UNITED STATES
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 October 28, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-10738
ANNTAYLOR STORES CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3499319
-------- -----------
(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 November 24, 1995
------- -----------------
Common Stock, $.0068 par value 23,084,311
==================================================================
INDEX TO FORM 10-Q
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations
for the Quarters and Nine Months Ended
October 28, 1995 and October 29, 1994 3
Condensed Consolidated Balance Sheets at
October 28, 1995 and January 28, 1995 4
Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended October 28, 1995
and October 29, 1994 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Operations 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
PART I. FINANCIAL INFORMATION
====================================================================
Item 1. Financial Statements
ANN TAYLOR STORES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarters and Nine Months Ended October 28, 1995 and October
29, 1994
(unaudited)
Quarters Ended Nine Months Ended
------------------ -------------------
Oct. 28, Oct. 29, Oct. 28, Oct. 29,
1995 1994 1995 1994
-------- -------- ------- -------
(in thousands, except per share amounts)
Net sales $178,500 $164,632 $530,501 $469,851
Cost of sales 98,362 87,576 304,586 251,970
------- ------- ------- -------
Gross profit 80,138 77,056 225,915 217,881
Selling, general and administrative
expenses 69,074 54,826 198,758 152,635
Amortization of goodwill 2,377 2,377 7,130 7,130
------- ------- ------- -------
Operating income 8,687 19,853 20,027 58,116
Interest expense 5,402 3,642 14,368 10,215
Other (income) expense, net 374 (10) 200 316
------- ------- ------- -------
Income before income taxes and
extraordinary loss 2,911 16,221 5,459 47,585
Income tax provision 2,225 7,937 5,091 23,318
------- ------- ------- -------
Income before extraordinary loss 686 8,284 368 24,267
Extraordinary loss (net of income
tax benefit of $654,000) --- --- --- 868
------- ------- ------- -------
Net income $686 $8,284 $368 $ 23,399
======= ======= ======= =======
Net income per share of common stock:
Income per share before
extraordinary loss $ .03 $ .35 $ .02 $ 1.05
Extraordinary loss per share --- --- --- .04
------- ------- ------- -------
Net income per share $ .03 $ .35 $ .02 $ 1.01
======= ======== ======= =======
Weighted average number of shares
and share equivalents
outstanding 23,195 23,693 23,244 23,208
======= ======= ======= =======
See accompanying notes to condensed consolidated financial statements.
============================================================================
ANNTAYLOR STORES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
October 28, 1995 and January 28, 1995
October 28, 1995 January 28, 1995
---------------- ----------------
(unaudited)
(in thousands)
ASSETS
Current assets
Cash $ 1,251 $ 1,551
Accounts receivable, net of allowances of
$684,000 and $931,000, respectively 73,849 61,211
Merchandise inventories 120,966 93,705
Prepaid expenses and other current assets 14,577 7,956
Deferred income taxes 3,650 3,650
------- -------
Total current assets 214,293 168,073
Property and equipment
Land and building 9,189 499
Leasehold improvements 62,000 43,370
Furniture and fixtures 82,877 59,105
Construction in progress 33,966 24,867
------- -------
188,032 127,841
Less accumulated depreciation and
amortization 38,605 31,503
------- -------
Net property and equipment 149,427 96,338
Goodwill, net of accumulated amortization
of $64,349,000 and $57,219,000,
respectively 315,901 323,031
Investment in CAT 4,856 3,792
Deferred income taxes 400 1,600
Deferred financing costs, net of accumulated
amortization of $1,580,000 and $956,000,
respectively 3,848 2,829
Other assets 2,837 2,591
------- -------
Total assets $691,562 $598,254
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $62,483 $36,625
Accrued rent 7,396 5,243
Accrued interest 5,370 1,994
Accrued expenses 13,541 22,030
------- -------
Total current liabilities 88,790 65,892
Long-term debt 268,000 200,000
Other liabilities 7,826 6,250
Commitments and contingencies
Stockholders' equity
Common stock, $.0068 par value; 40,000,000
shares authorized; 23,129,653 and
23,106,572 shares issued, respectively 157 157
Additional paid-in capital 311,328 310,714
Warrants to acquire 37,046 and 58,412
shares of common stock, respectively 604 951
Retained earnings 15,364 14,996
Deferred compensation on restricted stock (71) (149)
------- -------
327,382 326,669
Less treasury stock, 45,342 and 65,843
shares, respectively, at cost (436) (557)
------- -------
Total stockholders' equity 326,946 326,112
Total liabilities and stockholders'
equity $691,562 $ 598,254
======== =======
See accompanying notes to condensed consolidated financial statements.
===========================================================================
ANNTAYLOR STORES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended October 28, 1995 and October 29, 1994
(unaudited)
Nine Months Ended
--------------------------------
Oct. 28, 1995 Oct. 29, 1994
------------- -------------
(in thousands)
Operating activities:
Net income $ 368 $23,399
Adjustments to reconcile net income
to net cash provided by operating
activities:
Extraordinary loss --- 1,522
Equity earnings in CAT (1,064) (1,108)
Provision for loss on accounts receivable 866 1,193
Depreciation and amortization 14,008 8,591
Amortization of goodwill 7,130 7,130
Amortization of deferred financing costs 624 793
Amortization of deferred compensation 78 280
Deferred income taxes 1,200 ---
Loss on disposal of property and equipment 947 1,125
(Increase) decrease in:
Receivables (13,444) (12,833)
Merchandise inventories (27,261) (43,434)
Prepaid expenses and other current assets (6,621) 998
Increase (decrease) in:
Accounts payable 25,372 9,109
Accrued expenses (2,071) 4,891
Other non-current assets and liabilities,
net 1,331 446
------- -------
Net cash provided by operating activities 1,463 2,102
Investing activities:
Purchases of property and equipment (68,994) (33,273)
------- -------
Net cash used by investing activities (68,994) (33,273)
------- -------
Financing activities:
Increase in bank overdrafts 486 ---
Borrowing under revolving credit agreement 39,000 53,000
Exercise of stock options 388 3,551
Payments of financing costs (1,643) (294)
Proceeds from (payment of) term loan 25,000 (56,000)
Net proceeds from common stock offering --- 30,414
Net borrowing on receivables facility 4,000 3,049
------- -------
Net cash provided by financing activities 67,231 33,720
------- -------
Net increase (decrease) in cash (300) 2,549
Cash, beginning of period 1,551 292
------- -------
Cash, end of period $1,251 $ 2,841
======= =======
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest $10,398 $ 6,655
======= =======
Cash paid during the period for income taxes $ 7,549 $21,065
======= =======
See accompanying notes to condensed consolidated financial statements.
=============================================================================
ANNTAYLOR STORES CORPORATION
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 1995 interim period shown in
this report are not necessarily indicative of results to be
expected for the fiscal year.
The January 28, 1995 condensed consolidated balance sheet
amounts have been derived from the previously audited
consolidated balance sheet of AnnTaylor Stores Corporation.
Certain fiscal 1994 amounts have been reclassified to conform
to the 1995 presentation.
It is not considered necessary to include detailed footnote
information as of October 28, 1995 and October 29, 1994. 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 Stores
Corporation 1994 Annual Report to Stockholders.
2. Income Per Share
----------------
Net income per share is calculated by dividing net income by
the total of the weighted average number of common shares and
common share equivalents outstanding, assuming the exercise of
outstanding warrants and the dilutive effect of outstanding stock
options, computed in accordance with the treasury stock method.
The number of shares used in the calculation was as follows:
Quarters Ended Nine Months Ended
------------------ ------------------
Oct. 28, Oct. 29, Oct. 28, Oct. 29,
1995 1994 1995 1994
-------- ------- ------- ---------
(in thousands)
Common shares 23,079 22,988 23,062 22,570
Warrants 37 60 47 100
Stock options 79 645 135 538
------ ------ ------ ------
23,195 23,693 23,244 23,208
====== ====== ====== ======
3. Long-term Debt
--------------
The following summarizes long-term debt outstanding at October
28, 1995:
(in thousands)
Revolving Credit Agreement $103,000
Term Loan 25,000
8-3/4% Notes 100,000
Receivables Facility 40,000
-------
Total long-term debt $268,000
========
On September 29, 1995, AnnTaylor, Inc. ("Ann Taylor"), a
wholly owned subsidiary of AnnTaylor Stores Corporation (the
"Company"), entered into an amended and restated credit agreement
to replace its existing bank credit agreement. The amended and
restated credit agreement provides, among other things, for a new
$25,000,000 term loan, in addition to the $125,000,000 revolving
credit facility provided for under the original credit agreement.
The term loan bears interest at a rate equal to, at the Company's
option, the Bank of America National Trust and Savings
Association ("Bank of America") (1) Base Rate plus 1.50%, or (2)
Eurodollar Rate plus 2.50%, and amounts outstanding under the
revolving credit facility bear interest at a rate equal to, at
the Company's option, the Bank of America (1) Base Rate plus
.75%, or (2) Eurodollar Rate plus 1.75%. Effective December 6,
1995, the interest rate on the term loan will increase by 1%.
The principal amount of the term loan is payable on September 29,
1998, and the maturity date of the revolving credit facility is
July 29, 1998. The amended and restated 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, some of which
provisions were amended by the new credit agreement. The amended
and restated credit agreement also provides for, among other
things, a limitation on capital expenditures commencing in fiscal
1996. Ann Taylor's payment obligations under the agreement are
guaranteed by the Company.
On October 31, 1995, AnnTaylor Funding, Inc., a wholly owned
subsidiary of Ann Taylor, entered into an amended and restated
receivables financing agreement, refinancing its existing
receivables financing facility on substantially the same terms as
the prior facility, except that the Lender under the agreement
changed from Clipper Receivables Corporation to Market Street
Capital Corp. The financial covenants in the new agreement were
revised to mirror certain of the financial covenants contained in
Ann Taylor's amended and restated bank credit agreement.
On November 27, 1995, Ann Taylor and its wholly owned
subsidiary AnnTaylor Distribution Services, Inc., received the
proceeds of a $7,000,000 seven year mortgage loan secured by the
Company's distribution center land and building in Louisville,
Kentucky. The mortgage loan bears interest at 7.5% and is
payable in monthly installments of $64,891 through December 1,
1997, and thereafter in monthly installments sufficient to
amortize the then remaining principal balance over a period of
five years.
===================================================================
Item 2. Management's Discussion and Analysis of Operations
Results of Operations
Quarters Ended Nine Months Ended
------------------ -------------------
Oct. 28, Oct. 29, Oct. 28, Oct. 29,
1995 1994 1995 1994
-------- ------ ------- -------
Number of Stores:
Open at beginning of period 289 235 262 231
Opened during period 14 18 43 26
Expanded during period* 12 8 29 21
Closed during period --- --- 2 4
Open at end of period 303 253 303 253
Type of Stores Open at End of Period:
AnnTaylor Stores 256 231
AnnTaylor Factory Stores 23 17
Ann Taylor Loft stores 15 ---
AnnTaylor Studio stores 9 5
- - -------------------
* Expanded stores are excluded from comparable store sales for
the first year following expansion.
==============================================================================
Quarter Ended October 28, 1995 Compared to Quarter Ended October 29, 1994
- - -------------------------------------------------------------------------
The Company's net sales in the third quarter of 1995 increased
to $178,500,000 from $164,632,000 in the third quarter of 1994,
an increase of $13,868,000 or 8.4%. The increase in net sales
was attributable to the opening of new stores and the expansion
of existing stores, offset by an 11.3% decrease in comparable
store sales in the third quarter of 1995. The Company believes
that the decrease in comparable store sales is principally
attributable to continued weakness in demand for women's apparel
generally.
Gross profit as a percentage of net sales decreased to 44.9%
in the third quarter of 1995 from 46.8% in the third quarter of
1994. This decrease was primarily attributable to markdowns
associated with increased promotional activities.
Selling, general and administrative expenses represented 38.7%
of net sales in the third quarter of 1995, compared to 33.3% of
net sales in the third quarter of 1994. The 5.4% increase is
primarily attributable to higher tenancy, store maintenance and
store selling costs as a percentage of sales (approximately 74%
of the increase), higher distribution expense relating to start-
up costs of the Company's distribution facility that opened in
Louisville, Kentucky in June 1995 (approximately 8% of the
increase), higher packaging and supplies expense (approximately
8% of the increase) and higher merchandising and design expense
(approximately 6% of the increase).
As a result of the foregoing, the Company had an operating
income of $8,687,000, or 4.9% of net sales, in the third quarter
of 1995, compared to operating income of $19,853,000, or 12.1% of
net sales, in the third quarter of 1994. Amortization of
goodwill was $2,377,000 in the third quarter of each of 1995 and
1994. Operating income, without giving effect to such
amortization in either year, was $11,064,000, or 6.2% of net
sales, in the 1995 period and $22,230,000, or 13.5% of net sales,
in the 1994 period.
Interest expense was $5,402,000 in the third quarter of 1995
and $3,642,000 in the third quarter of 1994. The increase in
interest expense is attributable to higher interest rates and
higher outstanding indebtedness in 1995.
The income tax provision was $2,225,000, or 76.4% of income
before income taxes, in the third quarter of 1995 compared to the
income tax provision of $7,937,000, or 48.9% of income before
income taxes, in the third quarter of 1994. The effective income
tax rate for both periods differed from the statutory rate
primarily because of non-deductible goodwill amortization.
As a result of the foregoing factors, the Company had net
income of $686,000, or 0.4% of net sales, for the third quarter
of 1995 compared to net income of $8,284,000, or 5.0% of net
sales, for the third quarter of 1994.
The Company conducts no business other than the management of
Ann Taylor.
===================================================================
Nine Months Ended October 28, 1995 Compared to Nine Months Ended
- - ----------------------------------------------------------------
October 29, 1994
- - ----------------------------------------------------------------
The Company's net sales in the first nine months of 1995
increased to $530,501,000 from $469,851,000 in the first nine
months of 1994, an increase of $60,650,000 or 12.9%. The
increase in net sales was attributable to the opening of new
stores and the expansion of existing stores, offset by the
closing of two stores and a 6.2% decrease in comparable store
sales in the first nine months of 1995. The decrease in
comparable store sales is attributable to weak customer response
to the Company's Spring and Summer merchandise assortments, as
well as continued weakness in demand for women's apparel
generally.
Gross profit as a percentage of net sales decreased to 42.6%
in the first nine months of 1995 from 46.4% in the first nine
months of 1994. This decrease was primarily attributable to
markdowns associated with increased promotional activities.
Selling, general and administrative expenses represented 37.5%
of net sales in the first nine months of 1995, compared to 32.5%
of net sales in the first nine months of 1994. The increase in
selling, general and administrative expenses as a percentage of
net sales was primarily attributable to higher tenancy, store
maintenance and store selling costs as a percentage of sales
(approximately 74% of the increase), higher distribution center
expense relating to start-up costs of the Company's distribution
facility in Louisville, Kentucky in the second quarter
(approximately 8% of the increase), additional catalog expense
relating to the Company's test of its catalog as a mail order
vehicle (approximately 7% of the increase), higher merchandising
and design expense (approximately 8% of the increase) and higher
packaging and supplies expense (approximately 3% of the
increase). The Company returned its catalog format to
principally an advertising vehicle, rather than a mail order
business, commencing Fall 1995.
As a result of the foregoing, operating income decreased to
$20,027,000, or 3.8% of net sales, in the first nine months of
1995, from $58,116,000, or 12.4% of net sales, in the first nine
months of 1994. Amortization of goodwill was $7,130,000 in the
first nine months of each of 1995 and 1994. Operating income,
without giving effect to such amortization in either year, was
$27,157,000, or 5.1% of net sales, in the 1995 period and
$65,246,000, or 13.9% of net sales, in the 1994 period.
Interest expense was $14,368,000 in the first nine months of
1995 and $10,215,000 in the first nine months of 1994. The
increase in interest expense is attributable to higher interest
rates applicable to the Company's debt obligations and higher
outstanding indebtedness in 1995.
The income tax provision was $5,091,000, or 93.3% of income
before income taxes in the 1995 period, compared to $23,318,000,
or 49.0% of income before income taxes and extraordinary loss, in
the 1994 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 a net
income of $368,000 or 0.1% of net sales, for the first nine
months of 1995 compared to net income before extraordinary loss
of $24,267,000, or 5.2% of net sales, for the first nine months
of 1994.
In connection with debt financing activities undertaken in May
and July of 1994, the Company incurred an extraordinary loss of
$868,000 net of taxes, in the second quarter of 1994. After
giving effect to these extraordinary losses, the Company had net
income of $23,399,000 in the first nine months of 1994.
