any Person entitled to
indemnification pursuant to Section 12.04, or any of their respective
successors, transferees or assigns, of every type and description, whether or
not evidenced by any note, guaranty or other instrument, arising under or in
connection with this Agreement, any other Loan Document, or any Interest Rate
Contract, whether or not for the payment of money, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however arising.
"Operating Lease" shall mean, as applied to any Person, any lease
of any Property by that Person as lessee which is not a Capital Lease.
"Other Taxes" shall have the meaning ascribed to such term in
Section 2.08(b).
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"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any Person succeeding to the functions thereof.
"Permits" shall mean any permit, approval, consent,
authorization, license, variance, or permission required from a Governmental
Authority under an applicable Requirement of Law.
"Permitted Existing Liens" shall mean the Liens on any Property,
other than any Environmental Liens, reflected on Schedule 8.02(b).
"Person" shall mean any natural person, corporation, limited
partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company,
land trust, business trust or other organization, whether or not a legal
entity, or any other nongovernmental entity, or any Governmental Authority.
"Plan" shall mean an employee benefit plan defined in Section
3(3) of ERISA in respect of which either the Borrower or any ERISA Affiliate
is, or within the immediately preceding six years was, an "employer" as
defined in Section 3(5) of ERISA.
"Potential Event of Default" shall mean an event which, with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default.
"Property" shall mean with respect to any Person, any real or
personal property, plant, building, facility, structure, equipment or unit,
or other asset (tangible or intangible) owned, leased or operated by such
Person.
"Pro Rata Share" shall mean, at any particular time and with
respect to any Lender, a fraction (expressed as a percentage), the numerator
of which shall be the then amount of such Lender's Commitment (or, if the
Commitments have been terminated, such Lender's Commitment as in effect
immediately prior to such termination) and the denominator of which shall be
the then aggregate amount of all Commitments (or, if the Commitments have
been terminated, the aggregate amount of all Commitments as in effect
immediately prior to such termination).
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"Receivables" shall mean and include all of the Borrower's
presently existing and hereafter arising or acquired right, title and
interest in and to (a) any rights to payment (the "Pool Receivables") from
any Person (an "Obligor") whether constituting an account, chattel paper,
instrument or a general intangible, arising under revolving credit card
accounts estab lished pursuant to contracts (the "Contracts") between the
Borrower and each Obligor pursuant to which indebtedness may arise for the
purchase of goods, including rights to payment of any interest or finance
charges and other obligations of such Obligors with respect thereto, (b) all
rights to, but not obligations under, all Contracts, (c) all rights in the
merchandise (including returned merchandise), if any, relating to the sale
which gave rise to any Pool Receivable, (d) all other security interests or
liens and property subject thereto from time to time purporting to secure
payment of a Pool Receivable, whether pursuant to the Contract related to
such Pool Receivable or otherwise, (e) all UCC financing statements covering
any collateral securing payment of any Pool Receivables, (f) all guarantees
and other agreements or arrangements of whatever character from time to time
supporting or securing payment of any Pool Receivable whether pursuant to the
contract related to such Pool Receivable or otherwise, (g) all monies due or
to become due with respect thereto, (h) all books and records related to any
of the foregoing, and (i) all proceeds thereof (as defined in the Uniform
Commercial Code) including funds received from or on behalf of the Obligors
in payment of any amounts owed (including finance charges, interest and all
other charges) in respect of the Pool Receivables or are applied to such
amounts owed by the Obligors (including insurance payments to be applied to
amounts owed in respect of any Pool Receivable).
"Receivables Transaction" shall mean (a) the transaction
contemplated by that certain Receivables Financing Agreement, dated as of
January 27, 1994 among AnnTaylor Funding, Inc., the Borrower, Clipper
Receivables Corporation, State Street Boston Capital Corporation and PNC
Bank, National Association and the other documents relating thereto (the
"1994 Receivables Transaction") and (b) any other similar transaction
replacing the 1994 Receivables Transaction; provided the terms and conditions
of such other transaction are on substantially the same terms as the
transaction described in clause (a) or are satisfactory to the Requisite
Lenders (whose approval shall not be unreasonably withheld or delayed).
"Reference Banks" shall mean Bank of America National Trust and
Savings Association. If any Reference Bank's Commitment shall terminate
(otherwise than on termination of all the Commitments), or for any reason
whatsoever any Reference Bank shall cease to be a Lender hereunder, that
Reference Bank shall thereupon cease to be a Reference Bank, and Eurodollar
Rate shall be determined on the basis of the rates as notified by the
remaining Reference Banks or Bank. Upon the removal of any Reference Bank,
the Borrower shall with the consent of the Agent (which consent shall not be
unreasonably withheld) designate another Lender as a new Reference Bank.
"Reference Rate" shall mean the rate of interest publicly
announced from time to time by Bank of America in San Francisco, California,
as its reference rate. It is a rate set by Bank of America based upon
various factors including Bank of America's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate. Any change in the Reference Rate shall take effect at the opening of
business on the date specified in the public announcement of such change.
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"Regulation D", "Regulation G", "Regulation T", "Regulation U"
and "Regulation X" shall mean Regulation D, Regulation G, Regulation T,
Regulation U and Regulation X, respectively, of the Federal Reserve Board as
in effect from time to time.
"Reimbursement Obligations" shall mean the reimburse ment or
repayment obligations of the Borrower to the Issuing Bank with respect to
Letters of Credit, for amounts paid out thereunder.
"Release" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration from any Property into the environment, including the movement of
Contaminants through or in the air, soil, surface water, groundwater or
Property.
"Remedial Action" shall mean any action required to (i) clean up,
remove, treat or in any other way address Contami nants in the indoor or
outdoor environment; (ii) prevent a Release or threat of Release or minimize
the further Release of Contaminants so they do not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; or (iii) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
"Reportable Event" shall mean the events described in Section
4043 of ERISA with respect to which the 30-day notice requirement is not
waived.
"Requirements of Law" shall mean, as to any Person, the charter
and by-laws or other organizational or governing docu ments of such Person,
and any law, rule or regulation, Permit, or determination of an arbitrator or
a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such Person or
any of its property is subject, including the Securities Act, the Securities
Exchange Act, Regulation G, Regulation T, Regulation U and Regulation X, and
any certificate of occupancy, zoning ordinance, building, environmental or land
use requirement or Permit or occupational safety or health law, rule or
regulation.
"Requisite Lenders" shall mean Lenders whose Pro Rata Shares, in
the aggregate, are more than 50%.
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"Responsible Officer" shall mean, as to ATSC or the Borrower, its
Chief Financial Officer, its Treasurer or its Vice President-Finance.
"Restricted Payment" shall mean (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of ATSC or the Borrower or any of its Subsidiaries now or
hereafter outstanding, including the Common Stock, except a distribution of
stock as part of a stock split and except a dividend payable solely in shares
of that class of stock or in any junior class of stock to the holders of that
class, (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of ATSC or the Borrower or any of its Subsidiaries
now or hereafter outstanding, (c) any payment or prepayment of principal of,
premi um, if any, or interest on, and any redemption, purchase, retirement or
defeasance of, or sinking fund or similar payment
with respect to, the Subordinated Notes or any consideration paid to any
Person for the purpose of any of the foregoing, and (d) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of capital stock of ATSC or the
Borrower or any of the Borrower's Subsidiaries now or hereafter outstanding.
"Restricted Subsidiary" shall mean any Subsidiary of the Borrower
which is not an Unrestricted Subsidiary. Whether or not a Restricted
Subsidiary is a "wholly-owned Restricted Subsidiary" shall be determined
without taking into account any directors' qualifying shares.
"Securities" shall mean any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities", or any certificates of
interest, shares, or participations in temporary or interim certificates for
the purchase or acquisition of, or any right to subscribe to, purchase or
acquire any of the foregoing, but shall not include any evidence of the
Obligations.
"Securities Act" shall mean the Securities Act of 1933, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"Securities Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended to the date hereof and from time to time hereafter, and
any successor statute.
"S&P" shall mean Standard & Poor's Rating Group.
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"Standby Letter of Credit" shall mean any Letter of Credit which
is not a Commercial Letter of Credit.
"Subordinated Note Indenture" shall mean the indenture dated as
of June 15, 1993 between the Borrower and Fleet Bank, N.A., as trustee
pursuant to which the Subordinated
Notes were issued.
"Subordinated Notes" shall mean the 8 3/4% Subordinated Notes due
2000 issued pursuant to the Subordinated Note Indenture.
"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership, trust or other entity of which a majority of the
stock (or equivalent ownership or controlling interest) having voting power
to elect a majority of the Board of Directors (if a corporation) or to select
the trustee or equivalent controlling interest is directly or indirectly
owned or controlled by such Person or one or more of the other Subsidi aries
of such Person or any combination thereof; provided, however, that for
purposes of this Agreement the charitable foundation permitted to be
established pursuant to Section 8.02(a)(viii) shall not be deemed to be a
Subsidiary of the Borrower.
"Taxes" shall have the meaning ascribed to such term in Section 2.08.
"Termination Date" shall mean the earlier to occur of (a) the
Final Maturity Date and (b) the date of termination of the Commitments
pursuant to Section 10.02(a).
"Termination Event" shall mean (i) a Reportable Event with
respect to any Benefit Plan; (ii) the withdrawal of the Borrower or any ERISA
Affiliate from a Benefit Plan during a plan year in which the Borrower or
such ERISA Affiliate was a "substan tial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of 20% of Benefit Plan participants who are
employees of the Borrower and its ERISA Affiliates; (iii) the imposition of
an obligation on the Borrower or any ERISA Affiliate under Section 4041 of
ERISA to provide affected parties written notice of intent to terminate a
Benefit Plan in a distress termination described in Section 4041(c) of ERISA;
(iv) the institution by the PBGC of proceedings to terminate a Benefit Plan;
(v) any event or condition which constitutes grounds under Section 4042 of
ERISA (excluding Section 4042(a)(4)) for the termination of, or the
appointment of a trustee to administer, any Benefit Plan; or (vi) the partial
or complete withdrawal of the Borrower or any ERISA Affiliate from a
Multiemployer Plan.
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"Total Capitalization" means, as of any date of determination,
the sum of Funded Debt plus obligations in respect of Capital Leases plus
ATSC shareholders' equity.
"Transaction Costs" shall mean the fees, costs and expenses
payable by the Borrower or any of its Subsidiaries or ATSC pursuant hereto or
in connection herewith or in respect hereof.
"Unrestricted Subsidiary" shall mean a Subsidiary of the Borrower
which has been designated as such by resolution duly adopted by the board of
directors of the Borrower, which at the time of such designation had assets
of $1,000 or less and which does not own or hold any Securities of, or any
Lien on any Property of, ATSC, the Borrower or any Restricted Subsidiary
provided no Subsidiary of the Borrower shall be (or if already an
Unrestricted Subsidiary shall immediately cease to be) an Unrestricted
Subsidiary if, at any time, ATSC, the Borrower or any other Restricted
Subsidiary of the Borrower shall create, incur, issue, assume, guarantee or
in any other manner whatsoever be or become liable with respect to any Claim
against or any Contractual Obligation or Indebtedness of, such Subsidiary.
1.02. Computation of Time Periods In this Agreement, in the
computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding". Periods of days referred to in this
Agreement shall be counted in calendar days unless Business Days are
expressly prescribed.
1.03. Accounting Terms. For purposes of this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them
in conformity with GAAP.
1.04. Other Definitional Provisions. References to "Articles",
"Sections", "subsections", "Schedules", "Exhibits" and "the preamble" shall
be to Articles, Sections, subsections, Schedules, Exhibits and the preamble,
respectively, of this Agreement unless otherwise specifically provided. The
words "include" and "including" when used herein are not intended to be
exclusive and mean "include, without limitation" and "including, without
limitation."
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ARTICLE II
Amounts and Terms of Loans
2.01. The Revolving Loan Facility.
(a) Availability. (i) Subject to the terms and conditions set
forth in this Agreement, each Lender hereby severally and not jointly agrees
to make to the Borrower from time to time during the period from the Initial
Funding Date to the Termination Date, revolving loans (each individually, a
"Loan" and, collectively, the "Loans"), in an amount which shall not exceed,
in the aggregate at any time outstanding, such Lender's Commitment; provided
that the aggregate principal amount of all Loans outstanding at any one time
shall not exceed the then Maximum Loan Amount.
(ii) All Loans under this Agreement shall be made by the
Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no Lender shall be responsible for any
failure by any other Lender to perform its obligation to make a Loan
hereunder and that the Commitment of any Lender shall not be increased or
decreased without the prior written consent of such Lender as a result of the
failure by any other Lender to perform its obligation to make a Loan. The
failure of any Lender to make available to the Agent any Borrowing of the
Commitments shall not relieve any other Lender of its obligation hereunder to
make available to the Agent such other Lender's Pro Rata Share of any
Borrowing of the Commitments on the date such funds are to be made available
pursuant to the terms of this Agreement.
(iii) Loans may be prepaid pursuant to Section 2.04, and,
subject to the provisions of this Agreement, any amounts so prepaid may be
reborrowed, up to the amount available under this Section 2.01(a) at the time
of such Borrowing, until the Business Day immediately preceding the Final
Maturity Date. Each Lender's Commitment shall expire, and each Loan then
outstanding shall mature and be repaid by the Borrower, without further
action on the part of the Lenders, on the Final Maturity Date.
(iv) Loans made on any Funding Date shall be in the aggregate
minimum amount of $1,000,000 and in integral
multiples of $1,000,000 in excess thereof.
(v) The Borrower shall from time to time effect a prepayment
of the outstanding Loans (such amount, a "Cleandown") so as to cause the
aggregate outstanding principal amount of the Loans to be not more than (A)
$50,000,000, for at least 30 consecutive days during the period from the
Initial Funding Date to the last day of the Fiscal Year beginning on January
30, 1994, (B) $40,000,000, for at least 30 consecutive days in the Fiscal
Year beginning on or about January 30, 1995 and (C) $30,000,000, for at least
30 consecutive days in each Fiscal Year thereafter (each such period, a
"Cleandown Period"). Promptly after the end of any Cleandown Period, the
Borrower shall notify the Agent that a Cleandown Period has occurred and the
Agent shall notify the Lenders.
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(b) Notice of Borrowing. Whenever the Borrower desires to
borrow under this Section 2.01, the Borrower shall deliver to the Agent a
Notice of Borrowing (i) no later than 11:00 a.m. (New York time) on the
proposed Funding Date, in the case of a Borrowing of Base Rate Loans, and
(ii) not later than 11:00 a.m. (New York time) at least three Business Days
in advance of the proposed Funding Date, in the case of a Borrowing of
Eurodollar Rate Loans. The Notice of Borrowing shall specify (A) the Funding
Date (which shall be a Business Day), (B) the amount of the proposed
Borrowing, (C) whether the proposed Borrowing will be of Base Rate Loans or
Eurodollar Rate Loans, and (D) in the case of Eurodollar Rate Loans, the
requested Interest Period. In lieu of delivering the above-described Notice
of Borrowing and only with the consent of the Agent in its sole discretion at
such time, the Borrower may give the Agent telephonic notice of any proposed
Borrowing by the time required under this Section 2.01(b); provided that, in
the event the Agent so consents, such notice shall be confirmed immediately
by delivery to the Agent of a Notice of Borrowing by facsimile. Any Notice
of Borrowing (or telephonic notice in lieu thereof) pursuant to this Section
2.01(b) shall be irrevocable.
(c) Making of Loans. Promptly after receipt of a Notice of
Borrowing under Section 2.01(b) (or telephonic notice in lieu thereof if the
Agent consents to such telephonic notice, immediately confirmed by
facsimile), the Agent shall notify each Lender by facsimile or other similar
form of teletransmission, of the proposed Borrowing. Each Lender shall make
the amount of its Loan available to the Agent at the Agent's Payment Office
in Dollars and in immediately available funds, not later than (i) 1:00 p.m.
(New York time) on the Funding Date, in the case of a Borrowing of Base Rate
Loans and (ii) 11:00 a.m. (New York time) on the Funding Date, in the case of
Borrowing of Eurodollar Rate Loans. After the Agent's receipt of the
proceeds of such Loans, the Agent shall make the proceeds of such Loans
available to the Borrower on such Funding Date in Dollars and in immediately
available funds to an account of the Borrower, designated in writing by the
Borrower in the Notice of Borrowing.
(d) Loan Accounts. The Loans made by each Lender shall be
evidenced by one or more loan accounts maintained by the Agent and such
Lender in the ordinary course of business. The loan accounts or records
maintained by the Agent and each Lender shall be conclusive absent manifest
error of the amount of the Loans made by the Lenders to the Borrower and the
interest and payments thereon. Any failure so to record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Loans. In
case of a discrepancy between the entries in the Agent's books and any
Lender's books, such Lender's books shall
constitute prima facie evidence of the accuracy of the information so
recorded.
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(e) Termination or Reduction of Commitments. The Borrower shall
have the right, at any time and from time to time, (a) to terminate the
Commitments in whole, without premium or penalty, if no Loans or Letter of
Credit Obligations are then out standing, or (b) permanently to reduce in
part, without premium or penalty, the Commitments by an amount of up to (i)
the then maximum amount of the Commitments, less (ii) the aggregate principal
amount of Loans and Letter of Credit Obligations then outstanding. The
Borrower shall give not less than three Business Days' prior irrevocable
written notice (not later than 11:00 a.m. (New York time) on such day) to the
Agent designating the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction. Promptly
after receipt of a notice of such termination or reduction, the Agent shall
notify each Lender of the proposed termination or reduction. Such
termination or partial reduction of the Commitments shall be effective on the
date specified in the Borrower's notice and shall reduce the Commitment of
each Lender proportionately in accordance with its Pro Rata Share. Any such
partial reduction of the Commitments shall be in an aggregate minimum amount
of $2,000,000 and integral multiples of $1,000,000 in excess of that amount.
(f) Extension of Commitments.
(i) Upon the written request of the Borrower, received by
the Agent not more than 60 days and not less than 45 days prior to the first
and second anniversaries of the Initial Funding Date and subject to the
consent of each Lender willing to grant such request, the Final Maturity Date
shall be extended for up to two successive additional one year periods
commencing on the then current Final Maturity Date. The Agent shall promptly
transmit such request to each Lender. The Lenders shall respond through the
Agent to any such request of the Borrower not later than 30 days prior to the
first and second anniversaries of the Initial Funding Date. Any Lender not
responding by such time shall be deemed to have declined the request.
(ii) At the option of the Borrower, the Commit ment of any
Lender not consenting to the Borrower's request to extend such Lender's
Commitment may be assumed, in whole or in part, by one or more existing
Lenders or other banks meeting the qualifications of Eligible Assignee
acceptable to the Borrower and the Agent and consenting to such assumption,
upon compliance with Section 12.01; provided, however, that unless otherwise
agreed by the assuming Lender or bank, the Borrower shall pay the processing
and recordation fee required by Section 12.01(a) and any breakfunding fee
required pursuant to Section 2.07(d).
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(iii) If the Commitment of any Lender having declined the
request to extend its Commitment has not subsequently so consented and is not
replaced within six months after the first or second anniversary of the
Initial Funding Date, as the case may be, then the Commitments shall
terminate on the then current Final Maturity Date.
2.02. Interest on the Loans.
(a) Rate of Interest. The Borrower promises to pay interest on
the unpaid principal amount of all Loans from the date made until paid in
full at a fluctuating rate determined from time to time by reference to the
Base Rate or the Eurodollar Rate. The applicable basis for determining the
rate of interest
shall be selected by the Borrower at the time a Notice of Borrowing is given
by the Borrower pursuant to Section 2.01(b) or at the time a Notice of
Conversion/Continuation is delivered by the Borrower pursuant to Section
2.02(c); provided that the Borrower may not select the Eurodollar Rate as the
applicable basis for determining the rate of interest on a Loan if at the
time of such selection an Event of Default has occurred and is continuing.
If on any day a Loan is outstanding with respect to which notice has not been
delivered to the Agent in accordance with the terms of this Agreement
specifying the basis for determining the rate of interest, then for each such
day such Loan shall be a Base Rate Loan. Loans shall bear interest, subject
to Section 2.02(d), at the following rates:
(i) if a Base Rate Loan, then at a rate per annum equal to
the sum of (A) the Base Rate as in effect from time to time as interest
accrues and (B) the applicable margin set forth below:
Debt Rating Applicable Margin
-------------- -----------------
Level I Status 0%
Level II Status 0%
Level III Status 0%
Level IV Status . 25%
Level V Status .75%
(ii) if a Eurodollar Rate Loan, then at a rate per annum
equal to the sum of (A) the Eurodollar Rate determined for the applicable
Interest Period and (B) the applicable margin set forth below:
Debt Rating Applicable Margin
-------------- ------------------
Level I Status .55%
Level II Status .65%
Level III Status .75%
Level IV Status 1.125%
Level V Status 1.75%
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(iii) Any change in the Debt Rating shall be effective as of
the date on which such change is first publicly announced by Moody's or S&P.
Any change in the applicable margin due to a change in the applicable Debt
Rating shall be effective on the effective date of such change in the Debt
Rating and shall apply to all Loans that are outstanding at any time during
the period commencing on the effective date of the change in Debt Rating and
ending on the date immediately preceding the effective date of the next such
change in the Debt Rating which results in a change in the applicable margin.
In the event that the Agent is not notified of a reduction in the Debt
Rating, upon becoming aware (by any means) of such reduction, the Agent
shall make a retroactive adjustment to the applicable margin.
(iv) If the interest rate is decreased, the Borrower shall be
entitled to apply the difference between the amount of interest paid and the
amount due after giving effect to the reduction of the interest rate as a
credit towards the next payment of interest pursuant to paragraph (b) below.
If the interest rate is increased, the Borrower shall pay the difference
between the amount of interest paid and the amount due after giving effect to
the increase in the interest rate on the next day interest is payable
pursuant to paragraph (b) below.
(b) Interest Payments. Subject to Section 2.02(d),
(i) interest accrued on each Base Rate Loan shall be payable in arrears (A)
on the 15th day of each January, April, July and October, for the three-month
period ending on such date, commencing on the first such day following the
making of such Base Rate Loan, (B) upon the prepayment thereof on the amount
prepaid, (C) upon conversion thereof to a Eurodollar Rate Loan and (D) at
maturity; and (ii) interest accrued on each Eurodollar Rate Loan shall be
payable in arrears (A) on each Interest Payment Date applicable to such
Eurodollar Rate Loan, (B) upon the prepayment thereof on the amount prepaid
and (C) at maturity.
(c) Conversion or Continuation. (i) Subject to the provisions
of Sections 2.06 and 2.07, the Borrower shall have the option (A) to convert
at any time all or any part of outstanding Loans which comprise part of the
same Borrowing and which, in the aggregate, equal $1,000,000 or an integral
multiple of $1,000,000 in excess of such amount from Base Rate Loans to
Eurodollar Rate Loans; or (B) to convert all or any part of outstanding Loans
which, in the aggregate, equal $1,000,000 or an integral multiple of
$1,000,000 in excess of that amount from Eurodollar Rate Loans to Base Rate
Loans on the expiration date of any Interest Period applicable thereto,
provided the remaining amount of Eurodollar Loans with the same interest
period shall not be less than $1,000,000; or (C) upon the expiration of any
Interest Period applicable to a Borrowing of Eurodollar Rate Loans, to
continue all or any portion of such Loans equal to $1,000,000 or an integral
multiple of $1,000,000 in excess of such amount as Eurodollar Rate Loans, and
the succeeding Interest Period of such continued Loans shall commence on the
expiration date of the Interest Period applicable thereto; provided that no
outstanding Loan may be continued as, or be converted into, a Eurodollar Rate
Loan when any Event of Default has occurred and is continuing.
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(ii) In the event the Borrower shall elect to convert or
continue a Loan under this Section 2.02(c), the Borrower shall deliver an
irrevocable Notice of Conversion/Continuation to the Agent no later than
11:00 a.m. (New York time) at least three Business Days in advance of the
proposed conversion date or date of continuation. A Notice of
Conversion/Continuation shall specify (w) the proposed
conversion/continuation date (which shall be a Business Day), (x) the amount
of the Loan to be converted/continued, (y) the nature of the proposed
conversion/continuation, and (z) in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, the requested Interest Period. In
lieu of delivering the abovedescribed Notice of Conversion/Continuation, the
Borrower may give the Agent telephonic notice of any proposed conver
sion/continuation by the time required under this Section 2.02(c); provided
that such notice shall be confirmed immediately by delivery to the Agent by
facsimile of a Notice of Conver sion/Continuation. No failure of the
Borrower to confirm any telephonic notice by facsimile shall impair or in any
way limit the Borrower's obligations with respect to such Loans. Promptly
after receipt of a Notice of Conversion/Continuation under this Section
2.02(c) (or telephonic notice in lieu thereof immediately confirmed by
facsimile), the Agent shall notify each Lender of the proposed
conversion/continuation.
(iii) Any Notice of Conversion/Continuation for conversion to,
or continuation of, a Loan (or telephonic notice in lieu thereof) shall be
irrevocable and the Borrower shall be bound to convert or continue in
accordance therewith.
(d) Default Interest. Notwithstanding the rates of interest
specified in Section 2.02(a) and the payment dates specified in Section
2.02(b), effective immediately upon the
occurrence of any Event of Default of the type specified in Section 10.01(a)
or upon acceleration of maturity pursuant to Section 10.02(a) and for so long
thereafter as any such Event of Default or acceleration shall be continuing,
the principal balance of all Loans and Reimbursement Obligations then due and
payable (including all amounts due and payable pursuant to Sec tion 10.02(a))
and any interest payments on the Loans not paid when due, shall bear interest
payable upon demand at a rate which is 2% per annum in excess of the rate of
interest otherwise payable under this Agreement.
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(e) Computation of Interest. Interest on Base Rate Loans and
Reimbursement Obligations shall be computed on the basis of the actual number
of days elapsed in the period during which interest accrues and a year of 365
or 366 days, as applicable. Interest on Eurodollar Rate Loans shall be
computed on the basis of the actual number of days elapsed in the period
during which interest accrues and a year of 360 days. In computing interest
on any Loan, the date of the making of the Loan or the first day of an
Interest Period, as the case may be, shall be included and the date of
payment or the expiration date of an Interest Period, as the case may be,
shall be excluded; provided that if a Loan is repaid on the same day on which
it is made, one day's interest shall be paid on that Loan.
(f) Changes; Legal Restrictions. In the event that after the
date hereof (a) the adoption of or any change in any law, treaty, rule,
regulation, guideline or determination of a Governmental Authority or any
change in the interpretation or application thereof by a Governmental
Authority, or (b) compliance by any Lender with any request or directive
(whether or not having the force of law and whether or not the failure to
comply therewith would be unlawful) from any central bank or other
Governmental Authority or quasi-governmental authority exercising
jurisdiction, power or control over banks or financial institutions
generally, does impose, modify, or hold applicable, in the determination of a
Lender, any reserve, special deposit, compulsory loan, FDIC insurance,
capital allocation or similar requirement against assets held by, or deposits
or other liabilities (including those pertaining to Letters of Credit) in or
for the account of, advances or loans by, Commitments made, or other credit
extended by, or any other acquisition of funds by, a Lender or any Applicable
Lending Office of such Lender (except (a) with respect to Base Rate Loans, so
long as the Base Rate in effect at the time is determined under clause (a) in
the definition of "Base Rate", (b) with respect to Base Rate Loans, to the
extent that the reserve and FDIC insurance requirements are reflected in the
definition of "Base Rate" and (c) with respect to Eurodollar Rate Loans, to
the extent that the reserve requirements are reflected in the definition of
"Eurodollar Rate"), and the result of any of the foregoing is to increase the
cost to such Lender of making, renewing or maintaining the Loans or its
Commitment to the Borrower or issuing to the Borrower any Letter of Credit or
to reduce any amount receivable hereunder or thereunder; then, in any such
case, the Borrower shall upon written notice from and demand by that Lender
pay to such Lender, within 15 Business Days of the date specified in such
notice and demand, such amount or amounts (based upon a reasonable allocation
thereof by such Lender to the financing transactions contemplated by this
Agreement and affected by this Section 2.02(f)) as may be necessary to
compensate that Lender for any such additional cost incurred or reduced
amount received. Such Lender shall deliver to the Borrower a written
statement of the costs or reductions claimed and the basis therefor, and the
allocation made by such Lender of such costs and reductions, which statement
shall, in the absence of manifest error, be conclusive. If a Lender
subsequently recovers from another Person any amount previously paid by the
Borrower pursuant to this Section 2.02(f), such Lender shall, within 30 days
after receipt of such refund and to the extent permitted by applicable law,
pay to the Borrower, without interest, the amount of any such recovery.
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2.03. Fees
(a) Arrangement Fee. The Borrower shall pay to the Arranger,
solely for its own account, an arrangement fee in the amount set forth in the
Fee Letter on the Initial Funding Date. No Person other than the Arranger
shall have any interest in any such fees.
(b) Commitment Fee.
(i) The Borrower shall pay to the Agent, for the account of
each Lender, in accordance with their Pro Rata Shares, a commitment fee
accruing from and after the Initial Funding Date to the Termination Date upon
the difference between (A) the Commitments in effect from time to time and
(B) the Loans and Letter of Credit Obligations outstanding from time to time.
All such commitment fees payable under this paragraph shall be payable in
arrears on the fifteenth day of each January, April, July and October
beginning after the Initial Funding Date and in addition on the Termination
Date.
(ii) The commitment fee shall accrue at a rate per annum
equal to the percentage per annum set forth below:
Debt Rating Commitment Fee
--------------- --------------
Level I Status .20%
Level II Status .275%
Level III Status .30%
Level IV Status .375%
Level V Status .50%
Any change in the amount of the commitment fee shall become effective as of
the date the corresponding change in the interest rate becomes effective as
provided in Section 2.02(a)(iii). Any reduction of the fee shall be credited
against the next payment of the commitment fee. Any additional amount
payable by the Borrower shall be added to the next payment of the commitment
fee.
(c) Agency Fee. The Borrower shall pay to the Agent, solely for
its own account, the agency fee set forth in the Fee Letter in the amount per
annum agreed between the Agent and the Borrower payable in advance on the
Initial Funding Date and each one-year anniversary of the Initial Funding
Date. No Person other than the Agent shall have any interest in such fee.
(d) Letter of Credit Fees. The Borrower shall pay to the Agent,
for the account of the Lenders, or to the Issuing Bank, as applicable, a fee
for each Letter of Credit issued on behalf of the Borrower (the "Letter of
Credit Fee"), determined as set forth in Section 3.08(a) and (b).
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(e) Payment of Fees. The fees described in this Section 2.03
represent compensation for services rendered and to be rendered separate and
apart from the lending of money or the provision of credit and do not
constitute compensation for the use, detention or forbearance of money, and
the obligation of the Borrower to pay each fee described herein shall be in
addition to, and not in lieu of, the obligation of the Borrower to pay
interest, other fees and expenses otherwise described in this Agreement. Fees
and expenses shall be payable when due in immediately available funds. All
fees and expenses shall be nonrefundable when paid. All fees and expenses
specified or referred to in this Agreement due to the Agent, the Issuing Bank
or a Lender, including those referred to in this Section 2.03 and in Section
12.03, shall constitute Obligations and shall be secured by all the
Collateral. All fees described in this Section 2.03 which are expressed as a
per annum charge shall be calculated on the basis of the actual number of
days elapsed in a 360-day year.
2.04. Prepayments.
(a) Voluntary Prepayments. The Borrower may, upon not less than
one Business Day's prior written or telephonic irrevocable notice (in each
case not later than 11:00 a.m. (New York time) on the date such notice is
given), if made by telephone, confirmed immediately by facsimile to the Agent
(which notice the Agent shall promptly transmit by facsimile (or other
similar form of teletransmission) or telephone to each Lender), at any time
and from time to time, prepay any Base Rate Loan or Eurodollar Rate Loan in
whole or in part, without premium or penalty, in an aggregate minimum amount
of $1,000,000, and integral multiples of $1,000,000 in excess of such
amounts; provided that the Borrower may prepay such Loans in full without
regard to such minimum amount; and provided, further, that if the Borrower
prepays any Eurodollar Rate Loan on a date other than the expiration date of
the Interest Period applicable thereto, the Borrower shall pay to the Agent
the amounts described in Section 2.07(d). Any notice of prepayment given to
the Agent under this Section 2.04(a) shall specify the date of prepayment and
the aggregate principal amount of the prepayment. If a notice of prepayment
has been delivered as provided herein, such notice shall be irrevocable and
the principal amount of the Loans specified in such notice, and all interest
accrued thereon through the date of prepayment, shall become due and payable
on the prepayment date specified in such notice.
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(b) Mandatory Prepayments. The Borrower shall not at any time
cause or permit the aggregate outstanding balance of the Loans to exceed the
Maximum Loan Amount. If at any time such outstanding balance shall exceed
the Maximum Loan Amount, the Borrower shall, without demand or notice, pay to
the Agent such amount as may be necessary to eliminate such excess, and the
Borrower shall make such payment on the Business Day on which the Borrower
learns or is notified of the excess, if the Borrower so learns or is so
notified prior to 11:00 a.m. (New York time) on such day, and otherwise on
the immediately succeeding Business Day.
2.05. Payments.
(a) Manner and Time of Payment. (i) All payments of principal,
interest, Reimbursement Obligations and fees hereunder or any Letter of
Credit payable to the Lenders shall be made without condition or reservation
of right, in Dollars and in immediately available funds, delivered to the
Agent at the Agent's Payment Office not later than 1:00 p.m. (New York time)
on the date due; and funds received by the Agent after that time and date
shall be deemed to have been paid and received by the Agent on the next
succeeding Business Day. Payments actually received by the Agent for the
account of the Lenders shall be paid to them promptly in like funds after
receipt thereof by the Agent.
(ii) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the Agent may
assume that the Borrower has made such payment in full to the Agent on such
date, and the Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent the Borrower shall not have so
made such payment in full to the Agent, each Lender shall repay to the Agent
forthwith on demand the excess of the amount distributed to such Lender over
the amount, if any, paid by the Borrower for the account of such Lender,
together with interest thereon at the Federal Funds Rate, for each day from
the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Agent; provided, however, that if any Lender
shall fail to repay such amount within three Business Days after demand
therefor, such Lender shall, from and after such third Business Day until
payment is made to the Agent, pay interest thereon at a rate per annum equal
to the Base Rate.
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(b) Apportionment of Payments. So long as there does not exist
an Event of Default, all payments of principal and interest in respect of
outstanding Loans, all payments of fees constituting Obligations, and all
payments in respect of any other Obligations shall be allocated among such of
the Lenders as are entitled thereto, in proportion to their respective Pro
Rata Shares or otherwise as provided herein. After the occurrence and during
the continuance of an Event of Default, and after notice by the Agent to the
Borrower that payments and proceeds shall be so applied, all payments
remitted to the Agent and all amounts and proceeds of Collateral received by
the Agent shall be applied, subject to the provisions of this Agreement, (i)
first, to pay Obligations in respect of any fees or indemnities then due to
the Agent, the Issuing Bank and the Lenders; (ii) second, to pay Obligations
in respect of expense reimbursements then due under Section 12.03; (iii)
third, to pay or prepay principal of and interest on any outstanding
Reimbursement Obligations; (iv) fourth, to pay interest due in respect of
Loans; (v) fifth, to pay or prepay principal of Loans, and to pay
(or to the extent such Obligations are contingent, prepay or provide cash
collateral in respect of) Letter of Credit Obligations; provided that if
sufficient funds are not available to fund all payments to be made to the
holders of the Obligations described in this clause (v), the available funds
shall be allocated to the payment of such Obligations ratably, based on the
proportion of each such holder's interest in the aggregate outstanding
Loans, Reimbursement Obligations, other Letter of Credit Obligations (in
each instance whether or not due); and further, provided, that matured and, to
the extent permitted by law, unmatured interestbearing Obligations shall, in
any event, be paid prior to prepayment or provision of cash collateral for
contingent Letter of Credit Obligations; (vi) sixth, to the ratable payment of
all other Obligations then due and payable for expense reimbursements; (vii)
seventh, to pay Obligations then due and payable in respect of the Interest
Rate Contracts, if any; and (viii) eighth, to the ratable payment of all other
Obligations due to any and all holders of Obligations.
The Agent shall promptly distribute to each Lender at its primary
address set forth in Schedule 1.01(a), or at such other address as a Lender
may request in writing, such funds as it may be entitled to receive or as may
be shown due to it in the Agent's Loan Account, provided that the Agent shall
in any event not be bound to inquire into or determine the validity, scope or
priority of any interest or entitlement of any Lender or any
other holder of Obligations and may suspend all payments or seek appropriate
relief (including instructions from the Requisite Lenders or an action in the
nature of interpleader) in the event of any doubt or dispute as to any
apportionment or distribution contemplated hereby. The order of priority
herein is set forth solely to determine the rights and priorities of the
holders of Obligations as among themselves and may at any time or from time
to time be changed by the Lenders as they may elect, in writing in accordance
with Section 12.08 (except that no amendment shall require prepayment or
provision of cash collateral for contingent Letter of Credit Obligations
unless (as provided in clause (v) of Section 2.05(b)) matured and certain
interest-bearing unmatured Obligations shall have been paid), without
necessity of notice to or consent of or approval by the Borrower or any other
Person.
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(c) Payments on Non-Business Days. Whenever any payment to be
made by the Borrower hereunder shall be stated to be due on a day which is
not a Business Day, payments shall be made on the next succeeding Business
Day and such extension of time shall be included in the computation of the
payment of interest hereunder and of any of the fees specified in Section
2.03, as the case may be.
(d) Payments by Lenders to the Agent. Unless the Agent shall
have been notified by any Lender prior to any Funding Date that such Lender
does not intend to make available to the Agent such Lender's Loan on such
Funding Date (except that in the case of Base Rate Loans, the Agent shall
have been so notified no later than 1:00 p.m. (New York time) on the Funding
Date), the Agent may assume that such Lender has made such amount available
to the Agent on such Funding Date and the Agent in its sole discretion may,
but shall not be obligated to, make available to the Borrower a corresponding
amount on such Funding Date. If such corresponding amount is not in fact
made available to the Agent by such Lender on or prior to a Funding Date,
such Lender agrees to pay and the Borrower agrees to repay severally to the
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is paid or repaid to the Agent, at (A) in
the case of such Lender, the Federal Funds Rate for the first three Business
Days and there after at the Base Rate, and (B) in the case of the Borrower,
the interest rate applicable at the time to a Borrowing of Base Rate Loans
made on such Funding Date. If such Lender shall pay to the Agent such
corresponding amount, such amount so paid shall consti tute such Lender's
Loan, and if both such Lender and the Borrower shall have paid and repaid,
respectively, such corresponding amount, the Agent shall promptly pay over to
the Borrower such corresponding amount in same day funds, but the Borrower
shall remain obligated for all interest thereon. Nothing in this Section
2.05(d) shall be deemed to relieve any Lender of its obligation hereunder to
make its Loan on any Funding Date. Not withstanding any provision of this
Agreement to the contrary, the Agent may apply all funds and proceeds of
Collateral available for the payment of any Obligations first to repay any
amount owing by any Lender to the Agent as a result of such Lender's failure
to fund its Loan as required hereunder.
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2.06. Interest Periods. By giving notice as set forth in Section
2.01(b) or 2.02(c) with respect to a Borrowing of, conversion into or
continuation of Eurodollar Rate Loans, the Borrower shall have the option,
subject to the other provisions of this Section 2.06 and Section 2.07, to
specify an interest period (each an "Interest Period") to apply to the
Borrowing described in such notice, which Interest Period shall be either a 1-
, 2-, 3-, or 6-month period and, to the extent generally
available to each Lender, a 9- or 12-month period. The deter mination of
Interest Periods shall be subject to the following provisions:
(a) In the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the next
preceding Interest Period expires;
(b) If any Interest Period would otherwise expire on a day which
is not a Business Day, the Interest Period shall be extended to expire on the
next succeeding Business Day; provided that if any such Interest Period would
otherwise expire on a day which is not a Business Day and no further Business
Day occurs in that month, that Interest Period shall expire on the
immediately preceding Business Day;
(c) The Borrower may not select an Interest Period which
terminates later than the Final Maturity Date; and
(d) Without the prior written consent of the Agent and the
Requisite Lenders, there shall be no more than five Interest Periods under
this Agreement at any time.
2.07. Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding other provisions of this Agreement, the following provisions
shall govern with respect to Eurodollar Rate Loans as to the matters covered:
(a) Determination of Interest Rate. As soon as practicable two
Business Days prior to the Funding Date or date of conversion or
continuation, the Agent shall determine (which determination shall, absent
manifest error, be presumptively correct) the interest rate which shall apply
to the Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to the Borrower and
to each Lender.