=================================================================
Financial Condition
- - -------------------
For the first nine months of 1995, net cash provided by
operating activities totaled $1,463,000, primarily as a result of
non-cash operating expenses, partially offset by increases in
working capital. Cash used for investing activities during the
first nine months of 1995 amounted to $68,994,000, for the
purchase of property and equipment. Cash provided by financing
activities during the first nine months of 1995 amounted to
$67,231,000, primarily as a result of borrowings under the
revolving credit agreement, including the term loan, and
receivables facility.
Accounts receivable increased to $73,849,000 at October 28,
1995 from $61,211,000 at January 29, 1995, an increase of
$12,638,000 or 20.6%. This increase was primarily attributable
to Ann Taylor credit card receivables, which increased
approximately $9,513,000.
Merchandise inventories were $120,966,000 at October 28, 1995,
compared to inventories of $93,705,000 at January 28, 1995.
Total square footage increased to 1,605,000 square feet at
October 28, 1995 from 1,173,000 square feet at January 28, 1995.
On a per square foot basis, inventories were down 5.7% at the end
of the third quarter of 1995 compared to inventories per square
foot at the end of the previous fiscal year.
At October 28, 1995, the Company had outstanding long term
debt, on a consolidated basis, of $268,000,000, comprising
$103,000,000 under the revolving credit facility, $25,000,000
under the term loan, both pursuant to Ann Taylor's amended and
restated bank credit agreement (see Note 3 to Financial
Statements), $40,000,000 under AnnTaylor Funding, Inc.'s
receivables facility and $100,000,000 principal amount of Ann
Taylor's 8-3/4% Subordinated Notes due 2000. AnnTaylor Funding,
Inc. can borrow up to $40,000,000 under the receivables facility,
depending upon its accounts receivable balance. The maturity
date of the revolving credit facility is July 29, 1998 and the
maturity date of the term loan is September 29, 1998. The
maturity date of the receivables facility is January 17, 1997.
The amended and restated credit agreement also, among other
things, revised the limitations on capital expenditures for
fiscal 1996 through 1998 as follows: 1996: $6,250,000 per fiscal
quarter; 1997: $32,500,000 per fiscal year and 1998: $32,500,000
per fiscal year. The Company expects to be able to continue its
plans for growth and refurbishment within these limits. The
Company currently expects to add approximately 150,000 square
feet of retail store space in 1996.
The Company's capital expenditures, which are primarily
attributable to the Company's store expansion, renovation and
refurbishment programs, totaled $68,994,000 in the first nine
months of 1995. The Company expects total capital expenditures
for 1995 to be approximately $82,000,000 and to have increased
store square footage by approximately 500,000 square feet. The
Company continues to pursue financing a portion of such
expenditures through fixture and equipment lease financing
arrangements.
In addition, on November 27, 1995, Ann Taylor and its wholly
owned subsidiary AnnTaylor Distribution Services, Inc., received
the proceeds of a $7,000,000 seven year mortgage loan secured by
the Company's distribution center land and building in
Louisville, Kentucky. The mortgage loan bears interest at 7.5%
and is payable in monthly installments of $64,891 through
December 1, 1997; thereafter, monthly installments, which are
sufficient to amortize the then remaining principal balance over
a period of five years, will be due and payable. In accordance
with the terms of the amended and restated credit facility, the
Company applied a portion of the proceeds of the mortgage loan to
reduce borrowings outstanding under the revolving credit facility
and the term loan facility and, at the time of required delivery
of the fiscal year end reports, the maximum amount available to
be borrowed under the revolving credit facility will be decreased
by $3,500,000.
Dividends and distributions from Ann Taylor to the Company are
restricted by both the revolving credit agreement and the
indenture relating to Ann Taylor's
8-3/4% Subordinated Notes due 2000.
In order to finance its operations and capital requirements,
the Company expects to use internally generated funds and funds
available to it under the revolving credit agreement. The
Company believes that cash flow from operations and funds
available under the revolving credit agreement will be sufficient
to enable it to meet its ongoing cash needs for the foreseeable
future. In addition, if completed, the fixture and equipment
leasing transactions referred to above would provide the Company
with additional liquidity.
=================================================================
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.9.4 Amended and Restated Credit Agreement,
dated as of September 29, 1995, among Ann
Taylor, Bank of America, Fleet Bank,
National Association, as Co-Agents, the
financial institutions from time to time
party thereto, BA Securities, Inc., as
Arranger, and Bank of America, as Agent.
Incorporated by reference to Exhibit 10.1
to the Current Report on Form 8-K of Ann
Taylor filed on October 17, 1995.
10.10.1 Amended and Restated Guaranty, dated
as of September 29, 1995, made by the
Company in favor of Bank of America, as
Agent. Incorporated by reference to
Exhibit 10.4 to the Current Report on Form
8-K of Ann Taylor filed on October 17,
1995.
10.11.1 Amended and Restated Security and
Pledge Agreement, dated as of September 29,
1995, made by Ann Taylor in favor of Bank
of America, as Agent. Incorporated by
reference to Exhibit 10.2 to the Current
Report on Form 8-K of Ann Taylor filed on
October 17, 1995.
10.12.1 Amended and Restated Security and
Pledge Agreement, dated as of September 29,
1995, made by the Company in favor of Bank
of America, as Agent. Incorporated by
reference to Exhibit 10.5 to the Current
Report on Form 8-K of Ann Taylor filed on
October 17, 1995.
====================================================================
Item 6. Exhibits and Reports on Form 8-K (continued)
(a) Exhibits (continued)
10.13 Trademark Security Agreement, dated as of
September 29, 1995, made by Ann Taylor in
favor of Bank of America, as Agent.
Incorporated by reference to Exhibit 10.3
to the Current Report on Form 8-K of Ann
Taylor filed on October 17, 1995.
10.31.4 Amended and Restated Receivables
Financing Agreement dated October 31, 1995,
among AnnTaylor Funding, Inc., Ann Taylor,
Market Street Capital Corp. and PNC Bank,
National Association.
10.34 Mortgage, Assignment of Rents and Leases,
Security Agreement and Fixture Financing
Statement dated November 20, 1995, between
AnnTaylor Distribution Services, Inc., as
Mortgagor, and General Electric Capital
Assurance Company, as Mortgagee.
10.35 Promissory Note dated November 20, 1995
from Ann Taylor and AnnTaylor Distribution
Services, Inc., collectively as Borrower,
to General Electric Capital Assurance
Company, as Lender.
(b) Reports on Form 8-K:
The Company filed a report with the Commission on
Form 8-K dated September 29, 1995 with respect to
the amendment and restatement of Ann Taylor's then
existing revolving credit agreement and the
Company's amended and restated guarantee of Ann
Taylor's indebtedness under that agreement.
================================================================
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 Stores Corporation
Date: December 8, 1995 By: /s/ Walter J. Parks
-------------------- ---------------------
Walter J. Parks
Senior Vice President -Finance
(Duly Authorized Officer and
Principal Accounting Officer)
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BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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<CGS> 304,586
<TOTAL-COSTS> 304,586
<OTHER-EXPENSES> 206,088
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,368
<INCOME-PRETAX> 5,459
<INCOME-TAX> 5,091
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 368
<EPS-PRIMARY> 0
<EPS-DILUTED> .02
</TABLE>
AMENDED AND RESTATED
RECEIVABLES FINANCING AGREEMENT
Dated as of October 31, 1995
Among
ANNTAYLOR FUNDING, INC.
as the Company
ANNTAYLOR, INC.
as Servicer
and
MARKET STREET CAPITAL CORP.
as Lender
and
PNC BANK, NATIONAL ASSOCIATION
as Administrator
- - -----------------------------------------------------------------
TABLE OF CONTENTS
ARTICLE I
LOANS
SECTION 1.01. Commitments to Lend; Limits on
Lender's Obligations 2
SECTION 1.02. Loan Procedures 2
SECTION 1.03. Borrowing Base 3
SECTION 1.04. Note 3
SECTION 1.05. Principal 4
ARTICLE II
INTEREST
SECTION 2.01. Interest 4
SECTION 2.02. Payment Dates 4
SECTION 2.03. Funding with Commercial Paper 5
ARTICLE III
SETTLEMENTS
SECTION 3.01. Settlement Procedures 5
SECTION 3.02. Deemed Collections; Reduction of
Outstanding Principal, Etc 8
SECTION 3.03. Payments and Computations, Etc. 10
SECTION 3.04. Treatment of Collections and Deemed
Collections 11
SECTION 3.05. Spread Account; Customer Letter of
Credit 11
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees 13
SECTION 4.02. Yield Protection 13
SECTION 4.03. Funding Losses 15
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to Effectiveness 16
SECTION 5.02. Conditions Precedent to All 18
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Company 18
SECTION 6.02. Representations and Warranties of
AnnTaylor 23
ARTICLE VII
GENERAL COVENANTS OF THE COMPANY AND ANNTAYLOR
SECTION 7.01. Affirmative Covenants 27
SECTION 7.02 Separate Corporate Existence 28
SECTION 7.03. Reporting Requirements 31
SECTION 7.04. Negative Covenants of the Company 33
SECTION 7.05 Negative Covenants of AnnTaylor 35
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer 37
SECTION 8.02. Duties of Servicer 38
SECTION 8.03. Rights of the Administrator 39
SECTION 8.04. Responsibilities of the Company 41
SECTION 8.05. Further Action Evidencing Security
Interest 41
SECTION 8.06. Application of Collections 42
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest 42
SECTION 9.02. Remedies 43
ARTICLE X
EVENTS OF DEFAULT
SECTION 10.01. Events of Default 43
SECTION 10.02. Remedies 45
ARTICLE XI
THE ADMINISTRATOR
SECTION 11.01. Authorization and Action 46
SECTION 11.02. Administrator's Reliance, Etc 46
SECTION 11.03. PNC Bank and Affiliates 47
ARTICLE XII
ASSIGNMENT OF LENDER'S INTEREST
SECTION 12.01. Restrictions on Assignments 47
SECTION 12.02. Rights of Assignee 48
SECTION 12.03. Evidence of Assignment 48
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc 52
SECTION 14.02. Notices, Etc. 53
SECTION 14.03. No Waiver; Remedies 53
SECTION 14.04. Binding Effect; Survival 53
SECTION 14.05. Costs, Expenses and Taxes 54
SECTION 14.06. No Proceedings 54
SECTION 14.07. Confidentiality of the Company
Information 55
SECTION 14.08. Confidentiality of Program Information 57
SECTION 14.09. Captions and Cross References 59
SECTION 14.10. Governing Law 59
SECTION 14.11. Waiver Of Jury Trial 59
SECTION 14.12. Consent To Jurisdiction; Waiver Of
Immunities 60
SECTION 14.13. Execution in Counterparts 60
SECTION 14.14. No Recourse Against Other Parties 60
APPENDICES
APPENDIX A Definitions
SCHEDULES
SCHEDULE 6.01(n) List of Offices of the Company where
Records Are Kept
SCHEDULE 6.01(o) List of Lock-Box Banks
SCHEDULE 6.01(p)-1 Forms of Contracts
SCHEDULE 6.01(p)-2 Description of Credit and Collection Policy
SCHEDULE 6.02(k) List of Offices of the Servicer where
Records Are Kept
SCHEDULE 6.02(l) List of Bank Accounts
SCHEDULE 6.01(r) Trade Names
EXHIBITS
EXHIBIT 1.02(a) Form of Borrowing Notice
EXHIBIT 1.04 Form of Note
EXHIBIT 3.01(a) Form of Information Package
EXHIBIT 3.05 Form of Spread Account Agreement
EXHIBIT 5.01(g) Form of Lock-Box Agreement
EXHIBIT 5.01(h)-(i) Form of Opinion of Skadden, Arps, Slate,
Meagher & Flom - Enforceability
EXHIBIT 5.01(h)-(ii) Form of Opinion of General Counsel for the
Company
EXHIBIT 5.01(h)-(iii) Form of Opinion of Skadden, Arps, Slate,
Meagher & Flom - True Sale
EXHIBIT 5.01(h)-(iv) Form of Opinion of Skadden, Arps, Slate,
Meagher & Flom - Substantive Consolidation
EXHIBIT 5.01(h)-(v) Form of Opinion of Connecticut Counsel
=============================================================================
AMENDED AND RESTATED
RECEIVABLES FINANCING AGREEMENT
THIS IS AN AMENDED AND RESTATED RECEIVABLES FINANCING
AGREEMENT, dated as of October 31, 1995, among ANNTAYLOR FUNDING,
INC., a Delaware corporation (the "Company"), ANNTAYLOR, INC., a
------------
Delaware corporation ("AnnTaylor"), as initial servicer, MARKET
---------
STREET CAPITAL CORP., a Delaware corporation ("Lender"), and PNC
------
BANK, NATIONAL ASSOCIATION, a national banking association ("PNC
---
Bank"), as administrator for Lender (in such capacity, the
- - ----
"Administrator"). Unless otherwise indicated, capitalized terms
- - --------------
used in this Agreement are defined in Appendix A.
----------
Background
----------
1. The Company is a limited purpose subsidiary of
AnnTaylor formed for the purpose of purchasing Receivables
generated by AnnTaylor in the ordinary course of its business.
2. The Company, AnnTaylor, Clipper Receivables Corporation
("Clipper"), State Street Boston Capital Corporation ("State
------ -----
Street"), as administrator, and PNC Bank, as relationship bank,
- - ------
entered into the Receivables Financing Agreement, dated as of
January 27, 1994 (as amended prior to the date hereof, the
"Original Financing Agreement").
- - -----------------------------
3. Clipper has assigned to Lender all of its rights,
claims and obligations under the Original Financing Agreement and
the other Transaction Documents pursuant to the Assignment and
Assumption Agreement, dated as of October 31, 1995 (the
"Assignment Agreement"), among Clipper, Lender, State Street and
- - --------------------
PNC Bank.
4. In connection with the assignment to Lender pursuant to
the Assignment Agreement, the parties hereto desire to amend and
restate the Original Financing Agreement in its entirety as set
forth herein.
5. The Company has, and expects to have, Pool Receivables
which the Company intends to finance pursuant to this Agreement.
The Company has requested Lender, and Lender has agreed, subject
to the terms and conditions contained in this Agreement, to make
loans to the Company from time to time during the term of this
Agreement, which loans will be secured by the Receivables Pool.
6. AnnTaylor has been requested by the Company, Lender and
the Administrator to act, and has agreed to act, as initial
Servicer.
7. PNC Bank has been requested, and is willing, to act as
the Administrator.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto agree as
follows:
======================================================================
ARTICLE I
LOANS
SECTION 1.01. Commitments to Lend; Limits on Lender's
-------------------
Obligations. Upon the terms and subject to the conditions of
this Agreement, from time to time prior to the Termination Date,
the Company may request that Lender make loans to the Company
(each being a "Loan") and Lender shall make such Loans; provided
---- --------
that no Loan shall be made by Lender if, after giving effect
thereto, the then Outstanding Principal would exceed either (a)
$40,000,000 (the "Lending Limit"), or (b) the Borrowing Base then
-------------
in effect; and provided further that each Loan made pursuant to
----------------
this Section 1.01 shall have an original principal amount of at
------------
least $5,000,000 and shall be in integral multiples of
$1,000,000, unless the Outstanding Principal is $20,000,000 or
more, in which case, each Loan shall have an original principal
amount of at least $100,000 and shall be in integral multiples of
$100,000.
SECTION 1.02. Loan Procedures.
---------------
(a) Notice of Loan. Each Loan to the Company by Lender
--------------
shall be made on notice from the Company to the Administrator
substantially in the form of Exhibit 1.02(a) (each, a "Borrowing
--------------- ---------
Notice") received by the Administrator not later than noon (New
- - ------
York City time) on the Business Day next preceding the date of
such proposed Loan. Each such notice of a proposed Loan shall
specify the desired amount and date of such Loan, which date
shall be a Settlement Date.
(b) Funding of Loan. On the date of each Loan, Lender
---------------
shall, upon satisfaction of the applicable conditions set forth
in Article V, make available to the Administrator at the
---------
Administrator's Office the principal amount of its Loan in same
day funds, and after receipt by the Administrator of such funds,
the Administrator will disburse such funds to an account of the
Company designated in writing by the Company in the applicable
Borrowing Notice.
SECTION 1.03. Borrowing Base.
--------------
(a) Computation of Borrowing Base. On any date, the
-----------------------------
"Borrowing Base" means an amount equal to
NPB - LR
where:
LR = the Loss Reserve on such date; and
NPB = the Net Pool Balance on such date.
(b) Frequency of Computation. The Borrowing Base shall be
------------------------
computed and reported, as provided in Section 3.01, as of (i) the
------------
date of the initial Loan and (ii) the Cut-Off Date for each
Settlement Period. In addition, if the Administrator reasonably
believes that there shall exist any event or occurrence that has
a reasonable possibility of causing a Material Adverse Effect,
the Administrator may require the Servicer to provide a
computation of Collections received by the Company or the
Servicer since the last Cut-Off Date, the then aggregate Unpaid
Balance of all Pool Receivables and such other information
comprising a part of the Information Package that can be updated
from the last Cut-Off Date for purposes of computing the
Borrowing Base as of any other date, and the Servicer agrees to
do so within 5 Business Days of its receipt of the
Administrator's request.