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(b) Interest Rate Unascertainable, Inadequate or Unfair. With
respect to any Interest Period, if (i) none of the Reference Banks are
offering deposits in Dollars (in the applica ble amounts) in the London
interbank Eurodollar market for such Interest Period, or (ii) the Agent
reasonably determines that adequate and fair means do not exist for
ascertaining the applica ble interest rate on the basis provided for in the
definition of Eurodollar Rate, for any reason other than the failure of the
Reference Banks to offer deposits in Dollars in the relevant market, then the
Agent shall forthwith give notice thereof to the Borrower, whereupon until
the Agent has determined that the circumstances giving rise to such
suspension no longer exist, (a) the right of the Borrower to elect to have
Loans bear interest based upon the Eurodollar Rate, shall be suspended, and
(b) each outstanding Eurodollar Rate Loan, shall be converted into a Base
Rate Loan or a Eurodollar Rate Loan not covered by the notice described above
(as may be designated by the Borrower) on the last day of the then current
Interest Period therefor, notwithstanding any prior election by the Borrower
to the contrary.
(c) Illegality. (i) In the event that on any date any Lender
shall have determined (which determination shall, in the absence of manifest
error, be final and conclusive and binding upon all parties) that the making
or continuation of any Eurodollar Rate Loan has become unlawful by compliance
by that Lender in good faith with any law, governmental rule, regulation or
order of any Governmental Authority (whether or not having the
force of law and whether or not failure to comply therewith would be
unlawful), then, and in any such event, such Lender shall promptly give
notice (by teletransmission or by telephone promptly confirmed in writing) to
the Borrower and the Agent of that determination and the reasons therefor.
(ii) Upon the giving of the notice referred to in Section
2.07(c)(i), (A) the Borrower's right to request of such Lender and such
Lender's obligation to make Eurodollar Rate Loans shall be immediately
suspended, and such Lender shall make a Loan, as part of any requested
Borrowing of Eurodollar Rate Loans, as a Base Rate Loan or as a Eurodollar
Rate Loan not covered by the notice described in Section 2.07(c)(i) (as
designated by the Borrower), which Base Rate Loan or Eurodollar Rate Loan
shall, for all purposes, be considered a part of such Borrowing, and (B) if
the affected Eurodollar Rate Loan or Loans are then outstanding, the Borrower
shall immediately (or, if permitted by applicable law, no later than the date
permitted thereby, upon at least one Business Day's written notice to the
Agent and the affected Lender) convert each such Loan into a Base Rate Loan
or a Eurodollar Rate Loan not covered by such notice. If at any time notice
is given under Section 2.07(c)(i) by one or more Lenders, but not by all of
them, the provisions of this Section 2.07(c)(ii) shall apply only in favor of
the Lenders which gave such notice.
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(iii) In the event that a Lender determines at any time
following its giving of a notice referred to in Section 2.07(c)(i) that such
Lender may lawfully make Eurodollar Rate Loans of the type(s) referred to in
such notice, such Lender shall promptly give notice (by facsimile or by
telephone promptly confirmed in writing) to the Borrower and the Agent of
that determination, whereupon the Borrower's right to request of such Lender
and such Lender's obligation to make Eurodollar Rate Loans of such type(s)
shall be restored.
(d) Compensation. In addition to such amounts as are required
to be paid by the Borrower pursuant to Sections 2.02(a), (d) and (f), the
Borrower shall compensate each Lender, upon demand, for all losses, expenses
and liabilities (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Lender to fund or maintain such Lender's Eurodollar Rate Loans to the
Borrower) which such Lender may sustain (i) if for any reason a Borrowing of,
conversion into or continuation of Eurodollar Rate Loans does not occur on a
date specified therefor in a Notice of Borrowing or a Notice of
Conversion/Continuation or in a telephonic request for borrowing or
conversion/continuation or a successive Interest Period does not commence
after notice therefor is given pursuant to Section 2.02(c), (ii) if any
prepayment or payment of any Eurodollar Rate Loan (including any prepayment
pursuant to Section 2.04) occurs for any reason on a date which is not the
last day of the applicable Interest Period, (iii) as a consequence of any
required conversion of a Eurodollar Rate Loan to a Base Rate Loan as a result
of any of the events indicated in Section 2.07(c), or (iv) as a consequence
of any other failure by the Borrower to prepay or repay Eurodollar Rate Loans
when required by the terms of this Agreement. Such Lender shall deliver to
the Borrower with a copy to the Agent, as a condition of the Borrower's
obligation to compensate such Lender, a written statement as to such losses,
expenses and liabilities which statement, in the absence of manifest error,
shall be conclusive as to such amounts.
(e) Quotation of Eurodollar Rate. If all the Reference Banks
shall have failed to provide offered quotations
to the Agent in accordance with the definition of "Eurodollar Rate", the
Agent shall give the Borrower and each Lender prompt notice thereof and the
Loans requested shall be made or continued as, or converted into, Base Rate
Loans.
(f) Booking of Eurodollar Rate Loans. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of, any of
its branch offices, agencies or the office of an Affiliate of that Lender;
provided that no such Lender shall be entitled to receive any greater amount
under Section 2.02(f) or Section 2.08 as a result of the transfer of any such
Loan than such Lender would be entitled to immediately prior thereto unless
(i) such transfer occurred at a time when circumstances giving rise to the
claim for such greater amount did not exist and were not reasonably
foreseeable by such Lender, or (ii) such claim would have arisen even if such
transfer had not occurred.
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2.08. Taxes.
(a) Any and all payments by the Borrower hereunder shall be
made, in accordance with Section 2.05, free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect
thereto including those arising after the date hereof as a result of the
adoption of or any change in any law, treaty, rule, regulation, guideline or
determination of a Governmental Authority or any change in the interpretation
or application thereof by a Governmental Authority but excluding, in the case
of each Lender and the Agent, taxes imposed on its income and franchise taxes
imposed on it by the United States of America or any Governmental Authority
(including Puerto Rico) and, in the case of each Lender, taxes imposed on its
income and franchise taxes imposed on it as a result of making any Loan, by
the Governmental Authority of the jurisdiction of such Lender's Applicable
Lending Office (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities which a Lender determines to be
applicable to this Agreement, the Commitments, the Loans or the Letters of
Credit being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, (i) so long as such Lender or the Agent
is in compliance with Section 2.08(e), the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.08)
such Lender or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law. If a withholding tax of the United States of
America or any other Governmental Authority shall be or become applicable (y)
after the date of this Agreement, to such payments by the Borrower made to
the Applicable Lending Office or any other office that a Lender specified on
Schedule 1.01(a) to this Agreement may claim as its Applicable Lending Office
or (z) after such Lender's selection and designation of any other Applicable
Lending Office, to such payments made to such other Applicable Lending
Office, such Lender shall, in good faith, use its best efforts to make, fund
and maintain its Loans, and to make, fund and maintain its obligations under
the Letters of Credit, through another Applicable Lending Office of such
Lender in another jurisdiction so as to reduce the Borrower's liability
hereunder, if the making, funding or maintenance of such Loans or obligations
under the Letters of Credit through such other Applicable Lending
Office of such Lender does not, in the judgment of such Lender, otherwise
materially adversely affect such Loans, obligations under the Letters of
Credit or such Lender.
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(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges, or similar levies which arise from any payment made hereunder, from
the issuance of Letters of Credit hereunder, or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement, the
Commitments, the Loans or the Letters of Credit (hereinafter referred to as
"Other Taxes").
(c) The Borrower will indemnify each Lender and the Agent for
the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed by any Governmental Authority on amounts payable under this Section
2.08) paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest, and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days after
the date such Lender or the Agent (as the case may be) makes written demand
therefor. A certificate as to any additional amount payable to any Lender
under this Section 2.08 submitted to such Borrower and the Agent (if a Lender
is so submitting) by such Lender or the Agent shall show in reasonable detail
the amount payable and the calculations used to determine such amount and
shall, absent manifest error, be final, conclusive and binding upon all
parties hereto. Each Lender agrees that, to the extent that such Lender is
entitled to claim an exemption in respect of all or a portion of any Taxes
which are otherwise required to be paid or deducted or withheld pursuant to
this Section 2.08 in respect of any payments under this Agreement such Lender
shall within a reasonable time after receiving written request by the
Borrower provide the Borrower with such certificates as such Lender in good
faith may deem appropriate to obtain the benefits of such exemption. With
respect to such deduction or withholding for or on account of any Taxes and
to confirm that all such Taxes have been paid to the appropriate Governmental
Authorities, the Borrower shall promptly (and in any event not later than 30
days after receipt) furnish to each Lender such certificates, receipts and
other documents as may be required (in the judgment of such Lender) to
establish any tax credit to which such Lender may be entitled.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes by the Borrower, the Borrower will furnish to the Agent, at its
address referred to in Section 12.08, the original or a certified copy of a
receipt evidencing payment thereof.
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(e) Each Lender which is a foreign person (i.e., a person other
than a United States person for United States Federal income tax purposes)
agrees that:
(i) it shall, no later than the Initial Funding Date (or, in the
case of a Lender which becomes a party hereto pursuant to Section 12.01 after
the Initial Funding Date, the date upon which such Lender becomes a party
hereto) deliver to the Borrower and the Agent two accurate and complete
signed originals of Internal Revenue Service Form 4224 or any successor
thereto ("Form 4224"), or two accurate and complete signed originals of
Internal Revenue Service Form 1001 or any successor thereto ("Form 1001"), as
appropriate, in each case indicating that the Lender is on the date of
delivery thereof entitled to receive payments of
principal, interest and fees under this Agreement free from withholding of
United States Federal income tax;
(ii) if at any time the Lender makes any changes necessitating a
new Form 4224 or Form 1001, it shall with reasonable promptness deliver to
the Borrower and the Agent in replacement for, or in addition to, the forms
previously delivered by it hereunder, two accurate and complete signed
originals of Form 4224; or two accurate and complete signed originals of Form
1001, as appropriate, in each case indicating that the Lender is on the date
of delivery thereof entitled to receive payments of principal, interest and
fees under this Agreement free from withholding of United States Federal
income tax;
(iii) it shall, before or promptly after the occurrence of any
event (including the passing of time but excluding any event mentioned in
(ii) above) requiring a change in or renewal of the most recent Form 4224 or
Form 1001 previously delivered by such Lender, deliver to the Borrower
through the Agent two accurate and complete original signed copies of Form
4224 or Form 1001 in replacement for the forms previously delivered by the
Lender; and
(iv) it shall, promptly upon the Borrower's or the Agent's
reasonable request to that effect, deliver to the Borrower or the Agent (as
the case may be) such other forms or similar documentation as may be required
from time to time by any applicable law, treaty, rule or regulation in order
to establish such Lender's tax status for withholding purposes.
(f) If the IRS or any other Governmental Authority of the United
States or of any other jurisdiction asserts a claim that the Agent or the
Borrower did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered, was
not properly executed, or because such Lender failed to notify the Agent of a
change in circumstances which rendered the exemption from withholding tax
ineffective or for any other reason), such Lender shall indemnify the Agent
and/or the Borrower, as applicable, fully for all amounts paid, directly or
indirectly, by the Agent and/or the Borrower, as applicable, as tax or
otherwise, including penalties and interest, and including any taxes imposed
by any jurisdiction on the amounts payable to the Agent or the Borrower, as
applica ble, under this Section 3.01(f), together with all costs and
expenses, including, legal fees, incurred by the Agent or the Borrower.
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(g) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obli gations of the Borrower
contained in this Section 2.08 shall survive the payment in full of principal
and interest hereunder, the termination of the Letters of Credit and the
termination of this Agreement.
2.09. Increased Capital. If any Lender or the Issuing Bank determines
that either (a) the introduction of or any change in any law, order or
regulation or in the interpretation or administration of any law, order or
regulation by any Governmental Authority charged with the interpretation or
administration thereof from the date hereof or (b) compliance with any
guideline or request issued or made from the date hereof from any central
bank or other Governmental Authority (whether or not having the force of law)
has or would have the effect of reducing the rate of return on the capital of
such Lender or the Issuing Bank or any corporation controlling such Lender
or the Issuing Bank, as a consequence of or with reference to such Lender's
Commitment or its making or maintaining Loans or the Issuing Bank's
issuance or maintenance of, or such Lender's participation in any Letter of
Credit, below the rate which the Lender or the Issuing Bank or such other
corporation could have achieved but for such compliance (taking into account
the policies of such Lender or the Issuing Bank or corporation with regard to
capital), then the Borrower shall from time to time, upon demand by such
Lender or the Issuing Bank (with a copy of such demand to the Agent), pay
to such Lender or the Issuing Bank additional amounts sufficient to
compensate such Lender or other corporation for such reduction, upon
receipt by the Borrower (with a copy to the Agent) of a certificate as to
such amounts, by such Lender or the Issuing Bank, setting forth in
reasonable detail the basis for, and the calculations used by such Lender
or the Issuing Bank in determining, any such amounts. Such certificate,
in the absence of manifest error shall be conclusive and binding for
all purposes. Each Lender and the Issuing Bank agree promptly to notify
the Borrower and the Agent of any circum stances that would cause the
Borrower to pay additional amounts pursuant to this Section 2.09, provided
that the failure to give such notice shall not affect the Borrower's
obligation to pay such additional amounts hereunder.
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2.10. Use of Proceeds of the Loans. The proceeds of the Loans may be
used for general corporate purposes, including to repay Indebtedness owed by
the Borrower under the Existing Credit Agreement.
2.11. Authorized Officers of the Borrower. The Borrower shall notify
the Agent in writing of the names of the officers and employees authorized to
request Loans and Letters of Credit and to request a conversion/continuation
of any Loan and shall provide the Agent with a specimen signature of each
such officer or employee. The Agent shall be entitled to rely conclusively
on such officer's or employee's authority to request such Loan or Letter of
Credit or such conversion/continuation until the Agent receives written
notice to the contrary. The Agent shall have no duty to verify the
authenticity of the signature appearing on any written Notice of Borrowing or
Notice of Conversion/Continuation and, with respect to an oral request for
such a Loan or Letter of Credit or such conversion/continuation, the Agent
shall have no duty to verify the identity of any person representing himself
as one of the officers or employees authorized to make such request on behalf
of the Borrower. Neither the Agent nor any Lender shall incur any liability
to the Borrower in acting upon any telephonic notice referred to above which
the Agent believes in good faith to have been given by a duly authorized
officer or other person authorized to borrow on behalf of the Borrower.
2.12. Replacement of Lender in Event of Adverse Condition. If the
Borrower becomes obligated to pay additional amounts to any Lender pursuant
to Sections 2.02(f), 2.07(d), 2.08 or 2.09 as a result of any condition
described in such Sections which is not generally applicable to all Lenders,
then, unless such Lender has theretofore taken steps to remove or cure, and
has removed or cured, the conditions creating the cause for such obligation
to pay such additional amounts, the Borrower may designate another bank which
is reasonably acceptable to the Agent and the Issuing Bank (such bank being
herein called a "Replacement Lender") to purchase for cash all of the
Obligations of such Lender and all of such Lender's rights hereunder,
without recourse to or warranty by, or expense to, such Lender for a
purchase price equal to the outstanding principal amount payable to such
Lender plus any accrued but unpaid interest and accrued but unpaid commitment
and other fees, expense reimbursements and indemnities in respect of that
Lender's Commitment. Such Lender shall consummate such sale in accordance
with such terms (and, if such Lender is an Issuing Bank, such other terms as
may be necessary to compensate fully such Lender) within a reasonable time not
exceeding 60 days from the date the Borrower designated a Replacement Lender,
and upon compliance with the provisions of Section 12.01 such Lender shall no
longer be a party hereto or have any obligations or rights hereunder (except
rights which, pursuant to the provisions of this Agreement, survive the
termination of this Agreement and the repayment of the Loans), and the
Replacement Lender shall succeed to such obligations and rights.
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ARTICLE III
Letters of Credit
3.01. Obligation to Issue. (a) Subject to the terms and conditions set
forth in this Agreement, the Issuing Bank hereby agrees to issue, and each
Lender agrees to participate in, one or more Letters of Credit for the
account of the Borrower, up to an aggregate face amount at any one time
outstanding equal to the Commitments from time to time during the period
commencing on the Initial Funding Date and ending on the Business Day which
is five Business Days prior to the Final Maturity Date.
(b) The Lenders acknowledge that the Existing Letters of Credit
have been issued for the account of the Borrower prior to the Initial Funding
Date and agree to participate in such Letters of Credit to the same extent
and on the same conditions as if such Letters of Credit had been issued
pursuant to paragraph (a) above.
3.02. Types and Amounts. The Issuing Bank shall not issue any Letter
of Credit at any time:
(a) if the aggregate maximum amount then available for drawing
under Letters of Credit issued by the Issuing Bank, after giving effect to
the issuance of such Letter of Credit, would exceed any limit imposed by law
or regulation upon the Issuing Bank;
(b) if, immediately after the issuance of such Letter of Credit,
the aggregate principal amount of Letter of Credit Obligations then existing
(which amount shall be calcu lated without giving effect to the participation
of the Lenders pursuant to Section 3.06) would exceed the Commitments then in
effect less the principal amount of all outstanding Loans;
(c) which has an expiration date (A) more than one year after
the date of issuance, for Standby Letters of Credit (provided that a Standby
Letter of Credit may provide for an annual renewal on the terms set forth in
Section 3.04(c)) or more than 180 days after the date of issuance (subject to
extension for a maximum period of 60 days), for Commercial Letters of Credit,
or (B) after four Business Days immediately preceding the Final Maturity
Date;
(d) if the Issuing Bank has received written notice from the
Requisite Lenders, the Agent or the Borrower, on or prior to the Business Day
prior to the requested date of issuance
of such Letter of Credit, that one or more of the applicable conditions
contained in Article IV is not then satisfied; or
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(e) if any requested Commercial Letter of Credit does not
provide for drafts or any Letter of Credit is not otherwise in form and
substance acceptable to the Issuing Bank, or if the issuance of the requested
Letter of Credit would violate any applicable policies of the Issuing Bank.
3.03. Conditions. In addition to being subject to the satisfaction of
the conditions precedent contained in Section 4.02, the obligation of the
Issuing Bank to issue any Letter of Credit is subject to the condition that
as of the date of issuance, no order, judgment or decree of any court,
arbitrator or other Governmental Authority shall purport by its terms to
enjoin or restrain the Issuing Bank from issuing such Letter of Credit and no
law, rule or regulation applicable to the Issuing Bank and no request or
directive (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) from any Governmental
Authority with jurisdiction over the Issuing Bank shall prohibit or request
the Issuing Bank to refrain from the issuance of Letters of Credit generally
or the issuance of such Letter of Credit.
3.04. Issuance of Letters of Credit.
(a) The Borrower shall give the Issuing Bank notice (i) by
facsimile (confirmed by delivery of the original executed Letter of Credit
application to the Issuing Bank not later than one Business Day thereafter)
or (ii) by Microtrade or similar system not later than 12:00 noon (New York
time) one Business Day preceding the requested issuance of a Letter of Credit
under this Agreement, or such shorter notice as may be acceptable to the
Issuing Bank. Such notice shall be irrevocable and shall specify (A) the
stated amount of the Letter of Credit requested to be issued, (B) if notice
is given by facsimile, the effective date (which day shall be a Business
Day) of issuance of such Letter of Credit, (C) the date on which such Letter
of Credit is to expire (which date shall be a Business Day and shall be
subject to paragraph (c) of Section 3.02), (D) the Person for whose benefit
the requested Letter of Credit is to be issued, (E) in the case of Standby
Letters of Credit, the full text of any certificate to be presented by the
beneficiary in case of any drawing thereunder and (F) such other matters as
the Issuing Bank may require.
(b) The Issuing Bank shall not extend or amend any Letter of
Credit if the issuance of a new Letter of Credit having the same terms as
such Letter of Credit as so extended or amended would be prohibited by
Section 3.02. Any request for amendment to any previously issued Letter of
Credit shall be received by the Issuing Bank not later than 3:00 p.m. (New
York time) one Business Day prior to the date of the proposed amendment (i)
by facsimile confirmed by delivery of the original executed application for
amendment not later than one Business Day thereafter or (ii) by Microtrade or
similar system. Each written request for an amendment to a previously issued
Letter of Credit made by facsimile or by Microtrade or similar system shall
be in the form of the relevant letter of credit application signed by the
Borrower and shall not request an extension beyond four Business Days
immediately preceding the Final Maturity Date. Notwithstanding any provision
of any letter of credit application to the contrary, in the event of any
conflict between the terms of any such letter of credit application and the
terms of this Agreement, the terms of this Agreement shall control with
respect to events of default, representations and warranties, and
covenants, except that such letter of credit application may provide for
further warranties relating specifically to the transaction or affairs
underlying such Letter of Credit.
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(c) The Issuing Bank and the Lenders agree that, while a Standby
Letter of Credit is outstanding and prior to the Final Maturity Date, at the
option of the Borrower and upon the written request of the Borrower received
by the Issuing Bank at least five days (or such shorter time as the Issuing
Bank may agree in a particular instance in its sole discretion) prior to the
proposed date of notification of renewal, the Issuing Bank shall be entitled
to authorize the automatic renewal of any Letter of Credit issued by it.
Each such request for renewal of a Letter of Credit shall be made by
Microtrade or similar system or by facsimile, confirmed immediately in an
original writing, and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the Letter of Credit to be renewed; (ii) the proposed date
of notification of renewal of the Letter of Credit (which shall be a Business
Day); (iii) the revised expiry date of the Letter of Credit; and (iv) such
other matters as the Issuing Bank may require. The Issuing Bank shall not so
renew any Letter of Credit if: (A) the Issuing Bank would have no obligation
at such time to issue or amend such Letter of Credit in its renewed form
under the terms of Section 3.02 or 3.03; or (B) the beneficiary of any such
Letter of Credit does not accept the proposed renewal of the Letter of
Credit. If any outstanding Existing Letter of Credit shall provide that it
shall be automatically renewed unless the beneficiary thereof receives notice
from the Issuing Bank that such Letter of Credit shall not be renewed, and if
at the time of renewal the Issuing Bank would be entitled to authorize the
automatic renewal of such Letter of Credit in accordance with this paragraph
(c) upon the request of the Borrower, but the Issuing Bank shall not have
received any amendment application from the Borrower with respect to such
renewal or other written direction by the Borrower with respect thereto, the
Issuing Bank shall nonetheless be permitted to allow such Letter of Credit to
renew, and the Borrower and the Lenders hereby authorize such renewal, and,
accordingly, the Issuing Bank shall be deemed to have received an amendment
application from the Borrower requesting such renewal.
(d) The Issuing Bank shall notify the Agent of (i) each request
for issuance or amendment to confirm availability and (ii) each issuance and
amendment of a Letter of Credit and the amount and expiration date thereof on
the date such Letter of Credit is issued or amended and of each payment under
a Letter of Credit and the amount thereof on the date of such payment. The
Agent shall notify the Lenders, on a weekly basis, of each issuance of a
Letter of Credit.
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3.05. Reimbursement Obligations; Duties of the Issuing Bank.
(a) (i) The Borrower shall reimburse the Issuing Bank (and the
Issuing Bank shall notify the Agent promptly of such reimbursement) for
drawings under a Letter of Credit issued by it no later than 1:00 p.m. (New
York time) on each date that any amount is paid by the Issuing Bank under any
Letter of Credit in an amount equal to the amount so paid by the Issuing
Bank; and
(ii) any Reimbursement Obligation with respect to any Letter
of Credit shall bear interest from the date of the relevant drawing at the
interest rate applicable to Base Rate Loans until the first Business Day
after the date on which the Issuing Bank gives notice of such drawing to the
Borrower and thereafter at the interest rate for past due Base Rate Loans in
accordance with Section 2.04(d).
(b) No action taken or omitted to be taken by the
Issuing Bank under or in connection with any Letter of Credit shall put the
Issuing Bank under any resulting liability to any Lender or relieve such
Lender of its obligations hereunder to the Issuing Bank except in the event
of the Issuing Bank's gross negligence or wilful misconduct. In determining
whether to pay under any Letter of Credit, the Issuing Bank shall have no
obliga tion to the Lenders other than to confirm that any documents required
to be delivered under such Letter of Credit appear to have been delivered and
that they appear on their face to comply with the requirements of such Letter
of Credit.
(c) The obligations of the Borrower under this
Agreement and any Letter of Credit to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any drawing under a Letter of
Credit, shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement and such Letter of Credit under
all circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement
or any Letter of Credit;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of the Borrower in
respect of any Letter of Credit or any other amendment or waiver of or any
consent to departure from all or any Letter of Credit;
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(iii) the existence of any claim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by the Letter of Credit or any unrelated transaction;
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any
Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of
Credit against presentation of a draft or certifi cate that does not strictly
comply with the terms of any Letter of Credit; or any payment made by the
Issuing Bank under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to
any beneficiary or any transferee of any Letter of Credit, including any
arising in connection with any insolvency proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to departure
from any other guarantee, for all or any of the obligations of the Borrower
in respect of any Letter of Credit; or
(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any
other circumstance that might otherwise constitute a defense available to, or
a discharge of, the Borrower or a guarantor.
3.06. Participations.
(a) Immediately upon issuance by the Issuing Bank of any Letter
of Credit for the account of the Borrower in accordance with the procedures
set forth in this Article III, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuing Bank,
without recourse or warranty, an undivided interest in the amount of such
Lender's Pro Rata Share in such Letter of Credit (including all obligations
of the Borrower with respect thereto other than amounts owing to the Issuing
Bank under Section 3.08(b)) and any security therefor or guaranty pertaining
thereto.
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(b) If the Issuing Bank makes any payment under any Letter of
Credit and the Borrower does not repay such amount to the Issuing Bank
pursuant to Section 3.05(a) or 3.07, the Issuing Bank shall promptly notify
the Agent and the Agent shall promptly notify each Lender of such failure,
and each Lender shall promptly and unconditionally pay to the Agent for the
account of the Issuing Bank the amount of such Lender's Pro Rata Share of
such payment, in Dollars and in immediately available funds, and the Agent
shall promptly pay such amount, and any other amounts received by the Agent
for the Issuing Bank's account pursuant to this Section 3.06(b), to the
Issuing Bank. If the Agent so notifies such Lender prior to 11:00 a.m. (New
York time) on any Business Day, such Lender shall make available to the Agent
for the account of the Issuing Bank its Pro Rata Share of the amount of such
payment on such Business Day in Dollars and in immediately available funds at
the Agent's Payment Office. If and to the extent such Lender shall not have
so made its Pro Rata Share of the amount of such payment available to the
Agent for the account of the Issuing Bank, such Lender agrees to pay to the
Agent for the account of the Issuing Bank forthwith on demand such amount
together with interest thereon, for each day from the date such payment was
first due until the date such amount is paid to the Agent for the account of
the Issuing Bank, at the Federal Funds Rate for three Business Days and then
at the Base Rate. The failure of any Lender to make available to the Agent
for the account of the Issuing Bank its Pro Rata Share of any such payment
shall not relieve any other Lender of its obligation hereunder to make
available to the Agent for the account of the Issuing Bank its Pro Rata Share
of any payment on the date such payment is to be made.
(c) Whenever the Issuing Bank receives a payment from the
Borrower on account of a Reimbursement Obligation, including any interest
thereon, as to which the Agent has previously received payments from the
Lenders for the account of the Issuing Bank pursuant to this Section 3.06, it
shall promptly pay to the Agent at the Agent's Payment Office and the Agent
shall promptly pay to each Lender which has funded its participating interest
therein in Dollars and in the kind of funds so received, an amount equal to
such Lender's Pro Rata Share thereof. Each such payment shall be made by the
Issuing Bank or the Agent, as the case may be, on the Business Day on which
such Person receives the funds paid to such Person pursuant to the preceding
sentence, if received prior to 11:00 a.m. (New York time) on such Business
Day, and otherwise on the next succeeding Business Day.
(d) Upon the request of any Lender, the Issuing Bank
shall furnish to such Lender copies of any Letter of Credit or Letter of
Credit application form to which the Issuing Bank is party and such other
documentation as may reasonably be requested by such Lender.
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(e) The obligations of a Lender to make payments to
the Agent for the account of the Issuing Bank with respect to a Letter of
Credit issued on behalf of the Borrower in accordance with the terms hereof
shall be irrevocable, shall not be subject to any qualification or exception
whatsoever (except in the event of the Issuing Bank's gross negligence or
wilful misconduct), and shall be honored in accordance with the terms and
conditions of this Agreement under all circumstances (subject to Section
3.02), including any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against a beneficiary named in
a Letter of Credit or any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the Agent, the Issuing Bank, any
Lender, or any other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transactions between the Borrower and
the beneficiary named in any Letter of Credit);
(iii) any draft, certificate of any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any state ment therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(v) any failure by the Agent or the Issuing Bank to make any
reports required pursuant to Section 3.09; or
(vi) the occurrence of any Event of Default or Potential
Event of Default.
3.07. Payment of Reimbursement Obligations.
(a) The Borrower agrees to pay to the Issuing Bank
the amount of all Reimbursement Obligations, interest and other amounts
payable to the Issuing Bank under or in connection with any Letter of Credit
issued on behalf of the Borrower immediately when due, irrespective of any
claim, setoff, defense or other right which the Borrower may have at any time
against the Issuing Bank or any other Person.
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(b) In the event any payment by the Borrower
received by the Issuing Bank with respect to such Letter of Credit and
distributed by the Agent to the Lenders on account of their participations is
thereafter set aside, avoided or recovered from the Issuing Bank in
connection with any receiver ship, liquidation or bankruptcy proceeding or
otherwise, each Lender which received such distribution shall, upon demand by
the Issuing Bank, contribute such Lender's Pro Rata Share of the amount set
aside, avoided or recovered together with interest at the rate required to be
paid by the Issuing Bank upon the amount required to be repaid by it.
3.08. Compensation for Letters of Credit.
(a) Letter of Credit Fees. (i) The Borrower shall pay with
respect to each Letter of Credit issued as a Standby Letter of Credit
quarterly in arrears, on the fifteenth day of each January, April, July and
October beginning after the Initial Funding Date and also on the Termination
Date, a Letter of Credit Fee equal to the percentage per annum set forth
below, applied (on the basis of actual days elapsed in a 360-day year) to the
maximum amount available to be drawn under such Standby Letter of Credit from
day to day during the previous quarter. This fee shall be paid to the Agent,
for the account of the Lenders in proportion to their respective Pro Rata
Shares.
Debt Rating Standby Letter of Credit Fee
------------------- -----------------------------
Level I Status .55%
Level II Status .65%
Level III Status .75%
Level IV Status 1.125%
Level V Status 1.75%
Any change in the amount of the Letter of Credit Fee shall become effective
as of the date the corresponding change in the interest rate becomes
effective, as provided in Section 2.02(a)(iii). Any reduction of the fee
shall be credited against the next payment of the Letter of Credit Fee. Any
additional amount payable by the Borrower shall be added to the next payment
of the Letter of Credit Fee.
(ii) The Borrower shall pay with respect to each Letter of
Credit issued as a Commercial Letter of Credit quarterly in arrears on the
fifteenth day of each January, April, July and October beginning after the
Initial Funding Date and also on the Termination Date, a Letter of Credit Fee
equal to 0.25% per annum applied (on the basis of actual days elapsed in a
360-day year) to the maximum amount available to be drawn under such
Commercial Letter of Credit from day to day during the previous quarter.
This fee shall be paid to the Agent, for the account of the Lenders in
proportion to their respective Pro Rata Shares.
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(b) Issuing Bank Charges. The Borrower shall pay to the Issuing
Bank, solely for its own account, quarterly in arrears on the fifteenth day
of each January, April, July and October beginning after the Initial Funding
Date and also on the Termination Date, (i) a processing fee equal to .20% per
annum applied (on the basis of actual days elapsed in a 360-day year) to the
maximum amount available to be drawn from day to day during the immediately
preceding fiscal quarter under each Letter of Credit issued by it, and (ii)
the standard charges assessed by the Issuing Bank including charges assessed
in connection with the negotiation, amendment or cancellation of Letters of
Credit.
3.09. Indemnification; Exoneration.
(a) In addition to amounts payable as elsewhere provided in this
Article III, the Borrower hereby agrees to protect, indemnify, pay and save
the Agent, the Issuing Bank and each Lender harmless from and against any and
all Liabilities and Costs which the Agent or the Issuing Bank or Lender may
incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of the Letter of Credit other than, in the case of the Issuing Bank,
as a result of its gross negligence or willful misconduct, as determined by
the final judgment of a court of competent jurisdiction or (ii) the failure
of the Issuing Bank to honor a drawing under such Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Governmental Authority (all such acts or omissions
herein called "Governmental Acts").
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(b) As between the Borrower, the Agent, the Lenders and the
Issuing Bank, the Borrower assumes all risks of the acts and omissions of, or
misuse of such Letter of Credit by, the beneficiary of such Letter of Credit.
In furtherance and not in limitation of the foregoing, the Issuing Bank, the
Agent and the Lenders shall not be responsible (except for the Issuing Bank's
gross negligence or willful misconduct in connection therewith): (i) for the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of the Letters of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, or other similar form of
teletransmission or otherwise, whether or not they be in cipher; (iv) for
errors in interpretation of technical terms; (v) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (vi) for the
misapplication by the beneficiary of a Letter of Credit of the proceeds of
any drawing under such Letter of Credit; and (vii) for any consequences
arising from causes beyond the control of the Agent, the Issuing Bank and
Lenders including any Governmental Acts. None of the above shall affect,
impair, or prevent the vesting of any of the Issuing Bank's rights or powers
under this Section 3.09.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Bank under or in connection with Letters of Credit issued on behalf
of the Bo rrower or any related certificates, if taken or omitted in good
faith, shall not, in the absence of gross negligence or willful misconduct,
put the Issuing Bank, the Agent or any Lender under any resulting liability
to the Borrower or relieve the Borrower of any of its obligations hereunder
to any such Person.
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ARTICLE IV
Conditions To Loans and Letters of Credit
4.01. Conditions Precedent to the Initial Funding. The obligation of
each Lender to make any Loan requested to be made by it on the Initial
Funding Date (individually, an "Initial Loan" and collectively, the "Initial
Loans") and of the Issuing Bank to issue any Letter of Credit pursuant hereto
on the Initial Funding Date shall be subject to satisfaction of all of the
following conditions precedent (unless waived by all the Lenders):
(a) Certain Documents and Other Items. The Agent shall have
received on or before the Initial Funding Date all of the following, all of
which, except as provided below, shall be in form and substance satisfactory
to the Agent, the Co-Agents and the Lenders and in sufficient copies for each
Lender:
(i) This Agreement, executed by the Borrower and
the Lenders, together with all Exhibits and Schedules;
(ii) Evidence that a notice has been given as to the
termination of the Existing Credit Agreement and that provision has been made
for the repayment of all amounts outstanding thereunder;
(iii) The Borrower Pledge Agreement executed by the Borrower,
together with stock certificates and appropriate stock powers (endorsed in
blank);
(iv) The ATSC Guaranty executed by ATSC;
(v) The ATSC Pledge Agreement executed by ATSC, together
with stock certificates and appropriate stock powers (endorsed in blank);
(vi) The Borrower's Certificate of Incorporation, as amended,
modified or supplemented to the Initial Funding Date, certified to be true,
correct and complete by the Secretary of State of Delaware as of a date not
more than ten Business Days prior to the Initial Funding Date, together with
a good standing certificate from the Secretary of State of Delaware dated a
date not more than ten Business Days prior to the Initial Funding Date;
(vii) ATSC's Certificate of Incorporation, as amended,
modified or supplemented to the Initial Funding Date, certified to be true,
correct and complete by the Secretary of State of Delaware as of a date not
more than ten Business Days prior to the Initial Funding Date, together with
a good standing certificate from the Secretary of State of Delaware dated as
of a date not more than ten Business Days prior to the Initial Funding Date;
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(viii) A certificate of the Secretary or Assistant Secretary of
the Borrower dated the Initial Funding Date certifying (A) the names and true
signatures of the incumbent officers of the Borrower authorized to sign this
Agreement, the other Loan Documents and any notice or certificate to be
delivered hereunder, (B) the By-Laws of the Borrower as in effect on the date
of such certification, (C) the resolutions of the Borrower's Board of
Directors approving and authorizing the execution, delivery and performance
of this Agreement, and all other Loan Documents executed by the Borrower, and
(D) that there have been no changes in the Certificate of Incorporation of
the Borrower since the date of the most recent certification thereof by the
Secretary of State of Delaware;
(ix) A certificate of the Secretary or Assistant Secretary of
ATSC dated the Initial Funding Date certifying (A) the names and true
signatures of the incumbent officers of ATSC authorized to sign the ATSC
Guaranty and the ATSC Pledge Agreement, (B) the By-Laws of ATSC as in effect
on the date of such certification, (C) the resolutions of ATSC's Board of
Directors approving and authorizing the execution, delivery and performance
of the ATSC Guaranty and the ATSC Pledge Agreement and all other Loan
Documents executed by ATSC, and (D) that there have been no changes in the
Certificate of Incorporation of ATSC since the date of the most recent
certification thereof by the Secretary of the State of Delaware;
(x) A favorable legal opinion, dated the Initial Funding
Date, addressed to the Agent, the Issuing Bank and the Lenders from Skadden,
Arps, Slate, Meagher & Flom, counsel to the Borrower and ATSC, in
substantially the form of Exhibit
4.01(a)(x);
(xi) A certificate dated the Initial Funding Date executed by
the Vice President-Finance of each of the Borrower and ATSC to the effect
that there has been no material adverse change in the financial condition,
business, operations, properties or prospects of the Borrower or ATSC, from
the date of the last available audited financial statements;
(xii) A certificate dated the Initial Funding Date executed by
the Vice President-Finance of the Borrower to the effect that the Commitments
and all Obligations hereunder constitute "Permitted Indebtedness" and "Senior
Indebtedness" under the Subordinated Note Indenture; and
(xiii) Such additional items as the Agent or the Requisite
Lenders may reasonably require.
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(b) Fees and Expenses Paid. All costs, fees and
expenses (including legal fees and expenses, including the allocated cost of
in-house counsel) for which invoices have been delivered at least three
Business Days prior to the Initial Funding Date) and other compensation
payable to the Arranger, the Co-Agents, the Agent and the Lenders shall have
been paid.
The acceptance by the Borrower of the proceeds of the Initial
Loans made hereunder shall constitute a representation and warranty by the
Borrower as of the Initial Funding Date in respect of such Loans that all the
conditions contained in this Section 4.01 have been satisfied or waived in
writing pursuant to Section 12.08.
4.02. Conditions Precedent to all Loans and Letters of Credit. The
obligation of the Lenders to make any Loan requested to be made by it, and of
the Issuing Bank to issue any Letter of Credit, on any date, is subject to
the following conditions precedent as of such date:
(a) Notice of Borrowing. The Agent shall have
received in accordance with the provisions of Section 2.01(b), on or before
any Funding Date, a Notice of Borrowing.
(b) Additional Matters. As of the Funding Date for
any Loan or the date of issuance of any Letter of Credit:
(i) Representations and Warranties. All of the
representations and warranties of the Borrower contained in or repeated
pursuant to Section 5.02 and in any other Loan Document (other than
representations and warranties which expressly speak only as of a different
date) shall be true and complete in all material respects on and as of such
Funding Date or issuance date, as though made on and as of such date;
(ii) No Default. No Event of Default or Potential Event of
Default shall have occurred and be continuing or would result from the making
of the requested Loan or the issuance of the Letter of Credit; and
(iii) No Material Adverse Change. No event shall have
occurred after April 30, 1994 which, in the reasonable judgment of the
Requisite Lenders, has had or is likely to have a Material Adverse Effect.
(c) Supplemental Documentation. Such additional
documentation (including opinions of counsel) as the Agent or any Lender may
reasonably require.
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The acceptance by the Borrower of the proceeds of each Loan made
on any Funding Date other than the Initial Funding Date or the issuance of
any Letter of Credit in accordance with this Agreement shall constitute a
representation and warranty by the Borrower as of such Funding Date or
issuance date that all the conditions contained in this Section 4.02 have
been satisfied or waived in writing pursuant to Section 12.08.
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ARTICLE V
Representations and Warranties
5.01. Representations and Warranties on the Initial Funding Date. In
order to induce the Lenders to enter into this Agreement and to make the
Initial Loans, the Borrower hereby represents and warrants to each Lender,
the Co-Agents and the Agent that the following statements are true and
correct:
(a) Organization; Corporate Powers. Each of ATSC,
the Borrower and each Subsidiary of the Borrower (i) is a corpora tion duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction in which it owns or leases real property or in which the nature
of its business requires it to be so qualified, except those jurisdictions
(other than Alabama, Arkansas, Mississippi and Vermont) where the failure to
be in good standing or to so qualify has not had or will not have a Material
Adverse Effect, and (iii) has all requisite corporate power and authority to
own, operate and encumber its property and assets and to conduct its business
as presently conducted and as proposed to be conducted in connection with and
following the consummation of the transactions contemplated by the Loan
Documents.
(b) Authority. (i) Each of ATSC and the Borrower
has the requisite corporate power and authority to execute, deliver and
perform its obligations under each of the Loan Docu ments executed by it, or
to be executed by it.
(ii) The execution, delivery and performance (or filing or
recording, as the case may be) of each of the Loan Documents to which it is
party and the consummation of the transactions contemplated thereby, have
been duly authorized by all necessary corporate action on the part of each of
ATSC and the Borrower and no other corporate proceedings on the part of ATSC
or the Borrower are necessary to consummate such trans actions.
(iii) Each of the Loan Documents (other than those not in
effect on the date of the making of this representation) to which it is a
party has been duly executed and delivered by each of ATSC and the Borrower
and constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, is in full force and effect and no term or
condition thereof has been amended, modified or waived from the terms and
conditions contained therein delivered to the Agent pursuant to Article IV
without the prior written consent of the Agent and the Requisite Lenders, and
each of ATSC and the Borrower and, to the best of the Borrower's knowledge,
the other parties thereto have performed and complied in all material
respects with all the material terms, provisions, agreements and conditions
set forth therein and required to be performed or complied with by such
parties on or before the effective date thereof, and no default by any such
party exists thereunder.
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(c) No Conflict. The execution, delivery and perfor mance of
each Loan Document to which it is a party by each of ATSC and the Borrower
and each of the transactions contemplated thereby do not and will not (i)
constitute a tortious interference with any Contractual Obligation of any
Person, any liability resulting from which would have or be reasonably
expected to have a Material Adverse Effect, or (ii) conflict with or violate
such Person's Certificate of Incorporation or By-Laws or (iii) conflict with,
result in a breach of or constitute (with or without notice or lapse of time
or both) a default under any Requirement of Law or material Contractual
Obligation of the Borrower or any Subsidiary of the Borrower or (iv) result
in or require the creation or imposition of any Lien whatsoever upon any of
the properties or assets of ATSC, the Borrower or any Subsidiary of the
Borrower (other than Liens in favor of the Agent or the Issuing Bank arising
pursuant to the Loan Documents or Liens permitted pursuant to Section
8.02(b)), or (v) require any approval of stockholders, unless such approval
has been obtained.
(d) Governmental Consents. The execution, delivery and
performance of each Loan Document to which it is a party, by each of ATSC and
the Borrower and the transactions contemplated thereby do not and will not
require any registration with, consent or approval of, or notice to, or other
action, with or by any Governmental Authority, except filings, consents or
notices which have been, or will in due course be, made, obtained or given.
(e) Governmental Regulation. None of ATSC, the Borrower or any
of its Subsidiaries is subject to regulation under the Public Utility
Holdings Company Act of 1935, the Federal Power Act, the Interstate Commerce
Act, the Investment Company Act of 1940 or any other statute or regulation of
any Governmental Authority such that its ability to incur indebtedness is
limited or its ability to consummate the trans actions contemplated hereby is
materially impaired.
(f) Financial Position. All quarterly and annual financial
statements of ATSC, the Borrower or of the Borrower and any of its Restricted
Subsidiaries delivered to the Agent were prepared in conformity with GAAP,
except as otherwise noted therein, and fairly present the financial position
of the Borrower or the consolidated financial position of the Borrower and
such Subsidiaries, as the case may be, as at the respective dates thereof and
the results of operations and changes in cash flows for each of the periods
covered thereby, subject, in the case of any unaudited interim financial
statements, to changes resulting from audit and normal year-end adjustments.
Except as contemplated in the Loan Documents, none of the Borrower or any of
its Restricted Subsidiaries has any material obligations, contingent
liabilities or liabilities for taxes, long term leases or material or unusual
forward or long term commitments which are not reflected in such financial
statements and the notes thereto.
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(g) Permitted Indebtedness. All Obligations hereunder
constitute "Permitted Indebtedness" and "Senior Indebtedness" as such term is
defined in the Subordinated Note Indenture.
(h) Litigation; Adverse Effects. (i) There is no action, suit,
proceeding, investigation of any Governmental Authority or arbitration, at
law or in equity, or before or by any Governmental Authority, pending, or, to
the best knowledge of the Borrower, threatened against ATSC, the Borrower or
any
Subsidiary of the Borrower or any property of any of them, which would be
reasonably expected to (I) result in any Material Adverse Effect, (II)
materially and adversely affect the ability of any party to any of the Loan
Documents to perform its obligations thereunder, or (III) materially and
adversely affect the ability of the Borrower to perform its Obligations or
the Lenders' ability to enforce such Obligations.
(ii) None of ATSC, the Borrower or any Subsidiary of the
Borrower is (A) in violation of any applicable law which violation has or
might reasonably be expected to have a Material Adverse Effect, or (B)
subject to or in default with respect to any final judgment, writ,
injunction, decree, order, rule or regulation of any court or Governmental
Authority which has or might have a Material Adverse Effect. There is no
action, suit, proceeding or investigation pending or, to the knowledge of the
Borrower, threatened against or affecting ATSC, the Borrower or any
Subsidiary of the Borrower challenging the validity or the enforceability of
any of the Loan Documents.
(i) No Material Adverse Change. With respect to the Borrower or
any Restricted Subsidiary, there has occurred no event since April 30, 1994
which has or would be reasonably expected to have a Material Adverse Effect.
(j) Payment of Taxes. All tax returns and reports of each of
ATSC, the Borrower and its Subsidiaries required to be filed (including
extensions), have been timely filed, and all taxes, assessments, fees and
other charges of Governmental Authorities thereupon and upon their respective
properties, assets, income and franchises which are shown on such returns as
being due and payable, have been paid when due and payable, except such
taxes, if any, that are reserved against in accordance with GAAP, such taxes
which are not yet delinquent, such taxes which are payable in installments so
long as paid before any penalty accrues with respect thereto and such taxes
as are being contested in good faith by appropriate proceedings.
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(k) Material Adverse Agreements. None of ATSC, the Borrower or
any of its Subsidiaries is a party to or subject to any Contractual
Obligation or other restriction contained in its charter or By-laws which has
or would be reasonably expected to have a Material Adverse Effect after
giving effect to the consummation of the transactions contemplated in the
Loan Documents or otherwise.
(l) Securities Activities. None of ATSC, the Borrower or any of
its Subsidiaries is engaged in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock and the Borrower shall not
use the proceeds of any Loan in violation of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
(m) Disclosure. Subject to changes in facts or conditions which
are required or permitted under this Agreement, the representations and
warranties of ATSC and the Borrower contained in the Loan Documents, and all
certificates and other documents delivered to the Agent in connection
therewith, taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
(n) Patents, Trademarks, Permits, Etc. The Borrower and each of
its Restricted Subsidiaries owns, is licensed or otherwise has the lawful
right to use, or has all permits and
other approvals of Governmental Authorities, patents, trademarks, service
marks, trade names, copyrights, technology, know-how and processes used in or
necessary for the conduct of its business as currently conducted which are
material to its financial condition, business, operations, assets and
prospects, individually or taken as a whole. The use of such permits and
other approvals of Governmental Authorities, patents, trademarks, service
marks trade names, copyrights, technology, know-how and processes by the
Borrower or any such Subsidiary does not infringe on the rights of any
Person, subject to such claims and infringements the existence of which do
not have or are not reasonably expected to have a Material Adverse Effect.
The transactions contemplated by the Loan Documents will not impair the
ownership of or rights under (or the license or other right to use, as the
case may be) any permits and governmental approvals, patents, trademarks,
service marks, trade names, copyrights, technology, know-how or processes by
the Borrower or any such Subsidiary in any manner which has or might have a
Material Adverse Effect.
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(o) Environmental Matters. To the best of the Borrower's
knowledge, the operations of the Borrower and its Restricted Subsidiaries
comply in all material respects with all applicable environmental, health and
safety Requirements of Law except where any failure to comply is not
reasonably likely to have a Material Adverse Effect.
(p) ERISA. Each Plan which is intended to be qualified under
Section 401(a) of the IRC has been or will promptly be submitted to the IRS
for a determination that it is so qualified and that the trust related to any
such Plan is exempt from Federal income tax under Section 501(a) of the IRC
as currently in effect. Neither the Borrower nor any ERISA Affiliate has
breached any of the responsibilities, obligations or duties imposed on it by
ERISA or regulations promulgated thereunder with respect to any Plan which
breach would have or would be reasonably expected to have a Material Adverse
Effect. No Benefit Plan has incurred any accumulated funding deficiency (as
defined in Sections 302(a)(2) of ERISA and 412(a) of the IRC) whether or not
waived which would have or would be reasonably expected to have a Material
Adverse Effect. Neither the Borrower nor any ERISA Affiliate nor any
fiduciary of any Plan which is not a Multiemployer Plan (i) has engaged in a
nonexempt prohibited transaction described in Section 406 of ERISA or 4975 of
the IRC or (ii) has taken or failed to take any action which would constitute
or result in a Termination Event such that the events under (i) or (ii) or
both would have or would be reasonably expected to have a Material Adverse
Effect. Neither the Borrower nor any ERISA Affiliate has incurred any
liability to the PBGC which remains outstanding other than the payment of
premiums, and there are no premium payments which have become due which are
unpaid. Neither the Borrower nor any ERISA Affiliate has (i) failed to make
a required contribution or payment to a Multiemployer Plan which would have
or would be reasonably expected to have a Material Adverse Effect or (ii)
made a complete or partial withdrawal under Section 4203 or 4205 of ERISA
from a Multiemployer Plan which would have or would be reasonably expected to
have a Material Adverse Effect. Neither the Borrower nor any ERISA Affiliate
has failed to make a required installment or any other required payment under
Section 412 of the IRC on or before the due date for such installment or
other payment which would have or would be reasonably expected to have a
Material Adverse Effect. Neither the Borrower nor any ERISA Affiliate is
required to provide security to a Benefit Plan under Section 401(a)(29) of
the IRC due to a Plan amendment that results in an increase in current
liability for the plan year.
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(q) Net Worth. The Net Worth of the Borrower is at least
$269,000,000 on the Initial Funding Date prior to giving effect to all
transactions contemplated by Loan Documents, including the payment and
accrual of all Transaction Costs payable by the Borrower with respect to any
of the foregoing.
5.02. Subsequent Funding Representations and Warranties. In order to
induce the Lenders and the Issuing Bank to make any Loans after the Initial
Funding Date, and the Issuing Bank to issue Letters of Credit, the Borrower
hereby represents and warrants to each Lender, the Issuing Bank and the Agent
that the statements set forth in clauses (a) through (q) of Section 5.01
(except to the extent that such statements expressly are made only as of the
Initial Funding Date), are true, correct and
complete in all material respects as though made on and as of the Funding
Date in respect of each Borrowing after the Initial Funding Date and the date
of issuance of each Letter of Credit, except that the representations and
warranties need not be true and correct to the extent that changes in the
facts and conditions on which such representations and warranties are based
are required or permitted under this Agreement.
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ARTICLE VI
Reporting Covenants
6.01. Financial Statements. So long as the Borrower shall have any
Obligation or any Lender shall have any Commitment hereunder the Borrower
shall maintain or cause to be maintained a system of accounting established
and administered in accordance with sound business practices and consistent
with past practice to permit preparation of financial statements in
conformity with GAAP, and each of the financial statements described below
shall be prepared from such system and records. The Borrower shall deliver
or cause to be delivered to the Agent (with a sufficient number of copies for
all Lenders):
(a) As soon as practicable, and in any event within 45 days
after the end of each of ATSC's first three fiscal quarters on a consolidated
basis for ATSC, the Borrower and its Restricted Subsidiaries, a balance
sheet, income statement and cash flow statement for such fiscal quarter and a
year-to-date balance sheet, income statement and cash flow statement of ATSC,
all certified by a Responsible Officer;
(b) As soon as practicable, and in any event within 90 days
after the end of each Fiscal Year, annual financial statements on a
consolidated basis for ATSC, the Borrower and its Subsidiaries, consisting of
a balance sheet, income statement and cash flow statement, certified without
qualification by the firm of independent certified public accountants of
recognized national standing regularly retained by ATSC and acceptable to the
Agent, and accompanied by such firm's certification that, in the course of
its audit (conducted in accordance with generally accepted auditing
standards), it obtained no knowledge that an Event of Default or Potential
Event of Default has occurred as a result of a violation of any of the
covenants set forth in Article IX;
(c) As soon as practicable, and in any event within 45 days
after the end of each Fiscal Year, on a consolidated basis for ATSC, the
Borrower and its Subsidiaries, detailed financial projections for the next
succeeding Fiscal Year, including a written explanation of the principal
assumptions made with respect thereto;
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(d) Together with each delivery of the financial statements
pursuant to paragraphs (a) and (b) above, a Compliance Certificate of the
Borrower substantially in the form of Exhibit 6.01, stating that the
executive officers signatory thereto have reviewed the terms of this
Agreement, the ATSC Guaranty, the ATSC Pledge Agreement and the Borrower
Pledge Agreement, and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and condition
of the Borrower and its Subsidiaries, during the accounting period covered by
such financial statements, and that such review has not disclosed the
existence during or at the end of such accounting period, and that the
signers do not have knowledge of the existence as at the date of such
certificate, of any condition or event which constitutes an Event of Default
or Potential Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what action
the Borrower has taken, is taking and proposes to take with respect thereto;
provided, however, that Attachment 2 to Exhibit 6.01 need not be included in
the Compliance Certificate provided together with the financial statements
delivered pursuant to paragraph (a) above.
(e) Promptly upon the Borrower obtaining knowledge (A) of any
condition or event which constitutes an Event of Default or Potential Event
of Default, (B) of any condition or event which constitutes an event of
default or which, with the giving of notice or lapse of time or both, would
constitute an event of default under the Subordinated Note Indenture, (C) of
any condition or event which has or in the Borrower's judgment is likely to
have a Material Adverse Effect, a certificate of a Responsible Officer
specifying the nature and period of existence of any such condition or event,
or specifying the notice given or action taken by any lender or holder of the
Subordinated Notes and the nature of such claimed default, Event of Default,
Potential Event of Default, event or condition, and what action the Borrower
has taken, is taking and proposes to take with respect thereto;
(f) (A) Promptly after learning thereof, notice of the
institution of, or threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or any
Restricted Subsidiary of the Borrower involving claims in excess of
$5,000,000, or any Property of ATSC, the Borrower or any Restricted
Subsidiary of the Borrower valued in excess of $5,000,000 except, in each
case, where the same is fully covered by insurance (other than any applicable
deductible) or has been previously disclosed in writing by the Borrower and
of any material adverse change in any existing action, suit, proceeding,
governmental investigation or arbitration; and (B) promptly upon learning
thereof, notice of any investigation or proceeding before or by any
Governmental Authority, the effect of which might limit, prohibit or restrict
materially the manner in which it currently conducts its business or to
declare any substance contained in the products manu factured or distributed
by it to be dangerous, if such declaration is reasonably likely to have a
Material Adverse Effect;
(g) As soon as possible, and in any event within ten Business
Days after either the Borrower or any ERISA Affiliate knows or, solely with
respect to any Benefit Plan maintained by the Borrower or an ERISA Affiliate
on or after the Initial Funding Date, has reason to know that a Termination
Event has occurred, a written statement of a Responsible Officer of the
Borrower describing such Termination Event and the action, if
any, which the Borrower or such ERISA Affiliate has taken, is taking or
proposes to take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto;
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(h) As soon as possible, and in any event within ten Business
Days, after either the Borrower or any ERISA Affiliate knows that a
prohibited transaction (defined in Section 406 of ERISA and Section 4975 of
the Internal Revenue Code) involving the Borrower or any ERISA Affiliate has
occurred, a statement of a Responsible Officer of the Borrower describing
such transaction and the action which the Borrower or such ERISA Affiliate
has taken, is taking or proposes to take with respect thereto;
(i) Promptly upon, and in any event within ten Business Days
after, receipt by the Borrower or an ERISA Affiliate of the PBGC's intention
to terminate a Benefit Plan or to have a trustee appointed to administer a
Benefit Plan, copies of each such notice;
(j) Promptly upon, and in any event within ten Business Days
after, receipt by the Borrower or any ERISA Affili ate of any unfavorable
determination letter from the IRS regarding the qualification of a Plan under
Section 401(a) of the IRC, copies of such letter;
(k) Promptly upon, and in any event within ten Business Days
after, receipt by the Borrower or an ERISA Affiliate of a notice from a
Multiemployer Plan regarding the imposition of withdrawal liability, copies
of each such notice;
(l) Promptly upon, and in any event within ten Business Days,
after the Borrower or any ERISA Affiliate knows (A) a Multiemployer Plan has
been terminated, (B) the adminis trator or plan sponsor of a Multiemployer
Plan intends to terminate a Multiemployer Plan, or (C) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan a notification of such information;
(m) Such other information respecting the financial condition of
ATSC, the Borrower or any Subsidiary of the Borrower, business, operations,
assets, performance or prospects as the Agent or the Requisite Lenders may,
from time to time, reasonably request including financial projections and
including monthly balance sheets, income statements and cash flow statements;
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(n) On a timely basis consistent with the Borrower's legal
obligations to release such materials, copies of all financial statements,
reports and notices, if any, sent or made available generally by the Borrower
to the holders of its publicly-held Securities or sent or made available
generally to a holder of the Subordinated Notes or the trustee under the
Subordinated Note Indenture or filed with the Commission, and of all press
releases made available generally by the Borrower to the public concerning
material developments in the business of the Borrower;
(o) Upon the request of the Agent or any Lender, copies of any
management reports prepared by the Borrower's independent certified public
accountants in connection with the annual audit; and
(p) Promptly upon becoming aware thereof, notice of any change
in the Debt Rating by Moody's or S&P.
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ARTICLE VII
Affirmative Covenants
The Borrower covenants and agrees that, on and after the date hereof and
so long as any Lender shall have any Commitment hereunder and until payment
in full of all of the Obligations:
7.01. Corporate Existence, Etc. The Borrower shall, and shall cause
ATSC and each of its Subsidiaries to, at all times maintain its corporate
existence and preserve and keep in full force and effect its rights and
franchises except as permitted under Section 8.08.
7.02. Corporate Powers, Etc. The Borrower shall, and shall cause ATSC
and each Subsidiary of the Borrower to, qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it
to be so qualified, except in those jurisdictions (other than Alabama,
Arkansas, Mississippi, and Vermont) where the failure to so qualify does not
have or would not reasonably be expected to have a Material Adverse Effect.
7.03. Compliance with Laws. The Borrower shall, and shall cause ATSC
and each Subsidiary of the Borrower to, comply with all Requirements of Law,
and all restrictive covenants affecting it or its business, properties,
assets or operations, except where the failure so to comply would be
reasonably expected to have Material Adverse Effect.
7.04. Payment of Taxes and Claims. The Borrower shall, and shall cause
ATSC and each Subsidiary of the Borrower, to pay (a) all taxes, assessments
and other governmental charges imposed upon it or on any of its properties or
assets or in respect of any of its franchises, business, income or property
before any material penalty or interest in a material amount accrues thereon,
and (b) all claims (including claims for labor, services, materials and
supplies) for sums, material in the aggregate, which have become due and
payable and which by law have or may become a Lien (other than a Customary
Permitted Lien) upon any of its properties or assets, prior to the time when
any material penalty or fine shall be incurred with respect thereto; provided
that no such taxes, assessments and governmental charges referred to in
clause (a) above or claims referred to in clause (b) above need be paid if
being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted and if such reserve or other appropriate provision,
if any, as shall be required in conformity with GAAP shall have been made
therefor.
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7.05. Maintenance of Properties; Insurance. The Borrower shall and
shall cause ATSC and each Restricted Subsidiary of the Borrower to, maintain
or cause to be maintained in good repair, working order and condition,
excepting ordinary wear and tear and damage due to casualty or condemnation,
all Property material to its operations and will make or cause to be made all
appropriate repairs, renewals and replacements thereof, consistent with past
practice. The Borrower shall, and shall cause each of its Restricted
Subsidiaries to, maintain such insurance as it may be required to maintain
under its leases and other contracts and, to the extent not inconsistent with
such requirements, shall also maintain with financially sound insurance
companies, insurance policies and programs against loss or damage by fire,
theft, burglary, pilferage and loss in transit, together with such other
hazards as is reasonably consistent with prudent industry
practice, and maintain product and other liability insurance consistent with
prudent industry practice with financially sound insurance companies.
7.06. Inspection of Property; Books and Records; Discussions. The
Borrower shall, and shall cause ATSC and each Subsidiary of the Borrower to,
permit any authorized represen tative(s) designated by the Agent to visit and
inspect any of its properties, including financial and accounting records,
and to make copies and take extracts therefrom, and to discuss its affairs,
finances and accounts with its officers, employees, representatives, agents
or independent certified public accountants, all upon reasonable notice and
at such reasonable time and as often as may be reasonably requested. Each
such visitation and inspection made by or on behalf of the Agent shall be at
the Borrower's expense. The Borrower will keep proper books of record and
account in which entries in conformity with GAAP shall be made to prepare the
financial statements described in Section 6.01 and to satisfy all
Requirements of Law.
7.07. Labor Matters. The Borrower shall notify the Agent in writing,
promptly, of any material labor dispute to which it may become a party, any
strikes or walkouts relating to any of its facilities and the expiration of
any labor contract to which it is a party or by which it is bound.
7.08. Maintenance of Permits. The Borrower shall obtain and maintain,
and shall cause each of its Subsidiaries to obtain and maintain, in full
force and effect all Permits or other rights necessary for the operation of
its business, except where the failure to obtain or maintain such Permits or
rights would not have or would not reasonably be expected to have a Material
Adverse Effect.
7.09. ERISA. The Borrower shall establish, maintain and operate and
cause each of its ERISA Affiliates to establish, maintain and operate, all
Plans in all material respects in compliance with the applicable provisions
of ERISA, the IRC, and all other Requirements of Law.
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ARTICLE VIII
Negative Covenants
The Borrower covenants and agrees that, on and after the date hereof and
so long as any Lender shall have any Commitment hereunder and until payment
in full of all of the Obligations:
8.01. Indebtedness. The Borrower shall not, and shall not permit ATSC
or any Restricted Subsidiary to, create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to any Indebtedness,
except:
(a) the Obligations;
(b) Indebtedness in the form of bank overdrafts in the ordinary
course of business;
(c) the Subordinated Notes and obligations for fees, expenses
and indemnifications related thereto;
(d) Indebtedness in connection with any Receivables Transaction;
(e) (i) Indebtedness incurred by the Borrower or any Restricted
Subsidiary to finance Capital Expenditures and (ii)
Capital Lease obligations of the Borrower or any Restricted Subsidiary;
provided, however, that Capital Expenditures made in connection with the
Distribution Center shall not exceed $25,000,000 during the term of this
Agreement;
(f) Indebtedness in respect of Accommodation
Obligations permitted under Section 8.04; _
(g) Indebtedness of ATSC to the Borrower and any
Restricted Subsidiary in connection with any advances made pursuant to
Section 8.03(b);
(h) Indebtedness in respect of Interest Rate
Contracts;
(i) intercompany Indebtedness among the Borrower and
its Restricted Subsidiaries;
(j) if the CAT Joint Venture becomes a Restricted
Subsidiary, Indebtedness of the CAT Joint Venture existing on the date the
CAT Joint Venture becomes a Restricted Subsidiary; and
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(k) other Indebtedness of the Borrower and its
Restricted Subsidiaries not exceeding in the aggregate principal amount of
$5,000,000 at any one time outstanding.
8.02. Sales of Assets; Liens.
(a) Sales. The Borrower shall not, and shall not
permit ATSC or any Restricted Subsidiary to, sell, assign, trans fer, lease,
convey or otherwise dispose of, any properties or assets, whether now owned
or hereafter acquired, or any income or profits therefrom, except among ATSC,
the Borrower and any Restricted Subsidiary and except:
(i) sales of inventory and subleases of real property in the
ordinary course of business (and with respect to such subleases consistent
with its past practices);
(ii) subleases of real property not in the ordinary course of
business, but only to the extent the aggregate annual rental payments accrued
under all such subleases do not exceed $1,000,000;
(iii) Receivables Transactions;
(iv) other sales of assets, including the sale of Securities
of Subsidiaries, whether or not in the ordinary course of business, having an
aggregate fair market value of not more than $1,000,000 pursuant to one
single disposition or $2,000,000 in the aggregate pursuant to several
dispositions in any one Fiscal Year;
(v) licenses of trademarks to the extent necessary to
maintain or protect such trademarks in jurisdictions outside the United
States of America;
(vi) sales or dispositions of Cash Equivalents;
(vii) sales of the Borrower's interest in the CAT Joint
Venture pursuant to the CAT Joint Venture Agreement; and
(viii) transfer of cash or property in an amount not to exceed
1% of EBITDA for each Fiscal Year to a charitable foundation established by
the Borrower or ATSC;
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provided, that (A) no disposition (other than sales of Receivables permitted
by clause (iii) or transfers permitted by clause (viii)) in excess of
$1,000,000 shall be permitted unless the price to be received therefor
represents the then fair market value of the asset or property sold at the
time of such disposition and at least 80% of the price is to be paid in cash
at the closing of the disposition, (B) this Section 8.02(a) shall not
prohibit any sale of equipment and fixtures in the Borrower's distribution
center existing on the date hereof and (C) this Section 8.02(a) shall not
prohibit any sale or lease of the Distribution Center.
(b) Liens. The Borrower shall not, and shall not
permit ATSC or any Restricted Subsidiary to, create, incur, assume or permit
to exist, directly or indirectly, any Lien on or with respect to any of its
Property except:
(i) Liens securing the Obligations;
(ii) Liens upon the interest or title of a lessor or secured
by a lessor's interest under any lease under which the Borrower or any
Restricted Subsidiary is the lessee and the interest of the lessee under any
lease under which the Borrower or any Restricted Subsidiary is the lessor;
(iii) Customary Permitted Liens;
(iv) Liens granted by the Borrower or any Restricted
Subsidiary (including the interest of a lessor under a Capital Lease) and
Liens on Property existing at the time of acquisition thereof by the Borrower
or any Restricted Subsidiary securing Indebtedness permitted by Section
8.01(e);
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(v) Liens on Property of any Person existing at the time
such Person becomes a Restricted Subsidiary incurring Indebtedness permitted
by Section 8.01;
(vi) Liens with respect to judgments or attach ments which do
not result in an Event of Default or Potential Event of Default hereunder;
(vii) Permitted Existing Liens;
(viii) Liens in respect of Receivables sold pursuant to a
Receivables Transaction;
(ix) Liens in respect of Indebtedness permitted pursuant to
Section 8.01(k); and
(x) to the extent Indebtedness secured thereby is permitted
to be extended, renewed, replaced or refinanced, a future Lien upon any
Property which is subject to a Lien described in clause (vii) above, if such
future Lien attaches only to the same Property, secures only such permitted
extensions, renewals, replacements or refinancings and is of like quality,
character and extent.
8.03. Investments. The Borrower shall not, and shall not permit ATSC
or any Restricted Subsidiary to, make or own, directly or indirectly, any
Investment in any Person except:
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(a) Investments by the Borrower in Cash Equivalents;
(b) Investments by the Borrower resulting from
advances to ATSC to fund any of the items set forth in Section 8.05(a) or
(b);
(c) Investments by ATSC in the capital stock of the
Borrower;
(d) Investments in Subsidiaries if such Subsidiaries
have been organized in connection with a Receivables Transaction;
(e) Investments in Restricted Subsidiaries and
investments resulting from transactions permitted pursuant to Section
8.01(i);
(f) Investments in joint ventures (in the form of
corporations, partnerships or otherwise) in a maximum amount not exceeding
$10,000,000 at any one time outstanding;
(g) Investments in Unrestricted Subsidiaries in an
amount not to exceed $1,000,000 in the aggregate in any Fiscal Year;
(h) Investments not exceeding $5,000,000 at any one
time outstanding in respect of loans to senior executives and key employees
of the Borrower or any Restricted Subsidiary;
(i) Investments by the Borrower in the CAT Joint
Venture pursuant to the CAT Joint Venture Agreement in the form of (i)
capital stock, (ii) advances made to the CAT Joint Venture not to exceed
$5,000,000 in the aggregate outstanding at any time and (iii) one or more
Letters of Credit issued in respect of obligations of the CAT Joint Venture;
and
(j) other Investments by the Borrower not in excess
of an aggregate amount of $500,000 outstanding at any one time.
8.04. Accommodation Obligations. The Borrower shall not, and shall not
permit ATSC or any Restricted Subsidiary to, create or become or be liable,
directly or indirectly, with respect to any Accommodation Obligation except:
(i) guaranties resulting from endorsement of negotiable
instruments for collection in the ordinary course of business;
(ii) obligations, warranties and indemnities, not relating to
Indebtedness of any Person, which have been or are undertaken or made in the
ordinary course of business and not for the benefit or in favor of an
Affiliate of the Borrower or such Subsidiary;
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(iii) obligations in respect of any Receivables Transaction;
(iv) Accommodation Obligations arising in connection with the
Borrower's agreement to provide the CAT Joint Venture with one or more
Letters of Credit issued for the benefit of the CAT Joint Venture pursuant to
the CAT Joint Venture Agreement to the extent permitted by Section 8.03(i)
and similar arrangements for the benefit of other joint ventures. _
The Borrower shall not permit ATSC to, create or become or be liable,
directly or indirectly, with respect to any Accommodation Obligation except
Accommodation Obligations arising in connection with the ATSC Guaranty or
Accommodation Obligations for Indebtedness of the Borrower's wholly-owned
Restricted Subsidiaries permitted to be incurred under Section 8.01.
8.05. Restricted Payments. The Borrower shall not, and
shall not permit any of its Subsidiaries or ATSC, to declare or make any
Restricted Payment except:
(a) scheduled payments (but not prepayments) of interest due on
the Subordinated Notes, if such scheduled payments are permitted to be made
pursuant to the terms of such Subordinated Notes;
(b) dividends paid and declared in any Fiscal Year by the
Borrower to ATSC to fund (i) income and franchise taxes payable in such
Fiscal Year owed by ATSC pursuant to the Tax Sharing Agreement dated as of
July 12, 1989 between ATSC and the Borrower; (ii) other ordinary operating
expenses of ATSC not in excess of $500,000 in any Fiscal Year; (iii) ATSC's
share of expenses incurred in connection with, any public offering of Common
Stock; and (iv) payments permitted under Section 8.05(e);
(c) dividends paid or any other distribution made by any
Subsidiary on its capital stock;
(d) payments by ATSC to the Investor Group of its share of
expenses incurred in connection with any public offering of the Common Stock
held by the Investor Group; and
(e) payments by ATSC or the Borrower to acquire shares of Common
Stock from employees of ATSC, the Borrower or any Restricted Subsidiary in an
aggregate amount not exceeding $100,000 in any Fiscal Year.
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8.06. Conduct of Business. The Borrower shall not, and shall not
permit any of its Restricted Subsidiaries to, engage in any business other
than (a) the business engaged in by the Borrower or such Subsidiary on the
date hereof; (b) any business activities substantially similar or related
thereto; and (c) any Receivables Transaction.
8.07. Transactions with Affiliates. Except as set forth in Schedule
8.07, the Borrower shall not, and shall not permit ATSC or any Restricted
Subsidiary to, at any time after the Initial Funding Date directly or
indirectly enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any of its Affiliates on terms that are less favorable to it
than those fair and reasonable terms that might be obtained in a comparable
armslength transaction at the time; provided that the foregoing restriction
shall not apply to transactions among ATSC, the Borrower and its wholly-owned
Restricted Subsidiaries, customary fees paid to members of the Board of
Directors of the Borrower or ATSC or payments permitted under Section 8.03(h)
or the business contemplated by the CAT Joint Venture Agreement or other
joint ventures.
8.08. Restriction on Fundamental Changes.
(a) The Borrower shall not, and shall not permit any Restricted
Subsidiary to, enter into any merger or consolidation, or liquidate, wind-up
or dissolve (or suffer any liquidation or dissolution), discontinue its
business or convey, lease, sell, transfer or otherwise dispose of, in one
transaction or series of transactions, all or any substantial part of its
business or Property, whether now or hereafter acquired, except (i) as
otherwise permitted under Section 8.02(a), (ii) that any Restricted
Subsidiary may merge into or convey, sell, lease or transfer all or
substantially all of its assets to, the Borrower or any other Restricted
Subsidiary and (iii) that nothing contained herein shall prohibit the
Borrower from dissolving or
liquidating any Subsidiary if in the reasonable opinion of the Borrower's
senior management such dissolution or liquidation has no reasonable
likelihood of having a Material Adverse Effect.
(b) The Borrower shall not and shall not permit ATSC or any
Restricted Subsidiary to, amend its Certificate of Incorpo ration or By-Laws
in a manner that is in any way adverse to the rights of the Agent and the
Lenders hereunder.
8.09. ERISA. The Borrower shall not, and shall not permit any of its
ERISA Affiliates to, do any of the following to the extent that such act or
failure to act would in the aggregate, after taking into account any other
such acts or failures to act, have a Material Adverse Effect: _
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(a) Engage, or permit any ERISA Affiliate to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of the IRC
for which a statutory or class exemption is not available or a private
exemption has not been previously obtained from the DOL;
(b) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the IRC), whether or not waived;
(c) terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan which would result in any liability of the Borrower or any ERISA
Affiliate under Title IV of ERISA;
(d) fail, or permit any ERISA Affiliate to fail, to make any
contribution or payment to any Multiemployer Plan which the Borrower or any
ERISA Affiliate may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto;
(e) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section 412 of the
IRC on or before the due date for such install ment or other payment; or
(f) amend, or permit any ERISA Affiliate to amend, a Plan
resulting in an increase in current liability for the plan year such that the
Borrower or any ERISA Affiliate is required to provide security to such Plan
under Section 401(a)(29) of the IRC.
8.10. Sales and Leasebacks. The Borrower shall not, and shall not
permit any Restricted Subsidiary to, become liable, directly or by way of
any Accommodation Obligation, with respect to any lease, whether an Operating
Lease or a Capital Lease, of any Property whether now owned or hereafter
acquired, (a) which the Borrower or any Restricted Subsidiary has sold or
transferred or is to sell or transfer to any other Person, or (b) which the
Borrower or any such Restricted Subsidiary intends to use for substantially
the same purposes as any other Property which has been or is to be sold or
transferred by that entity to any other Person in connec tion with such
lease; provided, that this Section 8.10 shall not prohibit any sale and
leaseback of the Distribution Center.
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8.11. Subordinated Indebtedness.
(a) No Change. The Borrower shall not, and shall not permit
ATSC to, amend, supplement or modify the terms of the Subordinated Notes (i)
which relate to subordination, interest (including options to pay in
kind), principal, tenor, extension of maturity, payments in respect of
redemptions, repurchases, sinking fund, principal, interest or other
payments, or the acceleration thereof or any rescission of acceleration or
(ii) except if necessary to comply with the provisions of the Trust
Indenture Act of 1939 or (iii) by making more restrictive, or adding,
covenants, breaches, defaults, or events of default, or (iv) by shortening
cure periods, or (v) if the benefits to the Borrower or the Agent or the
Lenders would thereby be in any material respect limited, restricted or
diminished.
(b) Notices. The Borrower shall deliver to the Agent (i) a copy
of each notice or other written communication delivered by or on behalf of
the Borrower to any trustee under the Subordinated Indenture, such delivery
to be made at the same time and by the same means as such notice or other
written communication is delivered to such Person, and (ii) a copy of each
notice or other written communication received by the Borrower from the
trustee under the Subordinated Indenture, such delivery to be made promptly
after such notice or other written communication is received by the Borrower.
8.12. Margin Regulations. No portion of the proceeds of any credit
extended under this Agreement shall be used in any manner which might cause
the extension of credit or the application of such proceeds to violate
Regulation G, Regulation T, Regulation U or Regulation X or any other
regulation of the Federal Reserve Board or to violate the Securities Exchange
Act or the Securities Act, in each case as in effect on the date or dates of
such Borrowing and such use of proceeds.
8.13. Change of Fiscal Year. The Borrower shall not change its Fiscal
Year.
8.14. Subsidiaries. (a) The Borrower shall not permit any
Unrestricted Subsidiary to enter into any Accommodation Obligation with
respect to any Indebtedness of ATSC, the Borrower or any Restricted
Subsidiary or to grant or permit to exist any Lien on its Property to secure
any such Indebtedness.
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(b) The Borrower shall not, and shall not permit any Restricted
Subsidiary to, create or otherwise become effective any consensual
encumbrance or restriction of any kind on the ability of any Restricted
Subsidiary to pay dividends or make any other distribution, in respect of its
stock or make any other Restricted Payment, pay any Indebtedness or other
Obligation owed to the Borrower or any other Restricted Subsidiary, make
loans or advances or other Investments in the Borrower or any other
Restricted Subsidiary or sell, transfer or otherwise convey any of its
Property to the Borrower or any other Restricted Subsidiary.
ARTICLE IX
Financial Covenants
The Borrower covenants and agrees that, on and after the
date hereof and so long as any Lender has any Commitment hereunder and until
payment in full of all the Obligations:
9.01. Minimum Net Worth. The Borrower shall not permit Net Worth as
determined at the end of any fiscal quarter (beginning with the fiscal
quarter ending on or about October 31, 1994) to be less than the Net Worth on
or about July 29, 1994 plus (a) 50% of Net Income after July 31, 1994
(without deducting from such cumulative amount the amount of any net loss
incurred in any Fiscal Year except extraordinary losses associated with the
redemption or repurchase of Indebtedness) plus (b) 100% of the net proceeds of
any equity issue or conversion of debt to equity subsequent to the Initial
Funding Date minus (c) any expenses related to the payments described in
Section 8.05(b)(iii) or Section 8.05(e).
9.02. Funded Debt to Total Capitalization Ratio. The Borrower shall
not permit the ratio of (a) (i) Funded Debt plus (ii) obligations in respect
of Capital Leases to (b) Total Capitalization as determined at the end of
each fiscal quarter (beginning with the fiscal quarter ending on October 31,
1994) to exceed .45 to 1.
9.03. Minimum Fixed Charge Coverage Ratio. The Borrower shall not
permit the Fixed Charge Coverage Ratio, as determined at the end of any
fiscal quarter for the preceding four fiscal quarters (or, if less, the
number of quarters elapsed since the Initial Funding Date) to be less than
the ratio set forth opposite the month in which such fiscal quarter ends:
Quarter Ended Minimum Ratio
-------------- ---------------
October 1994 1.00 to 1.00
January 1995 1.00 to 1.00
April 1995 1.00 to 1.00
July 1995 1.05 to 1.00
October 1995 1.05 to 1.00
January 1996 1.05 to 1.00
April 1996 1.10 to 1.00
July 1996 1.10 to 1.00
October 1996 1.10 to 1.00
January 1997 and thereafter 1.20 to 1.00
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ARTICLE X
Events of Default; Rights and Remedies
10.01. Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. (i) The Borrower shall
fail to pay when due any principal of any Loan or Reimbursement Obligation,
or
(ii) The Borrower shall fail to pay any interest on any Loan
or Reimbursement Obligation, or any fee or other amount payable under this
Agreement, within the earlier of (A) five Business Days after the same shall
become due in accordance with terms hereof or (B) in the event that a
principal or inter est payment shall be due under the terms of the
Subordinated Notes within such five Business Day period, one Business Day
prior to such payment date in respect of the Subordinated Notes or if the
payments are due on the same date, on such due date.
(b) Breach of Certain Covenants. The Borrower shall fail duly
and punctually to perform or observe (or cause ATSC to perform or observe)
any agreement, covenant or obligation binding on the Borrower under Article
VIII or Article IX or binding on the Borrower or ATSC under any section of
the Collateral Documents (which failure continues after the expiration of any
grace period specified under such section of the Collateral Documents).
(c) Breach of Representation or Warranty. Any
representation or warranty made or deemed made by the Borrower or ATSC to the
Agent, the Issuing Bank or any Lender herein or in any of the other Loan
Documents or in any written statement or certificate at any time given by the
Borrower or ATSC pursuant to any of the Loan Documents shall be false or
misleading in any material respect on the date as of which made or deemed
made.
(d) Other Defaults. Either the Borrower or ATSC shall fail duly
and punctually to perform or observe any agreement, covenant or obligation
arising under this Agreement (except those described in Sections 10.01(a),
(b) and (c)) or under any of the other Loan Documents, and such failure shall
continue for 20 days (or, in the case of Loan Documents other than this
Agreement, any longer period of grace expressly set forth therein).
(e) Default as to Other Indebtedness. ATSC, the Borrower or any
Restricted Subsidiary shall fail to make any payment when due (whether by
scheduled maturity, required prepay ment, acceleration, demand or otherwise)
on any Indebtedness of ATSC, the Borrower or any such Subsidiary, other than
an Obliga tion, if the aggregate amount of all such Indebtedness is
$5,000,000 or more; or any breach, default or event of default shall occur,
or any other event shall occur or condition shall exist, under any
instrument, agreement or indenture pertaining thereto, if the effect thereof
is to accelerate, or permit the holder(s) of such Indebtedness to accelerate,
the maturity of any such Indebtedness; or any such Indebtedness shall be
declared to be due and payable or required to be prepaid (other than by a
regularly scheduled required prepayment prior to the stated maturity
thereof), or the holder of any Lien (other than Liens upon property leased to
ATSC, the Borrower or such Restricted Subsidiary which were created by the
landlord prior to the commencement of the lease), in any amount, shall
commence foreclosure of such Lien upon property of ATSC, the Borrower or any
Restricted Subsidiary having a value in excess of $5,000,000 in the
aggregate.
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(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (i)
An involuntary case shall be commenced against the Borrower or ATSC or any
Restricted Subsidiary, and the petition shall not be dismissed within 60 days
after commencement of the case, or a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of the Borrower
or ATSC or any Restricted Subsidiary in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or hereinafter in
effect; or any other similar relief shall be granted under any applicable
federal, state or foreign law.