SECTION 1.04. Note. The Loans shall be evidenced by a
----
replacement promissory note (as from time to time supplemented,
extended, amended, modified or further replaced from time to
time, and including the Original Note for as long as it was in
effect, the "Note"), substantially in the form set forth in
----
Exhibit 1.04, with appropriate insertions, dated the date hereof,
- - -----------
payable to the order of Lender in the maximum principal amount of
$40,000,000 (or, if less, in the aggregate unpaid principal
amount of all of the Loans) on the Termination Date. The
Administrator shall record in its records, or at its option on
the schedule attached to the Note, the date and amount of each
Loan made hereunder, each repayment thereof and the other
information provided for thereon. The aggregate unpaid principal
amount so recorded shall be rebuttable presumptive evidence of
the principal amount owing and unpaid on the Note. The failure
so to record any such information or the error in so recording
any such information shall not, however, limit or otherwise
affect the actual obligations of the Company hereunder or under
the Note to repay the principal amount of all Loans, together
with all interest accruing thereon.
SECTION 1.05. Principal. The Company shall repay the
---------
principal of the Loans (i) on each Settlement Date in an amount
equal to the excess, if any, of the Outstanding Principal over
the Borrowing Base then in effect and (ii) in full on the
Termination Date. Outstanding Principal shall not be considered
reduced by any allocation, setting aside or distribution of any
portion of Collections unless such Collections shall have been
actually delivered to the Administrator pursuant hereto (or
deemed delivered pursuant to Section 3.03(a)(i)). Outstanding
-----------------
Principal shall not be considered reduced by any distribution of
any portion of Collections if at any time such distribution is
rescinded or must otherwise be returned for any reason.
======================================================================
ARTICLE II
INTEREST
SECTION 2.01. Interest. The Company hereby promises to pay
--------
interest for each Interest Period on the unpaid principal amount
of each Loan (or the applicable portion thereof) for the period
commencing on the date of such Loan until such Loan is paid in
full, as follows:
(a) at all times while the making or maintenance
of such Loan (or the applicable portion thereof) by
Lender is funded by the issuance of Commercial Paper
Notes, the CP Rate for such Interest Period; and
(b) at all times while the making or maintenance
of such Loan (or the applicable portion thereof) by
Lender is not funded by the issuance of Commercial
Paper Notes, the Bank Rate applicable to such Interest
Period;
provided, however, that on any day when an Event of Default shall
- - ------- ------
have occurred and be continuing, the Loans shall accrue interest
at a rate per annum equal to the higher of (i) the Alternate Base
Rate plus 2% per annum and (ii) the rate otherwise applicable to
such Loan during such Interest Period plus 2% per annum. The
interest rate on any Loan bearing interest at the Alternate Base
Rate shall change simultaneously with each change in the
Alternate Base Rate.
SECTION 2.02. Payment Dates. Interest accrued on each Loan
-------------
shall be payable, without duplication; (a) on the Termination
Date; (b) on the date of any payment or repayment, in whole or in
part, of any principal outstanding on such Loan and (c) on each
Settlement Date. Interest accrued on Loans after the date such
Loan is due and payable (whether on the Termination Date, upon
acceleration or otherwise), together with interest on any and all
other amounts remaining unpaid, shall be payable upon demand. No
provision of this Agreement shall require the payment or permit
the collection of interest in excess of the maximum permitted by
applicable law. Interest for any Loan shall not be considered
paid by any distribution if at any time such distribution is
rescinded or must otherwise be returned for any reason.
SECTION 2.03. Funding with Commercial Paper. Lender will
-----------------------------
initially fund the Loans with Liquidity Loans made to Lender
under the Liquidity Agreement and/or other advances made to
Lender under its other Program Support Agreements. At such time
as (i) the Fixed Charge Coverage Ratio is at least 1.00 to 1.00
for at least one full fiscal quarter, and there has been no
material adverse change in the consolidated financial condition,
business or operations of ATSC and its consolidated Subsidiaries
since the end of such fiscal quarter, (ii) Standard & Poor's and
Moody's Investors Service, Inc. have confirmed that the
Commercial Paper Notes will be rated A1/P-1 after giving effect
to the transaction contemplated by this Agreement, and (iii)
Lender, the Administrator and the Company have agreed upon a new
Program Fee, Lender will, to the extent that it is able to do so,
fund the Loans by the issuance of Commercial Paper Notes.
====================================================================
ARTICLE III
SETTLEMENTS
SECTION 3.01. Settlement Procedures.
---------------------
The parties hereto will take the following actions with
respect to each Settlement Period:
(a) Information Package. On or before the fifth day
-------------------
of the calendar month immediately following the calendar
month in which the Cut-Off Date for such Settlement Period
occurs, or, if such day is not a Business Day, the next
succeeding Business Day (each, a "Reporting Date"), Servicer
shall deliver to the Administrator a report, substantially
in the form of Exhibit 3.01 (each, an "Information
------------ -----------
Package"). In the event that the amount of Collections
-------
received during the Settlement Period to which an
Information Package relates is less than the amount equal to
(i) the Amount Payable for the related Settlement Date minus
(ii) the amount of funds available to be drawn from the
Spread Account on such Settlement Date, the Administrator
shall withdraw the amount of any such deficiency from the
Customer Letter of Credit on the Business Day next
succeeding the applicable Reporting Date. The Administrator
shall hold the funds so withdrawn from the Customer Letter
of Credit in a segregated account for application on the
related Settlement Date pursuant to this Section 3.01.
------------
(b) Collections. Servicer shall set aside for the
-----------
sole benefit of Lender and the Administrator all Collections
received to the extent necessary to pay the Estimated Amount
as it accrues (whether or not then due) that will be payable
during such Settlement Period or on the next occurring
Settlement Date; provided that, unless the Administrator
--------
shall request it to do so in writing after the occurrence
and during the continuance of an Event of Default, Servicer
shall not be required to hold such Collections in a separate
deposit account containing only such Collections. So long
as no Event of Default has occurred and is continuing,
Collections received during a Settlement Period in excess of
the amount to be set aside with respect to the Estimated
Amount for such Settlement Period shall be used by the
Company to pay the purchase price for Receivables generated
by AnnTaylor, as seller, pursuant to the Purchase Agreement;
if any Collections remain after such payment, they shall be
retained by the Company for use in its sole discretion
(subject to the terms of this Agreement). If an Event of
Default has occurred and is continuing, all Collections
shall be held by Servicer pursuant to the first sentence of
this paragraph (b). On each Settlement Date, Servicer shall
------------
remit to the Administrator an amount equal to the lesser of
(1) the amount of Collections received during the Settlement
Period related to such Settlement Date and (2) the sum of
(i) the amount of interest on the Loans accrued during the
most recently ended Interest Period (plus any interest
previously accrued and remaining unpaid), plus (ii) the
----
amount of principal then due and owing with respect to the
Loans (plus any principal previously due and remaining
unpaid), plus (iii) all fees and other amounts accrued and
----
payable by the Company under this Agreement (the amount set
forth in this clause (2), the "Amount Payable"). To the
--------- --------------
extent that the amount described in the foregoing clause (1)
----------
is less than the amount described in the foregoing
clause (2), the Administrator shall withdraw the amount of
---------
any such deficiency from the Spread Account. All
Collections received during the applicable Settlement Period
that exceed the amount described in the foregoing clause (2)
----------
shall be (A) deposited by the Servicer to the Spread Account
and/or (B) paid by the Servicer to the issuer of the
Customer Letter of Credit, in each case, to the extent
necessary to bring the sum of the funds in the Spread
Account plus the stated amount of the Customer Letter of
Credit up to the Enhancement Limit; unless an Event of
Default has occurred and is continuing, all remaining
Collections shall be available to the Company pursuant to
the second sentence of this paragraph (b).
-------------
(c) Order of Application of Collections Prior to
---------------------------------------------
Termination Date. Upon receipt by the Administrator of
---------------
amounts on any Settlement Date pursuant to the foregoing
paragraph (b) and any amounts withdrawn from the Customer
------------
Letter of Credit pursuant to the foregoing paragraph (a)
-------------
prior to the occurrence of the Termination Date, the
Administrator shall apply such amounts to the items
specified in the subclauses below, in the order of priority
of such subclauses:
(i) to accrued and unpaid Servicer's Fee;
(ii) to interest accrued during the most
recently ended Interest Period in respect of the Loans,
plus any such interest previously due and remaining
unpaid;
(iii) to the Program Fee accrued during the
most recently ended Interest Period, plus any portion
of the Program Fee previously due and remaining unpaid;
(iv) to the extent of any principal due on
the Loans, to such outstanding principal;
(v) to accrued and unpaid amounts owed to
the Administrator hereunder;
(vi) to other accrued and unpaid amounts
owing to Lender hereunder;
(vii) on a pro rata basis, to accrued and
--- ----
unpaid amounts owing to any Affected Party hereunder;
and
(viii) any remaining amounts to the Spread
Account, up to the Enhancement Limit or to the issuer
of the Customer Letter of Credit, up to the amount
necessary to restore the stated amount thereof to the
Enhancement Limit, as applicable.
(d) Order of Application of Collections After
-----------------------------------------
Termination Date. Upon receipt by the Administrator of
---------------
amounts on any Settlement Date pursuant to the foregoing
paragraph (b) and any amounts withdrawn from the Customer
-------------
Letter of Credit pursuant to the foregoing paragraph (a) on
-------------
or after the occurrence of the Termination Date, the
Administrator shall apply such items to the item specified
in the subclauses below, in the order of priority of such
subclauses:
(i) to accrued and unpaid Servicer's Fee;
(ii) to interest accrued during the most
recently ended Interest Period in respect of the Loans,
plus any such interest previously due and remaining
unpaid;
(iii) to the Program Fee accrued during the
most recently ended Interest Period, plus any such
Program Fee previously due and remaining unpaid;
(iv) to the outstanding principal of the
Loans until reduced to zero;
(v) to accrued and unpaid amounts owed to
the Administrator hereunder;
(vi) to other accrued and unpaid amounts
owing to Lender hereunder;
(vii) on a pro rata basis, to accrued and
--- ----
unpaid amounts owing to any Affected Party hereunder;
and
(viii) any remaining amounts to the Company.
(e) Non-Distribution of Servicer's Fee. If the
----------------------------------
Administrator consents (which consent may be revoked at any
time during the continuance of an Event of Default), the
amount in respect of Servicer's Fee may be retained by
Servicer, in which case no distribution shall be made in
respect of the Servicer's Fee pursuant to clause (c) or (d)
---------- ---
above, as the case may be.
(f) Delayed Payment. If on any day described in this
---------------
Section 3.01, a payment is not paid because the sum of (i)
------------
Collections during the relevant Settlement Period, (ii) the
amounts in the Spread Account and (iii) the amounts
available to be drawn on the Customer Letter of Credit were
less than the aggregate amounts payable, the next available
Collections shall be applied to such payment.
SECTION 3.02. Deemed Collections; Reduction of Outstanding
-------------------------------------------
Principal, Etc.
- - --------------
(a) Deemed Collections. If on any day
------------------
(i) the Unpaid Balance of any Pool Receivable is
(A) reduced as a result of any defective,
rejected or returned merchandise or services, any cash
discount, or any adjustment by the Company or any
Affiliate of the Company,
(B) reduced or cancelled as a result of a
setoff in respect of any claim by the Obligor thereof
against the Company or any Affiliate of the Company
(whether such claim arises out of the same or a related
or an unrelated transaction), or
(C) reduced on account of the obligation of
the Company or any Affiliate of the Company to pay to
the related Obligor any rebate or refund, or
(D) less than the amount included in
calculating the Net Pool Balance for purposes of any
Information Package, or
(ii) any of the representations or warranties of the
Company set forth in Section 6.01(l), (p) or (u) were not
-------------- --- ---
true when made with respect to any Pool Receivable, or any
of the representations or warranties of the Company set
forth in Section 6.01(l) or (u) are no longer true with
--------------- ---
respect to any Pool Receivable, or
(iii) without duplication, the Company receives a
Deemed Collection (as defined in the Purchase Agreement),
then, on such day, the Company shall be deemed to have received a
Collection of such Pool Receivable
(I) in the case of clause (i) above, in the
----------
amount of such reduction or cancellation or the
difference between the actual Unpaid Balance and the
amount included in calculating such Net Pool Balance,
as applicable;
(II) in the case of clause (ii) above, in
-----------
the amount of the Unpaid Balance of such Pool
Receivable; and
(III) in the case of clause (iii) above, in
------------
the amount so received as a Deemed Collection.
If the Company has paid in full the Unpaid Balance of a
Receivable, such Receivable, and any Related Security therefor,
shall be released from the security interest therein created by
this Agreement, without any further act, and such Receivable
shall no longer be a Pool Receivable.
(b) The Company's Optional Prepayment. The Company may at
---------------------------------
any time elect to prepay the Loans in whole or in part, by giving
the Administrator at least 3 Business Days' prior written notice
of such prepayment (including the amount of such proposed
reduction and the proposed date on which such prepayment will be
made),
provided that,
(A) the amount of any such prepayment shall
be not less than $100,000 and shall be an integral
multiple of $100,000, and the Outstanding Principal
after giving effect to such reduction shall be not less
than $20,000,000 (unless the Outstanding Principal
shall thereby be reduced to zero), and
(B) any prepayment shall be accompanied by
the interest accrued on the amount being prepaid, plus
any Liquidation Fee, plus, if the Termination Date
shall have occurred and the Outstanding Principal shall
thereby be reduced to zero, all other amounts then due
to the Lender or the Administrator.
SECTION 3.03. Payments and Computations, Etc.
------------------------------
(a) Payments. All amounts to be paid, remitted or
--------
deposited by the Company or Servicer to the Administrator or any
other Person hereunder (other than amounts payable under
Section 4.02) shall be paid or deposited in accordance with the
- - ------------
terms hereof no later than 11:30 a.m. (New York time) on the day
when due in lawful money of the United States of America in same
day funds (i) in the case of amounts to be paid, remitted or
deposited in respect of accrued and unpaid interest on the Loans
or in reduction of Outstanding Principal, to the Administrator at
PNC Bank, ABA #043000096, for further credit to Account
#1002420425; Reference: AnnTaylor Funding, (ii) in the case of
all fees, expenses and other amounts (other than amounts payable
under Section 4.02), to the Administrator at PNC Bank, ABA
------------
#043000096, Account #1-188375, Attention: Charlene Wilson, 7001,
and (iii) in all other cases to the address of the Person
entitled to such payment or deposit as such Person shall specify.
(b) Late Payments. Without duplication, the Company shall,
-------------
to the extent permitted by law, pay to Lender interest on all
amounts not paid or deposited when due hereunder and the Servicer
shall, to the extent permitted by law, pay to Lender interest on
all amounts not remitted when due hereunder because of any
failure of the Servicer to comply with its obligations as
Servicer hereunder, in each case at 2% per annum above the
--- -----
Alternate Base Rate, payable on demand, provided, however, that
-------- -------
such interest rate shall not at any time exceed the maximum rate
permitted by applicable law.
(c) Method of Computation. All computations of interest,
---------------------
Liquidation Fee, any fees payable under Sections 4.01(b) and any
----------------
other fees payable by the Company to Lender or the Administrator
in connection with Loans hereunder shall be made on the basis of
a year of 360 days (other than interest calculated by reference
to the Alternate Base Rate, in which case such calculation shall
be made on the basis of a year of 365 or 366 days, as applicable)
for the actual number of days (including the first day but
excluding the last day) elapsed.
SECTION 3.04. Treatment of Collections and Deemed
-----------------------------------
Collections. The Company shall forthwith deliver to Servicer all
- - -----------
Collections deemed received by the Company pursuant to Section
-------
3.02(a), and Servicer shall hold or distribute such Collections
- - ------
pursuant to the terms hereof to the same extent as if such
Collections had actually been received on the date of such
delivery to Servicer. During the continuance of an Event of
Default, if requested by the Administrator, Servicer shall cause
such deemed Collections to be paid on the second Business Day
after they arise to the Lock-Box Bank or, if Collections are
being paid to the Administrator pursuant to Section 8.03(c), to
---------------
the Administrator. So long as the Company shall hold any
Collections or deemed Collections required to be paid to Servicer
or the Administrator, it shall hold such Collections for the sole
benefit of the Lender and the Administrator and shall clearly
mark its records to reflect such benefit (subject to the
Company's right to use certain Collections to pay the purchase
price due under the Purchase Agreement as set forth in Section
-------
3.01(b)); provided that unless the Administrator shall request it
- - ------ --------
to do so in writing after the occurrence and during the
continuance of an Event of Default, the Company shall not be
required to hold such Collections in a separate deposit account
containing only such Collections.