(ii) A decree or order of a court having jurisdic tion in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over the Borrower
or ATSC or any Restricted Subsidiary, or over all or a substantial part of
the property of the Borrower or ATSC or any Restricted Subsidiary, shall be
entered; or an interim receiver, trustee or other custodian of the Borrower
or ATSC or any Restricted Subsidiary, or of all or a substantial part of the
property of the Borrower or ATSC or any Restricted Subsidiary, shall be
appointed or a warrant of attachment, execution or similar process against
any substantial part of the property of the Borrower or ATSC or any
Restricted Subsidiary, shall be issued and any such event shall not be
stayed, vacated, dismissed, bonded or discharged within 60 days of entry,
appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver,
Etc. The Borrower or ATSC or any Restricted Subsidiary shall have an order
for relief entered with respect to it or commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking of
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; the Borrower or ATSC or any Restricted Subsidiary shall
make any assignment for the benefit of creditors or shall be unable or
generally fail, or admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors (or any committee thereof) of the
Borrower or ATSC or any Restricted Subsidiary adopts any resolution to
approve any of the foregoing.
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(h) Judgments and Attachments. Any money judgment (other than a
money judgment covered by insurance, but only if the insurer has admitted
liability with respect to such money judgment), writ or warrant of
attachment, or similar process involving in any case an amount in excess of
$5,000,000 shall be entered or filed against the Borrower or ATSC or any
Restricted Subsidiary or any of their Property, and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 60 days.
(i) Dissolution. Any order, judgment or decree shall be entered
against the Borrower or ATSC or any Restricted Subsidiary decreeing its
involuntary dissolution or split-up and such order shall remain undischarged
and unstayed for a period in excess of 60 days; or the Borrower or ATSC or
any Restricted Subsidiary shall otherwise dissolve or cease to exist except
as permitted by Section 8.08.
(j) Collateral Documents; Failure of Security or Subordination.
For any reason other than a release of Liens or the failure of the Agent and
the Lenders to take any action unilaterally available to them to maintain the
perfection of the Liens created in favor of the Agent pursuant to this
Agreement and the Collateral Documents, any Collateral Document ceases to be
in full force and effect or any Lien intended to be created thereby ceases to
be or is not valid and perfected; or any Lien in favor of the Agent
contemplated by this Agreement or any Collateral Document, or the
subordination provisions of the Subordinated Notes shall, at any time, be
invalidated or otherwise cease to be in full force and effect; or any such
Lien or any Obligation shall be subordinated or shall not have the priority
contemplated by this Agreement, the Collateral Documents or such
subordination provisions, for any reason.
(k) Change in Control. Any Change in Control shall occur.
(l) ERISA Liabilities. Any Termination Event occurs which will
or is reasonably likely to subject either the Borrower or an ERISA Affiliate
to a liability which will or is reasonably expected to have a Material
Adverse Effect.
An Event of Default shall be deemed "continuing" until cured or
waived in writing in accordance with Section 12.08.
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10.02. Rights and Remedies.
(a) Acceleration. Upon the occurrence of any Event of Default
described in Section 10.01(f) or 10.01(g) with respect
to the Borrower, the Commitments shall automatically and immediately
terminate and the unpaid principal amount of and any and all accrued interest
on the Loans and all Reimbursement Obligations shall automatically become
immediately due and payable, with all additional interest from time to time
accrued thereon and without presentment, demand, or protest or other
requirements of any kind (including valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and of acceleration),
all of which are hereby expressly waived by the Borrower, and the obligation
of each Lender to make any Loan hereunder and of the Issuing Bank to issue
any Letter of Credit shall thereupon terminate; and upon the occurrence and
during the continuance of any other Event of Default, the Agent shall at the
request, or may with the consent, of the Requisite Lenders, by written notice
to the Borrower, (i) declare that the Commitments are terminated, whereupon
the Commitments and the obligation of each Lender to make any Loan hereunder
and of the Issuing Bank to issue any Letter of Credit shall immediately
terminate, and (ii) declare the unpaid principal amount of and any and all
accrued and unpaid interest on the Loans and all Letter of Credit Obligations
to be, and the same shall thereupon be, immediately due and payable with all
additional interest from time to time accrued thereon and without
presentment, demand, or protest or other requirements of any kind (including
valuation and appraisement, diligence, presentment, notice of intent to
demand or accelerate and of acceleration), all of which are hereby expressly
waived by the Borrower.
(b) Deposit for Letters of Credit. In addition, upon demand by
the Agent or the Issuing Bank after the occurrence and during the continuance
of any Event of Default, the Borrower shall deposit with the Agent for the
benefit of the Issuing Bank with respect to each Letter of Credit then
outstanding, promptly upon the demand of the Agent, cash or Cash Equivalents
in an amount equal to the greatest amount for which such Letter of Credit may
be drawn. Such deposit shall be held by the Agent for the benefit of the
Issuing Bank as security for, and to provide for the payment of, the
Reimbursement Obligations. Pending the application of such deposit to
payment of the Reimbursement Obligations, the Agent may invest such deposit
in an open account or similar immediately available savings deposit and all
interest accrued thereon shall be held with such deposit as additional
security for the Reimbursement Obligations.
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(c) Rescission. If at any time after acceleration of the
maturity of the Loans, the Borrower shall pay all arrears of interest and all
payments on account of principal of the Loans and Reimbursement Obligations
which shall have become due otherwise than by acceleration (with interest on
principal and on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
nonpayment of principal of and accrued interest on the Loans due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
Section 12.08, then by written notice to the Borrower, the Requisite Lenders
may elect, in the sole discretion of such Requisite Lenders, to rescind and
annul the acceleration and its consequences and thereupon shall release any
deposit made pursuant to Section 10.02(b); provided, however, that no
rescission shall occur after the earlier of 30 days after the date of
acceleration or any Event of Default specified in paragraph (f) or (g) of
Section 10.01, whichever is earlier. No action pursuant to this paragraph
(c) shall affect any subsequent Event of Default or Potential Event of
Default or impair any right or remedy consequent thereon. The provisions of
the preceding sentence are intended merely to bind the Lenders to a decision
which may be made at the election of the Requisite
Lenders; they are not intended to benefit the Borrower and do not give the
Borrower the right to require the Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein are met.
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ARTICLE XI
The Agent
11.01. Appointment and Authorization. Each Lender and the Issuing Bank
hereby irrevocably appoints, designates and authorizes the Agent to take such
action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, nor shall the
Agent have or be deemed to have any fiduciary relationship with any Bank, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
11.02. Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
11.03. Liability of Agent. None of the Agent-Related Persons shall (a)
be liable for any action taken or omitted to be taken by any of them under or
in connection with this Agreement or any other Loan Document (except for its
own gross negligence or willful misconduct), or (b) be responsible in any
manner to any of the Lenders or the Issuing Bank for any recital, statement,
representation or warranty made by ATSC, Borrower or any Subsidiary or
Affiliate of ATSC or the Borrower, or any officer thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by
the Agent under or in connection with, this Agreement or any other Loan
Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure
of ATSC, the Borrower or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under
any obligation to any Lender or the Issuing Bank to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
Properties, books or records of ATSC, the Borrower or any of the Subsidiaries
or Affiliates of ATSC or the Borrower.
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11.04. Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by
the Agent. The Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless
it shall first receive such advice or concurrence of the Requisite Lenders
as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing
to take any such action. The Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the
Requisite Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders and the Issuing
Bank.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has executed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter either sent by the Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Lender.
11.05. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Potential Event of Default or
Event of Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Agent for the account
of the Lenders, unless the Agent shall have received written notice from a
Lender or the Borrower referring to this Agreement, describing such Potential
Event of Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Agent receives such a notice, the
Agent shall give notice thereof to the Lenders. The Agent shall take such
action with respect to such Potential Event of Default or Event of Default as
shall be requested by the Requisite Lenders; provided, however, that unless
and until the Agent shall have received any such request, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Potential Event of Default or Event of Default
as it shall deem advisable or in the best interest of the Lenders.
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11.06. Credit Decision. Each Lender expressly acknowledges that none of
the Agent-Related Persons has made any represen tation or warranty to it and
that no act by the Agent hereinafter taken, including any review of the
affairs of ATSC and the Borrower and its Subsidiaries shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without
reliance upon the Agent and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of ATSC and the Borrower and its Subsidiaries, and all
applicable bank regulatory laws relating to the transactions contemplated
thereby, and made its own decision to enter into this Agreement and extend
credit to the Borrower hereunder. Each Lender also represents that it will,
independently and without reliance upon the Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports
and other documents expressly herein required to be furnished
to the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into the
possession of any of the Agent-Related Persons.
11.07. Indemnification. Whether or not the transactions contemplated
hereby shall be consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so),
ratably from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind whatsoever which may at any time (including at any
time following the repayment of the Loans and the termination or resignation
of the related Agent) be imposed on, incurred by or asserted against any such
Person any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any such
Person under or in connection with any of the foregoing; provided, however,
that no Lender shall be liable for the payment to the Agent-Related Persons
of any portion of such liabilities, obligations, losses, damages, penalties,
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actions, judgments, suits, costs, expenses or disbursements resulting from
such Person's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender shall reimburse the Agent upon demand for its
ratable share of any costs or out-of-pocket expenses (including legal fees
and the allocated cost of staff counsel) incurred by the Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities
under, this Agreement, any other Loan Document, or any document contemplated
by or referred to herein to the extent that the Agent is not reimbursed for
such expenses by or on behalf of the Borrower. Without limiting the
generality of the foregoing, if the IRS or any other Governmental Authority
of the United States of America or other jurisdiction asserts a claim that
the Agent did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered, was
not properly executed, or because such Lender failed to notify the Agent of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to the
Agent under this Section 11.07, together with all costs and expenses and
attorneys' fees (including legal fees and the allocated cost of staff
counsel). The obligation of the Lenders in this Section shall survive the
payment of all Obligations hereunder.
11.08. Agent in Individual Capacity. Bank of America and its Affiliates
may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind
of banking, trust, financial advisory or other business with ATSC and the
Borrower and its Subsidiaries and Affiliates as though Bank of America were
not the Agent hereunder and without notice to or consent of the Lenders.
With respect to its Loans, Bank of America shall have the same rights and
powers under this Agreement as any other
Lender and may exercise the same as though it were not the Agent, and the
terms "Lender" and "Lenders" shall include Bank of America in its individual
capacity.
11.09. Successor Agent. The Agent may resign as Agent upon 30 days'
notice to the Lenders. If the Agent shall resign as Agent under this
Agreement, the Requisite Lenders shall appoint from among the Lenders a
successor agent for the Lenders which successor agent shall be approved by
the Borrower. If no successor agent is appointed prior to the effective date
of the resignation of the Agent, the Agent may appoint, after consulting with
the Lenders and the Borrower, a successor agent from among the Lenders. Upon
the acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article XI and Sections 12.03 and 12.04 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the
date which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Requisite Lenders appoint a successor agent as
provided for above except that the Agent shall remain as collateral agent for
the purpose of the Collateral Documents until a successor agent has been
appointed.
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11.10. The Arranger. The Arranger shall have no right, power,
obligation, liability, responsibility or duty under this Agreement other
than the right to receive the fee referred to in Section 2.03(a) and the
right to indemnity under Section 12.04.
11.11. Co-Agents. None of the Lenders identified on the facing page or
signature pages of this Agreement as a "Co-Agent" shall have any right or
power, obligations, liability, responsibility or duty under this Agreement
other than those applicable to all Lenders as such. Each Lender acknowledges
that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not
taking action hereunder.
11.12. Collateral Matters.
(a) Each Lender and the Issuing Bank authorizes and directs the
Agent to enter into the Collateral Documents for the benefit of the Lenders
and the Issuing Bank. Each Lender and the Issuing Bank agrees that any
action taken by the Agent or the Requisite Lenders in accordance with the
provisions of this Agreement or the Collateral Documents, and the exercise by
the Agent or the Requisite Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall
be authorized and binding upon all of the Lenders and the Issuing Bank.
(b) The Agent is hereby authorized on behalf of all of the
Lenders and the Issuing Bank, without the necessity of any notice to or
further consent from any Lender or the Issuing Bank from time to time prior
to an Event of Default, to take any action with respect to any Collateral or
Collateral Documents which may be necessary to perfect and maintain perfected
the
Liens upon the Collateral granted pursuant to the Collateral Documents.
(c) Each Lender and the Issuing Bank hereby irrevoca bly
authorize the Agent, at the option and in the discretion of the Agent, to
release any Lien granted to or held by the Agent upon any Collateral upon (i)
any sale of such Collateral permitted under this Agreement (or any waiver
hereof) and (ii) termination of the Commitments and payment and satisfaction
of all Loans, Reimbursement Obligations, other Letter of Credit Obligations
(whether or not due) and all other Obligations which have matured and which
the Agent has been notified in writing are then due and payable.
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11.13. Relations Among Lenders.
(a) Each Lender agrees that it will not take any action, nor
institute any actions or proceedings, against the Borrower or any other
obligor hereunder or any other Loan Document or with respect to any
Collateral, without the prior written consent of the Requisite Lenders.
(b) The Lenders are not partners or co-venturers, and no Lender
shall be liable for the acts or omissions of, or (except as otherwise set
forth herein in case of the Agent) authorized to act for, any other Lender.
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ARTICLE XII
Miscellaneous
12.01. Assignments and Participations.
(a) At any time after the Initial Funding Date, each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its
Commitment, Loans or interest in the Letters of Credit); provided, that (i)
each such assignment shall be of a constant, and not a varying, percentage of
the assigning Lender's rights and obligations under this Agreement and the
assignment shall cover the same percentage of such Lender's Commitment, Loans
and Letter of Credit Obligations, (ii) unless the Agent and the Borrower
otherwise consent, the aggregate amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall
in no event be less than $10,000,000 and shall be an integral multiple of
$2,000,000 (unless the assigning Lender's Commitment is less than
$10,000,000, in which case the assignment may be in the amount of such
Commitment) provided that assignments between Lenders shall have no minimum
amount, (iii) the Borrower shall consent (which consent shall not be
unreasonably withheld) and the Agent and the Issuing Bank shall consent to
such assignment and (iv) the parties to each such assignment shall execute
and deliver to the Agent an Assignment and Acceptance, together with
processing and recordation fee of $3,000. From and after the effective date
specified in each Assignment and Acceptance, (A) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder as fully as
if such assignee had been named as a Lender in accordance with the terms of
this Agreement and (B) the Lender assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to
such Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement.
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) the
assignment made under such Assignment and Acceptance is made without recourse
and, other than as provided in such Assignment and Acceptance, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document or any other instrument or document
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furnished pursuant hereto; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under any Loan Document or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements delivered pursuant to Article VI and such other Loan Documents and
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement; (v)
such assignee appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under this Agreement and the other
Loan Documents as are delegated to the Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender; and (vii) such an assignee is an Eligible
Assignee.
(c) The Agent shall maintain at its address referred to on the
signature pages hereof a copy of each Assignment and Acceptance delivered to
and accepted by it and shall record in the Agent's Loan Account the names and
addresses of each Lender and the Commitment of, and principal amount of the
Loans owing to, such Lender from time to time. The Borrower, the Agent and
the Lenders may treat each Person whose name is recorded in the Loan Account
as a Lender hereunder for all purposes of this Agreement.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender, the Agent shall, if such Assign ment and Acceptance has
been properly completed and is in substan tially the form of Exhibit 12.01
and if the conditions for the assignment referred to in the Assignment and
Acceptance set forth in Section 12.01(a) have been met, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in
the Agent's Loan Account and (iii) give prompt notice thereof to the Borrower
and the other Lenders.
(e) Each Lender may sell participations to one or more banks or
other entities as to all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment, the Loans owing
to it, the Letter of Credit Obligations); provided, that (i) such Lender's
obligations under
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this Agreement (including its Commitment) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the Borrower, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
with regard to any and all payments to be made under this Agreement, (iv) the
holder of any such participation shall not be entitled to voting rights under
this Agreement; provided, however, that the participation agreement between a
Lender and any of its participants may provide that such Lender will obtain
the approval of such participant prior to any amendment or waiver of any
provisions of this Agreement which would (A) extend the Final Maturity Date,
(B) reduce the interest rate or any fees hereunder, or (C) increase the
Commitment of the Lender granting the participation if such increase affects
such participant, and (v) the sale of any such participations which require
the Borrower to file a registration statement with the Commission or under
the securities regulation laws of any state shall not be permitted.
(f) The holder of any participation shall be entitled to the
benefits of Sections 2.02(f), 2.07(d), 2.08 and 2.09 as though it were also a
Lender hereunder; provided that no participant shall be entitled to receive
any payment or compensa tion in excess of that to which such participant's
selling Lender would have been entitled with respect to the amount of the
participation if such Lender had not sold such participation.
(g) Each Lender agrees to take normal and reasonable precautions
and exercise due care to maintain the confidentiality of all information
identified as "confidential" by the Borrower and provided to it by ATSC or
the Borrower or any Subsidiary of the Borrower, or by the Agent on ATSC's or
the Borrower's or such Subsidiary's behalf, in connection with this Agreement
or any other Loan Document, and neither it nor any of its Affiliates shall
use any such information for any purpose or in any manner other than pursuant
to the terms contemplated by this Agreement; except to the extent such
information (i) was or becomes generally available to the public other than
as a result of a disclosure by such Lender, or (ii) was or becomes available
on a non-confidential basis from a source other than the Borrower, provided
such source is not bound by a confidentiality agreement with the Borrower
known to such Lender; provided further, however, that any Lender may disclose
such information (A) at the request or pursuant to any requirement of any
Governmental Authority to which such Lender is subject or in connection with
an examination of such Lender by any such authority; (B) pursuant to subpoena
or other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent,
any Lender or their respective Affiliates may be party, (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder
or under any other Loan Document, and (F) to such Lender's independent
auditors and other professional advisors which are required to keep such
information confidential. Notwithstanding the foregoing, the Borrower
authorizes each Lender to disclose to any participant or assignee and to any
prospective participant or assignee, such financial and other information in
such Lender's possession concerning ATSC or the Borrower or its Subsidiaries
which has been delivered to Agent or the Lenders pursuant to this Agreement
or which has been delivered to the Agent or the Lenders by the Borrower in
connection with the Lenders' credit evaluation of the Borrower prior to
entering into this Agreement; provided that, unless otherwise agreed by the
Borrower, such participant
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or assignee agrees in writing to such Lender to keep such information
confidential to the same extent required of the Lenders hereunder.
12.02. Assignments to Federal Reserve Banks. Nothing herein shall
prohibit any Lender from pledging or assigning all or any portion of its
Loans to any Federal Reserve Bank in accordance with applicable law. In
order to facilitate such pledge or assignment, the Borrower hereby agrees
that, upon request of any Lender at any time and from time to time after the
Borrower has made its initial borrowing hereunder, the Borrower shall provide
to such Lender, at the Borrower's own expense, a promissory note evidencing
the Loans owing to such Lender.
12.03. Expenses.
(a) Generally. Whether or not any Funding Date shall have
occurred, the Borrower agrees upon demand to pay, or reimburse the Agent for,
all the Agent's and any of its Affiliates' costs and expenses of every type
and nature (including the reasonable fees, expenses and disbursements of
counsel to the Agent and each Co-Agent subject to the limitations set forth
in the Fee Letter, including the allocated cost of staff counsel and other
legal, travel, search and filing fees and expenses) and all fees, taxes
(except income and franchise taxes), assessments and duties incurred by the
Agent or its Affiliates in connection with (i) the negotiation, preparation
and execution of this Agreement (including the satisfaction or attempted
satisfaction of any of the conditions set forth in Article IV), the
Collateral Documents and the other Loan Documents and the making of the Loans
hereunder; (ii) the adminis tration of this Agreement, the Loan Documents,
the Loans and the Collateral; and (iii) the protection, collection or
enforcement of any of the Obligations or the Collateral.
(b) After Default. The Borrower further agrees to pay, or reimburse the
Agent, the Issuing Bank and the Lenders for, all out-of-pocket costs and
expenses, including the reasonable fees and disbursements of counsel to the
Agent, the Lenders and the Issuing Bank (including the allocated cost of
staff counsel) and also including all costs of settlement after the
occurrence of an Event of Default, (i) in enforcing any Obligation or in
foreclosing against the Collateral or exercising or enforcing any other right
or remedy available by reason of such Event of Default; (ii) in connection
with any refinancing or restructuring of the credit arrangements provided
under this Agreement in the nature of a "work-out" or in any insolvency or
bankruptcy proceeding, including any costs related to the hiring of
consultants or experts; (iii) in commencing, defending or intervening in any
litigation or in filing a petition, complaint, answer, motion or other
pleadings in any legal proceeding relating to the Borrower and related to or
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arising out of the transactions contemplated hereby or by any of the Loan
Documents; (iv) in taking any other action in or with respect to any suit or
proceeding (whether in bankruptcy or otherwise); (v) in protecting,
preserving, collecting, leasing, selling, taking possession of, or
liquidating any of the Collateral; or (vi) attempting to enforce or enforcing
any security interest in any of the Collateral or any other rights under the
Collateral Documents. Any payments made by the Borrower or received by the
Agent and applied as reimbursements for costs and expenses under this Section
12.03(b) shall be apportioned among the Agent, the Issuing Bank and the
Lenders in the order of priority set forth in Section 2.05(b).
12.04. Indemnity. The Borrower further agrees to defend,
protect, indemnify, and hold harmless the Agent, the Arranger, the Issuing
Bank and each and all of the Lenders, each of their respective Affiliates and
each of the respective officers, directors, employees and agents of each of
the foregoing (collec tively, the "Indemnified Parties") from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including the fees and disbursements of counsel (including
the allocated cost of staff counsel) for such Indemnified Parties in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnified Parties shall be designated a party thereto),
imposed on, incurred by, or asserted against such Indemnified Parties in any
manner relating to or arising out of the Commitment Letter, the transactions
contemplated hereby (whether or not consummated), the capitalization of the
Borrower, the Subordinated Notes, this Agreement, the Collateral Documents or
any of the other Loan Documents, the Commitments, the making of and
participation in the Loans or the Letters of Credit, or the use or intended
use of the Letters of Credit and the proceeds of the Loans hereunder
(collectively, the "Indemnified Matters"); provided, that the Borrower shall
have no obligation to an Indemnified Party hereunder with respect to (a)
matters for which such Indemnified Party has been compensated pursuant to or
for which an exemption is provided in Section 2.02(f), 2.07(d) or any other
provision of this Agreement and (b) Indemnified Matters caused by or
resulting from the gross negligence or willful misconduct of that Indemnified
Party, as determined by a final judgment of a court of competent
jurisdiction. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it
is violative of any law or public policy, the Borrower shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable
law, to the payment and satisfaction of all Indemnified Matters incurred by
the Indemnified Parties.
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12.05. Change in Accounting Principles. Except as otherwise provided
herein, if any changes in accounting principles from those used by the
Borrower in the preparation of the financial statements dated as of April 30,
1994 are hereafter required or permitted by the rules, regulations,
pronouncements and opinions of the Financial Accounting Standards Board of
the American Institute of Certified Public Accountants (or successors thereto
or agencies with similar functions) and are adopted by the Borrower with the
agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, standards or terms found in Articles VIII and IX hereof, the
parties hereto agree to enter into negotiations in order to amend such
provisions so as to reflect equitably such changes with the desired result
that the criteria for evaluating the Borrower's financial condition shall be
the same after such changes as if such changes had not been made; provided,
however, that no change in generally accepted accounting principles that
would affect the method of calculation of any of the financial covenants,
standards or terms shall be given effect in such calculations until such
provisions are amended, in a manner satisfactory to the Requisite Lenders, to
so reflect such change in accounting principles.
12.06. Setoff. In addition to any Liens granted to the Agent, the
Issuing Bank or the Lenders and any rights now or hereafter granted under
applicable law and not by way of limitation of any such Lien or rights, upon
the occurrence and during the continuance of any Event of Default, each
Lender and the Issuing Bank is hereby authorized by the Borrower at any time
or from time to time, without notice to the Borrower, or to any
other Person (any such notice being hereby expressly waived) to set off and
to appropriate and to apply any and all deposits (general or special,
including indebtedness evidenced by certificates of deposit, whether matured
or unmatured but not including trust accounts) and any other Indebtedness at
any time held or owing by that Lender or the Issuing Bank to or for the
credit or the account of the Borrower against and on account of the
Obligations of the Borrower to that Lender or the Issuing Bank including, but
not limited to, all Loans and Letter of Credit Obligations and all claims of
any nature or description arising out of or connected with this Agreement or
any of the other Loan Documents, irrespective of whether or not (a) that
Lender or the Issuing Bank shall have made any demand hereunder or (b) the
Agent shall have declared the principal of and interest on the Loans and
other amounts due hereunder to be due and payable as permitted by Article X
and although said obligations and liabilities, or any of them, may be
contingent or unmatured. Each Lender and the Issuing Bank agrees that it
shall not, without the express consent of the Agent, and that it shall, to
the extent it is lawfully entitled to do so during the continuation of an
Event of Default, upon the request of the Agent, exercise its set-off rights
hereunder against any accounts of the Borrower now or hereafter maintained
with such Lender or the Issuing Bank.
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12.07. Ratable Sharing. Subject to Section 2.05(b), the Lenders agree
among themselves that (a) with respect to all amounts received by them which
are applicable to the payment of the Obligations (excluding the fees
described or referred to in Section 2.03), equitable adjustment will be made
so that, in effect, all such amounts will be shared among them ratably in
accordance with their Pro Rata Shares, whether received by voluntary payment,
by the exercise of the right of set-off or banker's lien, by counterclaim or
cross action or by the enforce ment of any or all of the Obligations
(excluding the fees described or referred to in Section 2.03) or the
Collateral, (b) if any of them shall by voluntary payment or by the exercise
of any right of counterclaim, setoff, banker's lien or otherwise, receive
payment of a proportion of the aggregate amount of the Obligations held by it
which is greater than its Pro Rata Share of the payments on account of the
Obligations (excluding the fees described or referred to in Section 2.03),
the one receiving such excess payment shall purchase, without recourse or
warranty, an undivided interest and participation (which it shall be deemed
to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries with respect to
such Obligations shall be applied ratably in accordance with their Pro Rata
Shares; provided, however, that if all or part of such excess payment
received by the purchasing party is thereafter recovered from it, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to that party to the extent necessary to
adjust for such recovery, but without interest except to the extent the
purchasing party is required to pay interest in connection with such
recovery. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 12.07 may, to the fullest extent
permitted by law, exercise all its rights of payment (including, subject to
Section 12.06, the right of setoff) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the
amount of such participation.
12.08. Amendments and Waivers. (a) No amendment or modification of any
provision of this Agreement shall be effective without the written agreement
of the Requisite Lenders and the Borrower, and no termination or waiver of
any provision
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of this Agreement, or consent to any departure by the Borrower therefrom,
shall in any event be effective without the written concurrence of the
Requisite Lenders, which the Requisite Lenders shall have the right to grant
or withhold at their sole discretion; provided, however, that no amendment,
modification or waiver shall, unless evidenced by a writing signed by or on
behalf of all the Lenders, do any of the following: (i) increase the
Commitment of any Lender (other than by assignment); (ii) reduce the
principal of, or rate of interest on, the Loans or the amount of any fees
payable hereunder; (iii) extend the Final Maturity Date; (iv) release the
ATSC Guaranty or release all or substantially all of the shares pledged
pursuant to the Borrower Pledge Agreement and the ATSC Pledge Agreement
(other than as specifically provided hereunder); (v) change the definitions
of "Pro Rata Shares" or "Requisite Lenders"; or (vi) amend this Section
12.08(a).
(b) No amendment, modification, termination, or waiver of any
provision of this Agreement or any Loan Documents shall, unless in writing
and signed by the Agent in addition to the Requisite Lenders or Lenders, as
the case may be, affect the rights or duties of the Agent under this
Agreement or any Loan Documents. The Agent may, but shall have no obligation
to, with the concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of such Lender.
(c) Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.
(d) Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 12.08 shall be binding on each
assignee, transferee, recipient of a Lender's Commitment or Loans, each
future assignee, transferee, recipient of a Lender's Commitment or Loans and,
if signed by the Borrower, on the Borrower.
12.09. Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant
shall not avoid the occurrence of an Event of Default or Potential Event of
Default if such action is taken or condition exists.
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12.10. Notices.
(a) Unless otherwise specifically provided herein, all notices,
requests and other communications provided for hereunder shall be in writing
(including by facsimile transmission, provided that any matter transmitted by
the Borrower by facsimile shall be immediately confirmed by a telephone call
to the recipient at the number specified in Schedule 1.01(a)) and mailed,
faxed or delivered: if to the Borrower or the Agent, to the address or
facsimile number specified on the signature pages hereof and, if to any
Lender, to the address or facsimile number specified for notices in Schedule
1.01(a) or, as to the Borrower or the Agent, to such other address as shall
be designated by such party in a written notice to the other parties, and as
to each other party, at such other address as shall be designated by such
party in a written notice to the Borrower and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight (next-day) delivery or faxed, be effective on the
next day or when transmitted by facsimile machine, respectively; if mailed,
be effective upon the third Business Day after the date deposited into the
U.S. mail, or if delivered, be effective upon delivery; except that notices
pursuant to Article II or XI shall not be effective until actually received
by the Agent.
(c) Any notice, request or communication permitted to be given
by telephone shall be confirmed immediately in writing, including by
facsimile.
(d) The Borrower acknowledges and agrees that any agreement of
the Agent and the Lenders to receive certain notices by telephone and
facsimile is solely for the convenience and at the request of the Borrower.
The Agent and the Lenders shall be entitled to rely on the authority of any
Person purporting to be a Person authorized by the Borrower to give such
notice and the Agent and the Lenders shall not have any liability to the
Borrower or any other Person on account of any action taken or not taken by
the Agent or the Lenders in reliance upon such telephonic or facsimile
notice. The obligation of the Borrower to repay the Loans shall not be
affected in any way or to any extent by any failure by the Agent and the
Lenders to receive written confirmation of any telephonic or facsimile notice
or the receipt by the Agent and the Lenders of a confirmation which is at
variance with the terms understood by the Agent and the Lenders to be
contained in the telephonic or facsimile notice.
12.11. Survival of Warranties and Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the other Loan Documents and the making of the
Loans hereunder.
12.12. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of the Agent, the Issuing Bank or any Lender in
the exercise of any power, right or privilege under any of the Loan Documents
shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise
of any such power, right or privilege preclude any other or further exercise
thereof or of any other right, power or privilege. All rights and remedies
existing under the Loan Documents are cumulative to and not exclusive of any
rights or remedies otherwise available.
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12.13. Marshalling; Recourse to Security; Payments Set Aside. Neither
any Lender nor the Agent shall be under any obligation to marshal any assets
in favor of the Borrower or any other party or against or in payment of any
or all of the Obliga tions. Recourse to security shall not be required at
any time. To the extent that the Borrower makes a payment or payments to the
Agent or the Lenders, or the Agent or the Lenders enforce their security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable
cause, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, right and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
12.14. Severability. In case any provision in or obligation under this
Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
12.15. Headings. Article and Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive
effect.
12.16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
12.17. Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto
and the successors and permitted assigns of the Lenders. The terms and
provisions of this Agreement shall inure to the benefit of any assignee or
transferee of the Loans and the Commitments of any Lender (to the extent such
assignment or transfer is effected in accordance with Section 12.01), and in
the event of such transfer or assignment, the rights and privileges herein
conferred upon Lenders shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. The
Borrower's rights or any interest therein hereunder, and the Borrower's
duties and Obligations hereunder, may not be assigned without the written
consent of all the Lenders.
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12.18. Consent to Jurisdiction and Service of Process; Waiver of Jury
Trial. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE BORROWER WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER ACCEPTS, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS FROM WHICH NO APPEAL HAS BEEN
TAKEN OR IS AVAILABLE. THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO ITS RESPECTIVE NOTICE ADDRESSES SPECIFIED ON THE SIGNATURE PAGES
HEREOF, SUCH SERVICE TO BECOME EFFECTIVE TEN DAYS AFTER SUCH MAILING. EACH
OF THE BORROWER, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES (A) TRIAL BY
JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, AND (B) ANY OBJECTION (INCLUDING ANY OBJECTION OF THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH
ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY LENDER TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
12.19. Counterparts; Effectiveness; Inconsistencies. (a) This Agreement
and any amendments, waivers, consents, or supplements may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all
such counterparts together shall constitute but one and the same instrument.
(b) This Agreement shall become effective against each of the
Borrower, each Lender, the Co-Agents and the Agent hereto on the date (the
"Effective Date") when all of such parties have duly executed and delivered
this Agreement to each other (delivery by the Borrower to the Lenders and by
any Lender to the Borrower and any other Lender being deemed to have been
made by delivery to the Agent).
(c) This Agreement and each of the other Loan Documents shall be
construed to the extent reasonable to be consistent one with the other, but
to the extent that the terms and conditions of this Agreement are actually
inconsistent with the terms and conditions of any other Loan Document, this
Agreement shall govern.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed on the
date set forth above.
ANNTAYLOR, INC., as Borrower
By: Walter J. Parks
-----------------------------
Title: VP Finance
--------------------------
Address for Notices:
142 West 57th Street
New York, New York 10019
Attention: Jocelyn Barandiaran,
Vice President/Secretary
and General Counsel
With a copy to:
AnnTaylor, Inc.
414 Chapel Street
New Haven, CT 06511
Attention: Walter J. Parks
Vice President - Finance
Facsimile No.: (203) 865-2756
Telephone No.: (203) 865-0811
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: Dietmar Schiel
-----------------------
Title: Vice President
--------------------
Address for Notices:
Global Agency #5596
1455 Market Street, 12th Floor
San Francisco, California 94103
Attention: Dietmar Schiel
Facsimile No.: (415) 622-4894
Telephone No.: (415) 953-8501
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<PAGE>
Address for Payments:
ABA #121-000-358SF
1850 Gateway Boulevard
Concord, California 94502
Credit to Account Number:
Reference: AnnTaylor
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Co-Agent
By: Dietmar Schiel
-----------------------
Title: Vice President
--------------------
FLEET BANK, NATIONAL ASSOCIATION,
as Co-Agent
By: William H. Creaser
-----------------------
Title: Vice President
--------------------
LENDERS
-------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: Laurie Ann Marshall
-----------------------
Title: Vice President
--------------------
FLEET BANK, NATIONAL ASSOC.
By: William H. Creaser
-----------------------
Title: Vice President
--------------------
LTCB TRUST COMPANY
By: Yoshihide Nakagawa
-----------------------
Title: Vice President
--------------------
PNC BANK, NATIONAL ASSOCIATION
By: Mark Williams
-----------------------
Title: Vice President
--------------------
SHAWMUT BANK, N.A.
By: V. Luzzell
-----------------------
Title: Vice President
--------------------
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<PAGE>
EXHIBIT 2.01
FORM OF NOTICE OF BORROWING
To: Bank of America National Trust and Savings Association in its
capacity as Agent (the "Agent") under that certain Credit
Agreement dated as of July 29, 1994 (the "Credit Agreement"),
by and among AnnTaylor, Inc. (the "Borrower"), the financial
institutions from time to time party thereto as lenders (the
"Lenders"), BA Securities, Inc., as Arranger, Bank of America
National Trust and Savings Association and Fleet Bank, National
Association, as Co-Agents and the Agent.
Pursuant to Section 2.01(b) of the Credit Agreement, this Notice of
Borrowing (the "Notice") represents the Borrower's request to borrow on
___________________, 199__ (the "Funding Date") from the Lenders on a pro
rata basis an aggregate principal amount of $_________ as [Base Rate Loans]
[Eurodollar Rate Loans with an Interest Period of________ months]. Proceeds
of such Loans are to be disbursed on the Funding Date in immediately
available funds [to the Borrower's account at Bank of America National Trust
and Savings Association, ABA No._______, Account No._______________, Contact
Person:____________________] [other payment instructions].
The Borrower hereby certifies that (i) its representation
and warranties as set forth in Section 5.02 of the Credit Agreement and in
any other Loan Document (other than representations and warranties which
expressly speak only as of a different date and other than for changes
permitted or contemplated by the Credit Agreement), shall be true and correct
in all material respects on and as of the Funding Date; and (ii) no Event of
Default or Potential Event of Default has occurred and is continuing or will
result from the proposed Borrowing.
Unless otherwise defined herein, terms defined in the Credit Agreement
shall have the same meanings in this Notice.
Dated: _______________ 199_.
ANNTAYLOR, INC.
By: ____________________________
Title:__________________________
<PAGE>
EXHIBIT 2.02
FORM OF NOTICE OF CONVERSION/CONTINUATION
To: Bank of America National Trust and Savings Association in its
capacity as Agent (the "Agent") under that certain Credit
Agreement dated as of July 29, 1994 (the "Credit Agreement"),
by and among AnnTaylor, Inc. (the "Borrower"), the financial
institutions from time to time party thereto as lenders (the
"Lenders"), BA Securities, Inc., as Arranger, Bank of America
National Trust and Savings Association and Fleet Bank, National
Association, as Co-Agents and the Agent.
Pursuant to Section 2.02(c) of the Credit Agreement, this Notice of
Conversion/Continuation (the "Notice") represents the Borrower's irrevocable
election to [insert one or more of the following]:
1 Convert $_________ in aggregate principal amount of Base
Rate Loans to Eurodollar Rate Loans , on __________, 199_.
The initial Interest Period for such Eurodollar Rate Loans is
requested to be a _____ month period.
2 Convert $_____________ in aggregate principal amount
of Eurodollar Rate Loans with a current Interest Period
ending __________, 199_ to Base Rate Loans on
__________________, 199_.
3 Continue as Eurodollar Rate Loans $______________ in
aggregate principal amount of Eurodollar Rate Loans
with a current Interest Period ending _____________, 199_.
The succeeding Interest Period is requested to be a
________________ (___) month period.
4 The Borrower hereby certifies that no Event of Default has
occurred and is continuing under the Credit Agreement or
will result from the proposed conversion/continuation.
Unless otherwise defined herein, terms defined in the Credit
Agreement shall have the same meanings in this Notice.
Dated: __________________ 199_.
ANNTAYLOR, INC.
By: ______________________
Title:______________________
1 Use if converting Base Rate Loans to Eurodollar Rate Loans.
2. Use if converting Eurodollar Rate Loans to Base Rate Loans.
3. Use if continuing Eurodollar Rate Loans.
4. Use if converting to our continuing Eurodollar Rate Loans.
<PAGE>
EXHIBIT 4.01(a)(iii)
FORM OF BORROWER PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as such agreement may be amended, supplemented or
otherwise modified from time to time, this "Agreement"), dated as of July 29,
1994, is made by ANNTAYLOR, INC. a Delaware corporation, with its principal
place of business located at 142 West 57th Street, New York, New York 10019
(the "Borrower"), in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, with an office located at 1455 Market Street, San Francisco,
California 94103, in its capacity as Agent under the Credit Agreement (as
defined below) (the "Agent").
R E C I T A L S:
The Borrower, the Agent, BA Securities, Inc., Bank of America National
Trust and Savings Association and Fleet Bank, National Association, as Co-
Agents and certain financial institutions currently and in the future to be
parties to the Credit Agreement (such financial institutions being
collectively the "Lenders") have entered into a certain Credit Agreement
dated as of July 29, 1994 (as such agreement may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"; the capitalized
terms not otherwise defined herein are being used herein as defined in the
Credit Agreement), which provides (i) for the Lenders to make the Loans and
the Issuing Bank to issue the Letters of Credit and (ii) that as a condition
precedent to the making of the Loans and the issuance of the Letters of
Credit, that the Borrower enter into this Agreement to secure its obligations
to the Agent under the Credit Agreement.
The Borrower is the legal and beneficial owner of the shares of capital
stock described in Schedule I hereto (the "Pledged Shares") and issued by the
Persons listed on such schedule as amended from time to time (the "Pledged
Companies") which Pledged Shares constitute all of the capital stock of such
Pledged Companies owned by the Borrower.
NOW, THEREFORE, in consideration of the above premises and in order to
induce the Lenders to make the Loans and the Issuing Bank to issue the
Letters of Credit under the Credit Agreement, the Borrower hereby agrees with
the Agent for its benefit, and for the benefit of the Lenders and the Issuing
Bank as follows:
Section 1. Grant of Security. To secure the prompt and complete
payment, observance and performance when due (whether at the stated maturity,
by acceleration or otherwise) of all the Obligations (as defined in the
Credit Agreement) and all other obligations of the Borrower under the Credit
Agreement, the Borrower hereby assigns and pledges to the Agent, and hereby
grants to the Agent, for its benefit and the benefit of the Lenders and the
Issuing Bank, a security interest in, all of the Borrower's right, title and
interest in and to the following, whether now owned or existing or hereafter
arising or acquired (collectively, the "Pledged Collateral"):
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<PAGE>
(a) all of the Pledged Shares;
(b) all additional shares of stock of the Pledged Companies from time
to time acquired by the Borrower in any manner and any other securities,
options or rights received by the Borrower pursuant to any reclassification,
reorganization, increase or reduction of capital or stock dividend or in
substitution of or in exchange for any of the
Pledged Shares so that all of the issued and outstanding capital stock of the
Pledged Companies owned by the Borrower will continue to be pledged to the
Agent;
(c) all shares of capital stock owned by the Borrower in any Persons
hereinafter created or acquired;
(d) the certificates representing the shares referred to in clauses
(a), (b) and (c) above; and
(e) all dividends, cash, instruments and other property and proceeds,
from time to time received, receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the shares
referred to in clauses (a), (b) and (c) above.
Section 2. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral are
simultaneously herewith being delivered to the Agent to be held by or at the
direction of the Agent pursuant hereto and are to be accompanied by duly
executed instruments of transfer or assignment, undated and in blank, or will
be delivered to the Agent upon delivery of a Pledge Agreement Supplement as
provided in Section 4(c). The Agent shall have the right, at any time after
the occurrence and during the continuance of an Event of Default in its
discretion and without notice to the Borrower, to transfer to or to register
in its name or any of its nominees any or all of the Pledged Collateral,
subject only to the revocable rights specified in Section 5(a) of this
Agreement and to applicable law. In addition, the Agent shall have the right
at any time after the occurrence and during the continuance of an Event of
Default to exchange certificates or instruments representing or evidencing
Pledged Collateral for certificates or instruments of smaller or larger
denominations.
Section 3. Representations and Warranties. The Borrower
represents and warrants as follows:
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<PAGE>
(a) The Pledged Shares issued by Subsidiaries of the Borrower (i) have
been duly authorized and validly issued; (ii) are fully paid and non-
assessable; and (iii) constitute all of the capital stock of the Subsidiaries
owned by the Borrower. There are no existing options, warrants, calls or
commitments of any character whatsoever relating to any of the Pledged Shares
issued by Subsidiaries of the Borrower.
(b) The Borrower is the sole record and beneficial owner of the Pledged
Collateral free and clear of any Lien except for the Lien created by this
Agreement.
(c) The pledge of the Pledged Shares pursuant to this Agreement will
create a valid and perfected first priority security interest in the Pledged
Collateral, securing the payment of the Obligations.
(d) No consent, authorization, approval, or other action by, and no
notice to or filing with, any Governmental Authority or regulatory body is
required for the exercise by the Agent of the voting or other rights provided
for in this Agreement or the remedies in respect of the Pledged Collateral
pursuant to this Agreement (except as may be required in connection with such
disposition by laws affecting the offering and sale of securities generally).
(e) There exist no voting restrictions on any of the Pledged Shares
issued by Subsidiaries of the Borrower.
The representations and warranties set forth in this Section 3 shall
survive the execution and delivery of this Agreement.
Section 4. Further Assurances; Supplements.
(a) The Borrower agrees that at any time and from time to time, at the
expense of the Borrower, the Borrower will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
(b) The Borrower will defend the title to the Pledged Collateral and
the Liens of the Agent thereon against the claim of any Person and, subject
to Section 15 of this Agreement, will maintain and preserve such Liens until
payment in full in cash of the Obligations and the termination of the
Commitments under the Credit Agreement.
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<PAGE>
(c) (i) The Borrower will, upon obtaining any additional shares or
securities of the Pledged Companies, pledge such additional shares or
securities so that at all times the Pledged Shares shall constitute all of
the Borrower's ownership of the capital stock of the Pledged Companies and
promptly (and in any event within ten Business Days) deliver to the Agent a
Pledge Agreement Supplement, duly executed by the Borrower, in substantially
the form of Schedule II hereto (a "Pledge Agreement Supplement"), identifying
the additional shares which are pledged pursuant to Section 1(b) of this
Agreement.
(ii) The Borrower will, upon receiving any shares of capital stock of
any Persons, pledge the shares or securities of such Persons so that at all
times the Pledged Shares shall constitute all of the Borrower's ownership of
the capital stock in such Persons and promptly (and in any event within 10
Business Days) deliver to the Agent a Pledge Agreement Supplement, duly
executed by the Borrower, in substantially the form of Schedule II hereto (a
"Pledge Agreement Supplement") identifying such Persons, and shares of
capital stock of such Persons which are pledged pursuant to Section 1(c) of
this Agreement.
(d) The Borrower hereby authorizes the Agent to attach each Pledge
Agreement Supplement to this Pledge Agreement and agrees that all shares
listed on any Pledge Agreement Supplement delivered to the Agent shall for
all purposes hereunder constitute Pledged Collateral.
Section 5. Voting Rights; Dividends; Etc.
(a) So as long as no Event of Default shall have occurred and be
continuing (and, in the case of Section 5(b)(i) below, until written notice
from the Agent to the Borrower which notice shall not be required should an
Event of Default occur under Sections 10.01(f) or (g) of the Credit
Agreement):
(i) The Borrower shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent with the
terms of this Agreement or the Credit Agreement.
(ii) The Borrower shall be entitled to receive and retain any and all
dividends and other distributions paid in respect of the Pledged Collateral.
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<PAGE>
(b) Upon the occurrence and during the continuation of an Event of
Default:
(i) All rights of the Borrower to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant
to Section 5(a)(i) above shall cease upon written notice from the Agent to
the Borrower, and all such rights shall thereupon become vested in the Agent
who shall thereupon have the sole right to exercise such voting and other
consensual rights.
(ii) All rights of the Borrower to receive the dividends which it would
otherwise be authorized to receive and retain pursuant to Section 5(a)(ii)
above shall cease, and all such rights shall thereupon become vested in the
Agent who shall thereupon have the sole right to receive and hold as Pledged
Collateral such dividends.
(iii) All dividends which are received by the Borrower contrary to the
provisions of paragraph (ii) of this Section 5(b) shall be received in trust
for the benefit of the Agent, shall be segregated from other funds of the
Borrower and shall be forthwith paid over to the Agent as Pledged Collateral
in the same form as so received (with any necessary endorsement).
(c) In order to permit the Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 5(b)(i)
above, and to receive all dividends and distributions which it may be
entitled to receive under Section 5(b)(ii) above, the Borrower shall, if
necessary, upon written notice of the Agent, from time to time execute and
deliver to the Agent appropriate proxies, dividend payment orders and other
instruments as the Agent may reasonably request.
Section 6. Transfers and Other Liens; Additional Shares.
(a) The Borrower agrees that except as permitted by the Credit
Agreement it will not (i) sell, assign or transfer or otherwise dispose of
any of the Pledged Collateral, or (ii) grant any option or warrant with
respect to, any of the Pledged Collateral issued by Subsidiaries of the
Borrower or (iii) create or permit to exist any Lien, security interest, or
other charge or encumbrance upon or with respect to any of the Pledged
Collateral, except for the Lien in favor of the Agent under this Agreement.
(b) The Borrower agrees that it will cause the Subsidiaries not to
issue any stock or other securities in addition to or in substitution for the
Pledged Collateral except to the Borrower.
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<PAGE>
Section 7. Agent Appointed Attorney-in-Fact. The Borrower hereby
irrevocably constitutes and appoints the Agent as the
Borrower's true and lawful attorney-in-fact, with full authority in the place
and stead of the Borrower and in the name of the Borrower or otherwise, from
time to time upon the occurrence and during the continuation of any Event of
Default, in the Agent's discretion for the purpose of carrying out the terms
of this Agreement to take any action and to execute any document or
instrument which the Agent may deem necessary or advisable, including,
without limitation, to receive, endorse and collect all instruments made
payable to the Borrower representing any dividend, interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same.
Section 8. Agent May Perform. If the Borrower fails to perform any
agreement contained herein, the Agent may, but shall not be obligated to,
after notice to the Borrower itself perform, or cause performance of, such
agreement, and the expenses of the Agent incurred in connection therewith
shall constitute Obligations hereunder.
Section 9. Reasonable Care. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Agent accords its own property, it
being understood that the Agent shall not have responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral,
whether or not the Agent has or is deemed to have knowledge of such matters,
or (b) taking any necessary steps to preserve rights against any parties with
respect to any Pledged Collateral.
Section 10. Remedies upon Default. If any Event of Default
shall have occurred and be continuing:
(a) (i) The Agent may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party in default
under the Uniform Commercial Code and the Agent may also, without notice
except as specified below, sell the Pledged Collateral or any part thereof in
one or more parcels at a public or private sale, at any exchange, broker's
board or at any of the Agent's offices or elsewhere, for cash, on credit or
for future delivery, and upon such other terms as the Agent may deem
commercially reasonable.
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<PAGE>
(ii) The Borrower agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to the Borrower of the time and
place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it
was so adjourned. The Borrower hereby waives any claims against the Agent
arising by reason of the fact that the price at which any Pledged Collateral
may have been sold at such a private sale was less than the price which might
have been obtained at a public sale, even if the Agent
accepts the first offer received and does not offer such Pledged Collateral
to more than one offeree.
(b) If, at any time when Agent in its sole discretion determines,
following the occurrence and during the continuation of an Event of Default,
that, in connection with any actual or contemplated exercise of its rights to
sell the whole or any part of the Pledged Collateral issued by Subsidiaries
of the Borrower hereunder, it is necessary or advisable to effect a public
registration of all or part of the Pledged Collateral issued by Subsidiaries
of the Borrower pursuant to the Securities Act, the Borrower shall, in an
expeditious manner, cause each of the Subsidiaries to:
(i) prepare and file with the Commission a registration statement
with respect to such Pledged Collateral and use its best efforts to cause
such registration statement to become and remain effective;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Act with respect to the
sale or other disposition of such Pledged Collateral covered by such
registration statement whenever the Agent shall desire to sell or otherwise
dispose of such Pledged Collateral;
(iii) furnish to the Agent such numbers of copies of a prospectus
and a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as the Agent may request in order to
facilitate the public sale or other disposition of such Pledged Collateral by
the Agent;
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<PAGE>
(iv) use its best efforts to register or qualify such Pledged
Collateral covered by such registration statement under such other securities
or blue sky laws of such jurisdictions within the United States of America as
the Agent shall request, and do such other reasonable acts and things as may
be required of it to enable the Agent to consummate the public sale or other
disposition in such jurisdictions of such Pledged Collateral by the Agent;
and
(v) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable an earnings statement which shall
satisfy the provisions of Section 11(a) of the Securities Act.
(c) The Borrower acknowledges the impossibility of ascertaining
the amount of damages which would be suffered by the Agent and the Lenders by
reason of the failure by the Borrower to perform any of the covenants
contained in this Section 10 and, consequently, agrees that, if the Borrower
shall fail to perform any of such covenants, the Agent shall be entitled to
specific performance.
(d) The Borrower acknowledges that notwithstanding the legal
availability of a private sale or a sale subject to the restrictions
described above in paragraph (a), the Agent may, in its discretion, elect to
register any or all the Pledged Collateral under the Securities Act (or
any applicable state securities law) in accordance with its rights
hereunder. The Borrower, however, recognizes that the Agent may be
unable to effect a public sale of any or all the Pledged Collateral and
may be compelled to resort to one or more private sales thereof. The
Borrower also acknowledges that any such private sale may result in
prices and other terms less favorable to the seller than if such sale
were a public sale and, notwithstanding such circumstances, agrees that
any such private sale shall be deemed to have been made in a
commercially reasonable manner. The Agent shall be under no obligation to
delay a sale of any of the Pledged Collateral for the period of time
necessary to permit the registrant to register such securities for public
sale under the Securities Act, or under applicable state securities
laws, even if the Borrower would agree to do so.
(e) If the Agent determines to exercise its right to sell any or all of
the Pledged Collateral, upon written request, the Borrower shall, from time
to time, furnish to the Agent all such information as the Agent may request
in order to determine the number of shares and other instruments included in
the Pledged Collateral which may be sold by the Agent as exempt transactions
under the Act and rules of the Commission thereunder, as the same are from
time to time in effect.
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Section 11. Decisions Relating to Exercise of Remedies. Notwithstanding
anything in this Agreement to the contrary, the Agent may exercise, and at
the request of the Requisite Lenders shall exercise or refrain from
exercising, all rights and remedies hereunder and provided by law which
remedies are cumulative and not exclusive.
Section 12. Expenses. The Borrower shall upon written demand pay to
the Agent the amount of any and all expenses, including the fees and
disbursements of its counsel and of any experts and agents, as provided in
Section 12.03 of the Credit Agreement.
Section 13. Amendments, Etc. No amendment or waiver of any provision
of this Agreement nor consent to any departure by the Borrower herefrom shall
in any event be effective unless the same shall be in writing and signed by
the party to be charged therewith, and any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given.
Section 14. Notices. All notices and other communications provided for
hereunder shall be given in the manner set forth in the Credit Agreement and
to the address first above written or, as to each party, at such other
address as may be designated by such party in a written notice to the other
party.
Section 15. Continuing Security Interest. This Agreement shall create
a continuing first priority security interest in the Pledged Collateral, and
shall (a) remain in full force and effect until payment in full (after the
termination of the Commitments) of the Obligations; (b) continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored
or returned by the obligee of the Obligations, all as though such payment or
performance had not been made; (c) be binding upon the Borrower, its
successors and
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<PAGE>
assigns; and (d) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Lenders and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (d), any Lender may assign or otherwise transfer its rights and
obligations with the Credit Agreement to any other Person or entity, and such
other Person or entity shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, all as provided
in, and to the extent set forth in, the Credit Agreement. Upon the payment
in full in cash (after the termination of the Commitments) of the
Obligations, the Borrower shall be entitled to the return, upon its request
and at its expense, of such of the Pledged Collateral as shall not have been
sold or otherwise applied pursuant to the terms hereof. Upon the sale by the
Borrower of any Pledged Collateral permitted under the Credit Agreement (or
any waiver thereof), the Borrower shall be entitled to the return, upon its
request and at its expense, of such Pledged Collateral.
Section 16. Severability. If for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing
or future law, such invalidity shall not impair the operation of or effect
those portions of this Agreement which are valid.
Section 17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 18. Consent to Jurisdiction and Service of Process; Waiver of
Jury Trial. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE BORROWER WITH
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER ACCEPTS, FOR ITSELF IN AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE. THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS NOTICE ADDRESS
SPECIFIED ON THE FIRST PAGE HEREOF, SUCH SERVICE TO BECOME EFFECTIVE TEN DAYS
AFTER SUCH MAILING. EACH OF THE BORROWER AND, BY ACCEPTANCE HEREOF, THE
AGENT AND THE LENDERS, IRREVOCABLY WAIVES (A) TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT, AND (B) ANY OBJECTION (INCLUDING
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT IN
ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
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<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the day
first above written.
ANNTAYLOR, INC.
By:________________________
Name:______________________
Title:_____________________
Agreed and accepted to as of
the date first above written:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: ---------------------------------
Name:---------------------------------
Title:---------------------------------
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<PAGE>
SCHEDULE I
TO
PLEDGE AGREEMENT
Attached to and forming a part of that Pledge Agreement dated as of July
29, 1994 by AnnTaylor, Inc. to BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION as Agent for the Banks party to the Credit Agreement.
Class Stock Number
Stock of Certificate of
Issuer Stock No(s). Shares
- - ------- --------- ------------ ------
AnnTaylor Travel, Inc. Common 1 1
AnnTaylor Funding, Inc. Common 1 100
AnnTaylor Distribution
Services, Inc. Common 1 1
CAT US Inc. Common 1 2,000
CAT US Inc. Common 11 2,000
C.A.T. (Far East)
Limited Common 5 30,000
C.A.T. (Far East)
Limited Common 8 30,000
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<PAGE>
SCHEDULE II
TO
PLEDGE AGREEMENT
PLEDGE AGREEMENT SUPPLEMENT
This Pledge Agreement Supplement, dated ___________, 19__, is delivered
pursuant to Section 4 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Agreement Supplement may be
attached to the Pledge Agreement, dated as of July 29, 1994 (the "Borrower
Pledge Agreement", the terms defined therein and not otherwise defined herein
being used as therein defined), made by the undersigned to Bank of America
National Trust and Savings Association as Agent for the Lenders and the
Issuing Bank party to the Credit Agreement, and that the shares listed on
this Pledge Agreement Supplement shall be and become part of the Pledged
Collateral referred to in the Borrower Pledge Agreement and shall secure all
Obligations.
The undersigned agrees that the securities listed below shall for all
purposes constitute Pledged Collateral and shall be subject to the security
interest created by the Borrower Pledge Agreement.
The undersigned further agrees that the Persons listed below shall for
all purposes constitute Pledged Companies under the provisions of the
Borrower Pledge Agreement.
The undersigned hereby certifies that the representations and warranties
set forth in Section 3 of the Borrower Pledge Agreement are true and correct
as to the Pledged Collateral listed herein on and as of the date hereof.
ANNTAYLOR, INC.
By: ---------------------
Title: --------------------
Class Stock Number Subsidiary
Stock of Certificate of
Issuer Stock No(s). Shares Yes or No
- - ------- --------- ------------ ------ ----------
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<PAGE>
EXHIBIT 4.01(a)(iv)
FORM OF ATSC GUARANTY
THIS GUARANTY (as such agreement may be amended, supplemented or
otherwise modified from time to time, this "Guaranty") dated as of July 29,
1994 is made by ANNTAYLOR STORES CORPORATION, a Delaware corporation, with
its principal place of business at 142 West 57th Street, New York, New York
10019 (the "Guarantor"), in favor of BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, with an office at 1455 Market Street, San Francisco,
California 94103, in its capacity as Agent under the "Credit Agreement" (as
defined below) (the "Agent").
R E C I T A L S:
ANNTAYLOR, INC., a Subsidiary of the Guarantor, (the "Borrower"), the
Agent, BA Securities, Inc., as Arranger and certain financial institutions
currently and in the future parties to the Credit Agreement (such financial
institutions being collectively, the "Lenders") have entered into a certain
Credit Agreement dated as of July 29, 1994 (as such agreement may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement";
the capitalized terms not otherwise defined herein are being used herein as
defined in the Credit Agreement), which provides (i) for the Lenders to make
Loans to the Borrower and for the Issuing Banks to issue Letters of Credit
and (ii) that, as a condition precedent to the making the Loans and the
issuance of the Letters of Credit, the Guarantor enter into this Guaranty.
NOW, THEREFORE, in consideration of the above premises, and in order to
induce the Lenders to make the Loans and the Issuing Banks to issue the
Letters of Credit under the Credit Agreement, the Guarantor agrees as
follows:
1. Guaranty.
(a) The Guarantor hereby unconditionally and irrevocably guarantees to
the Agent, for its benefit and the benefit of the Lenders and the Issuing
Banks, the full and prompt payment when due, whether at maturity or earlier,
by reason of acceleration, mandatory prepayment or otherwise, and in
accordance with the terms and conditions of the Credit Agreement, of all of
the Obligations, whether or not from time to time reduced or extinguished or
hereafter increased or incurred, whether or not recovery may be or hereafter
may become barred by any statute of limitations, and whether enforceable or
unenforceable as against the Borrower, now or hereafter existing, or due or
to become due (all such indebtedness, liabilities and obligations being
hereinafter collectively referred to as the "Guaranteed Obligations").
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<PAGE>
(b) The Guarantor further agrees that, if any payment made by the
Borrower or any other person and applied to the Guaranteed Obligations is at
any time annulled, set aside, rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be refunded or repaid, or
the proceeds of Collateral are required to be returned by the Agent, any of
the Lenders or the Issuing Banks to the Borrower, its estate, trustee,
receiver or any other party, including, without limitation, the Guarantor,
under any bankruptcy law, state or federal law, common law or equitable
cause, then, to the extent of such payment or repayment, the Guarantor's
liability hereunder (and any lien, security interest or other collateral
securing such liability) shall be and remain in full force and effect, as
fully as if such payment had never been made, or, if prior thereto this
Guaranty shall have been cancelled or surrendered (and if any lien, security
interest or other collateral securing Guarantor's liability hereunder shall
have been released or terminated by virtue of such cancellation or
surrender), this Guaranty (and such lien, security interest or other
collateral) shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect the obligations of the Guarantor in respect of the amount of
such payment (or any lien, security interest or other collateral securing
such obligation).
(c) The Guarantor further agrees to pay all costs and expenses upon
demand including, without limitation, all court costs and reasonable
attorneys' fees and expenses paid or incurred by the Agent (i) in endeavoring
to collect all or any part of the Guaranteed Obligations after the same
become due and owing from, or in prosecuting any action against, the
Guarantor or any other guarantor of all or any part of the Guaranteed
Obligations or (ii) in endeavoring to realize upon (whether by judicial, non-
judicial or other proceedings) any Collateral or any other collateral
securing Guarantor's liabilities under this Guaranty.
2. Representations and Warranties.
The Guarantor hereby represents and warrants to the Agent that each
representation and warranty made by Borrower in Article V of the Credit
Agreement applicable to the Guarantor is true and correct, which
representations and warranties (except such representations and warranties
which are expressly made as of a different date) shall survive the execution
and delivery of this Guaranty, and shall, except to the extent that the same
have been modified by a writing delivered to and accepted in writing by the
Agent, and, other than with respect to changes permitted or contemplated by
the Credit Agreement, continue to be true and correct on the date of each
Loan, and on the date of issuance of each Letter of Credit.
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<PAGE>
3. Waivers; Other Agreements.
(a) The Agent is hereby authorized, without notice to or demand upon
the Guarantor, which notice or demand is expressly waived hereby, and without
discharging or otherwise affecting the obligations of the Guarantor hereunder
(which shall remain absolute and unconditional notwithstanding any such
action or omission to act), from time to time, to:
(i) supplement, renew, extend, accelerate or otherwise change the
time for payment of, or other terms relating to, the Guaranteed Obligations,
or otherwise modify, amend or change the terms of any promissory note or
other agreement, document or instrument (including the Credit Agreement and
the other Loan Documents) now or hereafter executed by the Borrower and
delivered to the Agent, including, without limitation, any increase or
decrease of the rate of interest thereon;
(ii) waive or otherwise consent to noncompliance with any provision of
any instrument evidencing the Guaranteed Obligations, or any part thereof, or
any other instrument or agreement in respect of the Guaranteed Obligations
(including the Credit Agreement and the other Loan Documents) now or
hereafter executed by the Borrower and delivered to the Agent;
(iii) accept partial payments on the Guaranteed
Obligations;
(iv) receive, take and hold additional security or collateral for
the payment of the Guaranteed Obligations, or for the payment of any other
guaranties of the Guaranteed Obligations or other liabilities of the
Borrower, and exchange, enforce, waive, substitute, liquidate, terminate,
abandon, fail to perfect, subordinate, transfer, otherwise alter and release
any such additional security or collateral;
(v) apply any and all such security or collateral and direct the
order or manner of sale thereof as the Agent may determine in its sole
discretion;
(vi) settle, release, compromise, collect or otherwise liquidate the
Guaranteed Obligations or accept, substitute, release, exchange or otherwise
alter, affect or impair any security or collateral for the Guaranteed
Obligations or any other guaranty therefor, in any manner;
(vii) add, release or substitute any one or more other guarantors,
makers or endorsers of the Guaranteed Obligations and otherwise deal with the
Borrower or any other guarantor, maker or endorser as the Agent may elect in
its sole discretion;
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<PAGE>
(viii) apply any and all payments or recoveries from the Borrower, from
any other guarantor, maker or endorser of the Guaranteed Obligations or from
the Guarantor to the Guaranteed Obligations to the Obligations in such order
as provided in subsection 2.05(b) of the Credit Agreement, whether such
Guaranteed Obligations are secured or unsecured or guaranteed or not
guaranteed by others;
(ix) apply any and all payments or recoveries from the Guarantor
or any other guarantor, maker or endorser of the Guaranteed Obligations or
sums realized from security furnished by any of them upon any of their
indebtedness or obligations to the Agent as the Agent in its sole discretion,
may determine, whether or not such indebtedness or obligations relate to the
Guaranteed Obligations; and
(x) refund at any time, at the Agent's sole discretion, any payment
received by the Agent in respect of any Guaranteed Obligations, and payment
to the Agent of the amount so refunded shall be fully guaranteed hereby even
though prior thereto this Guaranty shall have been cancelled or surrendered
(or any release or termination of any collateral by virtue thereof) by the
Agent, and such prior cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligations of the Guarantor
hereunder in respect of the amount so refunded (and any collateral so
released or terminated shall be reinstated with respect to such obligations);
even if any right of reimbursement or subrogation or other right or remedy of
the Guarantor is extinguished, affected or impaired by any of the foregoing
(including, without limitation, any election of remedies by reason of any
judicial, non-judicial or other proceeding in respect of the Guaranteed
Obligations which impairs any subrogation, reimbursement or other right of
Guarantor).
(b) The Guarantor hereby agrees that its obligations under
this Guaranty are absolute and unconditional and shall not be discharged or
otherwise affected as a result of:
(i) the invalidity or unenforceability of any security for or other
guaranty of the Guaranteed Obligations or of any promissory note or other
document (including, without limitation, the Credit Agreement) evidencing all
or any part of the Guaranteed Obligations, or the lack of perfection or
continuing perfection or failure of priority of any security for the
Guaranteed Obligations or any other guaranty therefor;
(ii) the absence of any attempt to collect the Guaranteed
Obligations from the Borrower or any other guarantor or other action to
enforce the same;
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<PAGE>
(iii) failure by the Agent to take any steps to perfect and maintain
any security interest in, or to preserve any rights to, any security or
collateral for the Guaranteed Obligations or any other guaranty therefor;
(iv) the Agent's election, in any proceeding instituted
under Chapter 11 of Title 11 of the United States Code (11 U.S.C. Sec. 101 et
seq.) (the "Bankruptcy Code"), of the application of Section 1111(b)(2) of
the Bankruptcy Code;
(v) any borrowing or grant of a security interest by the Borrower,
as debtor-in-possession, or extension of credit, under Section 364 of the
Bankruptcy Code;
(vi) the disallowance, under Section 502 of the Bankruptcy Code, of
all or any portion of the Agent's claim(s) for repayment of the Guaranteed
Obligations;
(vii) any use of cash collateral under Section 363 of the Bankruptcy
Code;
(viii) any agreement or stipulation as to the provision of adequate
protection in any bankruptcy proceeding;
(ix) the avoidance of any lien in favor of the Agent for any reason;
(x) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by or
against Borrower, the Guarantor or any other guarantor, maker or endorser,
including without limitation, any discharge of, or bar or stay against
collecting, all or any of the Guaranteed Obligations (or any interest
thereon) in or as a result of any such proceeding;
(xi) failure by the Agent to file or enforce a claim against the
Borrower or its estate in any bankruptcy or insolvency case or proceeding;
(xii) any action taken by the Agent that is authorized by this
Guaranty;
(xiii) any election by the Agent under Section 9-501(4) of the Uniform
Commercial Code as enacted in any relevant jurisdiction (the "Code") as to
any security for the Guaranteed Obligations or any guaranty of the Guaranteed
Obligations; or
(xiv) any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of a guarantor.
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<PAGE>
(c) The Guarantor hereby waives:
(i) any requirements of diligence or promptness on the part of the
Agent;
(ii) presentment, demand for payment or performance and protest and
notice of protest with respect to the Guaranteed Obligations;
(iii) notices (A) of nonperformance, (B) of acceptance of this
Guaranty, (C) of default in respect of the Guaranteed Obligations, (D) of the
existence, creation or incurrence of new or additional indebtedness, arising
either from additional loans extended to the Borrower or otherwise, (E) that
the principal amount, or any portion thereof, and/or any interest on any
instrument or document evidencing all or any part of the Guaranteed
Obligations is due, (F) of any and all proceedings to collect from the
Borrower, any endorser or any other guarantor of all or any part of the
Guaranteed Obligations, or from anyone else, and (G) of exchange, sale,
surrender or other handling of any security or collateral given to the Agent
to secure payment of the Guaranteed Obligations or any guaranty therefor;
(iv) any right to require the Agent to (a) proceed first against the
Borrower, or any other person whatsoever, (b) proceed against or exhaust any
security given to or held by the Agent in connection with the Guaranteed
Obligations, or (c) pursue any other remedy in the Agent's power whatsoever;
(v) any defense arising by reason of (a) any disability or other
defense of the Borrower, (b) the cessation from any cause whatsoever of the
liability of the Borrower, (c) any act or omission of the Agent or others
which directly or indirectly, by operation of law or otherwise, results in or
aids the discharge or release of the Borrower or any security given to or
held by the Agent in connection with the Guaranteed Obligations;
(vi) any and all other suretyship defenses under applicable law;
and
(vii) the benefit of any statute of limitations affecting the
Guaranteed Obligations or the Guarantor's liability hereunder or the
enforcement hereof.
In connection with the foregoing, the Guarantor covenants that this Guaranty
shall not be discharged, except by complete performance of the obligations
contained herein.
(d) The Guarantor hereby assumes responsibility for keeping
itself informed of the financial condition of the Borrower, of any and all
endorsers and/or other guarantors of any instrument or document evidencing
all or any part of the Guaranteed Obligations and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations or any part
thereof that diligent inquiry would reveal and the Guarantor hereby agrees
that the Agent shall not have any duty to advise the Guarantor of information
known to the Agent regarding such condition or any such circumstances.
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<PAGE>
(e) Notwithstanding anything to the contrary in this Guaranty, the
Guarantor hereby irrevocably waives all rights which may have arisen in
connection with this Guaranty to be subrogated to any of the rights (whether
contractual, under the Bankruptcy Code, including Section 509 thereof, under
common law or otherwise) of the Agent, the Lenders or the Issuing Banks
against the Borrower or against any collateral security or guarantee or right
of offset held by such Person for the payment of the Obligations. The
Guarantor hereby further irrevocably waives all contractual, common law,
statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Borrower or any other
Person which may have arisen in connection with this Guaranty. So long as
the Obligations remain outstanding, if any amount shall be paid by or on
behalf of the Borrower to the Guarantor on account of any of the rights
waived in this paragraph, such amount shall be held by the Guarantor in
trust, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Agent in the exact form
received by the Guarantor (duly indorsed by the Guarantor to the Agent, if
required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Agent may determine. The provisions of this
paragraph shall survive the term of this Guaranty and the payment in full of
the Obligations and the termination of the commitments of the Lenders to
extend credit under the Credit Agreement.
(f) The Guarantor hereby agrees that any indebtedness of the Borrower
now or hereafter owing to the Guarantor is hereby subordinated to all of the
Guaranteed Obligations, whether heretofore, now or hereafter created (the
"Subordinated Debt"), and that without the prior consent of the Agent, the
Subordinated Debt shall not be paid in whole or in part until the Guaranteed
Obligations have been paid in full, the commitments of the Lenders to extend
credit under the Credit Agreement have been terminated and the Credit
Agreement has been terminated and is of no further force or effect, except
that payments of principal and interest on the Subordinated Debt shall be
permitted so long as no Potential Event of Default or Event of Default shall
have occurred and be continuing to the extent such payments would not render
the Borrower incapable of performing the Guaranteed Obligations. The
Guarantor will not accept any payment of or on account of any Subordinated
Debt at any time in contravention of the foregoing. At the request of the
Agent, the Borrower shall pay to the Agent all or any part of the
Subordinated Debt and any amount so paid to the Agent shall be applied to
payment of the Guaranteed Obligations. Each payment on the Subordinated Debt
received in violation of any of the provisions hereof shall be deemed to have
been received by Guarantor as trustee for the Agent and shall be paid over to
the Agent immediately on account of the Guaranteed Obligations, but without
otherwise affecting in any manner the Guarantor's liability under any of the
provisions of this Guaranty. The Guarantor agrees to file all claims against
the Borrower in any bankruptcy or other proceeding in which the filing of
claims is required by law in respect of any Subordinated Debt, and the Agent
shall be entitled to all of the Guarantor's right thereunder. If for any
reason the Guarantor fails to file such claim at least thirty (30) days prior
to the last date on which such claim should be filed, the Agent, as the
Guarantor's attorney-in-fact, is hereby authorized to do so in the
Guarantor's name or, in the Agent's discretion, to assign such claim to and
cause proof of claim to be filed in the name of the Agent or its nominee. In
all such cases, whether in administration, bankruptcy or otherwise, the
person or persons authorized to pay such claim shall pay to the Agent the
full amount payable on the claim in the proceeding, and, to the full
extent necessary for that purpose, the Guarantor hereby assigns to the Agent
all Guarantor's rights to any payments or distributions to which the
Guarantor otherwise would be entitled. If the amount so paid is greater than
the Guarantor's liability hereunder, the Agent will pay the excess amount to
the party entitled thereto. In addition, the Guarantor hereby appoints Agent
as its attorney-in-fact to exercise all of the Guarantor's voting rights in
connection with any bankruptcy proceeding or any plan for the reorganization
of the Borrower.
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(g) The Guarantor shall comply with all covenants applicable to it
under the Credit Agreement and shall otherwise take no action which will
cause an Event of Default or Potential Event of Default under the Credit
Agreement. The Guarantor shall also cause the Borrower to comply with all
covenants applicable to the Borrower under the Credit Agreement.
4. Default, Remedies.
(a) The obligations of the Guarantor hereunder are independent of and
separate from the Guaranteed Obligations and the obligations of any other
guarantor of the Guaranteed Obligations. If any of the Guaranteed
Obligations are not paid when due, or upon any Event of Default or any
default by Borrower as provided in any other instrument or document
evidencing all or any part of the Guaranteed Obligations, the Agent may, at
its sole election, proceed directly and at once, without notice, against the
Guarantor to collect and recover the full amount or any portion of the
Guaranteed Obligations, without first proceeding against the Borrower or any
other guarantor of the Guaranteed Obligations, or against any Collateral for
the Guaranteed Obligations under the ATSC Pledge Agreement or otherwise
against any Collateral under other Collateral Documents.
(b) At any time after maturity of the Guaranteed Obligations, the Agent
may, without notice to the Guarantor and regardless of the acceptance of any
security or collateral for the payment hereof, appropriate and apply toward
the payment of the Guaranteed Obligations (i) any indebtedness due or to
become due from the Agent to the Guarantor and (ii) any moneys, credits or
other property belonging to the Guarantor at any time held by or coming into
the possession of the Agent or any of its affiliates.
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<PAGE>
(c) The Guarantor hereby authorizes and empowers the Agent, in its sole
discretion, without any notice (except notices required by law to the extent
such notice as a matter of law may not be waived) or demand to the Guarantor
whatsoever and without affecting the liability of the Guarantor hereunder, to
exercise any right or remedy which the Agent may have available to it,
including but not limited to, foreclosure by one or more judicial or
nonjudicial sales, and the Guarantor hereby waives any defense to the
recovery by the Agent against the Guarantor of any deficiency after such
action, notwithstanding any impairment or loss of any right of reimbursement,
contribution, subrogation or other right or remedy against the Borrower, or
any other guarantor, maker or endorser, or against any security for the
Guaranteed Obligations or for any guaranty of the Guaranteed Obligations. No
exercise by the Agent of, and no omission of the Agent to exercise, any power
or authority recognized herein and no impairment or suspension of any right
or remedy of the Agent against the Guarantor, any other guarantor, maker or
endorser or any security shall in any way suspend, discharge, release,
exonerate or otherwise affect any of the Guarantor's obligations hereunder or
give to the Guarantor any right of recourse against
the Agent, the Lenders or the Issuing Banks.
(d) The Guarantor consents and agrees that the Agent shall not be under
any obligation to make any demand upon or pursue or exhaust any of its rights
or remedies against the Borrower or any guarantor or others with respect to
the payment of the Guaranteed Obligations, or to pursue or exhaust any of its
rights or remedies with respect to any security therefor, or any direct or
indirect guaranty thereof or any security for any such guaranty, or to
marshal any assets in favor of the Guarantor or against or in payment of any
or all of the Guaranteed Obligations or to resort to any security or any such
guaranty in any particular order, and all of its rights hereunder, under the
ATSC Pledge Agreement and the other Loan Documents shall be cumulative. The
Guarantor hereby agrees to waive, and does hereby absolutely and irrevocably
waive and relinquish the benefit and advantage of, and does hereby covenant
not to assert against the Agent any valuation, stay, appraisal, extension or
redemption laws now existing or which may hereafter exist which, but for this
provision, might be applicable to any sale made under the judgment, order or
decree of any court, or privately under the power of sale conferred by this
Guaranty or the ATSC Pledge Agreement. Without limiting the generality of
the foregoing, the Guarantor hereby agrees that it will not invoke or utilize
any law which might cause delay in or impede the enforcement of the rights
under this Guaranty, the ATSC Pledge Agreement or any of the other Loan
Documents.
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5. Miscellaneous.
(a) This Guaranty shall be irrevocable as to any and all of the
Guaranteed Obligations until the Credit Agreement has been terminated, the
commitments of the Lenders to extend credit under the Credit Agreement have
been terminated and all Guaranteed Obligations then outstanding have been
repaid.
(b) This Guaranty shall be binding upon the Guarantor and upon its
successors and assigns, heirs and legal representatives and shall inure to
the benefit of the Agent, the Lenders and the Issuing Banks; all references
herein to the Borrower and to the Guarantor shall be deemed to include their
successors and assigns, heirs and legal representatives as applicable. The
Borrower's successors and assigns shall include a receiver, trustee or debtor-
in-possession of or for the Borrower. All references to the singular shall
be deemed to include the plural where the context so requires. The Guarantor
acknowledges the Agent's acceptance hereof and reliance hereon.
(c) No delay on the part of the Agent in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise
by the Agent of any right or remedy shall preclude any further exercise
thereof; nor shall any modification or waiver of any of the provisions of
this Guaranty be binding upon the Agent, except as expressly set forth in a
writing duly signed and delivered by the Agent or on the Agent's behalf by an
authorized officer or agent of the Agent. The Agent's failure at any time or
times hereafter to require strict performance by the Borrower or of the
Guarantor or any other guarantor of any of the provisions, warranties, terms
and conditions contained in any promissory note, security agreement,
agreement, guaranty, instrument or document now or at any time or times
hereafter executed by the Borrower or the Guarantor or any other guarantor
and delivered to the Agent shall not waive, affect or diminish any right of
the Agent at any time or times hereafter to demand strict performance thereof
and such right shall not be deemed to have been waived by any act or
knowledge
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of the Agent, its agents, officers or employees, unless such waiver is
contained in an instrument in writing signed by an officer or agent of the
Agent and directed to the Borrower or the Guarantor, or either of them (as
the case may be) specifying such waiver. No waiver by the Agent of any
default shall operate as a waiver of any other default or the same default on
a future occasion, and no action by the Agent permitted hereunder shall in
any way affect or impair the Agent's rights or the obligations of the
Guarantor under this Guaranty. Any determination by a court of competent
jurisdiction of the amount of any principal and/or interest owing by the
Borrower to the Agent shall be conclusive and binding on the Guarantor
irrespective of whether it was a party to the suit or action in which such
determination was made.
(d) THIS GUARANTY SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK. Whenever possible,
each provision of this Guaranty shall be interpreted in such a manner as to
be effective and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions or the
remaining provisions of this Guaranty.
(e) Consent to Jurisdiction and Service of Process; Waiver of Jury
Trial. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE GUARANTOR WITH RESPECT
TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
GUARANTY, THE GUARANTOR ACCEPTS, FOR ITSELF IN AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS FROM WHICH NO APPEAL HAS
BEEN TAKEN OR IS AVAILABLE. THE GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO ITS NOTICE ADDRESS SPECIFIED ON THE FIRST PAGE HEREOF,
SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. EACH OF
THE GUARANTOR AND, BY ACCEPTANCE HEREOF, THE AGENT AND THE LENDERS,
IRREVOCABLY WAIVES (A) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT
TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT, AND (B) ANY OBJECTION (INCLUDING
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY IN
ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(f) This Guaranty (and any instrument or agreement granting or creating
any security for this Guaranty) contains all the terms and conditions of the
agreement between the Agent and the Guarantor relating to the subject matter
hereof. The terms or provisions of this Guaranty may not be waived, altered,
modified or amended except in writing duly executed by the party to be
charged thereby. This Guaranty is secured by the ATSC Pledge Agreement.
Reference is made to such ATSC Pledge Agreement for the terms and conditions
governing the collateral security for the obligations of the Guarantor
hereunder.
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<PAGE>
(g) Neither the Agent nor its Affiliates, directors, officers, agents,
attorneys or employees shall be liable to the Guarantor for any action taken,
or omitted to be taken, by it or them or any of them under this Guaranty, or
the other Loan Documents or in connection therewith except that no person
shall be relieved of any liability for gross negligence or willful misconduct
as determined by a final judgment of a court of competent jurisdiction.
(h) The Guarantor warrants and agrees that each of the waivers set
forth in this Guaranty are made with full knowledge of their significance and
consequences, and that under the circumstances, the waivers are reasonable.
If any of said waivers are determined to be contrary to any applicable law or
public policy, such waivers shall be effective only to the maximum extent
permitted by law. Should any one or more provisions of this Guaranty be
determined to be illegal or unenforceable, all other provisions hereof shall
nevertheless remain effective.
(i) Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
(j) Captions are for convenience only and shall not affect the meaning
of any term or provision of this Guaranty.
(k) All notices and other communications provided for hereunder shall
be given in the manner set forth in the Credit Agreement and to the addresses
set forth in the Credit Agreement or, in the case of the Guarantor, at its
addresses set forth above.