SECTION 3.05. Spread Account; Customer Letter of Credit.
-----------------------------------------
(a) Unless the Company has delivered a Customer Letter of Credit
pursuant to Section 3.05(e), the Company, for the benefit of
---------------
Lender, shall establish and maintain or cause to be established
and maintained in the name of the Company, on behalf of Lender,
with PNC Bank, a segregated account (the "Spread Account"),
--------------
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of Lender. The Spread Account,
all funds deposited therein from time to time, all investments of
such funds and all proceeds of any of the foregoing shall be
subject to a pledge and security interest in favor of the
Administrator for the benefit of Lender pursuant to an agreement
substantially in the form attached hereto as Exhibit 3.05 (such
------------
agreement, as further amended, supplemented or otherwise modified
from time to time, being the "Spread Account Agreement").
------------------------
(b) Except as expressly provided in this Agreement,
Servicer agrees that it shall have no right of setoff or banker's
lien against, and no right to otherwise deduct from, any funds
held in the Spread Account for any amount owed to it by the
Administrator or Lender.
(c) Funds on deposit in the Spread Account shall be
invested at the direction of Servicer in accordance with the
Spread Account Agreement; provided, however, investments of funds
-------- -------
representing Collections collected during any Settlement Period
shall be invested in investments that will mature so that such
funds will be available for transfer on the applicable Settlement
Date with respect to such Settlement Period. All interest and
other investment earnings (net of losses and investment expenses)
on funds on deposit in the Spread Account shall be added to the
balance in the Spread Account and applied in accordance with this
Agreement.
(d) If on any Settlement Date, no Event of Default has
occurred and is continuing and the amount of funds in Spread
Account, after giving effect to all withdrawals therefrom on such
date, exceeds 1.5% of the Lending Limit (the "Enhancement
-----------
Limit"), the amount of such excess shall be released to the
- - -----
Company.
(e) The Company may, at its option, in lieu of establishing
and maintaining the Spread Account, deliver to the Administrator,
for the benefit of Lender, and maintain in force until the Final
Payout Date, one or more irrevocable letters of credit
(collectively, with any substitutions therefor and replacements
thereof, the "Customer Letter of Credit"), with a stated amount
-------------------------
equal to the Enhancement Limit, from, or confirmed by, a bank or
other financial institution whose short term unsecured debt
obligations are rated at least A-1 by Standard and Poor's
Corporation and P-1 by Moody's Investors Service, Inc., and who
is otherwise acceptable to the Administrator (whose acceptance
shall not be unreasonably withheld), and in a form reasonably
acceptable to the Administrator, together with an opinion of
counsel for such Customer Letter of Credit issuer acceptable in
form and substance to the Administrator; provided that a copy of
--------
such Customer Letter of Credit shall have been provided to
Standard & Poor's Corporation and Moody's Investors Service, Inc.
and they shall have either confirmed (orally or in writing) the
rating of the Commercial Paper Notes or waived (orally or in
writing) such requirement of confirmation.
(f) The Company may satisfy its obligations pursuant to
this Section 3.05 by providing both a Spread Account and a
-----------
Customer Letter of Credit, provided that the sum of the amount of
--------
funds from time to time in the Spread Account plus the stated
amount from time to time of the Customer Letter of Credit is at
least equal to the Enhancement Limit. In the event that the
Company has provided a Customer Letter of Credit and the issuer
of such Customer Letter of Credit (including any issuer of a
confirming letter of credit) is downgraded below the ratings
required pursuant to the foregoing paragraph (e) (or such ratings
------------
are withdrawn), unless the Company has provided a substitute
Customer Letter of Credit satisfying the requirements of the
foregoing paragraph (e) or the Company has deposited in the
------------
Spread Account the amount necessary to bring the amount therein
up to the Enhancement Limit, in each case, on or prior to two (2)
Business Days after such downgrading or withdrawal, the
Administrator shall withdraw the full stated amount of the
Customer Letter of Credit and deposit it in the Spread Account.
If the Customer Letter of Credit has a stated expiration date
that is earlier than the Final Payout Date, unless the Company
has substituted therefor another Customer Letter of Credit
satisfying the requirements of the foregoing paragraph (e) or
-------------
deposited into the Spread Account the amount necessary to bring
the amount of funds therein up to the Enhancement Limit on or
before two (2) Business Days prior to the stated expiration date,
the Administrator shall withdraw the full stated amount of the
Customer Letter of Credit and deposit such funds into the Spread
Account.
===================================================================
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees. The Company shall pay to the
----
Administrator for the account of the Lender certain fees payable
in such amounts and on such dates as are set forth in the fee
letter, dated as of the date hereof (as amended or supplemented
from time to time, the "Fee Letter") among the Company, AnnTaylor
----------
and the Administrator.
SECTION 4.02. Yield Protection.
----------------
(a) If (i) Regulation D or (ii) any Regulatory Change
occurring after the date hereof
(A) shall subject an Affected Party to any tax, duty
or other charge with respect to any Loan owned by, owed to
or funded by it, or any obligations or right to make Loans
or to provide funding therefor, or shall change the basis of
taxation of payments to the Affected Party of any part of
the Loans owned by, owed to or funded in whole or in part by
it or any other amounts due under this Agreement in respect
of the Loans (or any portion thereof) owned by or funded by
it or its obligations or rights, if any, to make Loans or to
provide funding therefor (except for changes in the rate of
any tax which is a franchise tax or a tax on the net income
of such Affected Party imposed by the United States of
America, by any jurisdiction in which such Affected Party's
principal executive office is located and, if such Affected
Party's principal executive office is not in the United
States of America, by any jurisdiction where such Affected
Party's principal office in the United States is located);
or
(B) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed
by the Federal Reserve Board, but excluding any reserve
included in the determination of the interest rate
applicable to the Loans), special deposit or similar
requirement against assets of any Affected Party, deposits
or obligations with or for the account of any Affected Party
or with or for the account of any affiliate (or entity
deemed by the Federal Reserve Board to be an affiliate) of
any Affected Party, or credit extended by any Affected
Party; or
(C) shall change the amount of capital maintained or
required or requested or directed to be maintained by any
Affected Party in respect of the transactions contemplated
hereby; or
(D) shall impose any other condition affecting any
Loan owned by, owed to or funded in whole or in part by any
Affected Party, or its obligations or rights, if any, to
make Loans or to provide funding therefor;
and the result of any of the foregoing is or would be
(x) to increase the cost to (I) an Affected Party
funding or making or maintaining any Loans (or any portion
thereof), any purchases, reinvestments, or loans or other
extensions of credit under any Program Support Agreement or
any commitment of such Affected Party with respect to any of
the foregoing, or (II) the Administrator for continuing its
or the Company's relationship with Lender,
(y) to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement, or
under any Program Support Agreement with respect thereto, or
(z) in the sole determination of such Affected Party,
to reduce the rate of return on the capital of an Affected
Party as a consequence of its obligations hereunder or
arising in connection herewith to a level below that which
such Affected Party could otherwise have achieved,
then within thirty days after demand by such Affected Party
(which demand shall be accompanied by a statement setting forth
the basis of such demand), the Company shall pay directly to such
Affected Party such additional amount or amounts as will
compensate such Affected Party for such additional or increased
cost or such reduction.
(b) Each Affected Party will promptly notify the Company
and the Administrator of any event of which it has knowledge
which will entitle such Affected Party to compensation pursuant
to this Section 4.02; provided, however, no failure to give or
------------ -------- -------
delay in giving such notification shall adversely affect the
rights of any Affected Party to such compensation except that no
Affected Party shall be entitled to compensation under this
Section 4.02 with respect to any increased costs or reduced
- - ------------
return incurred more than 90 days prior to the date on which a
responsible officer of such Affected Party had actual knowledge
and notified the Company of the event giving rise to such
increased cost or reduced return.
(c) In determining any amount provided for or referred to
in this Section 4.02, an Affected Party may use any reasonable
------------
averaging and attribution methods that it reasonably shall deem
applicable; provided that such Affected Party shall not be
--------
arbitrary with respect to requesting similar compensation with
respect to similar transactions to the extent it is entitled to
do so pursuant to the applicable agreements. Any Affected Party
when making a claim under this Section 4.02 shall submit to the
------------
Company a statement as to such increased cost or reduced return
(including calculation thereof in reasonable detail), which
statement shall, in the absence of demonstrable error, be
conclusive and binding upon the Company.
(d) Any Affected Party which is a participant shall only be
entitled to amounts under this Section 4.02 to the extent that
------------
such amounts, together with all amounts due to the Person selling
such participation under this Section 4.02, do not exceed the
-------------
amounts that would have been due to such Person under this
Section 4.02 if the participation had not been entered into or
- - -----------
sold.
SECTION 4.03. Funding Losses. In the event that any
--------------
Liquidity Bank shall incur any loss or expense (including any
loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such
Liquidity Bank to make any Liquidity Loan or maintain any
Liquidity Loan, but not including loss of anticipated profit) as
a result of any Loan not being made in accordance with a request
therefore under Section 1.02 (other than by reason of the failure
------------
of Lender to fund such Loan pursuant to its commitment) or as a
result of any Loan being paid on a date other than a Settlement
Date, then, upon written notice from the Administrator to the
Company and Servicer, but without duplication of any Liquidation
Fee paid by the Company, the Company shall pay to Servicer, and
Servicer shall remit such amount paid by the Company to the
Administrator for the account of such Liquidity Bank, the amount
of such loss or expense. Such written notice (which shall
include calculations in reasonable detail) shall, in the absence
of manifest error, be conclusive and binding upon the Company and
Servicer.
====================================================================
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to Effectiveness. The
-------------------------------------
effectiveness of this Amended and Restated Receivables Financing
Agreement is subject to the condition precedent that the
Administrator shall have received, on or before the date of such
effectiveness, the following, each (unless otherwise indicated)
dated such date and in form and substance satisfactory to the
Administrator:
(a) A copy of the resolutions of the Board of
Directors of each of the Company and AnnTaylor approving
this Agreement and the other Transaction Documents to which
it is a party to be delivered by it hereunder and the
transactions contemplated hereby, certified by its Secretary
or Assistant Secretary;
(b) Good standing certificates for the Company issued
by the Secretaries of State of Delaware and Connecticut;
good standing certificates for AnnTaylor issued by the
Secretaries of State of New York and Delaware;
(c) A certificate of the Secretary or Assistant
Secretary of each of the Company and AnnTaylor certifying
the names and true signatures of the officers authorized on
its behalf to sign this Agreement and the other Transaction
Documents to be delivered by it hereunder (on which
certificate the Administrator and Lender may conclusively
rely until such time as the Administrator shall receive from
the Company or AnnTaylor, as the case may be, a revised
certificate meeting the requirements of this subsection
(c));
(d) The Certificate of Incorporation of each of the
Company and AnnTaylor, duly certified by the Secretary of
State of Delaware, as of a recent date acceptable to
Administrator, together with a copy of the by-laws of each
of the Company and AnnTaylor, duly certified by the
Secretary or an Assistant Secretary of the Company or
AnnTaylor, as the case may be;
(e) Copies of proper assignments of, and amendments
to, the financing statements (Form UCC-1) filed in
connection with the transactions contemplated by the
Original Financing Agreement, and copies of proper financing
statements (Form UCC-1) naming the Company as the debtor and
Lender as the secured party, filed or delivered to the
Lender or the Administrator for filing;
(f) A search report updating the search report
delivered in connection with the Original Financing
Agreement provided in writing to the Administrator by LEXIS
Document Service, listing all effective financing statements
that name the Company or AnnTaylor as debtor and that are
filed in the jurisdictions in which filings were made
pursuant to subsection (e) above and in such other
-------------
jurisdictions that Administrator shall reasonably request,
together with copies of such financing statements (none of
which shall cover the Receivables Pool or any interests
therein other than those in favor of Clipper);
(g) Duly executed copies of Lock-Box Agreements with
each of the Lock-Box Banks;
(h) Opinions of (i) Skadden, Arps, Slate, Meagher &
Flom, special counsel to the Company, in substantially the
form of Exhibits 5.01(h)-(i), 5.01(h)-(iii) and 5.01(h)-
------------------- ------------- --------
(iv), (ii) Jocelyn F.L. Barandiaran, general counsel for the
----------
Company, in substantially the form of Exhibit 5.01(h)-(ii)
-------------------
and (iii) Tyler, Cooper & Alcorn, special Connecticut
counsel to the Company, in substantially the form of Exhibit
-------
5.01(h)-(v);
-----------
(i) Such powers of attorney as the Administrator shall
reasonably request to enable the Administrator to collect
all amounts due under any and all Pool Receivables;
(j) A pro forma Information Package, assuming a Cut-
---------
Off Date of October 27, 1995;
(k) The Assignment Agreement, duly executed by
Clipper, State Street, Lender and the Administrator;
(l) The Liquidity Agreement, duly executed by Lender,
the Liquidity Agent and each Liquidity Bank;
(m) The Spread Account Agreement, duly executed by the
parties thereto;
(n) An amendment to the Purchase Agreement, duly
executed by the Company and AnnTaylor;
(o) The Note, duly executed by the Company; and
(p) The Fee Letter, duly executed by the Company and
AnnTaylor.
SECTION 5.02. Conditions Precedent to All Loans. Each Loan
---------------------------------
and the effectiveness of this Amended and Restated Receivables
Financing Agreement shall be subject to the further conditions
precedent that on the date of such Loan or effectiveness, as the
case may be, the following statements shall be true (and the
Company by accepting the amount of such Loan or executing and
delivering this Agreement, as the case may be, shall be deemed to
have certified that):
(a) the representations and warranties contained in
Section 6.01 are correct on and as of such day as though
------------
made on and as of such day and shall be deemed to have been
made on such day,
(b) no event has occurred and is continuing, or would
result from such Loan or effectiveness, as the case may be,
that constitutes an Event of Default or Unmatured Event of
Default,
(c) after giving effect to each proposed Loan, the
Outstanding Principal will not exceed the Lending Limit or
the Borrowing Base, and
(d) the Termination Date shall not have occurred.
====================================================================
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the
-------------------------------------
Company. The Company represents and warrants as follows:
- - -------
(a) Organization and Good Standing. It has been duly
-----------------------------
organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power
and authority to own its properties and to conduct its
business as such properties are presently owned and such
business is presently conducted, and had at all relevant
times, and now has, all necessary power, authority, and
legal right to acquire and own the Pool Receivables.
(b) Due Qualification. It is duly qualified to do
-----------------
business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or
the conduct of its business requires such qualification,
licenses or approvals except where the failure to be in good
standing or to so qualify has not had and will not have a
Material Adverse Effect.
(c) Power and Authority; Due Authorization. It (i)
--------------------------------------
has all necessary power, authority and legal right to (A)
execute and deliver this Agreement, the Note and the other
Transaction Documents to which it is a party, (B) carry out
the terms of the Transaction Documents, and (C) borrow the
Loans and grant the security interest in the Receivables
Pool on the terms and conditions herein provided and (ii)
has duly authorized by all necessary corporate action the
execution, delivery and performance of this Agreement, the
Note and the other Transaction Documents to which it is a
party and the borrowing of the Loans and the granting of the
security interest in the Receivables Pool on the terms and
conditions herein provided.
(d) Valid Security Interest; Binding Obligations.
--------------------------------------------
This Agreement creates a valid first priority security
interest in the Receivables Pool in favor of the Lender,
enforceable against creditors of, and purchasers from, the
Company; and this Agreement constitutes, and the Note and
each other Transaction Document to be signed by it when duly
executed and delivered will constitute, its legal, valid and
binding obligation enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting
the enforcement of creditors' rights generally and by
general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at
law.
(e) No Violation. The consummation of the
------------
transactions contemplated by this Agreement, the Note and
the other Transaction Documents and the fulfillment of the
terms hereof will not (i) conflict with, result in any
breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default
under, the certificate of incorporation or by-laws of the
Company or any indenture, loan agreement, receivables
purchase agreement, mortgage, deed of trust, or other
agreement or instrument to which the Company is a party or
by which it or any of its properties is bound, except where
such conflict, breach or default has not had and will not
have a Material Adverse Effect, (ii) result in the creation
or imposition of any Lien upon any of the Company's
properties pursuant to the terms of any such indenture, loan
agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument, other than this
Agreement, or (iii) violate any law or any order, rule, or
regulation applicable to the Company of any court or of any
federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over
the Company or any of its properties except where such
violation has not had and will not have a Material Adverse
Effect.
(f) No Proceedings. There are no proceedings or
--------------
investigations pending, or to the Company's knowledge
threatened, before any court, regulatory body,
administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this
Agreement or any other Transaction Document, (ii) seeking to
prevent the consummation of any of the transactions
contemplated by this Agreement or any other Transaction
Document, or (iii) seeking any determination or ruling that
could reasonably be expected to have a Material Adverse
Effect.