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IN WITNESS WHEREOF, undersigned have made this Guaranty as of the date
first above written.
ANNTAYLOR STORES CORPORATION
By:_________________________
Title:----------------------
Agreed and accepted to as of
the date first above written:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By:_________________________
Title:
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EXHIBIT 4.01(a)(v)
FORM OF ATSC PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as such agreement may be amended, supplemented or
otherwise modified from time to time, this "Agreement"), dated as of July 29,
1994, is made by ANNTAYLOR STORES CORPORATION, a Delaware corporation, with
its principal place of business located at 142 West 57th Street, New York,
New York 10019 (the "Grantor"), in favor of BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, with an office located at 1455 Market Street, San
Francisco, California 94103, in its capacity as Agent under the Credit
Agreement (as defined below) (the "Agent").
R E C I T A L S:
ANNTAYLOR, INC., a Subsidiary of the Grantor (the "Borrower"), the
Agent, BA Securities, Inc., Bank of America National Trust and Savings
Association and Fleet Bank, National Association, as Co-Agents and certain
financial institutions currently and in the future to be parties to the
Credit Agreement (such financial institutions being collectively the
"Lenders") have entered into a certain Credit Agreement dated as of July 29,
1994 (as such agreement may be amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"; the capitalized terms not
otherwise defined herein are being used herein as defined in the Credit
Agreement), which provides (i) for the Lenders to make the Loans and the
Issuing Bank to issue the Letters of Credit and (ii) that as a condition
precedent to the making of the Loans and the issuance of the Letters of
Credit, that the Grantor enter into a Guaranty dated as of the date hereof
(the "Guaranty") in favor of the Agent and that, concurrently with the
execution of the Guaranty, the Grantor enter into this Agreement to secure
its obligations to the Agent under the Guaranty.
The Grantor is the legal and beneficial owner of the shares of capital
stock described in Schedule I hereto (the "Pledged Shares") and issued by the
Borrower which Pledged Shares constitute all of the capital stock of the
Borrower owned by the Grantor and is equal to 100% of the issued and
outstanding capital stock of the Borrower.
NOW, THEREFORE, in consideration of the above premises and in order to
induce the Lenders to make the Loans and the Issuing Bank to issue the
Letters of Credit under the Credit Agreement, the Grantor hereby agrees with
the Agent for its benefit, and for the benefit of the Lenders and the Issuing
Bank as follows:
Section 1. Grant of Security. To secure the prompt and complete
payment, observance and performance when due (whether at the stated maturity,
by acceleration or otherwise) of all the Guaranteed Obligations (as defined
in the Guaranty) and all other obligations of the Grantor under the Guaranty,
the Grantor hereby assigns and pledges to the Agent, and hereby grants to the
Agent, for its benefit and the benefit of the Lenders and the Issuing Bank, a
security interest in, all of the Grantor's right, title and interest in and
to the following, whether now owned or existing or hereafter arising or
acquired (collectively, the "Pledged Collateral"):
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(a) all of the Pledged Shares;
(b) all additional shares of stock of the Borrower
from time to time acquired by the Grantor in any manner and any other
securities, options or rights received by the Grantor pursuant to any
reclassification, reorganization, increase or reduction of capital or stock
dividend or in substitution of or in exchange for any of the Pledged Shares
so that all of the issued and outstanding capital stock of the Borrower owned
by the Grantor will continue to be pledged to the Agent;
(c) the certificates representing the shares referred to in clauses (a)
and (b) above; and
(d) all dividends, cash, instruments and other property or proceeds,
from time to time received, receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the shares
referred to in clauses (a) and (b) above.
Section 2. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral are
simultaneously herewith being delivered to the Agent to be held by or at the
direction of the Agent pursuant hereto and are to be accompanied by duly
executed instruments of transfer or assignment, undated and in blank, or will
be delivered to the Agent upon delivery of a Pledge Agreement Supplement as
provided in Section 4(c). The Agent shall have the right, at any time after
the occurrence and during the continuance of an Event of Default in its
discretion and without notice to the Grantor, to transfer to or to register
in its name or any of its nominees any or all of the Pledged Collateral,
subject only to the revocable rights specified in Section 5(a) of this
Agreement and to applicable law. In addition, the Agent shall have the right
at any time after the occurrence and during the continuance of an Event of
Default to exchange certificates or instruments representing or evidencing
Pledged Collateral for certificates or instruments of smaller or larger
denominations.
Section 3. Representations and Warranties. The Grantor
represents and warrants as follows:
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(a) The Pledged Shares (i) have been duly authorized and validly
issued; (ii) are fully paid and non-assessable; and (iii) constitute all of
the capital stock of the Borrower owned by the Grantor. There are no
existing options, warrants, calls or commitments of any character whatsoever
relating to any of the Pledged Shares.
(b) The Grantor is the sole record and beneficial owner of the Pledged
Collateral free and clear of any Lien except for the Lien created by this
Agreement.
(c) The Grantor has full power, authority, legal right and requisite
corporate authority to pledge, assign, transfer and deliver the Pledged
Collateral being pledged to the Agent as provided herein.
(d) This Agreement has been duly authorized, executed and delivered by
the Grantor and constitutes a legal, valid and binding obligation of the
Grantor, enforceable against the Grantor in accordance with its terms except
as enforcement may be limited by applicable bankruptcy, insolvency or similar
laws related to creditors' rights generally, as such laws would apply in the
event of the bankruptcy, insolvency of, or other similar occurrence with
respect to, the Grantor.
(e) The pledge of the Pledged Shares pursuant to this Agreement will
create a valid and perfected first priority security interest in the Pledged
Collateral, securing the payment of the Guaranteed Obligations.
(f) No consent, authorization, approval, or other action by, and no
notice to or filing with, any Governmental Authority or regulatory body is
required either (i) for the pledge by the Grantor of the Pledged Collateral
pursuant to this Agreement or for the execution, delivery or performance of
this Agreement by the Grantor or (ii) for the exercise by the Agent of the
voting or other rights provided for in this Agreement or the remedies in
respect of the Pledged Collateral pursuant to this Agreement (except as may
be required in connection with such disposition by laws affecting the
offering and sale of securities generally).
(g) The execution, delivery and performance of this Agreement is not in
conflict with and does not violate any instrument or agreement to which the
Grantor is a party or by which the Grantor is bound.
(h) There exist no voting restrictions on any of the Pledged Shares.
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<PAGE>
The representations and warranties set forth in this Section 3 shall
survive the execution and delivery of this Agreement.
Section 4. Further Assurances; Supplements.
(a) The Grantor agrees that at any time and from time to time, at the
expense of the Grantor, the Grantor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
(b) The Grantor will defend the title to the Pledged Collateral and,
subject to Section 15 of this Agreement, the Liens of the Agent thereon
against the claim of any Person and will maintain and preserve such Liens
until payment in full in cash of the Guaranteed Obligations and the
termination of the Commitments under this Credit Agreement.
(c) The Grantor will, upon obtaining any additional shares or
securities of the Borrower, pledge such additional shares or securities so
that at all times the Pledged Shares shall constitute all of the Grantor's
ownership of the capital stock of the Borrower and promptly (and in any event
within three Business Days) deliver to the Agent a Pledge Agreement
Supplement, duly executed by the Grantor, in substantially the form of
Schedule II hereto (a "Pledge Agreement Supplement"), identifying the
additional shares which are pledged pursuant to Section 1(b) of this
Agreement.
(d) The Grantor hereby authorizes the Agent to attach each Pledge
Agreement Supplement to this Pledge Agreement and agrees that all shares
listed on any Pledge Agreement Supplement delivered to the Agent shall for
all purposes hereunder constitute Pledged Collateral.
Section 5. Voting Rights; Dividends; Etc.
(a) So as long as no Event of Default shall have occurred and be
continuing (and, in the case of Section 5(b)(i) below, until written notice
from the Agent to the Grantor which notice shall not be required should an
Event of Default occur under Sections 10.01(f) or (g) of the Credit
Agreement):
(i) The Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Collateral or
any part thereof for any purpose not inconsistent with the terms of this
Agreement or the Credit Agreement.
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<PAGE>
(ii) The Grantor shall be entitled to receive and retain
any and all dividends and other distributions paid in respect of the
Pledged Collateral.
(b) Upon the occurrence and during the continuation of an Event of
Default:
(i) All rights of the Grantor to exercise the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant to Section 5(a)(i) above shall cease upon written notice from
the Agent to the Grantor, and all such rights shall thereupon become
vested in the Agent who shall thereupon have the sole right to exercise
such voting and other consensual rights.
(ii) All rights of the Grantor to receive the dividends
which it would otherwise be authorized to receive and retain pursuant to
Section 5(a)(ii) above shall cease, and all such rights shall thereupon
become vested in the Agent who shall thereupon have the sole right to
receive and hold as Pledged Collateral such dividends.
(iii) All dividends which are received by the Grantor
contrary to the provisions of paragraph (ii) of this Section 5(b) shall be
received in trust for the benefit of the Agent, shall be segregated from
other funds of the Grantor and shall be forthwith paid over to the
Agent as Pledged Collateral in the same form as so received (with any
necessary endorsement).
(c) In order to permit the Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 5(b)(i)
above, and to receive all dividends and distributions which it may be
entitled to receive under Section 5(b)(ii) above, the Grantor shall, if
necessary, upon written notice of the Agent, from time to time execute and
deliver to the Agent appropriate proxies, dividend payment orders and other
instruments as the Agent may reasonably request.
Section 6. Transfers and Other Liens; Additional Shares.
(a) The Grantor agrees that except as permitted by the Credit
Agreement it will not (i) sell, assign or transfer or otherwise dispose of,
or grant any option or warrant with respect to, any of the Pledged Collateral
or (ii) create or permit to exist any Lien, security interest, or other
charge or encumbrance upon or with respect to any of the Pledged Collateral,
except for the Lien in favor of the Agent under this Agreement.
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<PAGE>
(b) The Grantor agrees that it will cause the Borrower not to
issue any stock or other securities in addition to or in substitution for the
Pledged Collateral except to the Grantor.
Section 7. Agent Appointed Attorney-in-Fact. The Grantor hereby
irrevocably constitutes and appoints the Agent as the Grantor's true and
lawful attorney-in-fact, with full authority in the place and stead of the
Grantor and in the name of the Grantor or otherwise, from time to time upon
the occurrence and during the continuation of any Event of Default, in the
Agent's discretion for the purpose of carrying out the terms of this
Agreement to take any action and to execute any document or instrument which
the Agent may deem necessary or advisable, including, without limitation, to
receive, endorse and collect all instruments made payable to the Grantor
representing any dividend, interest payment or other distribution in respect
of the Pledged Collateral or any part thereof and to give full discharge for
the same.
Section 8. Agent May Perform. If the Grantor fails to perform any
agreement contained herein, the Agent may, but shall not be obligated to,
after notice to the Grantor itself perform, or cause performance of, such
agreement, and the expenses of the Agent incurred in connection therewith
shall constitute Guaranteed Obligations hereunder.
Section 9. Reasonable Care. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Agent accords its own property, it
being understood that the Agent shall not have responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral,
whether or not the Agent has or is deemed to have knowledge of such matters,
or (b) taking any necessary steps to preserve rights against any parties with
respect to any Pledged Collateral.
Section 10. Remedies upon Default. If any Event of Default
shall have occurred and be continuing:
(a) (i) The Agent may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and
remedies of a secured party in default under the Uniform Commercial
Code and the Agent may also, without notice except as specified below,
sell the Pledged Collateral or any part thereof in one or
more parcels at a public or private sale, at any exchange,
broker's board or at any of the Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms
as the Agent may deem commercially reasonable.
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(ii) The Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to
the Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute
reasonable notification. The Agent shall not be obligated to make any
sale of Pledged Collateral regardless of notice of sale having been
given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. The Grantor hereby waives any claims against the Agent arising
by reason of the fact that the price at which any Pledged Collateral may
have been sold at such a private sale was less than the price which might
have been obtained at a public sale, even if the Agent accepts the first
offer received and does not offer such Pledged Collateral to more than one
offeree.
(b) If, at any time when Agent in its sole discretion determines,
following the occurrence and during the continuation of an Event of Default,
that, in connection with any actual or contemplated exercise of its rights to
sell the whole or any part of the Pledged Collateral hereunder, it is
necessary or advisable to effect a public registration of all or part of the
Pledged Collateral pursuant to the Securities Act, the Grantor shall, in an
expeditious manner, cause the Borrower to:
(i) prepare and file with the Commission a registration
statement with respect to the Pledged Collateral and use its best efforts
to cause such registration statement to become and remain effective;
(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Act with
respect to the sale or other disposition of the Pledged Collateral covered
by such registration statement whenever the Agent shall desire to sell or
otherwise dispose of the Pledged Collateral;
(iii) furnish to the Agent such numbers of copies of a
prospectus and a preliminary prospectus, in conformity with the requirements
of the Securities Act, and such other documents as the Agent may request in
order to facilitate the public sale or other disposition of the Pledged
Collateral by the Agent;
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(iv) use its best efforts to register or qualify the
Pledged Collateral covered by such registration statement under such other
securities or blue sky laws of such jurisdictions within the United States
of America as the Agent shall request, and do such other reasonable
acts and things as may be required of it to enable the Agent to consummate
the public sale or other disposition in such jurisdictions of the
Pledged Collateral by the Agent; and
(v) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable an earnings
statement which shall satisfy the provisions of Section 11(a) of the
Securities Act.
(c) The Grantor acknowledges the impossibility of ascertaining the
amount of damages which would be suffered by the Agent and the Lenders by
reason of the failure by the Grantor to perform any of the covenants
contained in this Section 10 and, consequently, agrees that, if the Grantor
shall fail to perform any of such covenants, the Agent shall be entitled to
specific performance.
(d) The Grantor acknowledges that notwithstanding the legal
availability of a private sale or a sale subject to the restrictions
described above in paragraph (a), the Agent may, in its discretion, elect to
register any or all the Pledged Collateral under the Securities Act (or any
applicable state securities law) in accordance with its rights hereunder.
The Grantor, however, recognizes that the Agent may be unable to effect a
public sale of any or all the Pledged Collateral and may be compelled to
resort to one or more private sales thereof. The Grantor also acknowledges
that any such private sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall
be deemed to have been made in a commercially reasonable manner. The Agent
shall be under no obligation to delay a sale of any of the Pledged Collateral
for the period of time necessary to permit the registrant to register such
securities for public sale under the Securities Act, or under applicable
state securities laws, even if the Grantor would agree to do so.
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(e) If the Agent determines to exercise its right to sell any or
all of the Pledged Collateral, upon written request, the Grantor shall, from
time to time, furnish to the Agent all such information as the Agent may
request in order to determine the number of shares and other instruments
included in the Pledged Collateral which may be sold by the Agent as exempt
transactions under the Act and rules of the Commission thereunder, as the
same are from time to time in effect.
Section 11. Decisions Relating to Exercise of Remedies.
Notwithstanding anything in this Agreement to the contrary, the Agent may
exercise, and at the request of the Requisite Lenders shall exercise or
refrain from exercising, all rights and remedies hereunder and provided by
law which remedies are cumulative and not exclusive.
Section 12. Expenses. The Grantor shall upon written
demand pay to the Agent the amount of any and all expenses, including the
fees and disbursements of its counsel and of any experts and agents, as
provided in Section 12.03 of the Credit Agreement.
Section 13. Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Grantor
herefrom shall in any event be effective unless the same shall be in writing
and signed by the party to be charged therewith, and any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 14. Notices. All notices and other communications
provided for hereunder shall be given in the manner set forth in the Credit
Agreement and to the address first above written or, as to each party, at
such other address as may be designated by such party in a written notice to
the other party.
Section 15. Continuing Security Interest. This Agreement
shall create a continuing first priority security interest in the Pledged
Collateral, and shall (a) remain in full force and effect until payment in
full (after the termination of the Commitments)
of the Guaranteed Obligations; (b) continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Guaranteed
Obligations, or any part thereof, is, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or returned by the
obligee of the Guaranteed Obligations, all as though such payment or
performance had not been made; (c) be binding upon the Grantor, its
successors and assigns; and (d) inure, together with the rights and remedies
of the Agent hereunder, to the benefit of the Lenders and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (d), any Lender may assign or otherwise transfer its rights
and obligations with the Credit Agreement to any other Person or entity, and
such other Person or entity shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, all
as provided in, and to the extent set forth in, the Credit Agreement. Upon
the payment in full in cash (after the termination of the Commitments) of the
Guaranteed Obligations, the Borrower shall be entitled to the return, upon
its request and at its expense, of such of the Pledged Collateral as shall
not have been sold or otherwise applied pursuant to the terms hereof.
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Section 16. Severability. If for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing
or future law, such invalidity shall not impair the operation of or effect
those portions of this Agreement which are valid.
Section 17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 18. Consent to Jurisdiction and Service of Process; Waiver of
Jury Trial. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE GRANTOR WITH
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE GRANTOR ACCEPTS, FOR ITSELF IN AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE. THE GRANTOR
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS NOTICE ADDRESS
SPECIFIED ON THE FIRST PAGE HEREOF, SUCH SERVICE TO BECOME EFFECTIVE TEN DAYS
AFTER SUCH MAILING. EACH OF THE GRANTOR AND, BY ACCEPTANCE HEREOF, THE AGENT
AND THE LENDERS, IRREVOCABLY WAIVES (A) TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT, AND (B) ANY OBJECTION (INCLUDING
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT IN
ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
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IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the day
first above written.
ANNTAYLOR STORES CORPORATION
By:_________________________
Name:_______________________
Title:______________________
Agreed and accepted to as of
the date first above written:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: --------------------------------
Name:--------------------------------
Title: ------------------------------
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SCHEDULE I
TO
PLEDGE AGREEMENT
Attached to and forming a part of that Pledge Agreement dated as of July
29, 1994 by AnnTaylor Stores Corporation to BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION as Agent for the Banks party to the Credit Agreement.
Class Stock Number
Stock of Certificate of
Issuer Stock No(s). Shares
- - ------- --------- ------------ ------
AnnTaylor, Inc. Common 1 1
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SCHEDULE II
TO
PLEDGE AGREEMENT
PLEDGE AGREEMENT SUPPLEMENT
---------------------------
This Pledge Agreement Supplement, dated -----------------, 199_, is
delivered pursuant to Section 4 of the Pledge Agreement referred to below.
The undersigned hereby agrees that this Pledge Agreement Supplement may be
attached to the Pledge Agreement, dated as of July 29, 1994 (the "ATSC Pledge
Agreement", the terms defined therein and not otherwise defined herein being
used as therein defined), made by the undersigned to Bank of America National
Trust and Savings Association as Agent for the Lenders and the Issuing Bank
party to the Credit Agreement, and that the shares listed on this Pledge
Agreement Supplement shall be and become part of the Pledged Collateral
referred to in the ATSC Pledge Agreement and shall secure all Guaranteed
Obligations.
The undersigned agrees that the securities listed below shall for all
purposes constitute Pledged Collateral and shall be subject to the security
interest created by the ATSC Pledge Agreement.
The undersigned hereby certifies that the representations and warranties
set forth in Section 3 of the ATSC Pledge Agreement are true and correct as
to the Pledged Collateral listed herein on and as of the date hereof.
ANNTAYLOR STORES CORPORATION
By: -----------------------
Title:----------------------
Class Stock Number
Stock of Certificate of
Issuer Stock No(s). Shares
- - ------- --------- ------------ ------
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EXHIBIT 4.01(a) (xi)
FORM OF OPINION OF
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
July --, 1994
Bank of America National Trust
and Savings Association,
as Agent
335 Madison Avenue
New York, New York 10017
The Financial Institutions listed on
Schedule I hereto
Re: AnnTaylor Stores Corporation
AnnTaylor, Inc.
---------------
Ladies and Gentlemen:
We have acted as special counsel to AnnTaylor, Inc., a Delaware
corporation (the "Borrower"), and AnnTaylor Stores Corporation, a Delaware
corporation ("ATSC", and together with the Borrower, the "Credit Parties") in
connection with the preparation, execution and delivery of the Credit Agree
ment, dated as of July 29, 1994 (the "Credit Agreement"), among the Borrower,
the financial institutions identified on Schedule I hereto (the "Lenders"),
and Bank of America National Trust and Savings Association, as agent for such
Lenders (in such capacity, the "Agent"), and the preparation, execution and
delivery of certain other agreements, instruments and documents related to
the Credit Agreement. This opinion is being delivered pursuant to Section
4.01(a)(x) of the Credit Agreement. Capitalized terms used herein and not
otherwise defined herein shall have the same meanings herein as set forth in
the Credit Agreement.
In our examination we have assumed the genuineness of all
signatures including endorsements, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or
photostatic copies, and the authenticity of the originals of such copies. As
to any facts material to this opinion which we did not independently estab
lish or verify, we have relied upon statements and representations of the
Credit Parties and their respective officers and other representatives and of
public officials, including the facts set forth in the Borrower's Certificate
and ATSC's Certificate, each as described below.
<PAGE>
In rendering the opinions set forth herein, we have examined and
relied on originals or copies of the following:
(a) the Credit Agreement;
(b) the Borrower Pledge Agreement;
(c) the ATSC Guaranty;
(d) the ATSC Pledge Agreement;
(e) the Subordinated Note Indenture;
(f) the certificate of the Borrower executed by an officer of
the Borrower dated the date hereof, a copy of which is attached as Exhibit A
hereto (the "Borrower's Certificate");
(g) the certificate of ATSC executed by an officer of ATSC,
dated the date hereof, a copy of which is attached as Exhibit B hereto
("ATSC's Certificate", and together with the Borrower's Certificate, the
"Credit Parties' Certificates");
(h) certified copies of the Certificate of Incorporation and
By-laws of each of the Credit Parties;
(i) a certified copy of certain resolutions of the Board of
Directors of each of the Credit Parties adopted by unanimous written consent
on July , 1994;
<PAGE>
(j) certificates and telegrams from public officials in the
State of Delaware as to the good standing of the Credit Parties in such juris
diction; and
(k) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
The Credit Agreement, the Borrower Pledge Agreement, the ATSC
Guaranty and the ATSC Pledge Agreement shall hereinafter be referred to
collectively as the "Subject Documents" and the Borrower Pledge Agreement and
the ATSC Pledge Agreement shall hereinafter be referred to collectively as
the "Security Documents".
Members of our firm are admitted to the bar of the State of New
York. We express no opinion as to the laws of any jurisdiction other than
(i) the laws of the State of New York, (ii) the General Corporation Law of
the State of Delaware (the "DGCL") and (iii) the federal laws of the United
States of America to the extent specifically referred to herein.
The opinions set forth below are subject to the following
qualifications:
(i) enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws affecting creditors' rights generally and by general principles of
equity (regardless of whether enforcement is sought in equity or at law);
(ii) certain of the remedial provisions with respect to
the security including waivers with respect to the exercise of remedies
against the collateral contained in each of the Security Documents and the
ATSC Guaranty may be unenforceable in whole or in part, but the inclusion of
such provisions does not affect the validity of the Security Documents and
the ATSC Guaranty, each taken as a whole, and each of the Security Documents,
each taken as a whole, together with applicable law, contains adequate provi
sions for the practical realization of the benefits of the security created
thereby;
<PAGE>
(iii) we express no opinion as to any provision with
respect to governing law to the extent that it purports to affect the choice
of law governing perfection and the effect of perfection and non-perfection
of the security interests; and
(iv) we call to your attention that the Credit Agreement
provides that the Borrower will cause ATSC to comply with certain covenants
and that ATSC is not a party to the Credit Agreement (although ATSC agrees to
comply with such covenants pursuant to the ATSC Guaranty); accordingly, the
remedy of specific performance may not be available with respect to compli
ance by ATSC with such covenants unless such remedy is enforced under the
ATSC Guaranty.
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:
1. Each of the Credit Parties has been incorporated and is validly
existing and in good standing under the laws of the State of Delaware.
2. Each of the Credit Parties has the corporate power and corporate
authority to execute, deliver and perform all of its obligations under each
of the Subject Documents to which it is a party. The execution and delivery
by each of the Credit Parties of each of the Subject Documents to which it is
a party and the consummation of the transactions contemplated thereby have
been duly authorized by all requisite corporate action on the part of each
such Credit Party. Each of the Subject Documents has been duly executed and
delivered by each Credit Party which is a party thereto.
3. Each of the Subject Documents constitutes the valid and binding
obligation of each Credit Party thereto enforceable against such Credit Party
in accordance with its terms, subject to the following qualifications:
<PAGE>
(a) we express no opinion as to the enforceability of any
rights to contribution or indemnification provided for in the Subject Docu
ments which are violative of the public policy underlying any law, rule or
regulation (including any federal or state securities law, rule or regu
lation); and
(b) we express no opinion as to Sections 3.06, 12.06 and
12.07 of the Credit Agreement to the extent such provisions authorize or
permit any party to any Subject Document or any purchaser of a participation
interest from any such party to set-off or apply any deposit, property or in
debtedness with respect to any participation interest.
4. The execution and delivery by each of the Credit Parties of each of
the Subject Documents to which it is a party and the performance by each such
Credit Party of its obligations under each such Subject Document, each in
accordance with its terms, do not (i) conflict with the Certificate of Incor
poration or By-laws of such Credit Party, (ii) constitute a violation of or a
default under any Applicable Contracts (as defined below) or (iii) cause the
creation of any security interest or lien (other than the liens granted under
or created by the Security Documents) upon any of the property of such Credit
Party pursuant to any Applicable Contracts. We do not express any opinion,
however, as to whether the execution, delivery or performance by any Credit
Party of any Subject Document to which it is a party will constitute a viola
tion of or a default under any covenant, restriction or provision with
respect to financial ratios or tests or any aspect of the financial condition
or results of operations of such Credit Party. For purposes of this para
graph 4, "Applicable Contracts" mean those agreements or instruments set
forth on Schedule I to the Credit Parties' Certificates and which have been
identified to us as all the agreements and instruments which are material to
the business or financial condition of the Credit Parties.
<PAGE>
5. Neither the execution, delivery or performance by any Credit Party
of any of the Subject Documents to which it is a party nor the compliance by
such Credit Party with the terms and provisions thereof will contravene any
provision of any Applicable Law. For purposes of this paragraph 5 and
paragraph 6, "Applicable Laws" shall mean the DGCL and those laws, rules and
regulations of the State of New York and of the United States of America
(including, without limitation, Regulations G, U and X of the Federal Reserve
Board and the Investment Company Act of 1940) which, in our experience, are
normally applicable to transactions of the type contemplated by the Subject
Documents.
6. No Governmental Approval which has not been obtained or taken and
is not in full force and effect is required to authorize or is required in
connection with the execution, delivery or performance of any of the Subject
Documents by any Credit Party. For the purposes of this paragraph 6, the
term "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, recording or registration with,
any Governmental Authority pursuant to Applicable Laws, and for the purposes
of this paragraph 6 and paragraph 7, the term "Governmental Authority" means
any federal, New York or, to the extent relating to the DGCL, Delaware
executive, legislative, judicial, administrative or regulatory body.
7. Neither the execution, delivery or performance by any Credit
Party of its obligations under the Subject Documents to which it is a party
nor compliance by such Credit Party with the terms thereof will contravene
any Applicable Order against such Credit Party. For purposes of this
paragraph 7, the term "Applicable Orders" means those orders or decrees of
Governmental Authorities identified on Schedule II to the Credit Parties'
Certificates.
<PAGE>
8. The delivery to the Agent for the benefit of itself, the
Lenders and the Issuing Banks in the State of New York of the certificates
identified in Schedule IV to the Borrower's Certificate (the "Borrower
Pledged Securities"), together with the Borrower Pledge Agreement, is effec
tive to create in favor of the Agent for the benefit of itself, the Lenders
and the Issuing Banks, a valid and perfected security interest in the
Borrower Pledged Securities to secure the Obligations (as referred to in the
Borrower Pledge Agreement and hereafter, the "Borrower Obligations"). The
delivery to the Agent for the benefit of itself, the Lenders and the Issuing
Banks in the State of New York of the certificates identified in Schedule IV
to ATSC's Certificate (the "ATSC Pledged Securities" and collectively with
the Borrower Pledged Securities, the "Pledged Securities"), together with the
ATSC Pledge Agreement, is effective to create in favor of the Agent for the
benefit of itself, the Lenders and the Issuing Banks, a valid and perfected
security interest in the ATSC Pledged Securities to secure the Guaranteed
Obligations (as referred to in the ATSC Pledge Agreement and hereafter, the
"ATSC Obligations"). Under the New York UCC, no interest of any other
creditor of the Borrower is equal or prior to the security interest of the
Agent for the benefit of itself, the Lenders and the Issuing Banks in the
Borrower Pledged Securities and no interest of any other creditor of ATSC is
equal or prior to the security interest of the Agent for the benefit of
itself, the Lenders and the Issuing Banks in the ATSC Pledged Securities.
Our opinion in this paragraph 8 is subject to the following
qualifications:
(a) we have assumed that the Borrower has sufficient
rights in the Borrower Pledged Securities for the security interest of the
Agent for the benefit of itself, the Lenders and the Issuing Banks to attach,
and we express no opinion as to the nature or extent of Borrower's rights in,
or title to, any of the Borrower Pledged Securities;
(b) we have assumed that ATSC has sufficient rights in
the ATSC Pledged Securities for the security interest of the Agent for the
benefit of itself, the Lenders and the Issuing Banks to attach, and we
express no opinion as to the nature or extent of ATSC's rights in, or title
to, any of the ATSC Pledged Securities;
<PAGE>
(c) we express no opinion with respect to proceeds of,
or distributions on, the Pledged Securities;
(d) we express no opinion as to the perfection of the
security interest of the Agent for the benefit of itself, the Lenders and the
Issuing Banks in any portion of the Pledged Securities the continuous
possession of which is not maintained in the State of New York and, in
addition, we call to your attention that the perfection and the effect of
perfection and non-perfection of the security interest may be governed by
laws other than those of the New York UCC to the extent the Pledged
Securities are or become located in a jurisdiction other than the State of
New York;
(e) we have assumed that each of the Agent, the Lenders
and the Issuing Banks acquired its interest in the Pledged Securities in good
faith and that neither the Agent, any of the Lenders nor any of the Issuing
Banks has notice prior to or on the date of delivery to the Agent of such
items of the Pledged Securities of an adverse claim with respect to the
Pledged Securities;
(f) we have assumed that each of the Pledged Securities
is indorsed to or registered in the name of the Agent for the benefit of
itself, the Lenders and the Issuing Banks or is indorsed in blank or is
accompanied by a stock power executed in blank; and
(g) we express no opinion with respect to the priority
of the security interests of the Agent for the benefit of itself, the Lenders
and the Issuing Banks in the Pledged Securities against (a) a lien creditor
(as such term is defined in Section 9-301(3) of the New York UCC) who
attached or levied prior to the perfection of the security interest of the
Agent for the benefit of itself, the Lenders and the Issuing Banks; (b) a
lien creditor (as such term is defined in Section 9-301(3) of the New York
UCC) with respect to future advances to the extent set forth in Section 9-
301(4) of the New York UCC; (c) a lien, claim or encumbrance in favor of the
United States of America, any state, or any agency or instrumentality of
either of them, or any other governmental entity (including without
limitation federal tax liens, liens arising under the Employee Retirement
Income Security Act of 1974, as amended or claims given priority pursuant to
31 U.S.C. Sec. 3713); (d) a lien arising by operation of law that does not
require filing or possession to perfect; and (e) the interest of any person
who has entered into an intercreditor or subordination agreement with the
Agent for the benefit of itself, the Lenders and the Issuing Banks.
<PAGE>
9. The Borrower Obligations constitute "Senior Indebtedness"
within the meaning of that term as defined in the Subordinated Note
Indenture. We call to your attention that the maximum amount of Senior
Indebtedness that may be incurred under the Credit Agreement is limited as
set forth in the Subordinated Note Indenture.
10. (a) The authorized capital stock of the Borrower consists of
1,000 shares of common stock, of which one share is currently issued and
outstanding; (b) such share of common stock has been duly authorized and
validly issued, is fully paid and nonassessable and is held of record by
ATSC; and (c) to our knowledge no authorized but unissued shares and no
treasury shares of capital stock of the Borrower are subject to any option,
warrant, right of conversion or purchase or any similar rights.
In rendering the foregoing opinions, we have assumed, with your
consent, that:
(a) the execution, delivery and performance of each
Credit Party's obligations under the Subject Documents does not and will not
conflict with, contravene, violate or constitute a default under (i) any
lease, indenture, instrument or other agreement to which such Credit Party or
its property is subject (other than the Applicable Contracts as to which we
express our opinion in paragraph 4), (ii) any rule, law or regulation to
which such Credit Party is subject (other than Applicable Laws as to which we
express our opinion in paragraph 5), (iii) any judicial or administrative
order or decree of any governmental authority (other than Applicable Orders
as to which we express our opinion in paragraph 7) or (iv) any consent,
approval, license, authorization or validation of, or filing, recording or
registration with any governmental authority (other than Governmental
Approvals as to which we express our opinion in paragraph 6); and
(b) no authorization, consent or other approval of,
notice to or filing with any court, governmental authority or regulatory body
(other than Governmental Approvals as to which we express our opinion in
paragraph 6) is required to authorize or is required in connection with the
execution, delivery or performance by any Credit Party of any Subject
Document to which it is a party or the transactions contemplated thereby.
<PAGE>
Our opinions are also subject to the following assumptions and
qualifications:
(a) we have assumed each of the Subject Documents
constitutes the legal, valid and binding obligation of each party to such
Subject Document (other than the Credit Parties) enforceable against such
party (other than the Credit Parties) in accordance with its terms; and
(b) we express no opinion as to the effect on the
opinions expressed herein of (i) the compliance or noncompliance of the
Agent, the Lenders or the Issuing Banks to the Subject Documents with any
state, federal or other laws or regulations applicable to them or (ii) the
legal or regulatory status or the nature of the business of the Agent, the
Lenders or the Issuing Banks.
This opinion is being furnished only to you and is solely for your
benefit and is not to be used, circulated, quoted, relied upon or otherwise
referred to by any other Person or for any other purpose without our prior
written consent, provided that this opinion may be furnished to prospective
assignees and participants, but only the Lenders shall have the right to rely
hereon.
Very truly yours,
<PAGE>
SCHEDULE I
LENDERS
-------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
FLEET BANK, NATIONAL ASSOCIATION
LTCB TRUST COMPANY
PNC BANK, NATIONAL ASSOCIATION
SHAWMUT BANK, N.A.
<PAGE>
Exhibit A to Opinion of
Special Counsel of the Borrower
--------------------------------
Officer's Certificate
---------------------
I, Jocelyn F.L. Barandiaran, am Vice President, General Counsel and
Corporate Secretary of AnnTaylor, Inc., a Delaware corporation (the
"Borrower"). I understand that pursuant to Section 4.01(a)(x) of that
certain Credit Agreement, dated as of July 29, 1994 (the "Credit Agreement"),
among the Borrower, the financial institutions party thereto (the "Lenders"),
Bank of America National Trust and Savings Association and Fleet Bank,
National Association, as Co-Agents (the "Co-Agents") for such Lenders, BA
Securities, Inc., as Arranger (the "Arranger"), and Bank of America National
Trust and Savings Association in its separate capacity as administrative
agent for the Lenders hereunder (in such capacity, the "Agent"), Skadden,
Arps, Slate, Meagher & Flom is rendering an opinion. Defined terms used
herein but not otherwise defined shall have the meaning set forth in the
Credit Agreement. I further understand that Skadden, Arps, Slate, Meagher &
Flom is relying on this certificate and the statements made herein in
rendering such opinion.
With regard to the foregoing, on behalf of the Borrower I certify
that:
1. Set forth on Schedule I hereto are all of the agreements and
instruments (other than the Loan Documents) to which the Borrower is a party
or by which it or any of its assets are bound and which are material to the
business or property of the Borrower after giving effect to the termination
of the Existing Credit Agreement and the Loan Documents (as defined in the
Existing Credit Agreement) to which the Borrower is a party.
2. Set forth on Schedule II hereto are all of the orders,
judgments and decrees of any governmental authority which are material to the
business or property of the Borrower.
3. Set forth on Schedule III hereto are all consents, approvals,
licenses, authorizations or validations of, or filings, recordings or
registrations with any governmental authority required in connection with the
execution, delivery or performance of the Subject Documents (as such term is
used in the opinion of Skadden, Arps, Slate, Meagher & Flom referred to
above) to which the Borrower is a party.
<PAGE>
4. The Borrower holds no stock in any company other than the
stock represented by the certificates set forth on Schedule IV hereto. The
companies set forth on Schedule IV hereto which are majority-owned
Subsidiaries of the Borrower hold no stock in any other company.
5. The Borrower is primarily engaged in the business of the
retail sale of women's apparel, shoes and accessories. The value of all
securities owned by the Borrower (excluding those issued by majority-owned
Subsidiaries of the Borrower) does not exceed 10% of the value of the
Borrower's total assets.
6. Of the 1000 shares of authorized capital stock of the Borrower,
one share is currently issued and outstanding. No authorized but unissued
shares and no treasury shares of capital stock of the Borrower are subject to
any option, warrant, right of conversion or purchase or any similar rights.
7. The Borrower does not directly or indirectly own or operate
facilities used for the generation, transmission or distribution of electric
energy for sale or facilities used for the distribution at retail of natural
or manufactured gas for heat, light or power and the Borrower does not own
any interest in any company which owns or operates such facilities.
8. Neither the Borrower nor any of its subsidiaries is a person
providing railroad transportation for compensation (a "rail carrier") or a
person controlled by or affiliated with a rail carrier or a person providing
sleeping car transportation for compensation (a "sleeping car carrier") or a
corporation organized to provide transportation by rail carrier or sleeping
car carrier.
-2-
<PAGE>
IN WITNESS WHEREOF, I have executed this certificate this 29th day
of July, 1994.
By: Jocelyn Barandiaran
------------------------------------
Name: Jocelyn F.L. Barandiaran
Title: Vice President, General Counsel
and Corporate Secretary
<PAGE>
Schedule I
Applicable Contracts
1. Tax Sharing Agreement, dated as of July 12, 1989, between the Company
and AnnTaylor Stores Corporation ("ASTC").
2. CAT Joint Venture Agreement, dated July 13, 1993, among CAT U.S., Inc.
C.A.T. (Far East) Ltd., Cygne Designs, Inc., Cygne Design F.E., Limited and
the Borrower.
3. Indenture, dated as of June 15, 1993, between the Borrower and Fleet
Bank, N.A., as Trustee.
4. Employment Agreement, effective as of February 3, 1992, between the
Borrower, AnnTaylor Stores Corporation and Sally Frame Kasaks.
5. Stock Subscription Agreement, dated as of January 24, 1994, among
AnnTaylor Funding, Inc. and the Borrower.
6. Purchase and Sale Agreement, dated as of January 27, 1994, between the
Borrower and AnnTaylor Funding, Inc.
7. Receivables Financing Agreement, dated as of January 27, 1994, among
AnnTaylor Funding, Inc., the Borrower, Clipper Receivables Corporation, State
Street Boston Capital Corporation and PNC Bank, N.A.
8. Lease, dated as of March 17, 1989, between Carven Associates and
AnnTaylor concerning the West 57th Street headquarters, as amended by the
First Amendment thereto dated as of November 14, 1990, the Second Amendment
thereto dated as of February 28, 1993 and the Third Amendment thereto dated
as of June 24, 1993, and the letter agreement dated as of October 1, 1993,
the Extension and Amendment to Lease dated October 1, 1993, the Modification
and Extension Amendment dated April 14, 1994 and the letter agreement dated
February 8, 1994. License Agreements dated April 6, 1994 and July 9, 1994.
.
9. Lease, dated December 1, 1985, between Hamilton Realty Co. and the
Borrower (as successor in interest to ASC Stores III, Inc.) concerning the
New Haven distribution center, as amended by the letter agreement dated March
22, 1993, and the letter agreement dated February 24, 1994 and an exercise of
the option dated May 23, 1994.
-4-
<PAGE>
10. Lease, dated June 12, 1986, between SMR 85-1 Limited Partnership and the
Borrower (as successor in interest to ASC Stores III, Inc.) concerning the
New Haven offices, as amended by the Amendment to Lease dated December 7,
1987 and the Second Amendment to Lease dated December 10, 1992.