(g) Bulk Sales Act. No transaction contemplated
--------------
hereby requires compliance with any bulk sales act or
similar law.
(h) Government Approvals. No authorization or
--------------------
approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by
the Company of this Agreement or any other Transaction
Document, except for the filing of the UCC statements and
------
the assignments of, and amendments to, the UCC financing
statements referred to in Article V, all of which, at the
---------
time required in Article V, shall have been duly made and
---------
shall be in full force and effect (or shall have been duly
delivered to the Administrator).
(i) Financial Condition. (x) The balance sheet of
-------------------
the Company as of January 28, 1995, and the related
statements of income and shareholders' equity of the Company
for the fiscal year then ended certified by Deloitte &
Touche, independent certified public accountants, copies of
which have been furnished to the Administrator, fairly
present the Company's financial condition, business,
business prospects and operations as at such date and the
results of the operations of the Company for the period
ended on such date; and (y) since January 28, 1995, there
has been no material adverse change in any of the Company's
financial condition, business, or operations.
(j) Litigation. No injunction, decree or other
----------
decision has been issued or made by any court, governmental
agency or instrumentality thereof that could reasonably be
expected to have a Material Adverse Effect, and no written
threat by any person has been made to attempt to obtain any
such decision.
(k) Margin Regulations. The use of all funds obtained
------------------
by the Company under this Agreement will not conflict with
or contravene any of Regulations G, T, U and X promulgated
by the Board of Governors of the Federal Reserve System from
time to time.
(l) Quality of Title. The Receivables Pool is owned
----------------
by the Company free and clear of any Lien (other than any
Lien arising hereunder solely as the result of any action
taken by Lender (or any assignee thereof) or by the
Administrator); upon the filing of the assignments of, and
amendments to, the UCC-1 financing statements filed with the
Secretary of State of Connecticut in connection with the
Original Financing Agreement, the filing of new UCC-1
financing statements with the Secretary of State of
Connecticut and the execution of the Spread Account
Agreement, Lender shall have acquired and shall at all times
thereafter continuously maintain a valid and perfected first
priority security interest in the Receivables Pool (other
than with respect to the Spread Account, in which case such
security interest shall be in respect of the Eligible
Investments (as defined in the Spread Account Agreement)
credited thereto), free and clear of any Lien (other than
any Lien arising hereunder solely as the result of any
action taken by Lender (or any assignee thereof) or by the
Administrator); and no financing statement or other
instrument similar in effect covering the Receivables Pool
or any portion thereof is on file in any recording office
except such as may be filed (i) in favor of AnnTaylor in
accordance with the Contracts, (ii) in favor of Lender or
the Administrator in accordance with this Agreement or in
connection with any Lien arising hereunder solely as the
result of any action taken by Lender (or any assignee
thereof) or by the Administrator or (iii) in favor of the
Company pursuant to the Purchase Agreement.
(m) Accurate Reports. No Information Package (if
----------------
prepared by the Company or to the extent information therein
was supplied by the Company) or other information, exhibit,
financial statement, document, book, record or report
furnished or to be furnished in writing by or on behalf of
the Company to the Administrator or Lender in connection
with this Agreement was or will be inaccurate in any
material respect (in light of the circumstances under which
such information was furnished and taken as a whole together
with all other information previously furnished or then
being furnished) as of the date it was or will be dated or
(except as otherwise disclosed to the Administrator and
Lender at or prior to such time) as of the date so
furnished, or contained or will contain any material
misstatement of fact or omitted or will omit to state a
material fact or any fact necessary to make the statements
contained therein not materially misleading on the date as
of which such information is dated or certified.
(n) Offices. The chief place of business and chief
-------
executive office of the Company is located at its address
specified in Schedule 6.01(n), and the offices where the
----------------
Company keeps all its books, records and documents
evidencing Pool Receivables, the related Contracts and all
agreements related to such Pool Receivables are located at
the addresses specified in Schedule 6.01(n) (or at such
----------------
other locations, notified to the Administrator in accordance
with Section 7.01(f), in jurisdictions where all action
--------------
required by Section 8.05 has been taken and completed).
------------
(o) Lock-Box Accounts. The names and addresses of all
-----------------
the Lock-Box Banks, together with the account numbers of the
lock-box accounts of the Company at such Lock-Box Banks, are
specified in Schedule 6.01(o) (or have been notified to the
----------------
Administrator in accordance with Section 7.04(d)).
---------------
(p) Eligible Receivables. Each Receivable included in
--------------------
the Net Pool Balance as an Eligible Receivable on the date
of any calculation of the Borrowing Base shall be an
Eligible Receivable on such date.
(q) Capitalization. The authorized capital stock of
--------------
the Company consists of one hundred (100) shares of common
stock, $1.00 par value, of which all are currently issued
and outstanding. All of such outstanding shares are validly
issued, fully paid and nonassessable and are owned
(beneficially and of record) by AnnTaylor.
(r) Trade Names. Except as disclosed on Schedule
----------- --------
6.01(r), the Company does not use any trade name other than
------
its actual corporate name. From and after the date that
fell five (5) years before the date hereof, the Company has
not been known by any legal name other than its corporate
name as of the date hereof, nor has it been the subject of
any merger or other corporate reorganization except as
disclosed on Schedule 6.01(r).
-------
(s) Taxes. The Company has filed all tax returns and
-----
reports required by law to have been filed by it and has
paid all taxes and governmental charges thereby shown to be
owing, except any taxes not yet delinquent and any such
taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside
on its respective books.
(t) Compliance with Applicable Laws. The Company is
-------------------------------
in compliance in all material respects with the requirements
of all applicable laws, rules, regulations, and orders of
all governmental authorities (including, without limitation,
Regulation Z, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection
practices and privacy and all other consumer laws, rules and
regulations applicable to the Receivables and related
Contracts), a breach of any of which, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect.
(u) Receivable Evidenced By Instruments. None of the
-----------------------------------
Receivables is evidenced by an instrument (other than
instruments received in connection with collection efforts,
all of which shall be delivered, duly endorsed, to the
Administrator if requested by the Administrator during the
continuance of an Event of Default).
SECTION 6.02. Representations and Warranties of AnnTaylor.
-------------------------------------------
AnnTaylor, as Servicer, represents and warrants as follows:
(a) Organization and Good Standing. It has been duly
------------------------------
organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power
and authority to own its properties and to conduct its
business as such properties are presently owned and such
business is presently conducted.
(b) Due Qualification. It is duly qualified to do
-----------------
business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or
the conduct of its business requires such qualification,
licenses or approvals except where the failure to be in good
standing or to so qualify has not had and will not have a
Servicer Material Adverse Effect.
(c) Power and Authority; Due Authorization. It (i)
--------------------------------------
has all necessary power, authority and legal right to (A)
execute and deliver this Agreement and the other Transaction
Documents to which it is a party, and (B) carry out the
terms of the Transaction Documents, in its capacity as
Servicer, and (ii) has duly authorized by all necessary
corporate action the execution, delivery and performance of
this Agreement and the other Transaction Documents to which
it is a party in its capacity as Servicer.
(d) Binding Obligations. This Agreement constitutes,
-------------------
and each other Transaction Document to be signed by it in
its capacity as Servicer when duly executed and delivered
will constitute, its legal, valid and binding obligation
enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at
law.
(e) No Violation. The consummation of the
------------
transactions contemplated by this Agreement and the other
Transaction Documents to which AnnTaylor is a party in its
capacity as Servicer, and the fulfillment of the terms
hereof will not (i) conflict with, result in any breach of
any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under,
the certificate of incorporation or by-laws of AnnTaylor or
any indenture, loan agreement, receivables purchase
agreement, mortgage, deed of trust, or other agreement or
instrument to which AnnTaylor is a party or by which it or
any of its properties is bound, except where such conflict,
breach or default has not had and will not have a Servicer
Material Adverse Effect, (ii) result in the creation or
imposition of any Lien upon any of AnnTaylor's properties
pursuant to the terms of any such indenture, loan agreement,
receivables purchase agreement, mortgage, deed of trust, or
other agreement or instrument, other than this Agreement, or
(iii) violate any law or any order, rule, or regulation
applicable to AnnTaylor of any court or of any federal or
state regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over
AnnTaylor or any of its properties except where such
violation has not had and will not have a Servicer Material
Adverse Effect.
(f) No Proceedings. There are no proceedings or
--------------
investigations pending, or to AnnTaylor's knowledge
threatened, before any court, regulatory body,
administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this
Agreement or any other Transaction Document to which
AnnTaylor is a party as Servicer, (ii) seeking to prevent
the consummation of any of the transactions contemplated by
this Agreement or any other Transaction Document to which
AnnTaylor is a party as Servicer, or (iii) seeking any
determination or ruling that could reasonably be expected to
have a Servicer Material Adverse Effect.
(g) Government Approvals. No authorization or
--------------------
approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by
AnnTaylor of this Agreement or any other Transaction
Document to which it is a party in its capacity as Servicer.
(h) Financial Condition. (x) The consolidated
-------------------
balance sheets of ATSC and its consolidated Subsidiaries as
at July 29, 1995, and the related statements of income and
shareholders' equity of ATSC and its consolidated
Subsidiaries for the six months then ended, certified by a
Responsible Officer of ATSC, copies of which have been
furnished to the Administrator, fairly present the
consolidated financial condition, business, business
prospects and operations of ATSC and its consolidated
Subsidiaries as at such date and the consolidated results of
the operations of ATSC and its consolidated Subsidiaries for
the period ended on such date, all in accordance with GAAP
consistently applied; and (y) since July 29, 1995 there has
been no material adverse change in any such condition,
business, or operations.
(i) Litigation. No injunction, decree or other
----------
decision has been issued or made by any court, governmental
agency or instrumentality thereof that could reasonably be
expected to have a Servicer Material Adverse Effect, and no
written threat by any person has been made to attempt to
obtain any such decision.
(j) Accurate Reports. No Information Package (if
----------------
prepared by AnnTaylor or any of its Affiliates, (other than
the Company), as Servicer, or to the extent information
therein was supplied by AnnTaylor or any of its Affiliates
(other than the Company), as Servicer, or other information,
exhibit, financial statement, document, book, record or
report furnished or to be furnished in writing by or on
behalf of AnnTaylor or any of its Affiliates (other than the
Company), as Servicer to the Administrator or Lender in
connection with this Agreement was or will be inaccurate in
any material respect (in light of the circumstances under
which such information was furnished and taken as a whole
together with all other information previously furnished or
then being furnished) as of the date it was or will be dated
or (except as otherwise disclosed to the Administrator and
Lender at or prior to such time) as of the date so
furnished, or contained or will contain any material
misstatement of fact or omitted or will omit to state a
material fact or any fact necessary to make the statements
contained therein not materially misleading.
(k) Offices. The chief place of business and chief
-------
executive office of AnnTaylor is located at its address
specified in Schedule 6.02(k), and the offices where
---------------
AnnTaylor keeps all its books, records and documents
evidencing Pool Receivables, the related Contracts and all
agreements related to such Pool Receivables are located at
the addresses specified in Schedule 6.02(k) (or at such
---------------
other locations, notified to the Administrator in accordance
with Section 7.01(f)).
--------------
(l) Bank Accounts. The names and addresses of all
-------------
banks with accounts in which Collections received at
AnnTaylor's stores or its headquarters are deposited,
together with the account numbers of such accounts are
specified in Schedule 6.02(l) (or have been notified to the
---------------
Administrator in accordance with Section 7.03(d)).
---------------
(m) Servicing Programs. No further license or
------------------
approval is required for the Administrator's use of any
program used by Servicer in the servicing of the Pool
Receivables, other than those which have been obtained and
are in full force and effect.
(n) Taxes. AnnTaylor has filed all tax returns and
-----
reports required by law to have been filed by it and has
paid all taxes and governmental charges thereby shown to be
owing, except any taxes not yet delinquent and any such
taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside
on its respective books.
(o) Compliance with Applicable Laws. AnnTaylor, as
-------------------------------
Servicer, is in compliance in all material respects with the
requirements of all applicable laws, rules, regulations, and
orders of all governmental authorities (including, without
limitation, Regulation Z, laws, rules and regulations
relating to usury, truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy and all other consumer
laws, rules and regulations applicable to the Receivables
and related Contracts), a breach of any of which,
individually or in the aggregate, could reasonably be
expected to have a Servicer Material Adverse Effect.
==========================================================================
ARTICLE VII
GENERAL COVENANTS OF THE COMPANY AND ANNTAYLOR
SECTION 7.01. Affirmative Covenants. From the date hereof
---------------------
until the Final Payout Date, the Company and AnnTaylor each
covenants, as to itself, that it will unless, in each case, the
Administrator shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material
-------------------------
respects with all applicable laws, rules, regulations and
orders with respect to the Pool Receivables and related
Contracts except where such noncompliance has not had and
will not have a Material Adverse Effect, in the case of this
covenant by the Company, or Servicer Material Adverse
Effect, in the case of this covenant by AnnTaylor.
(b) Preservation of Corporate Existence. Preserve and
-----------------------------------
maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and
qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises,
privileges and qualification would have a Material Adverse
Effect, in the case of this covenant by the Company, or
Servicer Material Adverse Effect, in the case of this
covenant by AnnTaylor.
(c) Audits. (i) At any time and from time to time
------
during regular business hours, upon reasonable notice and in
a manner designed not to unreasonably disrupt the normal
business operations of AnnTaylor or the Company, permit the
Administrator or any of its agents or representatives, (A)
to examine and make copies of and abstracts from all books,
records and documents (including, without limitation,
computer tapes and disks) in its possession or under its
control relating to the Receivables Pool, including, without
limitation, the related Contracts and other agreements, and
(B) to visit its offices and properties for the purpose of
examining such materials described in clause (i)(A) next
------------
above, and to discuss matters relating to the Receivables
Pool or its performance hereunder with any of its officers
or employees having knowledge of such matters; and (ii)
without limiting the provisions of clause (i) next above,
----------
from time to time on request of Administrator, permit
certified public accountants or other auditors acceptable to
the Administrator to conduct, at AnnTaylor's or the
Company's expense, as the case may be, a review of its books
and records; provided, however, that, unless an Event of
Default has occurred and is continuing, AnnTaylor and the
Company shall only be obligated to pay for (i) the out-of-
pocket expenses of the internal auditors of the
Administrator incurred with respect to such reviews done not
more frequently than three times per year (and such expenses
shall be subject to Section 14.05(a)) and (ii) in addition
----------------
to the amounts set forth in clause (i), the allocated cost
---------
of the internal auditors of the Administrator with respect
to such reviews done not more frequently than once a year.
(d) Keeping of Records and Books of Account. Maintain
---------------------------------------
and implement administrative and operating procedures
(including, without limitation, an ability to recreate
records evidencing Pool Receivables in the event of the
destruction of the originals thereof), and keep and main
tain, all documents, books, records and other information
reasonably necessary or advisable for the collection of all
Pool Receivables (including, without limitation, records
adequate to permit the daily identification of each new Pool
Receivable and all Collections of and adjustments to each
existing Pool Receivable).
(e) Performance and Compliance with Receivables and
-----------------------------------------------
Contracts. At its expense timely and fully perform and
---------
comply with all material provisions, covenants and other
promises required to be observed by it under the Contracts
related to the Pool Receivables and all other agreements
related to such Pool Receivables.
(f) Location of Records. Keep its chief place of
-------------------
business and chief executive office, and the offices where
it keeps its records concerning the Pool Receivables, all
related Contracts and all other agreements related to such
Pool Receivables (and all original documents relating
thereto), at its address(es) referred to in Section 6.01(n)
---------------
or 6.02(k), as the case may be, or, upon 30 days' prior
-------
written notice to the Administrator, at such other locations
in jurisdictions where all action required by Section 8.05
------------
shall have been taken and completed.
(g) Credit and Collection Policies. Comply in all
------------------------------
material respects with the Credit and Collection Policy in
regard to each Pool Receivable and the related Contract.
(h) Collections. Instruct all Obligors to cause all
-----------
Collections of Pool Receivables to be deposited directly
with a Lock-Box Bank.
SECTION 7.02 Separate Corporate Existence. The Company
----------------------------
hereby acknowledges that Lender, the Liquidity Banks and the
Administrator, are entering into the transactions contemplated by
this Agreement and the other Transaction Documents in reliance
upon the Company's identity as a legal entity separate from
AnnTaylor. Therefore, from and after the date hereof, the
Company shall take all steps specifically required by this
Agreement or by the Lender or Administrator to continue the
Company's identity as a separate legal entity and to make it
apparent to third Persons that the Company is an entity with
assets and liabilities distinct from those of Servicer, AnnTaylor
and any other Person, and is not a division of Servicer,
AnnTaylor or any other Person. Without limiting the generality
of the foregoing and in addition to and consistent with the other
covenants set forth herein, the Company shall take such actions
as shall be required in order that:
(a) The Company will be a limited purpose corporation
whose primary activities are restricted in its certificate
of incorporation to purchasing or otherwise acquiring from
AnnTaylor, owning, holding, granting security interests, or
selling interests, in Receivables, Contracts, Related
Security and Collections from AnnTaylor, entering into
agreements for the servicing and financing of the
Receivables Pool, entering into interest rate agreements,
spread account agreements and similar documents and
conducting such other activities as it deems necessary or
appropriate to carry out its primary activities;
(b) Not less than one member of the Company's Board of
Directors (the "Independent Director") shall be an
--------------------
individual who is not a direct, indirect or beneficial
stockholder, officer, director, employee, affiliate,
associate, or supplier of the Company or any of its
Affiliates. The certificate of incorporation of the Company
shall provide that (i) the Company's Board of Directors
shall not approve, or take any other action to cause the
filing of, a voluntary bankruptcy petition with respect to
the Company unless the Independent Director shall approve
the taking of such action in writing prior to the taking of
such action and (ii) such provision cannot be amended
without the prior written consent of the Independent
Director;
(c) The Independent Director shall not at any time
serve as a trustee in bankruptcy for the Company, AnnTaylor
or any Affiliate thereof;
(d) Any employee, consultant or agent of the Company
will be compensated from the Company's funds for services
provided to the Company. The Company will engage no agents
other than its attorneys, auditors and other professionals,
and a servicer for the Receivables Pool, which servicer will
be fully compensated for its services to the Company by
payment of the Servicer's Fee;
(e) The Company will contract with Servicer to perform
for the Company all operations required on a daily basis to
service the Receivables Pool. The Company will pay Servicer
the Servicer's Fee pursuant hereto. The Company will not
incur any material indirect or overhead expenses for items
shared between the Company and AnnTaylor (or any other
Affiliate thereof) which are not reflected in the Servicer's
Fee. To the extent, if any, that the Company and AnnTaylor
(or any other Affiliate thereof) share items of expenses not
reflected in the Servicer's Fee, such as legal, auditing and
other professional services, such expenses will be allocated
to the extent practical on the basis of actual use or the
value of services rendered, and otherwise on a basis
reasonably related to the actual use or the value of
services rendered, it being understood that AnnTaylor shall
pay all expenses relating to the preparation, negotiation,
execution and delivery of the Transaction Documents,
including, without limitation, legal, agency and other fees;
(f) The Company's operating expenses will not be paid
by AnnTaylor or any other Affiliate thereof;
(g) The Company will have its own separate post office
box and stationery;
(h) The Company's books and records will be maintained
separately from those of AnnTaylor and any other Affiliate
thereof;
(i) All financial statements of AnnTaylor or any
Affiliate thereof that are consolidated to include the
Company will contain detailed notes clearly stating that (A)
all of the Company's assets are owned by the Company, and
(B) the Company is a separate corporate entity with
creditors who have received security interests in the
Company's assets;
(j) The Company's assets will be maintained in a
manner that facilitates their identification and segregation
from those of AnnTaylor or any Affiliate thereof;
(k) The Company will strictly observe corporate
formalities in its dealings with AnnTaylor or any Affiliate
thereof, and funds or other assets of the Company will not
be commingled with those of AnnTaylor or any Affiliate
thereof. The Company shall not maintain joint bank accounts
or other depository accounts to which AnnTaylor or any
Affiliate thereof (other than AnnTaylor in its capacity as
Servicer) has independent access; and
(l) The Company will maintain arm's-length
relationships with AnnTaylor (and any Affiliate thereof).
Any Person that renders or otherwise furnishes services to
the Company will be compensated by the Company at market
rates for such services it renders or otherwise furnishes to
the Company. Except as contemplated in the Transaction
Documents neither the Company nor AnnTaylor will be or will
hold itself out to be responsible for the debts of the other
or the decisions or actions respecting the daily business
and affairs of the other.
SECTION 7.03. Reporting Requirements. From the date hereof
----------------------
until the Final Payout Date, the Company and AnnTaylor each
covenants as to itself that it will, unless the Administrator
shall otherwise consent in writing, furnish to the Administrator
the items set forth in paragraphs (a), (b), (g), (h), (i), (j),
-------------- --- --- --- --- ---
(k) and (m) in the case of the Company and the items set forth in
- - --- ---
paragraphs (c), (d), (e), (f), (g), (h), (i), (k), (l) and (m) in
- - ---------- --- --- --- --- --- --- --- --- --- ---
the case of AnnTaylor:
(a) Monthly Financial Statements - the Company. As
------------------------------------------
soon as available and in any event within 45 days after the
end of each month copies of the financial statements of the
Company prepared in conformity with GAAP (but subject to
year end audit adjustments), duly certified by a Responsible
Officer of the Company;
(b) Annual Financial Statements - the Company. As
-----------------------------------------
soon as available and in any event within 90 days after the
end of each fiscal year of the Company, copies of the
financial statements of the Company prepared in conformity
with GAAP, including a footnote containing the aggregate
Unpaid Balance of the Pool Receivables, the Unpaid Balance
of the Delinquent Receivables and of the Defaulted
Receivables, duly certified by independent certified public
accountants of recognized standing selected by the Company;
(c) Quarterly Financial Statements - ATSC. As soon as
-------------------------------------
available and in any event within 45 days after the end of
each fiscal quarter of ATSC, copies of the financial
statements of ATSC and its Subsidiaries prepared on a
consolidated basis in conformity with GAAP, duly certified
by a Responsible Officer of ATSC, together with a
certificate from such officer containing a computation of,
and showing compliance with, the financial restrictions
contained in Sections 7.05(d) and (e);
---------------- ---
(d) Annual Financial Statements - ATSC. As soon as
----------------------------------
available and in any event within 90 days after the end of
each fiscal year of ATSC, copies of the financial statements
of ATSC and its Subsidiaries prepared on a consolidated
basis in conformity with GAAP, duly certified by independent
certified public accountants of recognized standing selected
by ATSC, together with a certificate from such accountants
containing a computation of, and showing compliance with,
the financial restrictions contained in Sections 7.05(d) and
----------------
(e);
---
(e) Financial Statements - AnnTaylor. As soon as
--------------------------------
practicable after requested by the Administrator, copies of
the financial statements of AnnTaylor and its Subsidiaries
prepared on a consolidated basis in conformity with GAAP,
duly certified by a Responsible Officer of AnnTaylor;
(f) Reports to Holders and Exchanges. In addition to
--------------------------------
the reports required by subsections (a), (b), (c), (d) and
--------------- --- --- ---
(e) next above, promptly upon the Administrator's request,
---
copies of any reports which ATSC sends to any of its
securityholders, and any reports or registration statements
that ATSC files with the Securities and Exchange Commission
or any national securities exchange other than registration
statements relating to employee benefit plans and to
registrations of securities for selling securities;
(g) ERISA. Promptly after the filing or receiving
-----
thereof, copies of all reports and notices with respect to
any Reportable Event defined in Article IV of ERISA as to
which the 30-day notice requirement has not been waived by
the Pension Benefit Guaranty Corporation which ATSC, the
Company or AnnTaylor, as the case may be, files under ERISA
with the Internal Revenue Service, the Pension Benefit
Guaranty Corporation or the U.S. Department of Labor or
which the Company or AnnTaylor, as the case may be, receives
from the Pension Benefit Guaranty Corporation;
(h) Events of Default. As soon as possible and in any
-----------------
event within five days after a Responsible Officer of the
Company or AnnTaylor, as the case may be, has knowledge of
the occurrence of each Event of Default and each Unmatured
Event of Default, a written statement of a Responsible
Officer of the Company or AnnTaylor, as the case may be,
setting forth details of such event and the action that the
Company proposes to take with respect thereto;
(i) Litigation. As soon as possible and in any event
----------
within five Business Days of the Company's or AnnTaylor's,
as the case may be, knowledge thereof, notice of (i) any
litigation, investigation or proceeding which may exist at
any time could reasonably be expected to have a Material
Adverse Effect and (ii) any material adverse development in
previously disclosed litigation;
(j) Management Report. As soon as available, a copy
-----------------
of the annual management report of ATSC prepared in
connection with the annual audit referred to in Section
-------
7.03(d).
------
(k) Change in Credit and Collection Policy. Prior to
--------------------------------------
its effective date, notice of any change in the Credit and
Collection Policy;
(l) Bank Accounts. On or prior to each January 27th
------------
and, during the continuance of an Event of Default, as often
as requested by the Administrator, an updated and corrected
Schedule 6.02(l); and
---------------
(m) Other. Promptly, from time to time, such other
-----
information, documents, records or reports respecting the
Pool Receivables or the condition or operations, financial
or otherwise, of the Company or AnnTaylor, as the case may
be, as the Administrator may from time to time reasonably
request in order to protect the interests of the
Administrator or Lender under or as contemplated by this
Agreement.
SECTION 7.04. Negative Covenants of the Company. From the
---------------------------------
date hereof until the Final Payout Date, the Company will not
without the prior written consent of the Administrator:
(a) Sales, Liens, Etc. Except as otherwise provided
-----------------
herein or in the Purchase Agreement, sell, assign (by
operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Lien upon or with respect to,
the Receivables Pool, or any interest therein, or any lock-
box account to which any Collections of any Pool Receivable
are sent, or any right to receive income or proceeds from or
in respect of any of the foregoing.
(b) Extension or Amendment of Receivables. Except in
-------------------------------------
accordance with the Credit and Collection Policy as
permitted in Section 8.02, extend, amend or otherwise modify
------------
the terms of any Pool Receivable, or amend, modify or waive
any term or condition of any Contract related thereto.
(c) Change in Business or Credit and Collection
-------------------------------------------
Policy. Make any change in the character of its business or
------
in the Credit and Collection Policy, which change would, in
either case, adversely affect the collectability of a
significant portion of the Pool Receivables or otherwise
adversely affect the first priority, perfected security
interest or remedies of Lender under this Agreement or any
other Transaction Document or, without limiting the
generality of the foregoing, change the method of
calculating aging, which method is described in the Credit
and Collection Policy.
(d) Change in Payment Instructions to Obligors. Add
------------------------------------------
or terminate any bank as a Lock-Box Bank from those listed
in Schedule 6.01(o) or make any change in its instructions
----------------
to Obligors regarding payments to be made to the Company or
Servicer or payments to be made to any Lock-Box Bank, unless
the Administrator shall have received notice of such
addition, termination or change and duly executed copies of
Lock-Box Agreements with each new Lock-Box Bank.
(e) Mergers, Acquisitions, Sales, etc. Be a party to
---------------------------------
any merger or consolidation, or purchase or otherwise
acquire all or substantially all of the assets or any stock
of any class of, or any partnership or joint venture
interest in, any other Person, or sell, transfer, convey or
lease all or any substantial part of its assets (other than
pursuant hereto and the Purchase Agreement), or sell or
assign with or without recourse any Receivables or any
interest therein (other than pursuant hereto or the Purchase
Agreement).
(f) Restricted Payments. Purchase or redeem any
-------------------
shares of the capital stock of the Company, declare or pay
any dividends thereon (other than stock dividends), make any
distribution to stockholders or set aside any funds for any
such purpose, or make any payment in cash with respect to
the Company Note (as defined in the Purchase Agreement)
issued pursuant to the Purchase Agreement, unless after
giving effect thereto, the Company's Net Worth is at least
$850,000.
(g) Deposits to Special Accounts. Deposit or
----------------------------
otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box Account cash or cash proceeds
other than Collections of Pool Receivables.
(h) Incurrence of Indebtedness. Incur or permit to
--------------------------
exist any indebtedness or liability on account of deposits
or advances or for borrowed money or for the deferred
purchase price of any property or services, except (i)
indebtedness not exceeding in the aggregate $4,995 at any
one time outstanding, (ii) the Company's obligations
hereunder or under the other Transaction Documents and (iii)
the Company's obligations under a reimbursement agreement
related to the Customer Letter of Credit, provided that such
--------
obligations are subordinate to the Company's obligations
hereunder and under the Note and the parties thereto have
agreed to non-petition language with respect to the Company
reasonably satisfactory to the Administrator.
(i) Purchase Agreement. Amend or waive any provision
------------------
of the Purchase Agreement, or terminate the Purchase
Agreement, other than pursuant to the amendment dated the
date hereof.
(j) Certificate of Incorporation. Amend, repeal or
----------------------------
waive Articles III, VII, X, XI, XII or XIV of its
certificate of incorporation, other than the amendment
thereto on or about the date hereof made in connection with
the amendment and restatement of this Agreement.
SECTION 7.05 Negative Covenants of AnnTaylor. From the
-------------------------------
date hereof until the Final Payout Date, AnnTaylor will not,
without the prior written consent of the Administrator:
(a) Conduct of Business. Engage in any business other
-------------------
than the business engaged in by AnnTaylor on the date hereof
and any business activities substantially similar or related
thereto.
(b) Mergers, Acquisitions, etc. Be a party to any
--------------------------
merger, consolidation, or purchase or otherwise acquire all
or substantially all of the assets or any stock of any class
of, or any partnership or joint venture interest in, any
other person, or, except in the ordinary course of its
business, sell, transfer, convey or lease all or any
substantial part of its assets, or sell or assign with or
without recourse any Receivables or any interest therein
other than:
(i) pursuant to the Purchase Agreement;
(ii) licenses of trademarks to the
extent necessary to maintain or protect such trademarks
in jurisdictions outside the United States of America;
(iii) any sale or disposition of
AnnTaylor's interest in the CAT Joint Venture pursuant
to the CAT Joint Venture Agreement;
(iv) any purchase or acquisition of any
assets among AnnTaylor and its Restricted Subsidiaries;
it being understood that AnnTaylor shall be permitted
to incorporate new Restricted Subsidiaries;
(v) any purchase or acquisition of any
interest 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;
(vi) any purchase or acquisition of any
assets or capital stock in Unrestricted Subsidiaries in
an amount not to exceed $1,000,000 at any one time
outstanding;
(vii) any purchase or acquisition of any
assets or capital stock in the CAT Joint Venture
pursuant to the CAT Joint Venture Agreement in an
amount not to exceed 15% of Net Worth; and
(viii) any merger or consolidation of any
Subsidiary (other than the Company) into or with
AnnTaylor, so long as AnnTaylor is the surviving
corporation.
(c) Restricted Payments. Violate the provisions of
-------------------
Section 8.05 of the AnnTaylor Credit Agreement as in effect
------------
from time to time or, if the AnnTaylor Credit Agreement is
terminated or cancelled or it expires, as in effect
immediately prior to such termination, cancellation or
expiration (and such provisions, and the definitions related
thereto, are herein incorporated by reference as if fully
set forth herein).
(d) Net Worth. Permit Net Worth as determined at the
---------
end of any fiscal quarter (beginning with the fiscal quarter
ending on or about January 28, 1995) to be less than the Net
Worth on or about October 30, 1994 plus (a) 50% of Net
Income after October 30, 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 October 30, 1994 minus (c) any
-----
expenses related to the payments for ATSC's share of
expenses incurred in connection with any public offering of
common stock minus (d) payments by ATSC or AnnTaylor to
acquire shares of common stock from employees of ATSC,
AnnTaylor or any Restricted Subsidiary in an aggregate
amount not exceeding $100,000 in any fiscal year.
(e) Fixed Charge Coverage Ratio. Permit the Fixed
---------------------------
Charge Coverage Ratio, as determined at (i) the end of the
fiscal quarter ended in October of 1995 for such fiscal
quarter to be less than 0.45 to 1.00 and (ii) the end of any
fiscal quarter for the preceding four fiscal quarters (or,
if less, the number of full fiscal quarters elapsed since
October 28, 1995) to be less than the ratio set forth
opposite the month in which such fiscal quarter ends:
Quarter Ended Minimum Ratio
------------- -------------
January 1996 0.75 to 1.00
April 1996 1.00 to 1.00
July 1996 1.10 to 1.00
October 1996 1.15 to 1.00
January 1997 and thereafter 1.25 to 1.00
(f) Purchase Agreement. Amend or waive any provision
------------------
of the Purchase Agreement, or terminate the Purchase
Agreement, except for the amendment to the Purchase
Agreement dated the date hereof.
====================================================================
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer.
-----------------------
(a) AnnTaylor as Initial Servicer. The servicing,
-----------------------------
administering and collection of the Pool Receivables shall be
conducted by the Person designated as Servicer hereunder
("Servicer") from time to time in accordance with this Section
-------
8.01. Until the Administrator gives to AnnTaylor a Successor
- - ----
Notice (as defined in Section 8.01(b)), AnnTaylor is hereby
---------------
designated as, and hereby agrees to perform the duties and
obligations of, Servicer pursuant to the terms hereof.