-5-
<PAGE>
Schedule II
Applicable Orders
None
-6-
<PAGE>
Schedule III
Governmental Approvals
None
-7-
<PAGE>
Schedule IV
Stock Certificates
Company (Issuer) Certificate No. No. of Shares
- - --------------------- ------------- -------------
AnnTaylor Travel, Inc. 1 1
CAT US Inc. 1 2,000
CAT US Inc. 11 2,000
C.A.T. (Far East) Limited 5 30,000
C.A.T. (Far East) Limited 8 30,000
AnnTaylor Funding, Inc. 1 100
AnnTaylor Distribution
Services, Inc. 1 1
-8-
<PAGE>
Exhibit B to Opinion of
Special Counsel to ATSC
------------------------
Officer's Certificate
-----------------------
I, Jocelyn F.L. Barandiaran, am Vice President, General Counsel and
Corporate Secretary of AnnTaylor Stores Corporation, a Delaware corporation
("ATSC"). I understand that pursuant to Section 4.01(a)(x) of that certain
Credit Agreement, dated as of July 29, 1994 (the "Credit Agreement"), among
AnnTaylor, Inc., the financial institutions party thereto (the "Lenders"),
Bank of America National Trust and Savings Association and Fleet Bank,
National Association, as Co-Agents (the "Co-Agents") for such Lenders, BA
Securities, Inc., as Arranger (the "Arranger") and Bank of America National
Trust and Savings Association in its separate capacity as administrative
agent for the Lenders hereunder (in such capacity, the "Agent"), Skadden,
Arps, Slate, Meagher & Flom is rendering an opinion. Defined terms used
herein but not otherwise defined shall have the meaning set forth in the
Credit Agreement. I further understand that Skadden, Arps, Slate, Meagher &
Flom is relying on this certificate and the statements made herein in
rendering such opinion.
With regard to the foregoing, on behalf of ATSC I certify that:
1. Set forth on Schedule I hereto are all of the agreements and
instruments (other than the Loan Documents) to which ATSC is a party or by
which it or any of its assets are bound and which are material to the
business or property of ATSC after giving effect to the termination of the
Loan Documents (as defined in the Existing Credit Agreement) to which ATSC is
a party.
2. Set forth on Schedule II hereto are all of the orders,
judgments and decrees of any governmental authority which are material to the
business or property of ATSC.
3. Set forth on Schedule III hereto are all consents, approvals,
licenses, authorizations or validations of, or filings, recordings or
registrations with, any governmental authority required in connection with
the execution delivery or performance of the Subject Documents (as such term
is used in the opinion of Skadden, Arps, Slate, Meagher & Flom referred to
above) to which ATSC is a party.
<PAGE>
4. ATSC holds no stock in any company (other than treasury
shares) other than the stock represented by the certificates set forth on
Schedule IV hereto.
5. The value of all securities owned by ATSC (excluding those
referred to in paragraph 4 above) does not exceed 10% of the value of ATSC's
total assets.
6. ATSC does not directly or indirectly own or operate facilities
used for the generation, transmission or distribution of electric energy for
sale or facilities used for the distribution at retail of natural or
manufactured gas for heat, light or power and ATSC does not own any interest
in any company which owns or operates such facilities.
7. Neither ATSC nor any of its subsidiaries is a person providing
railroad transportation for compensation (a "rail carrier") or a person
controlled by or affiliated with a rail carrier or a person providing
sleeping car transportation for compensation (a "sleeping car carrier") or a
corporation organized to provide transportation by a rail carrier or sleeping
car carrier.
IN WITNESS WHEREOF, I have executed this certificate this 29th day
of July, 1994.
By: Jocelyn Barandiaran
-------------------------
Name: Jocelyn F.L. Barandiaran
Title: Vice President, General Counsel
and Corporate Secretary
-2-
<PAGE>
Schedule I
Applicable Contracts
1. Tax Sharing Agreement, dated as of July 12, 1989, between AnnTaylor,
Inc. and ATSC.
2. Stipulation of Settlement dated February 16, 1993 providing for the
settlement of Consolidated Action.
3. Agreement among Defendants to the Stipulation of Settlement dated
February 16, 1993 providing for the settlement of Consolidated Action.
4. Agreement among the Company, National Union Fire Insurance Company of
Pittsburgh, Pennsylvania, Joseph E. Brooks and Thomas H.K. Brooks dated
February 15, 1993.
5. Warrant Agreement, dated as of July 15, 1989 between ATSC and The
Connecticut Bank and Trust Company, National Association.
-4-
<PAGE>
Schedule II
Applicable Orders
Settlement Order and Final Judgment dated May 25, 1993 in In Re AnnTaylor
Stores Securities Litigation (U.S. District Court, Southern District of New
York 91 Civ. 7145 (CBM)).
-4-
<PAGE>
Schedule III
Governmental Approvals
None
-5-
<PAGE>
Schedule IV
Stock Certificates
Company (Issuer) Certificate No. No. ofShares
- - ------------------- ---------------- --------------
AnnTaylor, Inc. 1 1
-6-
<PAGE>
EXHIBIT 6.01
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered to you pursuant to Section
6.01(f) of the Credit Agreement, dated as of July 29, 1994 as amended,
supplemented or modified from time to time (the "Credit Agreement"), among
AnnTaylor, Inc. (the "Borrower"), Bank of America National Trust and Savings
Association and Fleet Bank, National Association, as Co-Agents, the financial
institutions from time to time party thereto as lenders (the "Lenders"), BA
Securities, Inc., as Arranger and Bank of America National Trust and Savings
Association, as agent for the Lenders (in such capacity, the "Agent"). Terms
defined in the Credit Agreement and not otherwise defined herein are used
herein with the meanings so defined.
1. I am the duly elected, qualified and acting [Chief
Financial Officer] [Vice President - Finance] of the Borrower.
2. I have reviewed and are familiar with the contents of
this Certificate. I am providing this Certificate solely in my capacity as
officer of the Borrower. The matters set forth herein are true to the best of
my knowledge after diligent inquiry, but I express no personal opinion as to
any conclusions of law or other legal matters.
3. I have reviewed the terms of the Credit Agreement and
the principal Loan Documents referred to in Section 6.01(d) of
the Credit Agreement and have made or caused to be made under my supervision,
a review in reasonable detail of the transactions and condition of the
Borrower during the accounting period covered by the financial statements
attached hereto as Attachment 1 (the "Financial Statements"). Such review did
not disclose the existence during or at the end of the accounting period
covered by the Financial Statements, and I have no knowledge of the
existence, as of the date of this Certificate, of any condition or event
which constitutes an Event of Default or a Potential Event of Default [,
except as set forth below].
4. Attached hereto as Attachment 2 are the computations
showing compliance with the covenants specified therein.
IN WITNESS WHEREOF, I execute this Certificate this _______ day of
_____________, 199_.
ANNTAYLOR, INC.
By:-------------------
Title:----------------
<PAGE>
Attachment 2
to Exhibit 6.01
The information described herein is as of _____________, 199_, and
pertains to the period from _________ __, 19__ to ___________ __, 19__.
I. Negative Covenants
A. Indebtedness (Section 8.01)
Section Amount
----------------------------------------------------
8.01(e) $------
8.01(k) $------
B. Sales (Section 8.02(a))
Section Amount
-----------------------------------------------------
8.02(a)(ii) $------
8.02(a)(iii) $------
8.02(a)(iv) $------
C. Investments (Section 8.03)
Section Amount
-----------------------------------------------------
8.03(d) $------
8.03(e) $------
8.03(i)(i) $------
8.03(i)(ii) $------
D. Restricted Payments (Section 8.05)
Section Amount
-----------------------------------------------------
8.05(b)(i) $------
8.05(b)(ii) $------
8.05(b)(iii) $------
II Financial Covenants
A. Minimum Net Worth (Section 9.01)
Net Worth on the last day of
the period covered by this
Certificate $------
-2-
<PAGE>
B. Funded Debt to Total Capitalization
(Section 9.02)
1. Funded Debt on the last
day of the period covered
by this Certificate $------
2. a. Total Capitalization
on the last day of the period covered
by this Certificate $------
b. expenses related to
payments under Section 8.05(b)(iii) $------
3. Sum of items a. and b. $------
4. Ratio of line 1 to line 3 --- to 1
5. Funded Debt to Total
Capitalization for previous
fiscal quarter --- to 1
-3-
<PAGE>
C. Fixed Charge Coverage Ratio
(Section 9.03)
1. EBITDA for the twelve-month
period ending on the last
day covered by this Certificate or,
if it has been less than twelve months
since the Initial Funding Date, such
lesser period (the "Prior Period") $------
2. a. Capital Expenditures
(excluding Capital Expenditures
in respect of the Distribution Center)
paid or accrued during the Prior Period $------
b. Scheduled payments of
principal made during
the Prior Period excluding
any payment made upon termination
of a Receivables Transaction $------
c. Cash Interest Expense
during the Prior Period $------
d. Tax Expense during
the Prior Period $------
3. Sum of items a., b., c. and d. $------
4. Ratio of line 1 to line 3 --- to 1
-4-
<PAGE>
EXHIBIT 12.01
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated __________, 19__
Reference is made to the Credit Agreement dated as of July 29, 1994 (as
amended, supplemented or modified from time to time, the "Credit Agreement")
among AnnTaylor, Inc., a Delaware corporation ("Borrower"), Bank of America
National Trust and Savings Association and Fleet Bank, National Association,
as Co-Agents, the Lenders (as defined in the Credit Agreement), Bank of
America National Trust and Savings Association ("Bank of America"), as Agent
for the Lenders (the "Agent") and BA Securities, Inc. as Arranger. Unless
otherwise defined herein, terms defined in the Credit Agreement are used
herein with the same meanings.
__________________________________ (the "Assignor") and
____________________ (the "Assignee"), agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a
_____%(1) interest in and to all of the Assignor's rights and obligations under
the Credit Agreement as of the Effective Date (as defined below) including,
without limitation, such percentage interest in the Assignor's Commitment as
in effect on the Effective Date, the Loans owing to the Assignor on the
Effective Date and the Assignor's interest in Letter of Credit Obligations on
the Effective Date.
2. The Assignor (i) represents and warrants that, as of the date
hereof, its Commitment (without giving effect to assignments thereof which
have not yet become effective) is $________ and the aggregate outstanding
principal amount of Loans owing to it (without giving effect to assignments
thereof which have not yet become effective) is $________; (ii) represents
and warrants that it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any
adverse claim; (iii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any of the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any of the Loan Documents or
any other instrument or document furnished pursuant thereto; and (iv) makes
no representation or warranty and assumes no responsibility with respect to
the financial condition of Borrower or the performance or observance by
Borrower of any of its obligations under the Credit Agreement or any of the
Loan Documents or any other instrument or document furnished pursuant
thereto.
- - ------------
(1) Specify percentage in no more than 4 decimal points.
-1-
<PAGE>
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 6.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Arranger, the Assignor, the Issuing Bank
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) appoints and
authorizes the Agent to take such actions on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (iv)
agrees that it will become a party to the Credit Agreement on the Effective
Date and perform in accordance with their terms all of the obligations which
by the terms of the Credit Agreement are required to be performed by it as a
Lender; and (v) specifies as its address for notices the office set forth
beneath its name on the signature pages hereof.
4. The effective date of this Agreement and Acceptance shall be
__________ (the "Effective Date").(2) Following the execution of this
Assignment and Acceptance and receipt of Borrower's consent thereto, it will
be delivered to the Agent for acceptance and recording by the Agent.
5. Upon such acceptance, consent and recording, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and under the Loan Documents and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
6. Upon such acceptance, consent and recording, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement
in respect of the interest assigned hereby (including, without limitation,
all payments of principal, interest and commitment fees with respect thereto)
to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Effective Date directly between themselves.
- - ------------
(2) Such date shall be at least ______ Business Days after the execution of
this Assignment and Acceptance.
-2-
<PAGE>
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
[NAME OF ASSIGNOR]
By_______________________________
Name:
Title:
After the Effective Date:
Commitment: $------
Outstanding Loans: $------
[NAME OF ASSIGNEE]
By______________________________
Name:
Title:
Notice Address:
After the Effective Date:
Commitment: $------
Outstanding Loans: $------
Consented to this ____ day of
____________, 19__
ANNTAYLOR, INC.
By________________________
Name:
Title:
-3-
<PAGE>
Accepted this ____ day of
__________, 19__
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Agent
By________________________
Name:
Title:
-4-
<PAGE>
SCHEDULE 1.01(a)
LENDING OFFICES
Domestic Lending Office Eurodollar Lending Office
----------------------- --------------------------
BANK OF AMERICA NATIONAL TRUST Same
AND SAVINGS ASSOCIATION
PSO #5693
1850 Gateway Boulevard
Concord, CA 94520
Attention: Robert Simpson
Telephone: (510) 675-7340
Facsimile: (510) 675-7531/32
FLEET BANK, NATIONAL ASSOCIATION Same
Secured Lending Dept. CT HM M02B
One Constitution Plaza
Hartford, CT 06115
Attention: Robert Tardiff
Telephone: (203) 244-5748
Facsimile: (203) 244-6285
LTCB TRUST COMPANY Same
165 Broadway
New York, NY 10006
Attention: Winston Brown
Telephone: (212) 335-4854
Facsimile: (212) 608-3081
PNC BANK, NATIONAL ASSOCIATION Same
335 Madison Avenue
New York, NY 10017
Attention: Anna Di Rocco
Telephone: (212) 557-5442
Facsimile: (212) 557-5461
SHAWMUT BANK, N.A. Same
One Federal Street
Boston, MA 02211
Attention: Judi Whalen
Telephone: (617) 292-3907
Facsimile: (617) 292-3241
<PAGE>
SCHEDULE 1.01(b)
COMMITMENTS
Commitment
Bank Commitments Percentages
---- ------------ -----------
Bank of America National Trust
and Savings Association $20,000,000 26.666666667%
Fleet Bank, National
Association $20,000,000 26.666666667%
LTCB Trust Company $10,000,000 13.333333333%
PNC Bank, National Association $10,000,000 13.333333333%
Shawmut Bank, N.A. $15,000,000 20.000000000%
---------- -------------
Total: $75,000,000 100.000000000%
<PAGE>
SCHEDULE 3.01
EXISTING LETTERS OF CREDIT
L/C# USD Amount Issued Expires
- - ----- ---------- --------- ---------
45277 36,288.00 06-May-94 01-Aug-94
45315 29,258.00 11-Jul-94 22-Aug-94
45318 29,258.00 13-Jul-94 22-Aug-94
45320 25,344.90 25-Jul-94 21-Oct-94
136513S 950,000.00 18-Mar-93 07-Feb-95
136514S 196,250.00 18-Mar-93 18-Mar-95
136516S 500,000.00 06-Aug-93 31-Jan-95
429101 154,075.16 05-Jul-94 05-Aug-94
429102 12,768.00 05-Jul-94 05-Aug-94
429103 131,610.15 05-Jul-94 05-Aug-94
806028S 4,000,000.00 29-Jul-92 31-Oct-94
------------
6,064,852.21
<PAGE>
SCHEDULE 8.02(b)
PERMITTED EXISTING LIENS
Liens arising in connection with the Existing Credit
Agreement.
Liens in favor of Allied Stores Corporation consisting of UCC financing
statements filed in February 1989.
<PAGE>
SCHEDULE 8.07
TRANSACTIONS WITH AFFILIATES
None
CONFORMED COPY
ATSC GUARANTY
THIS GUARANTY (as such agreement may be amended,
supplemented or otherwise modified from time to time, this
"Guaranty") dated as of July 29, 1994 is made by ANNTAYLOR STORES
CORPORATION, a Delaware corporation, with its principal place of
business at 142 West 57th Street, New York, New York 10019 (the
"Guarantor"), in favor of BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, with an office at 1455 Market Street, San
Francisco, California 94103, in its capacity as Agent under the
"Credit Agreement" (as defined below) (the "Agent").
R E C I T A L S:
ANNTAYLOR, INC., a Subsidiary of the Guarantor, (the
"Borrower"), the Agent, BA Securities, Inc., as Arranger and
certain financial institutions currently and in the future
parties to the Credit Agreement (such financial institutions
being collectively, the "Lenders") have entered into a certain
Credit Agreement dated as of July 29, 1994 (as such agreement may
be amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"; the capitalized terms not otherwise
defined herein are being used herein as defined in the Credit
Agreement), which provides (i) for the Lenders to make Loans to
the Borrower and for the Issuing Banks to issue Letters of Credit
and (ii) that, as a condition precedent to the making the Loans
and the issuance of the Letters of Credit, the Guarantor enter
into this Guaranty.
NOW, THEREFORE, in consideration of the above premises, and
in order to induce the Lenders to make the Loans and the Issuing
Banks to issue the Letters of Credit under the Credit Agreement,
the Guarantor agrees as follows:
1. Guaranty.
(a) The Guarantor hereby unconditionally and irrevocably
guarantees to the Agent, for its benefit and the benefit of the
Lenders and the Issuing Banks, the full and prompt payment when
due, whether at maturity or earlier, by reason of acceleration,
mandatory prepayment or otherwise, and in accordance with the
terms and conditions of the Credit Agreement, of all of the
Obligations, whether or not from time to time reduced or
extinguished or hereafter increased or incurred, whether or not
recovery may be or hereafter may become barred by any statute of
limitations, and whether enforceable or unenforceable as against
the Borrower, now or hereafter existing, or due or to become due
(all such indebtedness, liabilities and obligations being
hereinafter collectively referred to as the "Guaranteed
Obligations").
<PAGE>
(b) The Guarantor further agrees that, if any payment made
by the Borrower or any other person and applied to the Guaranteed
Obligations is at any time annulled, set aside, rescinded,
invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of
Collateral are required to be returned by the Agent, any of the
Lenders or the Issuing Banks to the Borrower, its estate,
trustee, receiver or any other party, including, without
limitation, the Guarantor, under any bankruptcy law, state or
federal law, common law or equitable cause, then, to the extent
of such payment or repayment, the Guarantor's liability hereunder
(and any lien, security interest or other collateral securing
such liability) shall be and remain in full force and effect, as
fully as if such payment had never been made, or, if prior
thereto this Guaranty shall have been cancelled or surrendered
(and if any lien, security interest or other collateral securing
Guarantor's liability hereunder shall have been released or
terminated by virtue of such cancellation or surrender), this
Guaranty (and such lien, security interest or other collateral)
shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge,
impair or otherwise affect the obligations of the Guarantor in
respect of the amount of such payment (or any lien, security
interest or other collateral securing such obligation).
(c) The Guarantor further agrees to pay all costs and
expenses upon demand including, without limitation, all court
costs and reasonable attorneys' fees and expenses paid or
incurred by the Agent (i) in endeavoring to collect all or any
part of the Guaranteed Obligations after the same become due and
owing from, or in prosecuting any action against, the Guarantor
or any other guarantor of all or any part of the Guaranteed
Obligations or (ii) in endeavoring to realize upon (whether by
judicial, non-judicial or other proceedings) any Collateral or
any other collateral securing Guarantor's liabilities under this
Guaranty.
2. Representations and Warranties.
The Guarantor hereby represents and warrants to the Agent
that each representation and warranty made by Borrower in Article
V of the Credit Agreement applicable to the Guarantor is true and
correct, which representations and warranties (except such
representations and warranties which are expressly made as of a
different date) shall survive the execution and delivery of this
Guaranty, and shall, except to the extent that the same have been
modified by a writing delivered to and accepted in writing by the
Agent, and, other than with respect to changes permitted or
contemplated by the Credit Agreement, continue to be true and
correct on the date of each Loan, and on the date of issuance of
each Letter of Credit.
-2-
<PAGE>
3. Waivers; Other Agreements.
(a) The Agent is hereby authorized, without notice to or
demand upon the Guarantor, which notice or demand is expressly
waived hereby, and without discharging or otherwise affecting the
obligations of the Guarantor hereunder (which shall remain
absolute and unconditional notwithstanding any such action or
omission to act), from time to time, to:
(i) supplement, renew, extend, accelerate or otherwise
change the time for payment of, or other terms relating to,
the Guaranteed Obligations, or otherwise modify, amend or
change the terms of any promissory note or other agreement,
document or instrument (including the Credit Agreement and
the other Loan Documents) now or hereafter executed by the
Borrower and delivered to the Agent, including, without
limitation, any increase or decrease of the rate of interest
thereon;
(ii) waive or otherwise consent to noncompliance with
any provision of any instrument evidencing the Guaranteed
Obligations, or any part thereof, or any other instrument or
agreement in respect of the Guaranteed Obligations
(including the Credit Agreement and the other Loan
Documents) now or hereafter executed by the Borrower and
delivered to the Agent;
(iii) accept partial payments on the Guaranteed
Obligations;
(iv) receive, take and hold additional security or
collateral for the payment of the Guaranteed Obligations, or
for the payment of any other guaranties of the Guaranteed
Obligations or other liabilities of the Borrower, and
exchange, enforce, waive, substitute, liquidate, terminate,
abandon, fail to perfect, subordinate, transfer, otherwise
alter and release any such additional security or
collateral;
(v) apply any and all such security or collateral and
direct the order or manner of sale thereof as the Agent may
determine in its sole discretion;
(vi) settle, release, compromise, collect or otherwise
liquidate the Guaranteed Obligations or accept, substitute,
release, exchange or otherwise alter, affect or impair any
security or collateral for the Guaranteed Obligations or any
other guaranty therefor, in any manner;
(vii) add, release or substitute any one or more other
guarantors, makers or endorsers of the Guaranteed
Obligations and otherwise deal with the Borrower or any
other guarantor, maker or endorser as the Agent may elect in
its sole discretion;
-3-
<PAGE>
(viii) apply any and all payments or recoveries from the
Borrower, from any other guarantor, maker or endorser of the
Guaranteed Obligations or from the Guarantor to the
Guaranteed Obligations to the Obligations in such order as
provided in subsection 2.05(b) of the Credit Agreement,
whether such Guaranteed Obligations are secured or unsecured
or guaranteed or not guaranteed by others;
(ix) apply any and all payments or recoveries from the
Guarantor or any other guarantor, maker or endorser of the
Guaranteed Obligations or sums realized from security
furnished by any of them upon any of their indebtedness or
obligations to the Agent as the Agent in its sole
discretion, may determine, whether or not such indebtedness
or obligations relate to the Guaranteed Obligations; and
(x) refund at any time, at the Agent's sole
discretion, any payment received by the Agent in respect of
any Guaranteed Obligations, and payment to the Agent of the
amount so refunded shall be fully guaranteed hereby even
though prior thereto this Guaranty shall have been cancelled
or surrendered (or any release or termination of any
collateral by virtue thereof) by the Agent, and such prior
cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligations of the
Guarantor hereunder in respect of the amount so refunded
(and any collateral so released or terminated shall be
reinstated with respect to such obligations);
even if any right of reimbursement or subrogation or other right
or remedy of the Guarantor is extinguished, affected or impaired
by any of the foregoing (including, without limitation, any
election of remedies by reason of any judicial, non-judicial or
other proceeding in respect of the Guaranteed Obligations which
impairs any subrogation, reimbursement or other right of
Guarantor).
(b) The Guarantor hereby agrees that its obligations under
this Guaranty are absolute and unconditional and shall not be
discharged or otherwise affected as a result of:
(i) the invalidity or unenforceability of any security
for or other guaranty of the Guaranteed Obligations or of
any promissory note or other document (including, without
limitation, the Credit Agreement) evidencing all or any part
of the Guaranteed Obligations, or the lack of perfection or
continuing perfection or failure of priority of any security
for the Guaranteed Obligations or any other guaranty
therefor;
(ii) the absence of any attempt to collect the
Guaranteed Obligations from the Borrower or any other
guarantor or other action to enforce the same;
-4-
<PAGE>
(iii) failure by the Agent to take any steps to perfect
and maintain any security interest in, or to preserve any
rights to, any security or collateral for the Guaranteed
Obligations or any other guaranty therefor;
(iv) the Agent's election, in any proceeding instituted
under Chapter 11 of Title 11 of the United States Code (11
U.S.C. Sec. 101 et seq.) (the "Bankruptcy Code"), of the
application of Section 1111(b)(2) of the Bankruptcy Code;
(v) any borrowing or grant of a security interest by
the Borrower, as debtor-in-possession, or extension of
credit, under Section 364 of the Bankruptcy Code;
(vi) the disallowance, under Section 502 of the
Bankruptcy Code, of all or any portion of the Agent's
claim(s) for repayment of the Guaranteed Obligations;
(vii) any use of cash collateral under Section 363 of
the Bankruptcy Code;
(viii) any agreement or stipulation as to the provision
of adequate protection in any bankruptcy proceeding;
(ix) the avoidance of any lien in favor of the Agent
for any reason;
(x) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, liquidation or
dissolution proceeding commenced by or against Borrower, the
Guarantor or any other guarantor, maker or endorser,
including without limitation, any discharge of, or bar or
stay against collecting, all or any of the Guaranteed
Obligations (or any interest thereon) in or as a result of
any such proceeding;
(xi) failure by the Agent to file or enforce a claim
against the Borrower or its estate in any bankruptcy or
insolvency case or proceeding;
(xii) any action taken by the Agent that is authorized
by this Guaranty;
(xiii) any election by the Agent under Section 9-501(4)
of the Uniform Commercial Code as enacted in any relevant
jurisdiction (the "Code") as to any security for the
Guaranteed Obligations or any guaranty of the Guaranteed
Obligations; or
(xiv) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a
guarantor.
-5-
<PAGE>
(c) The Guarantor hereby waives:
(i) any requirements of diligence or promptness on the
part of the Agent;
(ii) presentment, demand for payment or performance and
protest and notice of protest with respect to the Guaranteed
Obligations;
(iii) notices (A) of nonperformance, (B) of acceptance
of this Guaranty, (C) of default in respect of the
Guaranteed Obligations, (D) of the existence, creation or
incurrence of new or additional indebtedness, arising either
from additional loans extended to the Borrower or otherwise,
(E) that the principal amount, or any portion thereof,
and/or any interest on any instrument or document evidencing
all or any part of the Guaranteed Obligations is due, (F) of
any and all proceedings to collect from the Borrower, any
endorser or any other guarantor of all or any part of the
Guaranteed Obligations, or from anyone else, and (G) of
exchange, sale, surrender or other handling of any security
or collateral given to the Agent to secure payment of the
Guaranteed Obligations or any guaranty therefor;
(iv) any right to require the Agent to (a) proceed
first against the Borrower, or any other person whatsoever,
(b) proceed against or exhaust any security given to or held
by the Agent in connection with the Guaranteed Obligations,
or (c) pursue any other remedy in the Agent's power
whatsoever;
(v) any defense arising by reason of (a) any
disability or other defense of the Borrower, (b) the
cessation from any cause whatsoever of the liability of the
Borrower, (c) any act or omission of the Agent or others
which directly or indirectly, by operation of law or
otherwise, results in or aids the discharge or release of
the Borrower or any security given to or held by the Agent
in connection with the Guaranteed Obligations;
(vi) any and all other suretyship defenses under
applicable law; and
(vii) the benefit of any statute of limitations
affecting the Guaranteed Obligations or the Guarantor's
liability hereunder or the enforcement hereof.
In connection with the foregoing, the Guarantor covenants that
this Guaranty shall not be discharged, except by complete
performance of the obligations contained herein.
(d) The Guarantor hereby assumes responsibility for keeping
itself informed of the financial condition of the Borrower, of any
-6-
<PAGE>
and all endorsers and/or other guarantors of any instrument
or document evidencing all or any part of the Guaranteed
Obligations and of all other circumstances bearing upon the risk
of nonpayment of the Guaranteed Obligations or any part thereof
that diligent inquiry would reveal and the Guarantor hereby
agrees that the Agent shall not have any duty to advise the
Guarantor of information known to the Agent regarding such
condition or any such circumstances.
(e) Notwithstanding anything to the contrary in this
Guaranty, the Guarantor hereby irrevocably waives all rights
which may have arisen in connection with this Guaranty to be
subrogated to any of the rights (whether contractual, under the
Bankruptcy Code, including Section 509 thereof, under common law
or otherwise) of the Agent, the Lenders or the Issuing Banks
against the Borrower or against any collateral security or
guarantee or right of offset held by such Person for the payment
of the Obligations. The Guarantor hereby further irrevocably
waives all contractual, common law, statutory or other rights of
reimbursement, contribution, exoneration or indemnity (or any
similar right) from or against the Borrower or any other Person
which may have arisen in connection with this Guaranty. So long
as the Obligations remain outstanding, if any amount shall be
paid by or on behalf of the Borrower to the Guarantor on account
of any of the rights waived in this paragraph, such amount shall
be held by the Guarantor in trust, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Agent in the exact form received
by the Guarantor (duly indorsed by the Guarantor to the Agent, if
required), to be applied against the Obligations, whether matured
or unmatured, in such order as the Agfent may determine. The
provisions of this paragraph shall survive the term of this
Guaranty and the payment in full of the Obligations and the
termination of the commitments of the Lenders to extend credit
under the Credit Agreement.
(f) The Guarantor hereby agrees that any indebtedness of
the Borrower now or hereafter owing to the Guarantor is hereby
subordinated to all of the Guaranteed Obligations, whether
heretofore, now or hereafter created (the "Subordinated Debt"),
and that without the prior consent of the Agent, the Subordinated
Debt shall not be paid in whole or in part until the Guaranteed
Obligations have been paid in full, the commitments of the
Lenders to extend credit under the Credit Agreement have been
terminated and the Credit Agreement has been terminated and is of
no further force or effect, except that payments of principal and
interest on the Subordinated Debt shall be permitted so long as
no Potential Event of Default or Event of Default shall have
occurred and be continuing to the extent such payments would not
render the Borrower incapable of performing the Guaranteed
Obligations. The Guarantor will not accept any payment of or on
account of any Subordinated Debt at any time in contravention of
the foregoing. At the request of the Agent, the Borrower shall
pay to the Agent
-7-
<PAGE>
all or any part of the Subordinated Debt and any
amount so paid to the Agent shall be applied to payment of the
Guaranteed Obligations. Each payment on the Subordinated Debt
received in violation of any of the provisions hereof shall be
deemed to have been received by Guarantor as trustee for the
Agent and shall be paid over to the Agent immediately on account
of the Guaranteed Obligations, but without otherwise affecting in
any manner the Guarantor's liability under any of the provisions
of this Guaranty. The Guarantor agrees to file all claims
against the Borrower in any bankruptcy or other proceeding in
which the filing of claims is required by law in respect of any
Subordinated Debt, and the Agent shall be entitled to all of the
Guarantor's right thereunder. If for any reason the Guarantor
fails to file such claim at least thirty (30) days prior to the
last date on which such claim should be filed, the Agent, as the
Guarantor's attorney-in-fact, is hereby authorized to do so in
the Guarantor's name or, in the Agent's discretion, to assign
such claim to and cause proof of claim to be filed in the name of
the Agent or its nominee. In all such cases, whether in
administration, bankruptcy or otherwise, the person or persons
authorized to pay such claim shall pay to the Agent the full
amount payable on the claim in the proceeding, and, to the full
extent necessary for that purpose, the Guarantor hereby assigns
to the Agent all Guarantor's rights to any payments or
distributions to which the Guarantor otherwise would be entitled.
If the amount so paid is greater than the Guarantor's liability
hereunder, the Agent will pay the excess amount to the party
entitled thereto. In addition, the Guarantor hereby appoints
Agent as its attorney-in-fact to exercise all of the Guarantor's
voting rights in connection with any bankruptcy proceeding or any
plan for the reorganization of the Borrower.
(g) The Guarantor shall comply with all covenants
applicable to it under the Credit Agreement and shall otherwise
take no action which will cause an Event of Default or Potential
Event of Default under the Credit Agreement. The Guarantor shall
also cause the Borrower to comply with all covenants applicable
to the Borrower under the Credit Agreement.
4. Default, Remedies.
(a) The obligations of the Guarantor hereunder are
independent of and separate from the Guaranteed Obligations and
the obligations of any other guarantor of the Guaranteed
Obligations. If any of the Guaranteed Obligations are not paid
when due, or upon any Event of Default or any default by Borrower
as provided in any other instrument or document evidencing all or
any part of the Guaranteed Obligations, the Agent may, at its
sole election, proceed directly and at once, without notice,
against the Guarantor to collect and recover the full amount or
any portion of the Guaranteed Obligations, without first
proceeding against the Borrower or any other guarantor of the
Guaranteed Obligations, or against any Collateral for the
Guaranteed Obligations under the
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<PAGE>
ATSC Pledge Agreement or otherwise against any Collateral under
other Collateral Documents.
(b) At any time after maturity of the Guaranteed
Obligations, the Agent may, without notice to the Guarantor and
regardless of the acceptance of any security or collateral for
the payment hereof, appropriate and apply toward the payment of
the Guaranteed Obligations (i) any indebtedness due or to become
due from the Agent to the Guarantor and (ii) any moneys, credits
or other property belonging to the Guarantor at any time held by
or coming into the possession of the Agent or any of its
affiliates.
(c) The Guarantor hereby authorizes and empowers the Agent,
in its sole discretion, without any notice (except notices
required by law to the extent such notice as a matter of law may
not be waived) or demand to the Guarantor whatsoever and without
affecting the liability of the Guarantor hereunder, to exercise
any right or remedy which the Agent may have available to it,
including but not limited to, foreclosure by one or more judicial
or nonjudicial sales, and the Guarantor hereby waives any defense
to the recovery by the Agent against the Guarantor of any
deficiency after such action, notwithstanding any impairment or
loss of any right of reimbursement, contribution, subrogation or
other right or remedy against the Borrower, or any other
guarantor, maker or endorser, or against any security for the
Guaranteed Obligations or for any guaranty of the Guaranteed
Obligations. No exercise by the Agent of, and no omission of the
Agent to exercise, any power or authority recognized herein and
no impairment or suspension of any right or remedy of the Agent
against the Guarantor, any other guarantor, maker or endorser or
any security shall in any way suspend, discharge, release,
exonerate or otherwise affect any of the Guarantor's obligations
hereunder or give to the Guarantor any right of recourse against
the Agent, the Lenders or the Issuing Banks.
(d) The Guarantor consents and agrees that the Agent shall
not be under any obligation to make any demand upon or pursue or
exhaust any of its rights or remedies against the Borrower or any
guarantor or others with respect to the payment of the Guaranteed
Obligations, or to pursue or exhaust any of its rights or
remedies with respect to any security therefor, or any direct or
indirect guaranty thereof or any security for any such guaranty,
or to marshal any assets in favor of the Guarantor or against or
in payment of any or all of the Guaranteed Obligations or to
resort to any security or any such guaranty in any particular
order, and all of its rights hereunder, under the ATSC Pledge
Agreement and the other Loan Documents shall be cumulative. The
Guarantor hereby agrees to waive, and does hereby absolutely and
irrevocably waive and relinquish the benefit and advantage of,
and does hereby covenant not to assert against the Agent any
valuation, stay, appraisal, extension or redemption laws now
existing or which may hereafter exist which, but for this
provision, might be applicable
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<PAGE>
to any sale made under the judgment, order or decree of
any court, or privately under the power of sale conferred
by this Guaranty or the ATSC Pledge Agreement. Without
limiting the generality of the foregoing, the Guarantor
hereby agrees that it will not invoke or utilize any
law which might cause delay in or impede the enforcement of the
rights under this Guaranty, the ATSC Pledge Agreement or any of
the other Loan Documents.
5. Miscellaneous.
(a) This Guaranty shall be irrevocable as to any and all of
the Guaranteed Obligations until the Credit Agreement has been
terminated, the commitments of the Lenders to extend credit under
the Credit Agreement have been terminated and all Guaranteed
Obligations then outstanding have been repaid.
(b) This Guaranty shall be binding upon the Guarantor and
upon its successors and assigns, heirs and legal representatives
and shall inure to the benefit of the Agent, the Lenders and the
Issuing Banks; all references herein to the Borrower and to the
Guarantor shall be deemed to include their successors and
assigns, heirs and legal representatives as applicable. The
Borrower's successors and assigns shall include a receiver,
trustee or debtor-in-possession of or for the Borrower. All
references to the singular shall be deemed to include the plural
where the context so requires. The Guarantor acknowledges the
Agent's acceptance hereof and reliance hereon.
(c) No delay on the part of the Agent in the exercise of
any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by the Agent of any right or remedy
shall preclude any further exercise thereof; nor shall any
modification or waiver of any of the provisions of this Guaranty
be binding upon the Agent, except as expressly set forth in a
writing duly signed and delivered by the Agent or on the Agent's
behalf by an authorized officer or agent of the Agent. The
Agent's failure at any time or times hereafter to require strict
performance by the Borrower or of the Guarantor or any other
guarantor of any of the provisions, warranties, terms and
conditions contained in any promissory note, security agreement,
agreement, guaranty, instrument or document now or at any time or
times hereafter executed by the Borrower or the Guarantor or any
other guarantor and delivered to the Agent shall not waive,
affect or diminish any right of the Agent at any time or times
hereafter to demand strict performance thereof and such right
shall not be deemed to have been waived by any act or knowledge
of the Agent, its agents, officers or employees, unless such
waiver is contained in an instrument in writing signed by an
officer or agent of the Agent and directed to the Borrower or the
Guarantor, or either of them (as the case may be) specifying such
waiver. No waiver by the Agent of any default shall operate as a
waiver of any other default or the same default on a future
occasion, and no action by the Agent permitted hereunder shall in
any way affect or
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<PAGE>
impair the Agent's rights or the obligations of the Guarantor
under this Guaranty. Any determination by a court of
competent jurisdiction of the amount of any principal and/or
interest owing by the Borrower to the Agent shall be conclusive
and binding on the Guarantor irrespective of whether it was a
party to the suit or action in which such determination was made.
(d) THIS GUARANTY SHALL BE CONSTRUED IN ALL RESPECTS IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW
YORK. Whenever possible, each provision of this Guaranty shall
be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Guaranty shall
be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Guaranty.
(e) Consent to Jurisdiction and Service of Process; Waiver
of Jury Trial. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE
GUARANTOR WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY, THE
GUARANTOR ACCEPTS, FOR ITSELF IN AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE.
THE GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO ITS NOTICE ADDRESS SPECIFIED ON THE FIRST
PAGE HEREOF, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER
SUCH MAILING. EACH OF THE GUARANTOR AND, BY ACCEPTANCE HEREOF,
THE AGENT AND THE LENDERS, IRREVOCABLY WAIVES (A) TRIAL BY JURY
IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT, AND (B) ANY OBJECTION (INCLUDING WITHOUT
LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
RESPECT TO THIS GUARANTY IN ANY JURISDICTION SET FORTH ABOVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
(f) This Guaranty (and any instrument or agreement granting
or creating any security for this Guaranty) contains all the
terms and conditions of the agreement between the Agent and the
Guarantor relating to the subject matter hereof. The terms or
provisions of this Guaranty may not be waived, altered, modified
or amended except in writing duly executed by the party to be
charged thereby. This Guaranty is secured by the ATSC Pledge
Agreement. Reference is made to such ATSC Pledge Agreement for
the terms and conditions governing the collateral security for
the obligations of the Guarantor hereunder.
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<PAGE>
(g) Neither the Agent nor its Affiliates, directors,
officers, agents, attorneys or employees shall be liable to the
Guarantor for any action taken, or omitted to be taken, by it or
them or any of them under this Guaranty, or the other Loan
Documents or in connection therewith except that no person shall
be relieved of any liability for gross negligence or willful
misconduct as determined by a final judgment of a court of
competent jurisdiction.
(h) The Guarantor warrants and agrees that each of the
waivers set forth in this Guaranty are made with full knowledge
of their significance and consequences, and that under the
circumstances, the waivers are reasonable. If any of said
waivers are determined to be contrary to any applicable law or
public policy, such waivers shall be effective only to the
maximum extent permitted by law. Should any one or more
provisions of this Guaranty be determined to be illegal or
unenforceable, all other provisions hereof shall nevertheless
remain effective.
(i) Wherever possible each provision of this Guaranty shall
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
(j) Captions are for convenience only and shall not affect
the meaning of any term or provision of this Guaranty.
(k) All notices and other communications provided for
hereunder shall be given in the manner set forth in the Credit
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<PAGE>
Agreement and to the addresses set forth in the Credit Agreement
or, in the case of the Guarantor, at its addresses set forth
above.
IN WITNESS WHEREOF, undersigned have made this Guaranty as
of the date first above written.
ANNTAYLOR STORES CORPORATION
By: /s/ Walter J. Parks
-------------------------
Title: VP - Finance
Agreed and accepted to as of
the date first above written:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: /s/ SCHIEL
----------------------
Title: Vice President
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CONFORMED COPY
FORM OF BORROWER PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as such agreement may be amended,
supplemented or otherwise modified from time to time, this
"Agreement"), dated as of July 29, 1994, is made by ANNTAYLOR,
INC. a Delaware corporation, with its principal place of business
located at 142 West 57th Street, New York, New York 10019 (the
"Borrower"), in favor of BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, with an office located at 1455 Market
Street, San Francisco, California 94103, in its capacity as Agent
under the Credit Agreement (as defined below) (the "Agent").
R E C I T A L S:
The Borrower, the Agent, BA Securities, Inc., Bank of
America National Trust and Savings Association and Fleet Bank,
National Association, as Co-Agents and certain financial
institutions currently and in the future to be parties to the
Credit Agreement (such financial institutions being collectively
the "Lenders") have entered into a certain Credit Agreement dated
as of July 29, 1994 (as such agreement may be amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"; the capitalized terms not otherwise defined herein
are being used herein as defined in the Credit Agreement), which
provides (i) for the Lenders to make the Loans and the Issuing
Bank to issue the Letters of Credit and (ii) that as a condition
precedent to the making of the Loans and the issuance of the
Letters of Credit, that the Borrower enter into this Agreement to
secure its obligations to the Agent under the Credit Agreement.
The Borrower is the legal and beneficial owner of the shares
of capital stock described in Schedule I hereto (the "Pledged
Shares") and issued by the Persons listed on such schedule as
amended from time to time (the "Pledged Companies") which Pledged
Shares constitute all of the capital stock of such Pledged
Companies owned by the Borrower.
NOW, THEREFORE, in consideration of the above premises and
in order to induce the Lenders to make the Loans and the Issuing
Bank to issue the Letters of Credit under the Credit Agreement,
the Borrower hereby agrees with the Agent for its benefit, and
for the benefit of the Lenders and the Issuing Bank as follows:
Section 1. Grant of Security. To secure the prompt and
complete payment, observance and performance when due (whether at
the stated maturity, by acceleration or otherwise) of all the
Obligations (as defined in the Credit Agreement) and all other
obligations of the Borrower under the Credit Agreement, the
Borrower hereby assigns and pledges to the Agent, and hereby
grants to the Agent, for its benefit and the benefit of the Lenders
<PAGE>
and the Issuing Bank, a security interest in, all of the
Borrower's right, title and interest in and to the following,
whether now owned or existing or hereafter arising or acquired
(collectively, the "Pledged Collateral"):
(a) all of the Pledged Shares;
(b) all additional shares of stock of the Pledged
Companies from time to time acquired by the Borrower in any
manner and any other securities, options or rights received
by the Borrower pursuant to any reclassification,
reorganization, increase or reduction of capital or stock
dividend or in substitution of or in exchange for any of the
Pledged Shares so that all of the issued and outstanding
capital stock of the Pledged Companies owned by the Borrower
will continue to be pledged to the Agent;
(c) all shares of capital stock owned by the Borrower
in any Persons hereinafter created or acquired;
(d) the certificates representing the shares referred
to in clauses (a), (b) and (c) above; and
(e) all dividends, cash, instruments and other
property and proceeds, from time to time received,
receivable or otherwise distributed or distributable in
respect of or in exchange for any or all of the shares
referred to in clauses (a), (b) and (c) above.
Section 2. Delivery of Pledged Collateral. All
certificates or instruments representing or evidencing the
Pledged Collateral are simultaneously herewith being delivered to
the Agent to be held by or at the direction of the Agent pursuant
hereto and are to be accompanied by duly executed instruments of
transfer or assignment, undated and in blank, or will be
delivered to the Agent upon delivery of a Pledge Agreement
Supplement as provided in Section 4(c). The Agent shall have the
right, at any time after the occurrence and during the
continuance of an Event of Default in its discretion and without
notice to the Borrower, to transfer to or to register in its name
or any of its nominees any or all of the Pledged Collateral,
subject only to the revocable rights specified in Section 5(a) of
this Agreement and to applicable law. In addition, the Agent
shall have the right at any time after the occurrence and during
the continuance of an Event of Default to exchange certificates
or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
Section 3. Representations and Warranties. The Borrower
represents and warrants as follows:
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<PAGE>
(a) The Pledged Shares issued by Subsidiaries of the
Borrower (i) have been duly authorized and validly issued;
(ii) are fully paid and non-assessable; and (iii) constitute
all of the capital stock of the Subsidiaries owned by the
Borrower. There are no existing options, warrants, calls or
commitments of any character whatsoever relating to any of
the Pledged Shares issued by Subsidiaries of the Borrower.
(b) The Borrower is the sole record and beneficial
owner of the Pledged Collateral free and clear of any Lien
except for the Lien created by this Agreement.
(c) The pledge of the Pledged Shares pursuant to this
Agreement will create a valid and perfected first priority
security interest in the Pledged Collateral, securing the
payment of the Obligations.
(d) No consent, authorization, approval, or other
action by, and no notice to or filing with, any Governmental
Authority or regulatory body is required for the exercise by
the Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement (except as may be
required in connection with such disposition by laws
affecting the offering and sale of securities generally).
(e) There exist no voting restrictions on any of the
Pledged Shares issued by Subsidiaries of the Borrower.
The representations and warranties set forth in this
Section 3 shall survive the execution and delivery of this
Agreement.
Section 4. Further Assurances; Supplements.
(a) The Borrower agrees that at any time and from time
to time, at the expense of the Borrower, the Borrower will
promptly execute and deliver all further instruments and
documents, and take all further action, that may be
necessary or desirable, or that the Agent may reasonably
request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to
enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Pledged Collateral.
(b) The Borrower will defend the title to the Pledged
Collateral and the Liens of the Agent thereon against the
claim of any Person and, subject to Section 15 of this
Agreement, will maintain and preserve such Liens until
payment in full in cash of the Obligations and the
termination of the Commitments under the Credit Agreement.
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<PAGE>
(c) (i) The Borrower will, upon obtaining any
additional shares or securities of the Pledged
Companies, pledge such additional shares or securities
so that at all times the Pledged Shares shall
constitute all of the Borrower's ownership of the
capital stock of the Pledged Companies and promptly
(and in any event within ten Business Days) deliver to
the Agent a Pledge Agreement Supplement, duly executed
by the Borrower, in substantially the form of
Schedule II hereto (a "Pledge Agreement Supplement"),
identifying the additional shares which are pledged
pursuant to Section 1(b) of this Agreement.
(ii) The Borrower will, upon receiving any shares
of capital stock of any Persons, pledge the shares or
securities of such Persons so that at all times the
Pledged Shares shall constitute all of the Borrower's
ownership of the capital stock in such Persons and
promptly (and in any event within 10 Business Days)
deliver to the Agent a Pledge Agreement Supplement,
duly executed by the Borrower, in substantially the
form of Schedule II hereto (a "Pledge Agreement
Supplement") identifying such Persons, and shares of
capital stock of such Persons which are pledged
pursuant to Section 1(c) of this Agreement.
(d) The Borrower hereby authorizes the Agent to attach
each Pledge Agreement Supplement to this Pledge Agreement
and agrees that all shares listed on any Pledge Agreement
Supplement delivered to the Agent shall for all purposes
hereunder constitute Pledged Collateral.
Section 5. Voting Rights; Dividends; Etc.
(a) So as long as no Event of Default shall have
occurred and be continuing (and, in the case of Section
5(b)(i) below, until written notice from the Agent to the
Borrower which notice shall not be required should an Event
of Default occur under Sections 10.01(f) or (g) of the
Credit Agreement):
(i) The Borrower shall be entitled to exercise
any and all voting and other consensual rights
pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms
of this Agreement or the Credit Agreement.
(ii) The Borrower shall be entitled to receive and
retain any and all dividends and other distributions
paid in respect of the Pledged Collateral.
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<PAGE>
(b) Upon the occurrence and during the continuation of
an Event of Default:
(i) All rights of the Borrower to exercise the
voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section
5(a)(i) above shall cease upon written notice from the
Agent to the Borrower, and all such rights shall
thereupon become vested in the Agent who shall
thereupon have the sole right to exercise such voting
and other consensual rights.
(ii) All rights of the Borrower to receive the
dividends which it would otherwise be authorized to
receive and retain pursuant to Section 5(a)(ii) above
shall cease, and all such rights shall thereupon become
vested in the Agent who shall thereupon have the sole
right to receive and hold as Pledged Collateral such
dividends.
(iii) All dividends which are received by the
Borrower contrary to the provisions of paragraph (ii)
of this Section 5(b) shall be received in trust for the
benefit of the Agent, shall be segregated from other
funds of the Borrower and shall be forthwith paid over
to the Agent as Pledged Collateral in the same form as
so received (with any necessary endorsement).
(c) In order to permit the Agent to exercise the
voting and other rights which it may be entitled to exercise
pursuant to Section 5(b)(i) above, and to receive all
dividends and distributions which it may be entitled to
receive under Section 5(b)(ii) above, the Borrower shall, if
necessary, upon written notice of the Agent, from time to
time execute and deliver to the Agent appropriate proxies,
dividend payment orders and other instruments as the Agent
may reasonably request.
Section 6. Transfers and Other Liens; Additional Shares.
(a) The Borrower agrees that except as permitted by
the Credit Agreement it will not (i) sell, assign or
transfer or otherwise dispose of any of the Pledged
Collateral, or (ii) grant any option or warrant with respect
to, any of the Pledged Collateral issued by Subsidiaries of
the Borrower or (iii) create or permit to exist any Lien,
security interest, or other charge or encumbrance upon or
with respect to any of the Pledged Collateral, except for
the Lien in favor of the Agent under this Agreement.
(b) The Borrower agrees that it will cause the
Subsidiaries not to issue any stock or other securities in
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<PAGE>
addition to or in substitution for the Pledged Collateral
except to the Borrower.
Section 7. Agent Appointed Attorney-in-Fact. The Borrower
hereby irrevocably constitutes and appoints the Agent as the
Borrower's true and lawful attorney-in-fact, with full authority
in the place and stead of the Borrower and in the name of the
Borrower or otherwise, from time to time upon the occurrence and
during the continuation of any Event of Default, in the Agent's
discretion for the purpose of carrying out the terms of this
Agreement to take any action and to execute any document or
instrument which the Agent may deem necessary or advisable,
including, without limitation, to receive, endorse and collect
all instruments made payable to the Borrower representing any
dividend, interest payment or other distribution in respect of
the Pledged Collateral or any part thereof and to give full
discharge for the same.
Section 8. Agent May Perform. If the Borrower fails to
perform any agreement contained herein, the Agent may, but shall
not be obligated to, after notice to the Borrower itself perform,
or cause performance of, such agreement, and the expenses of the
Agent incurred in connection therewith shall constitute
Obligations hereunder.
Section 9. Reasonable Care. The Agent shall be deemed to
have exercised reasonable care in the custody and preservation of
the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially equal to that
which the Agent accords its own property, it being understood
that the Agent shall not have responsibility for (a) ascertaining
or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged
Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters, or (b) taking any necessary steps to
preserve rights against any parties with respect to any Pledged
Collateral.
Section 10. Remedies upon Default. If any Event of Default
shall have occurred and be continuing:
(a) (i) The Agent may exercise in respect of the
Pledged Collateral, in addition to other rights and
remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party in
default under the Uniform Commercial Code and the Agent
may also, without notice except as specified below,
sell the Pledged Collateral or any part thereof in one
or more parcels at a public or private sale, at any
exchange, broker's board or at any of the Agent's
offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Agent may
deem commercially reasonable.
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<PAGE>
(ii) The Borrower agrees that, to the extent
notice of sale shall be required by law, at least ten
days' notice to the Borrower of the time and place of
any public sale or the time after which any private
sale is to be made shall constitute reasonable
notification. The Agent shall not be obligated to make
any sale of Pledged Collateral regardless of notice of
sale having been given. The Agent may adjourn any
public or private sale from time to time by
announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the
time and place to which it was so adjourned. The
Borrower hereby waives any claims against the Agent
arising by reason of the fact that the price at which
any Pledged Collateral may have been sold at such a
private sale was less than the price which might have
been obtained at a public sale, even if the Agent
accepts the first offer received and does not offer
such Pledged Collateral to more than one offeree.
(b) If, at any time when Agent in its sole discretion
determines, following the occurrence and during the
continuation of an Event of Default, that, in connection
with any actual or contemplated exercise of its rights to
sell the whole or any part of the Pledged Collateral issued
by Subsidiaries of the Borrower hereunder, it is necessary
or advisable to effect a public registration of all or part
of the Pledged Collateral issued by Subsidiaries of the
Borrower pursuant to the Securities Act, the Borrower shall,
in an expeditious manner, cause each of the Subsidiaries to:
(i) prepare and file with the Commission a
registration statement with respect to such Pledged
Collateral and use its best efforts to cause such
registration statement to become and remain effective;
(ii) prepare and file with the Commission such
amendments and supplements to such registration
statement and the prospectus used in connection
therewith as may be necessary to keep such registration
statement effective and to comply with the provisions
of the Act with respect to the sale or other
disposition of such Pledged Collateral covered by such
registration statement whenever the Agent shall desire
to sell or otherwise dispose of such Pledged
Collateral;
(iii) furnish to the Agent such numbers of copies
of a prospectus and a preliminary prospectus, in
conformity with the requirements of the Securities Act,
and such other documents as the Agent may request in
order to facilitate the public sale or other
disposition of such Pledged Collateral by the Agent;
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<PAGE>
(iv) use its best efforts to register or qualify
such Pledged Collateral covered by such registration
statement under such other securities or blue sky laws
of such jurisdictions within the United States of
America as the Agent shall request, and do such other
reasonable acts and things as may be required of it to
enable the Agent to consummate the public sale or other
disposition in such jurisdictions of such Pledged
Collateral by the Agent; and
(v) otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission,
and make available to its security holders, as soon as
reasonably practicable an earnings statement which
shall satisfy the provisions of Section 11(a) of the
Securities Act.
(c) The Borrower acknowledges the impossibility of
ascertaining the amount of damages which would be suffered
by the Agent and the Lenders by reason of the failure by the
Borrower to perform any of the covenants contained in this
Section 10 and, consequently, agrees that, if the Borrower
shall fail to perform any of such covenants, the Agent shall
be entitled to specific performance.
(d) The Borrower acknowledges that notwithstanding the
legal availability of a private sale or a sale subject to
the restrictions described above in paragraph (a), the Agent
may, in its discretion, elect to register any or all the
Pledged Collateral under the Securities Act (or any
applicable state securities law) in accordance with its
rights hereunder. The Borrower, however, recognizes that
the Agent may be unable to effect a public sale of any or
all the Pledged Collateral and may be compelled to resort to
one or more private sales thereof. The Borrower also
acknowledges that any such private sale may result in prices
and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable
manner. The Agent shall be under no obligation to delay a
sale of any of the Pledged Collateral for the period of time
necessary to permit the registrant to register such
securities for public sale under the Securities Act, or
under applicable state securities laws, even if the Borrower
would agree to do so.
(e) If the Agent determines to exercise its right to
sell any or all of the Pledged Collateral, upon written
request, the Borrower shall, from time to time, furnish to
the Agent all such information as the Agent may request in
order to determine the number of shares and other instruments
-8-
<PAGE>
included in the Pledged Collateral which may be
sold by the Agent as exempt transactions under the Act and
rules of the Commission thereunder, as the same are from
time to time in effect.
Section 11. Decisions Relating to Exercise of Remedies.
Notwithstanding anything in this Agreement to the contrary, the
Agent may exercise, and at the request of the Requisite Lenders
shall exercise or refrain from exercising, all rights and
remedies hereunder and provided by law which remedies are
cumulative and not exclusive.
Section 12. Expenses. The Borrower shall upon written
demand pay to the Agent the amount of any and all expenses,
including the fees and disbursements of its counsel and of any
experts and agents, as provided in Section 12.03 of the Credit
Agreement.
Section 13. Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the
Borrower herefrom shall in any event be effective unless the same
shall be in writing and signed by the party to be charged
therewith, and any such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which
given.
Section 14. Notices. All notices and other communications
provided for hereunder shall be given in the manner set forth in
the Credit Agreement and to the address first above written or,
as to each party, at such other address as may be designated by
such party in a written notice to the other party.
Section 15. Continuing Security Interest. This Agreement
shall create a continuing first priority security interest in the
Pledged Collateral, and shall (a) remain in full force and effect
until payment in full (after the termination of the Commitments)
of the Obligations; (b) continue to be effective or be
reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant
to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by the obligee of the
Obligations, all as though such payment or performance had not
been made; (c) be binding upon the Borrower, its successors and
assigns; and (d) inure, together with the rights and remedies of
the Agent hereunder, to the benefit of the Lenders and their
respective successors, transferees and assigns. Without limiting
the generality of the foregoing clause (d), any Lender may assign
or otherwise transfer its rights and obligations with the Credit
Agreement to any other Person or entity, and such other Person or
entity shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, all
as provided in, and to the extent set forth in, the Credit
Agreement. Upon the payment in full in
-9-
<PAGE>
cash (after the termination of the Commitments) of the Obligations,
the Borrower shall be entitled to the return, upon its request and at its
expense, of such of the Pledged Collateral as shall not have been
sold or otherwise applied pursuant to the terms hereof. Upon the
sale by the Borrower of any Pledged Collateral permitted under
the Credit Agreement (or any waiver thereof), the Borrower shall
be entitled to the return, upon its request and at its expense,
of such Pledged Collateral.
Section 16. Severability. If for any reason any provision
or provisions hereof are determined to be invalid and contrary to
any existing or future law, such invalidity shall not impair the
operation of or effect those portions of this Agreement which are
valid.
Section 17. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
Section 18. Consent to Jurisdiction and Service of Process;
Waiver of Jury Trial. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
THE BORROWER WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER ACCEPTS, FOR ITSELF IN AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE. THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO ITS NOTICE ADDRESS SPECIFIED
ON THE FIRST PAGE HEREOF, SUCH SERVICE TO BECOME EFFECTIVE TEN
DAYS AFTER SUCH MAILING. EACH OF THE BORROWER AND, BY ACCEPTANCE
HEREOF, THE AGENT AND THE LENDERS, IRREVOCABLY WAIVES (A) TRIAL
BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, AND (B) ANY OBJECTION (INCLUDING WITHOUT LIMITATION,
ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN
SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
-10-
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Agreement
to be duly executed and delivered by its officer thereunto duly
authorized as of the day first above written.
ANNTAYLOR, INC.
By: /s/ Walter J. Parks
--------------------------
Name: Walter J. Parks
-----------------------
Title: VP - Finance
-----------------------
Agreed and accepted to as of
the date first above written:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: /s/ Dietmar Schiel
--------------------------
Name: Dietmar Schiel
--------------------------
Title: Vice President
--------------------------
-11-
<PAGE>
SCHEDULE I
TO
PLEDGE AGREEMENT
Attached to and forming a part of that Pledge Agreement
dated as of July 29, 1994 by AnnTaylor, Inc. to BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION as Agent for the Banks
party to the Credit Agreement.
Class Stock Number
Stock of Certificate of
Issuer Stock No(s). Shares
- - ------ ----- ------------ ------
AnnTaylor Travel, Inc. Common 1 1
AnnTaylor Funding, Inc. Common 1 100
AnnTaylor Distribution
Services, Inc. Common 1 1
CAT US Inc. Common 1 2,000
CAT US Inc. Common 11 2,000
C.A.T. (Far East)
Limited Common 5 30,000
C.A.T. (Far East)
Limited Common 8 30,000
-12-
<PAGE>
SCHEDULE II
TO
PLEDGE AGREEMENT
PLEDGE AGREEMENT SUPPLEMENT
This Pledge Agreement Supplement, dated ,
19 , is delivered pursuant to Section 4 of the Pledge Agreement
referred to below. The undersigned hereby agrees that this
Pledge Agreement Supplement may be attached to the Pledge
Agreement, dated as of July 29, 1994 (the "Borrower Pledge
Agreement", the terms defined therein and not otherwise defined
herein being used as therein defined), made by the undersigned to
Bank of America National Trust and Savings Association as Agent
for the Lenders and the Issuing Bank party to the Credit
Agreement, and that the shares listed on this Pledge Agreement
Supplement shall be and become part of the Pledged Collateral
referred to in the Borrower Pledge Agreement and shall secure all
Obligations.
The undersigned agrees that the securities listed below
shall for all purposes constitute Pledged Collateral and shall be
subject to the security interest created by the Borrower Pledge
Agreement.
The undersigned further agrees that the Persons listed below
shall for all purposes constitute Pledged Companies under the
provisions of the Borrower Pledge Agreement.
The undersigned hereby certifies that the representations
and warranties set forth in Section 3 of the Borrower Pledge
Agreement are true and correct as to the Pledged Collateral
listed herein on and as of the date hereof.
ANNTAYLOR, INC.
By: ---------------------------
Title: --------------------------
CLASS STOCK NUMBER SUBSIDIARY
STOCK OF CERTIFICATE OF
ISSUER STOCK NO(S). SHARES YES OR NO
- - ------ ------ ------------ ------- ---------
-13-
CONFORMED COPY
ATSC PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as such agreement may be amended,
supplemented or otherwise modified from time to time, this
"Agreement"), dated as of July 29, 1994, is made by ANNTAYLOR
STORES CORPORATION, a Delaware corporation, with its principal
place of business located at 142 West 57th Street, New York, New
York 10019 (the "Grantor"), in favor of BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, with an office located at 1455
Market Street, San Francisco, California 94103, in its capacity
as Agent under the Credit Agreement (as defined below) (the
"Agent").
R E C I T A L S:
ANNTAYLOR, INC., a Subsidiary of the Grantor (the
"Borrower"), the Agent, BA Securities, Inc., Bank of America
National Trust and Savings Association and Fleet Bank, National
Association, as Co-Agents and certain financial institutions
currently and in the future to be parties to the Credit Agreement
(such financial institutions being collectively the "Lenders")
have entered into a certain Credit Agreement dated as of July 29,
1994 (as such agreement may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"; the
capitalized terms not otherwise defined herein are being used
herein as defined in the Credit Agreement), which provides (i)
for the Lenders to make the Loans and the Issuing Bank to issue
the Letters of Credit and (ii) that as a condition precedent to
the making of the Loans and the issuance of the Letters of
Credit, that the Grantor enter into a Guaranty dated as of the
date hereof (the "Guaranty") in favor of the Agent and that,
concurrently with the execution of the Guaranty, the Grantor
enter into this Agreement to secure its obligations to the Agent
under the Guaranty.
The Grantor is the legal and beneficial owner of the shares
of capital stock described in Schedule I hereto (the "Pledged
Shares") and issued by the Borrower which Pledged Shares
constitute all of the capital stock of the Borrower owned by the
Grantor and is equal to 100% of the issued and outstanding
capital stock of the Borrower.
NOW, THEREFORE, in consideration of the above premises and
in order to induce the Lenders to make the Loans and the Issuing
Bank to issue the Letters of Credit under the Credit Agreement,
the Grantor hereby agrees with the Agent for its benefit, and for
the benefit of the Lenders and the Issuing Bank as follows:
Section 1. Grant of Security. To secure the prompt and
complete payment, observance and performance when due (whether at
the stated maturity, by acceleration or otherwise) of all the
Guaranteed Obligations (as defined in the Guaranty) and all other
<PAGE>
obligations of the Grantor under the Guaranty, the Grantor hereby
assigns and pledges to the Agent, and hereby grants to the Agent,
for its benefit and the benefit of the Lenders and the Issuing
Bank, a security interest in, all of the Grantor's right, title
and interest in and to the following, whether now owned or
existing or hereafter arising or acquired (collectively, the
"Pledged Collateral"):
(a) all of the Pledged Shares;
(b) all additional shares of stock of the Borrower
from time to time acquired by the Grantor in any manner and
any other securities, options or rights received by the
Grantor pursuant to any reclassification, reorganization,
increase or reduction of capital or stock dividend or in
substitution of or in exchange for any of the Pledged Shares
so that all of the issued and outstanding capital stock of
the Borrower owned by the Grantor will continue to be
pledged to the Agent;
(c) the certificates representing the shares referred
to in clauses (a) and (b) above; and
(d) all dividends, cash, instruments and other
property or proceeds, from time to time received, receivable
or otherwise distributed or distributable in respect of or
in exchange for any or all of the shares referred to in
clauses (a) and (b) above.
Section 2. Delivery of Pledged Collateral. All
certificates or instruments representing or evidencing the
Pledged Collateral are simultaneously herewith being delivered to
the Agent to be held by or at the direction of the Agent pursuant
hereto and are to be accompanied by duly executed instruments of
transfer or assignment, undated and in blank, or will be
delivered to the Agent upon delivery of a Pledge Agreement
Supplement as provided in Section 4(c). The Agent shall have the
right, at any time after the occurrence and during the
continuance of an Event of Default in its discretion and without
notice to the Grantor, to transfer to or to register in its name
or any of its nominees any or all of the Pledged Collateral,
subject only to the revocable rights specified in Section 5(a) of
this Agreement and to applicable law. In addition, the Agent
shall have the right at any time after the occurrence and during
the continuance of an Event of Default to exchange certificates
or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
Section 3. Representations and Warranties. The Grantor
represents and warrants as follows:
-2-
<PAGE>
(a) The Pledged Shares (i) have been duly authorized
and validly issued; (ii) are fully paid and non-assessable;
and (iii) constitute all of the capital stock of the
Borrower owned by the Grantor. There are no existing
options, warrants, calls or commitments of any character
whatsoever relating to any of the Pledged Shares.
(b) The Grantor is the sole record and beneficial
owner of the Pledged Collateral free and clear of any Lien
except for the Lien created by this Agreement.
(c) The Grantor has full power, authority, legal right
and requisite corporate authority to pledge, assign,
transfer and deliver the Pledged Collateral being pledged to
the Agent as provided herein.
(d) This Agreement has been duly authorized, executed
and delivered by the Grantor and constitutes a legal, valid
and binding obligation of the Grantor, enforceable against
the Grantor in accordance with its terms except as
enforcement may be limited by applicable bankruptcy,
insolvency or similar laws related to creditors' rights
generally, as such laws would apply in the event of the
bankruptcy, insolvency of, or other similar occurrence with
respect to, the Grantor.
(e) The pledge of the Pledged Shares pursuant to this
Agreement will create a valid and perfected first priority
security interest in the Pledged Collateral, securing the
payment of the Guaranteed Obligations.
(f) No consent, authorization, approval, or other
action by, and no notice to or filing with, any Governmental
Authority or regulatory body is required either (i) for the
pledge by the Grantor of the Pledged Collateral pursuant to
this Agreement or for the execution, delivery or performance
of this Agreement by the Grantor or (ii) for the exercise by
the Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement (except as may be
required in connection with such disposition by laws
affecting the offering and sale of securities generally).
(g) The execution, delivery and performance of this
Agreement is not in conflict with and does not violate any
instrument or agreement to which the Grantor is a party or
by which the Grantor is bound.
(h) There exist no voting restrictions on any of the
Pledged Shares.
-3-
<PAGE>
The representations and warranties set forth in this
Section 3 shall survive the execution and delivery of this
Agreement.
Section 4. Further Assurances; Supplements.
(a) The Grantor agrees that at any time and from time
to time, at the expense of the Grantor, the Grantor will
promptly execute and deliver all further instruments and
documents, and take all further action, that may be
necessary or desirable, or that the Agent may reasonably
request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to
enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Pledged Collateral.
(b) The Grantor will defend the title to the Pledged
Collateral and, subject to Section 15 of this Agreement, the
Liens of the Agent thereon against the claim of any Person
and will maintain and preserve such Liens until payment in
full in cash of the Guaranteed Obligations and the
termination of the Commitments under the Credit Agreement.
(c) The Grantor will, upon obtaining any additional
shares or securities of the Borrower, pledge such additional
shares or securities so that at all times the Pledged Shares
shall constitute all of the Grantor's ownership of the
capital stock of the Borrower and promptly (and in any event
within three Business Days) deliver to the Agent a Pledge
Agreement Supplement, duly executed by the Grantor, in
substantially the form of Schedule II hereto (a "Pledge
Agreement Supplement"), identifying the additional shares
which are pledged pursuant to Section 1(b) of this
Agreement.
(d) The Grantor hereby authorizes the Agent to attach
each Pledge Agreement Supplement to this Pledge Agreement
and agrees that all shares listed on any Pledge Agreement
Supplement delivered to the Agent shall for all purposes
hereunder constitute Pledged Collateral.
Section 5. Voting Rights; Dividends; Etc.
(a) So as long as no Event of Default shall have
occurred and be continuing (and, in the case of Section
5(b)(i) below, until written notice from the Agent to the
Grantor which notice shall not be required should an Event
of Default occur under Sections 10.01(f) or (g) of the
Credit Agreement):
(i) The Grantor shall be entitled to exercise any
and all voting and other consensual rights pertaining
to the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this
Agreement or the Credit Agreement.
-4-
<PAGE>
(ii) The Grantor shall be entitled to receive and
retain any and all dividends and other distributions
paid in respect of the Pledged Collateral.
(b) Upon the occurrence and during the continuation of
an Event of Default:
(i) All rights of the Grantor to exercise the
voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section
5(a)(i) above shall cease upon written notice from the
Agent to the Grantor, and all such rights shall
thereupon become vested in the Agent who shall
thereupon have the sole right to exercise such voting
and other consensual rights.
(ii) All rights of the Grantor to receive the
dividends which it would otherwise be authorized to
receive and retain pursuant to Section 5(a)(ii) above
shall cease, and all such rights shall thereupon become
vested in the Agent who shall thereupon have the sole
right to receive and hold as Pledged Collateral such
dividends.
(iii) All dividends which are received by the
Grantor contrary to the provisions of paragraph (ii) of
this Section 5(b) shall be received in trust for the
benefit of the Agent, shall be segregated from other
funds of the Grantor and shall be forthwith paid over
to the Agent as Pledged Collateral in the same form as
so received (with any necessary endorsement).
(c) In order to permit the Agent to exercise the
voting and other rights which it may be entitled to exercise
pursuant to Section 5(b)(i) above, and to receive all
dividends and distributions which it may be entitled to
receive under Section 5(b)(ii) above, the Grantor shall, if
necessary, upon written notice of the Agent, from time to
time execute and deliver to the Agent appropriate proxies,
dividend payment orders and other instruments as the Agent
may reasonably request.
Section 6. Transfers and Other Liens; Additional Shares.
(a) The Grantor agrees that except as permitted by the
Credit Agreement it will not (i) sell, assign or transfer or
otherwise dispose of, or grant any option or warrant with
respect to, any of the Pledged Collateral or (ii) create or
permit to exist any Lien, security interest, or other charge
or encumbrance upon or with respect to any of the Pledged
Collateral, except for the Lien in favor of the Agent under
this Agreement.
-5-
<PAGE>
(b) The Grantor agrees that it will cause the Borrower
not to issue any stock or other securities in addition to or
in substitution for the Pledged Collateral except to the
Grantor.
Section 7. Agent Appointed Attorney-in-Fact. The Grantor
hereby irrevocably constitutes and appoints the Agent as the
Grantor's true and lawful attorney-in-fact, with full authority
in the place and stead of the Grantor and in the name of the
Grantor or otherwise, from time to time upon the occurrence and
during the continuation of any Event of Default, in the Agent's
discretion for the purpose of carrying out the terms of this
Agreement to take any action and to execute any document or
instrument which the Agent may deem necessary or advisable,
including, without limitation, to receive, endorse and collect
all instruments made payable to the Grantor representing any
dividend, interest payment or other distribution in respect of
the Pledged Collateral or any part thereof and to give full
discharge for the same.
Section 8. Agent May Perform. If the Grantor fails to
perform any agreement contained herein, the Agent may, but shall
not be obligated to, after notice to the Grantor itself perform,
or cause performance of, such agreement, and the expenses of the
Agent incurred in connection therewith shall constitute
Guaranteed Obligations hereunder.
Section 9. Reasonable Care. The Agent shall be deemed to
have exercised reasonable care in the custody and preservation of
the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially equal to that
which the Agent accords its own property, it being understood
that the Agent shall not have responsibility for (a) ascertaining
or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged
Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters, or (b) taking any necessary steps to
preserve rights against any parties with respect to any Pledged
Collateral.
Section 10. Remedies upon Default. If any Event of Default
shall have occurred and be continuing:
(a) (i) The Agent may exercise in respect of the
Pledged Collateral, in addition to other rights and
remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party in
default under the Uniform Commercial Code and the Agent
may also, without notice except as specified below,
sell the Pledged Collateral or any part thereof in one
or more parcels at a public or private sale, at any
exchange, broker's board or at any of the Agent's
offices or elsewhere, for cash, on credit or for future delivery,
-6-
<PAGE>
and upon such other terms as the Agent may
deem commercially reasonable.
(ii) The Grantor agrees that, to the extent notice
of sale shall be required by law, at least ten days'
notice to the Grantor of the time and place of any
public sale or the time after which any private sale is
to be made shall constitute reasonable notification.
The Agent shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or
private sale from time to time by announcement at the
time and place fixed therefor, and such sale may,
without further notice, be made at the time and place
to which it was so adjourned. The Grantor hereby
waives any claims against the Agent arising by reason
of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale
was less than the price which might have been obtained
at a public sale, even if the Agent accepts the first
offer received and does not offer such Pledged
Collateral to more than one offeree.
(b) If, at any time when Agent in its sole discretion
determines, following the occurrence and during the
continuation of an Event of Default, that, in connection
with any actual or contemplated exercise of its rights to
sell the whole or any part of the Pledged Collateral
hereunder, it is necessary or advisable to effect a public
registration of all or part of the Pledged Collateral
pursuant to the Securities Act, the Grantor shall, in an
expeditious manner, cause the Borrower to:
(i) prepare and file with the Commission a
registration statement with respect to the Pledged
Collateral and use its best efforts to cause such
registration statement to become and remain effective;
(ii) prepare and file with the Commission such
amendments and supplements to such registration
statement and the prospectus used in connection
therewith as may be necessary to keep such registration
statement effective and to comply with the provisions
of the Act with respect to the sale or other
disposition of the Pledged Collateral covered by such
registration statement whenever the Agent shall desire
to sell or otherwise dispose of the Pledged Collateral;
(iii) furnish to the Agent such numbers of copies
of a prospectus and a preliminary prospectus, in
conformity with the requirements of the Securities Act,
and such other documents as the Agent may request in
order to
-7-
<PAGE>
facilitate the public sale or other disposition of the
Pledged Collateral by the Agent;
(iv) use its best efforts to register or qualify
the Pledged Collateral covered by such registration
statement under such other securities or blue sky laws
of such jurisdictions within the United States of
America as the Agent shall request, and do such other
reasonable acts and things as may be required of it to
enable the Agent to consummate the public sale or other
disposition in such jurisdictions of the Pledged
Collateral by the Agent; and
(v) otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission,
and make available to its security holders, as soon as
reasonably practicable an earnings statement which
shall satisfy the provisions of Section 11(a) of the
Securities Act.
(c) The Grantor acknowledges the impossibility of
ascertaining the amount of damages which would be suffered
by the Agent and the Lenders by reason of the failure by the
Grantor to perform any of the covenants contained in this
Section 10 and, consequently, agrees that, if the Grantor
shall fail to perform any of such covenants, the Agent shall
be entitled to specific performance.
(d) The Grantor acknowledges that notwithstanding the
legal availability of a private sale or a sale subject to
the restrictions described above in paragraph (a), the Agent
may, in its discretion, elect to register any or all the
Pledged Collateral under the Securities Act (or any
applicable state securities law) in accordance with its
rights hereunder. The Grantor, however, recognizes that the
Agent may be unable to effect a public sale of any or all
the Pledged Collateral and may be compelled to resort to one
or more private sales thereof. The Grantor also
acknowledges that any such private sale may result in prices
and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable
manner. The Agent shall be under no obligation to delay a
sale of any of the Pledged Collateral for the period of time
necessary to permit the registrant to register such
securities for public sale under the Securities Act, or
under applicable state securities laws, even if the Grantor
would agree to do so.
(e) If the Agent determines to exercise its right to
sell any or all of the Pledged Collateral, upon written
-8-
<PAGE>
request, the Grantor shall, from time to time, furnish to
the Agent all such information as the Agent may request in
order to determine the number of shares and other
instruments included in the Pledged Collateral which may be
sold by the Agent as exempt transactions under the Act and
rules of the Commission thereunder, as the same are from
time to time in effect.
Section 11. Decisions Relating to Exercise of Remedies.
Notwithstanding anything in this Agreement to the contrary, the
Agent may exercise, and at the request of the Requisite Lenders
shall exercise or refrain from exercising, all rights and
remedies hereunder and provided by law which remedies are
cumulative and not exclusive.
Section 12. Expenses. The Grantor shall upon written
demand pay to the Agent the amount of any and all expenses,
including the fees and disbursements of its counsel and of any
experts and agents, as provided in Section 12.03 of the Credit
Agreement.
Section 13. Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the
Grantor herefrom shall in any event be effective unless the same
shall be in writing and signed by the party to be charged
therewith, and any such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which
given.
Section 14. Notices. All notices and other communications
provided for hereunder shall be given in the manner set forth in
the Credit Agreement and to the address first above written or,
as to each party, at such other address as may be designated by
such party in a written notice to the other party.
Section 15. Continuing Security Interest. This Agreement
shall create a continuing first priority security interest in the
Pledged Collateral, and shall (a) remain in full force and effect
until payment in full (after the termination of the Commitments)
of the Guaranteed Obligations; (b) continue to be effective or be
reinstated, as the case may be, if at any time payment and
performance of the Guaranteed Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount,
or must otherwise be restored or returned by the obligee of the
Guaranteed Obligations, all as though such payment or performance
had not been made; (c) be binding upon the Grantor, its
successors and assigns; and (d) inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the
Lenders and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (d), any
Lender may assign or otherwise transfer its rights and
obligations with the Credit Agreement to any other Person or
-9-
<PAGE>
entity, and such other Person or entity shall thereupon become
vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, all as provided in, and to the extent
set forth in, the Credit Agreement. Upon the payment in full in
cash (after the termination of the Commitments) of the Guaranteed
Obligations, the Borrower shall be entitled to the return, upon
its request and at its expense, of such of the Pledged Collateral
as shall not have been sold or otherwise applied pursuant to the
terms hereof.
Section 16. Severability. If for any reason any provision
or provisions hereof are determined to be invalid and contrary to
any existing or future law, such invalidity shall not impair the
operation of or effect those portions of this Agreement which are
valid.
Section 17. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
Section 18. Consent to Jurisdiction and Service of Process;
Waiver of Jury Trial. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
THE GRANTOR WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
GRANTOR ACCEPTS, FOR ITSELF IN AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE. THE GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO ITS NOTICE ADDRESS SPECIFIED
ON THE FIRST PAGE HEREOF, SUCH SERVICE TO BECOME EFFECTIVE TEN
DAYS AFTER SUCH MAILING. EACH OF THE GRANTOR AND, BY ACCEPTANCE
HEREOF, THE AGENT AND THE LENDERS, IRREVOCABLY WAIVES (A) TRIAL
BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, AND (B) ANY OBJECTION (INCLUDING WITHOUT LIMITATION,
ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN
SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
-10-
<PAGE>
IN WITNESS WHEREOF, the Grantor has caused this Agreement to
be duly executed and delivered by its officer thereunto duly
authorized as of the day first above written.
ANNTAYLOR STORES CORPORATION
By: /s/ Walter J. Parks
--------------------------
Name: Walter J. Parks
-----------------------
Title: VP - Finance
-----------------------
Agreed and accepted to as of
the date first above written:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: /s/ Dietmar Schiel
--------------------------
Name: Dietmar Schiel
--------------------------
Title: Vice President
--------------------------
-11-
<PAGE>
SCHEDULE I
TO
PLEDGE AGREEMENT
Attached to and forming a part of that Pledge Agreement
dated as of July 29, 1994 by AnnTaylor Stores Corporation to BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION as Agent for
the Banks party to the Credit Agreement.
Class Stock Number
Stock of Certificate of
Issuer Stock No(s). Shares
- - ------ ------ -------- ------
AnnTaylor, Inc. Common 1 1
-12-
<PAGE>
SCHEDULE II
TO
PLEDGE AGREEMENT
PLEDGE AGREEMENT SUPPLEMENT
This Pledge Agreement Supplement, dated -------------------,
19--, is delivered pursuant to Section 4 of the Pledge Agreement
referred to below. The undersigned hereby agrees that this
Pledge Agreement Supplement may be attached to the Pledge
Agreement, dated as of July 29, 1994 (the "ATSC Pledge
Agreement", the terms defined therein and not otherwise defined
herein being used as therein defined), made by the undersigned to
Bank of America National Trust and Savings Association as Agent
for the Lenders and the Issuing Bank party to the Credit
Agreement, and that the shares listed on this Pledge Agreement
Supplement shall be and become part of the Pledged Collateral
referred to in the ATSC Pledge Agreement and shall secure all
Guaranteed Obligations.
The undersigned agrees that the securities listed below
shall for all purposes constitute Pledged Collateral and shall be
subject to the security interest created by the ATSC Pledge
Agreement.
The undersigned hereby certifies that the representations
and warranties set forth in Section 3 of the ATSC Pledge
Agreement are true and correct as to the Pledged Collateral
listed herein on and as of the date hereof.
ANNTAYLOR STORES CORPORATION
By: _______________________
Title: _______________________
Class Stock Number
Stock of Certificate of
Issuer Stock No(s). Shares
- - ------ ----- ----------- ----------
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND CONDENSED CONSOLIDATED
BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000850090
<NAME> ANNTAYLOR INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-28-1995
<PERIOD-END> JUL-30-1994
<CASH> 1,257
<SECURITIES> 0
<RECEIVABLES> 55,731
<ALLOWANCES> 778
<INVENTORY> 68,308
<CURRENT-ASSETS> 134,521
<PP&E> 95,219
<DEPRECIATION> 31,342
<TOTAL-ASSETS> 536,023
<CURRENT-LIABILITIES> 62,509
<BONDS> 0
<COMMON> 1
0
0
<OTHER-SE> 307,170
<TOTAL-LIABILITY-AND-EQUITY> 536,023
<SALES> 305,219
<TOTAL-REVENUES> 305,219
<CGS> 164,394
<TOTAL-COSTS> 164,394
<OTHER-EXPENSES> 102,888
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,573
<INCOME-PRETAX> 31,364
<INCOME-TAX> 15,381
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (868)
<CHANGES> 0
<NET-INCOME> 15,115
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