(b) Successor Notice; Servicer Transfer Events. Upon
-----------------------------------------
AnnTaylor's receipt of a notice from the Administrator of the
Administrator's designation of a new Servicer (a "Successor
---------
Notice"), AnnTaylor agrees that it will terminate its activities
- - ------
as Servicer hereunder in a manner that the Administrator believes
will facilitate the transition of the performance of such
activities to the new Servicer, and the Administrator (or its
designee) shall assume each and all of AnnTaylor's obligations to
service and administer such Receivables, on the terms and subject
to the conditions herein set forth, and AnnTaylor shall use its
best efforts to assist the Administrator (or its designee) in
assuming such obligations, including, without limitation, by
allowing the Administrator (or its designee) access to all
computer software and programs used by AnnTaylor to service the
Pool Receivables. The Administrator agrees not to give AnnTaylor
a Successor Notice until after the occurrence and only during the
continuance of any Event of Default (any such Event of Default
being herein called a "Servicer Transfer Event"), in which case
-----------------------
such Successor Notice may be given at any time in the
Administrator's discretion. If AnnTaylor disputes the occurrence
of a Servicer Transfer Event, AnnTaylor may take appropriate
action to resolve such dispute provided that AnnTaylor must
--------
terminate its activities hereunder as Servicer and allow the
newly designated Servicer to perform such activities on the date
provided by the Administrator as described above, notwithstanding
the commencement or continuation of any proceeding to resolve the
aforementioned dispute.
(c) Subcontracts. Servicer may, with the prior consent of
------------
the Administrator, subcontract with any other Person for
servicing, administering or collecting the Pool Receivables,
provided that Servicer shall remain liable for the performance of
the duties and obligations of Servicer pursuant to the terms
hereof.
SECTION 8.02. Duties of Servicer.
------------------
(a) Appointment; Duties in General. Each of the Company,
------------------------------
Lender and the Administrator hereby appoints as its agent
Servicer, as from time to time designated pursuant to Section
8.01, to enforce its rights and interests in and under the Pool
Receivables, the Related Security and the related Contracts.
Servicer shall take or cause to be taken all such actions as may
be necessary or advisable to collect each Pool Receivable from
time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in
accordance with the Credit and Collection Policy.
(b) Allocation of Collections; Segregation. Servicer shall
--------------------------------------
set aside for the account of the Lender the Collections of Pool
Receivables as set forth in Section 3.01, but shall not be
------------
required (unless otherwise requested by the Administrator after
the occurrence and during the continuance of an Event of Default)
to segregate the funds constituting such portions of such
Collections prior to the remittance thereof in accordance with
such Section. If instructed by the Administrator after the
occurrence and during the continuance of an Event of Default,
Servicer shall segregate and deposit with a bank designated by
the Administrator, the Collections of Pool Receivables, on the
second Business Day following receipt by Servicer of such
Collections in immediately available funds. Such Collections
shall be applied in accordance with Section 3.01.
------------
(c) Modification of Receivables. So long as AnnTaylor is
---------------------------
the Servicer, Servicer may, (A) in accordance with the Credit and
Collection Policy, (i) extend the maturity of, or defer interest
payments or finance charges with respect to, any Pool Receivable
as Servicer may determine to be appropriate to maximize
Collections thereof, and (ii) adjust the Unpaid Balance of any
Receivable to reflect the reductions or cancellations described
in the first sentence of Section 3.02(a) or (B) as a result of a
-------------- ---
natural disaster, extend the maturity or defer interest payments
or finance charges with respect to any Pool Receivable of an
Obligor that is located in the area affected by such natural
disaster as Servicer may determine; provided that the aggregate
--------
Unpaid Balance of such extended or deferred Pool Receivables does
not exceed 3% of Outstanding Principal.
(d) Documents and Records. The Company shall deliver to
---------------------
Servicer, and Servicer shall hold for the sole benefit of the
Company and Lender in accordance with their respective interests,
all documents, instruments and records (including, without
limitation, computer tapes or disks) that evidence or relate to
Pool Receivables.
(e) Certain Duties to the Company. Servicer, if other than
-----------------------------
AnnTaylor, shall, as soon as practicable upon demand, deliver to
the Company copies of all documents, instruments and records in
its possession that evidence or relate to Pool Receivables.
(f) Termination. Servicer's authorization under this
-----------
Agreement shall terminate upon the Final Payout Date.
(g) Power of Attorney. The Company hereby grants to
-----------------
Servicer an irrevocable power of attorney, with full power of
substitution, coupled with an interest, to take in the name of
the Company all steps which are necessary or advisable to
endorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by the Company or
transmitted or received by Lender (whether or not from the
Company) in connection with any Pool Receivable.
(h) Information. Servicer shall take such steps as shall
-----------
be necessary to enable it to provide complete and accurate
information, within five (or, if an Event of Default is
continuing, one) Business Day(s) of request, to the
Administrator, with respect to the daily amounts and
corresponding locations of those Collections received by the
Company that have not been sent directly to the Lock-Box Banks.
SECTION 8.03. Rights of the Administrator.
---------------------------
(a) Notice to Obligors. At any time after the occurrence
------------------
and during the continuance of an Event of Default the
Administrator may notify the Obligors of Pool Receivables, or any
of them, of the security interest held by Lender.
(b) Notice to Lock-Box Banks. At any time following the
------------------------
occurrence and during the continuance of a Event of Default the
Administrator is hereby authorized to give notice to the Lock-Box
Banks, as provided in the Lock-Box Agreements, of the transfer to
the Administrator of dominion and control over the lock-boxes and
related accounts to which the Obligors of Pool Receivables make
payments. The Company hereby transfers to the Administrator,
effective when the Administrator shall give notice to the Lock-
Box Banks as provided in the Lock-Box Agreements, the exclusive
dominion and control over such lock-boxes and accounts, and shall
take any further action that the Administrator may reasonably
request to effect such transfer. To the extent that the Lock-Box
Banks are transferring Collections directly to the Administrator
or pursuant to instructions from the Administrator, neither the
Company nor the Servicer shall have any obligation to pay over
such Collections pursuant to Section 3.01(b). The Administrator
---------------
hereby agrees that upon the request of the Company (i) at and
after such time that this Agreement is no longer in effect, it
will provide written notice to the Lock-Box Banks and any bank
referred to in Section 7.01(i) to such effect and (ii) unless an
--------------
Event of Default is then continuing, it will within one Business
Day of such request by the Company deliver instructions to any
Lock-Box Bank whose Lock-Box Agreement has been cancelled or
terminated directing that mail addressed to the lock-box account,
administered by such Lock-Box Bank be forwarded to another Lock-
Box Bank as specified in such request by the Company.
(c) Rights on Servicer Transfer Event. At any time
---------------------------------
following a Servicer Transfer Event:
(i) The Administrator may direct the Obligors of Pool
Receivables, or any of them, to pay all amounts payable
under any Pool Receivable directly to the Administrator.
(ii) AnnTaylor shall, at the Administrator's request
and at AnnTaylor's expense, give notice of the Lender's
security interest to each Obligor and direct that payments
be made directly to the Administrator.
(iii) AnnTaylor shall, at the Administrator's request,
(A) assemble all of the documents, instruments and other
records (including, without limitation, computer programs,
tapes and disks) which evidence the Pool Receivables, and
the related Contracts and Related Security, or which are
otherwise necessary or desirable to collect such Pool
Receivables, and make the same available to the
Administrator at a place selected by the Administrator, and
(B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections of
Pool Receivables in a manner acceptable to the Administrator
and promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments
of transfer, to the Administrator.
(iv) Each of AnnTaylor, the Company and Lender hereby
authorizes the Administrator, and grants to the
Administrator an irrevocable power of attorney, to take any
and all steps in the Company's or AnnTaylor's name and on
behalf of the Company, AnnTaylor and Lender which are
necessary or desirable, in the determination of the
Administrator, to collect all amounts due under any and all
Pool Receivables, including, without limitation, endorsing
the Company's or AnnTaylor's name on checks and other
instruments representing Collections and enforcing such Pool
Receivables and the related Contracts; provided that the
Administrator shall not exercise its rights under such power
of attorney unless a Servicer Transfer Event shall have
occurred and be continuing.
SECTION 8.04. Responsibilities of the Company. Anything
-------------------------------
herein to the contrary notwithstanding:
(a) Contracts. The Company shall perform all of its
----------
obligations under the Contracts related to the Pool Receivables
and under the other agreements related thereto to the same extent
as if the security interest had not been granted hereunder and
the exercise by the Administrator or its designee of its rights
hereunder shall not relieve the Company from such obligations.
(b) Limitation of Liability. Neither the Administrator nor
-----------------------
Lender shall have any obligation or liability with respect to any
Pool Receivables, the Contracts related thereto or any other
agreements related thereto, nor shall any of them be obligated to
perform any of the obligations of the Company thereunder.
SECTION 8.05. Further Action Evidencing Security Interest.
-------------------------------------------
(a) Further Assurances. The Company agrees that from time
------------------
to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action
that the Administrator or its designee may reasonably request in
order to perfect or more fully evidence the security interest
granted hereunder, or to enable Lender or the Administrator or
its designee to exercise or enforce any of their respective
rights hereunder or under any Transaction Document. Without
limiting the generality of the foregoing, the Company will upon
the request of the Administrator or its designee:
(i) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof,
and such other instruments or notices, as may be necessary
or appropriate;
(ii) mark its summary master control data processing
records evidencing such Pool Receivables and related
Contracts with a legend, acceptable to the Administrator,
that the Pool Receivable and related Contracts have been
pledged hereunder.
(b) Additional Financing Statements; Performance by
-----------------------------------------------
Administrator. The Company hereby authorizes the Administrator
- - ------------
or its designee to file one or more financing or continuation
statements, and amendments thereto and assignments thereof,
relative to all or any portion the Receivables Pool now existing
or hereafter arising in the name of the Company. If the Company
fails to perform any of its agreements or obligations under this
Agreement, the Administrator or its designee may (but shall not
be required to) itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Administrator or
its designee incurred in connection therewith shall be payable by
the Company as provided in Section 14.05.
-------------
(c) Continuation Statements; Opinion. Without limiting the
--------------------------------
generality of subsection (a), the Company will, not earlier than
--------------
six (6) months and not later than three (3) months prior to the
fifth anniversary of the date of filing of the financing
statement referred to in Section 5.01(e) of the Original
--------------
Financing Agreement or any other financing statement filed
pursuant to this Agreement or in connection with any Loan
hereunder, unless the Final Payout Date shall have occurred
execute and deliver and file or cause to be filed an appropriate
continuation statement with respect to such financing statement.
SECTION 8.06. Application of Collections. Any payment by
--------------------------
an Obligor in respect of any indebtedness owed by it to the
Company shall, except as otherwise specified by such Obligor,
required by the underlying Contract or law be applied, first, as
-----
a Collection of any Finance Charge Receivable or Receivables that
are Pool Receivables then outstanding of such Obligor in the
order of the age of such Finance Charge Receivables, starting
with the oldest of such Finance Charge Receivable, second, as a
------
Collection of any Principal Receivable or Receivables that are
Pool Receivables then outstanding of such Obligor in the order of
the age of such Principal Receivables, starting with the oldest
of such Principal Receivable, and third, to any other
-----
indebtedness of such Obligor.
======================================================================
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest. To secure all
--------------------------
obligations of the Company arising in connection with this
Agreement, the Note and each other Transaction Document, whether
now or hereafter existing, due or to become due, direct or
indirect, or absolute or contingent, including, without
limitation, the principal of and interest on the Loans, all
Indemnified Amounts, payments on account of deemed Collections
and fees, the Company hereby assigns and grants to Lender a
continuing security interest in all of the Company's right, title
and interest, now or hereafter existing, in, to and under the
Receivables Pool (other than the Spread Account, it being
understood that the Company has granted a continuing security
interest in the Spread Account to the Lender under the Spread
Account Agreement).
SECTION 9.02. Remedies. Upon the occurrence and during the
--------
continuance of an Event of Default, Lender shall have, with
respect to the collateral granted pursuant to Section 9.01, and
------------
in addition to all other rights and remedies available to Lender
or the Administrator under this Agreement or other applicable
law, all the rights and remedies of a secured party upon default
under the UCC.
====================================================================
ARTICLE X
EVENTS OF DEFAULT
SECTION 10.01. Events of Default. The following events
-----------------
shall be "Events of Default" hereunder:
-----------------
(a) (i) The Company shall fail to pay any principal
of, or interest on, any Loan when due (whether or not
sufficient Collections have then been received to make such
payment) or (ii) Servicer (if AnnTaylor or its Affiliate is
Servicer) shall fail to perform or observe any term,
covenant or agreement that is an obligation of Servicer
hereunder (other than as referred to in clause (iii) next
------------
following) and such failure shall remain unremedied for
three Business Days or (iii) Servicer (if AnnTaylor or its
Affiliate is Servicer) shall fail to make any payment or
deposit to be made by it hereunder when due; or
(b) Any representation or warranty made or deemed to
be made by the Company or AnnTaylor (or any of their
respective officers) under or in connection with this
Agreement shall prove to have been false or incorrect in any
material respect when made (other than a breach of the
representations set forth in Section 6.01(l), 6.01(p) or
-----------------------
6.01(u)); or
------
(c) The Company or AnnTaylor shall fail to perform or
observe any other term, covenant or agreement contained in
this Agreement or any of the other Transaction Documents on
its part to be performed or observed and any such failure
shall remain unremedied for twenty days; or
(d) A default shall have occurred and be continuing
under any instrument or agreement evidencing, securing or
providing for the issuance of indebtedness for borrowed
money in excess of $2,000,000 of, or guaranteed by,
AnnTaylor, ATSC or any Restricted Subsidiary, which default
if unremedied, uncured, or unwaived (with or without the
passage of time or the giving of notice or both) would
permit acceleration of the maturity of such indebtedness and
such default shall have continued unremedied, uncured or
unwaived for a period long enough to permit such
acceleration and any notice of default required to permit
acceleration shall have been given; or any default under any
agreement or instrument relating to the purchase of
receivables of AnnTaylor, ATSC or any Restricted Subsidiary,
or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement
or instrument, if the effect of such default is to
terminate, or permit the termination of, the commitment of
any party to such agreement or instrument to purchase
receivables or the right of AnnTaylor, ATSC or any
Restricted Subsidiary to reinvest in receivables the
principal amount paid by any party to such agreement or
instrument for interest in receivables; or
(e) An Event of Bankruptcy shall have occurred and
remain continuing with respect to the Company, AnnTaylor,
ATSC or any Restricted Subsidiary; or
(f) The Net Yield at any time is less than -2%; or
(g) The Gross Default-to-Liquidation Ratio exceeds
2.00% or the Net Default to Liquidation Ratio exceeds 1.45%;
or
(h) The Payment Rate is less than 22%; or
(i) The Delinquency Ratio at any Cut-Off Date is
greater than 11.5% or the average of the Delinquency Ratios
for the most recent three Cut-Off Dates is greater than 11%;
or
(j) There shall exist any event, circumstance or
occurrence that would be reasonably likely to have a
material adverse effect on the validity or enforceability of
this Agreement, the Note or any other Transaction Document
or on the status, existence, perfection, priority or
enforceability of Lender's interest in the Receivables Pool;
or
(k) The warranty in Section 6.01(i)(y) shall not be
------------------
true at any time; or
(l) The occurrence of a Change-in-Control; or
(m) The Internal Revenue Service shall file notice of
a lien pursuant to Section 6323 of the Internal Revenue Code
with regard to any of the assets of the Company and such
lien shall not have been released within 5 days (or 30 days,
if payment in full with respect thereto shall have been made
within 5 days), or the Pension Benefit Guaranty Corporation
shall file notice of a lien pursuant to Section 4068 of
ERISA with regard to any of the assets of the Company; or
(n) The Dilution Ratio exceeds 15%; or
(o) The sum of (i) the balance in the Spread Account
and (ii) the stated amount of the Customer Letter of Credit
as of any Settlement Date, after giving effect to all
withdrawals therefrom or draws thereupon on such date, shall
be less than 0.5% of the then Outstanding Principal; or
(p) The Outstanding Principal shall exceed the
Borrowing Base as set forth in the most recently delivered
Information Package (or portion thereof) and the Company
shall not have prepaid the Loan in the amount of such excess
within one Business Day.
SECTION 10.02. Remedies.
--------
(a) Optional Acceleration. Upon the occurrence of a Event
---------------------
of Default (other than a Event of Default described in subsection
----------
(e) of Section 10.01), the Administrator shall, at the request,
- - --- -------------
or may with the consent, of Lender, by notice to the Company
declare the Loan Termination Date to have occurred, whereupon the
obligation of Lender to make any Loans hereunder shall
immediately terminate, and declare the unpaid principal amount
of, and any and all accrued and unpaid interest on the Loans to
be, and the same shall thereupon be, immediately due and payable,
without presentment, further demand, or protest or other
requirement of any kind, all of which are expressly waived by the
Company.
(b) Automatic Acceleration. Upon the occurrence of a Event
----------------------
of Default described in subsection (e) of Section 10.01 with
-------------
respect to the Company, AnnTaylor or ATSC, or subsection (f),
--------------
(g), (h), (i), (n), (o) or (p) of Section 10.01, the Loan
- - --- --- --- --- --- --- -------------
Termination Date shall occur automatically, whereupon the
obligation of Lender to make any Loan hereunder shall immediately
terminate, and the unpaid principal amount of and any and all
accrued interest on the Loans shall automatically become
immediately due and payable, without presentment, demand or
protest or other requirement of any kind, all of which are hereby
expressly waived by the Company.
(c) Additional Remedies. Upon any Loan Termination Date
-------------------
pursuant to this Section 10.02, no Loans thereafter will be made,
-------------
and the Administrator and Lender shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all
other rights and remedies provided to secured parties under the
UCC of each applicable jurisdiction and other applicable laws,
which rights shall be cumulative.
======================================================================
ARTICLE XI
THE ADMINISTRATOR
SECTION 11.01. Authorization and Action. Lender has
------------------------
appointed and authorized the Administrator (or its designees) to
take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Administrator
by the terms hereof, together with such powers as are reasonably
incidental thereto.
SECTION 11.02. Administrator's Reliance, Etc. The
-----------------------------
Administrator and its directors, officers, agents or employees
shall not be liable for any action taken or omitted to be taken
by it or them under or in connection with the Transaction
Documents (including, without limitation, the servicing,
administering or collecting Pool Receivables as Servicer pursuant
to Section 8.01), except for its or their own gross negligence or
------------
willful misconduct. Without limiting the generality of the
foregoing, the Administrator: (a) may consult with legal counsel
(including counsel for the Company or AnnTaylor), independent
certified public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken
in good faith by it in accordance with the advice of such
counsel, accountants or experts; (b) makes no warranty or
representation to Lender or any other holder of any interest in
Pool Receivables and shall not be responsible to Lender or any
such other holder for any statements, warranties or
representations made in or in connection with any Transaction
Document; (c) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms,
covenants or conditions of any Transaction Document by the
Company or AnnTaylor, or to inspect the property (including the
books and records) of the Company or AnnTaylor; (d) shall not be
responsible to Lender or any other holder of any interest in Pool
Receivables for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any
Transaction Document; and (e) shall incur no liability under or
in respect of this Agreement by acting upon any notice (including
notice by telephone), consent, certificate or other instrument or
writing (which may be by facsimile or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 11.03. PNC Bank and Affiliates. PNC Bank and any
-----------------------
of its Affiliates may generally engage in any kind of business
with the Company, AnnTaylor or any Obligor, any of their
respective Affiliates and any Person who may do business with or
own securities of the Company, AnnTaylor or any Obligor or any of
their respective Affiliates, all as if PNC Bank were not the
Administrator, and without any duty to account therefor to Lender
or any other holder of an interest in Pool Receivables.
==========================================================================
ARTICLE XII
ASSIGNMENT OF LENDER'S INTEREST
SECTION 12.01. Restrictions on Assignments.
---------------------------
(a) Neither the Company, nor AnnTaylor, as Servicer, may
assign its rights, or delegate its duties hereunder or any
interest herein without the prior written consent of the
Administrator. Lender may not assign its rights hereunder
(although it may delegate its duties hereunder as expressly
indicated herein) or the Loans (or any portion thereof) to any
Person without the prior written consent of the Company, which
consent shall not be unreasonably withheld; provided, however,
-----------------
that
(i) Lender may assign all of its rights and interests
in the Transaction Documents, together with all its interest
in the Loans, to PNC Bank, or any Affiliate of PNC Bank, or
to any "bankruptcy remote" special purpose entity the
business of which is administered by PNC Bank or any
Affiliate of PNC Bank or to any Program Support Provider;
provided, however, no such assignment may be made unless the
----------------
assignee shall agree with the Company that the Company shall
not be obligated to pay interest on the Loans in excess of
the interest that the Company would have been obligated to
pay absent such assignment, unless an Event of Default has
occurred and is continuing; and
(ii) Lender may assign and grant a security interest
or a participating interest in all of its rights in the
Transaction Documents, together with all of its rights and
interest in the Loans, to the Liquidity Agent or any Program
Support Provider, to secure Lender's obligations under or in
connection with the Commercial Paper Notes, the Liquidity
Agreement and any other Program Support Agreement, and
certain other obligations of Lender incurred in connection
with the funding of the Loans hereunder, which assignment
and grant of a security interest or a participating interest
shall not be considered an "assignment" for purposes of
Section 12.01 or, prior to the enforcement of such security
interest, for purposes of any other provision of this
Agreement.
The parties hereto anticipate that Market Street Capital Corp.
will assign all of its rights and obligations under this
Agreement and the other Transaction Documents to Market Street
Funding Corporation, a Delaware corporation ("Funding"). The
-------
Company and AnnTaylor hereby consent to such assignment, and
agree that upon receipt by AnnTaylor of notice of such assignment
by PNC Bank, (i) all references herein and in the other
Transaction Documents to "Lender" shall be deemed to refer to
Funding and (ii) all references herein and in the other
Transaction Documents to the "Administrator" shall refer to PNC
Bank, as administrator for Funding. The Company and AnnTaylor
hereby agree to execute and deliver such documents and
instruments, including UCC financing statements, as the
Administrator may reasonably request to evidence such assignment.
(b) The Company agrees to advise the Administrator within
five Business Days after notice to the Company of any proposed
assignment by Lender of the Loans (or any portion thereof), not
otherwise permitted under subsection (a), of the Company's
-------------
consent or non-consent to such assignment and if it does not
consent, the reasons therefor. If the Company does not consent
to such assignment, Lender may immediately assign such Loans (or
portion thereof) to PNC Bank or any Affiliate of PNC Bank. All
of the aforementioned assignments shall be upon such terms and
conditions as Lender and the assignee may mutually agree.
SECTION 12.02. Rights of Assignee. Upon the assignment by
------------------
Lender in accordance with this Article XII, the assignee
-----------
receiving such assignment shall have all of the rights of Lender
with respect to the Transaction Documents and the Loans (or such
portion thereof as has been assigned).
SECTION 12.03. Evidence of Assignment. Any assignment of
----------------------
the Loans (or any portion thereof) to any Person may be evidenced
by such instrument(s) or document(s) as may be satisfactory to
Lender, the Administrator and the assignee.
==========================================================================
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities.
----------
(a) General Indemnity. Without limiting any other rights
----------------
which any such Person may have hereunder or under applicable law,
the Company hereby agrees to indemnify each of the Administrator,
Lender, the Liquidity Banks, the other Program Support Providers,
the Liquidity Agent, each of their respective Affiliates, and all
successors, transferees, participants and assigns and all
officers, directors, shareholders, controlling persons, employees
and agents of any of the foregoing (each an "Indemnified Party"),
-----------------
forthwith on demand, from and against any and all damages,
losses, claims, liabilities and related costs and expenses,
including reasonable attorneys' fees and disbursements (all of
the foregoing being collectively referred to as "Indemnified
-----------
Amounts") awarded against or incurred by any of them arising out
- - -------
of or relating to the Transaction Documents or the ownership or
funding of the Loans or in respect of any Receivable or any
Contract, excluding, however, (a) Indemnified Amounts to the
--------- -------
extent determined by a court of competent jurisdiction to have
resulted from gross negligence or willful misconduct of such
Indemnified Party, (b) recourse (except as otherwise specifically
provided in this Agreement) for Defaulted Receivables, (c) taxes
on net income, or (d) Indemnified Amounts resulting solely from
acts or omissions of Servicer. Without limiting the foregoing,
the Company shall indemnify each Indemnified Party for
Indemnified Amounts arising out of or relating to:
(i) the transfer by the Company of any interest in any
Receivable other than the grant of a security interest to
Lender pursuant to Section 9.01;
------------
(ii) any representation or warranty made by the
Company under or in connection with any Transaction
Document, any Information Package or any other information
or report delivered by or on behalf of the Company pursuant
hereto, which shall have been false, incorrect or misleading
in any material respect when made or deemed made;
(iii) the failure by the Company to comply with any
applicable law, rule or regulation (including truth in
lending, fair credit billing, usury, fair credit reporting,
equal credit opportunity, fair debt collection practices and
privacy) with respect to any Pool Receivable or the related
Contract, or the nonconformity of any Pool Receivable or the
related Contract with any such applicable law, rule or
regulation;
(iv) the failure to vest and maintain vested in Lender
a first priority perfected security interest, in the
Receivables in, or purporting to be in, the Receivables
Pool, free and clear of any Lien, other than a Lien arising
solely as a result of an act of Lender or the Administrator,
whether existing at the time of any Loan or at any time
thereafter;
(v) the failure to file, or any delay in filing,
financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to any Receivables in, or
purporting to be in, the Receivables Pool, whether at the
time of any Loan or at any time thereafter;
(vi) without duplication of amounts paid pursuant to
Section 3.02(a), any dispute, claim, offset or defense
---------------
(other than discharge in bankruptcy) of the Obligor to the
payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense
based on such Receivable's or the related Contract's not
being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the merchandise or
services related to such Receivable or the furnishing or
failure to furnish such merchandise or services;
(vii) any failure of the Company or Servicer to
perform its duties or obligations in accordance with the
provisions of Article VIII; or
------------
(viii) any products liability claim arising out of or
in connection with merchandise or services that are the
subject of any Pool Receivable.
(b) Indemnity by AnnTaylor. Without limiting any other
----------------------
rights which any such person may have hereunder under applicable
law, AnnTaylor hereby agrees to indemnify each Indemnified Party,
forthwith on demand, from and against any and all Indemnified
Amounts awarded against or incurred by any of them arising out of
or relating to:
(i) any representation or warranty made by AnnTaylor
under or in connection with any Transaction Document in its
capacity as Servicer, any Information Package or any other
information or report delivered by or on behalf of AnnTaylor
in its capacity as Servicer pursuant hereto, which shall
have been false, incorrect or misleading in any material
respect when made or deemed made;
(ii) the failure by AnnTaylor, in its capacity as
Servicer, to comply with any applicable law, rule or
regulation (including truth in lending, fair credit billing,
usury, fair credit reporting, equal credit opportunity, fair
debt collection practices and privacy) with respect to any
Pool Receivable or other related contract; or
(iii) any failure of AnnTaylor to perform its duties,
covenants and obligations in accordance with the applicable
provisions of this Agreement.
(c) After-Tax Basis. Indemnification hereunder shall be in
---------------
an amount necessary to make the Indemnified Party whole after
taking into account any tax consequences to the Indemnified Party
of the payment of any of the aforesaid taxes and the receipt of
the indemnity provided hereunder or of any refund of any such tax
previously indemnified hereunder, including the effect of such
tax or refund on the amount of tax measured by net income or
profits which is or was payable by the Indemnified Party.
(d) Contest. Promptly after receipt of notice of the
-------
commencement of any action involving any indemnified party in
respect of which an indemnity will be sought pursuant to this
Section 13.01, such indemnified party shall promptly notify the
- - -------------
Company or AnnTaylor, as applicable; provided, however, that such
--------
failure to so notify shall not affect the rights of such
Indemnified Party to indemnity hereunder unless such failure
prejudices the Company's or AnnTaylor's ability to contest such
claim. The Company or AnnTaylor, as applicable, shall have the
right to assume the defense with respect to such indemnified
claim, and to retain counsel reasonably satisfactory to the
Indemnified Party to represent such Indemnified Party; provided
--------
that (i) AnnTaylor or the Company, as applicable, shall pay all
of the fees, costs and expenses of such counsel related to such
proceedings, (ii) the Company or AnnTaylor, as appropriate, has
acknowledged in writing to such Indemnified Party that such claim
is an indemnified claim hereunder and (iii) no Event of Default
has occurred and is continuing. In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel
at its own expense, except that AnnTaylor or the Company, as
applicable, shall pay the fees and expenses of such counsel
retained by the Indemnified Party in the event that (i) the
Company or AnnTaylor, as applicable, and the Indemnified Party
shall mutually agree to the retention of such counsel or, (ii)
the named parties to any such proceeding (including any impleaded
party) include both the Company and the Indemnified Party and
representation of both parties by the same counsel would be
inappropriate, in the reasonable opinion of the Indemnified
Party, due to actual or potential differing interests between
them. Neither the Company nor AnnTaylor, as applicable, shall be
liable for any settlement, compromise or fine or judgement by
consent with respect to any proceeding effected without its
written consent, unless an Event of Default has occurred and is
continuing, but if settled with such consent or if there shall be
a final judgement for the plaintiff, the Company or AnnTaylor, as
applicable, agrees to indemnify the indemnified party to the
extent set forth in this Section 13.01. In addition, neither the
-------------
Company nor AnnTaylor will, without the prior written consent of
the Indemnified Party, settle or compromise or consent to the
entry of any judgement in any pending or threatened claim,
action, suit, proceeding or investigation or agree to any fine in
respect of which indemnification may be sought hereunder (whether
or not the indemnified party is an actual or potential party to
such claim, action, suit, proceeding, or investigation) unless
such settlement, compromise, consent or agreement includes an
unconditional release of each Indemnified Party from all
liability arising out of such claim, action, suit, proceeding or
investigation. If an Event of Default has occurred and is
continuing, neither the Company nor AnnTaylor shall have the
right to control the defense of any indemnified claim pursuant to
this paragraph (d).
------------
(e) Contribution. If for any reason the indemnification
------------
provided above in this Section 13.01 is unavailable to an
------------
Indemnified Party or is insufficient to hold an Indemnified Party
harmless, then the Company or AnnTaylor or both, as applicable,
shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not
only the relative benefits received by such Indemnified Party on
the one hand and the Company or AnnTaylor or both, as applicable,
on the other hand but also the relative fault of such Indemnified
Party as well as any other relevant equitable considerations.
(f) Participants. Any Indemnified Party which is a
------------
participant shall only be entitled to amounts under this Section
-------
13.01 to the extent that such amounts, together with all amounts
- - -----
due to the Person selling such participation under this Section
-------
13.01, do not exceed the amounts that would have been due to such
- - -----
Person under this Section 13.01 if the participation had not been
-------------
entered into or sold.
====================================================================
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc. No amendment or waiver of
---------------
any provision of this Agreement nor consent to any departure by
the Company or AnnTaylor therefrom shall in any event be
effective unless the same shall be in writing and signed by (a)
the Company, AnnTaylor, the Administrator and Lender (with
respect to an amendment) or (b) the Administrator and Lender
(with respect to a waiver or consent by them) or the Company or
AnnTaylor (with respect to a waiver or consent by it), as the
case may be, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for
which given. The parties acknowledge that, before entering into
such an amendment or granting such a waiver or consent, Lender
may also be required to obtain the approval of some or all of the
Liquidity Banks to obtain confirmation from certain rating
agencies that such amendment, waiver or consent will not result
in a withdrawal or reduction of the ratings of the Commercial
Paper Notes.
SECTION 14.02. Notices, Etc. All notices and other
------------
communications provided for hereunder shall, unless otherwise
stated herein, be in writing (including facsimile communication)
and shall be personally delivered or sent by express mail or
courier or by certified mail, postage prepaid, or by facsimile,
to the intended party at the address or facsimile number of such
party set forth under its name on the signature pages hereof or
at such other address or facsimile number as shall be designated
by such party in a written notice to the other parties hereto.
All such notices and communications shall be effective, (a) if
personally delivered or sent by express mail or courier or if
sent by certified mail, when received, and (b) if transmitted by
facsimile, when sent, receipt confirmed by telephone or
electronic means.
SECTION 14.03. No Waiver; Remedies. No failure on the part
-------------------
of the Administrator, any Affected Party, any Indemnified Party,
Lender or any other holder of the Loans (or any portion thereof)
to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law. Without limiting the foregoing, to the
fullest extent permitted by law, each of PNC Bank, individually
and as the Administrator, and each Liquidity Bank is hereby
authorized by the Company at any time and from time to time, to
set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other
indebtedness at any time owing by PNC Bank or such Liquidity Bank
to or for the credit or the account of the Company for
obligations now or hereafter existing under this Agreement, to
the Administrator, any Affected Party, any Indemnified Party or
Lender, or their respective successors and assigns.
SECTION 14.04. Binding Effect; Survival. This Agreement
------------------------
shall be binding upon and inure to the benefit of the Company,
AnnTaylor, the Administrator, Lender and their respective
successors and assigns, and the provisions of Section 4.02 and
------------
Article XIII shall inure to the benefit of the Affected Parties
- - ------------
and the Indemnified Parties, respectively, and their respective
successors and assigns; provided, however, nothing in the
foregoing shall be deemed to authorize any assignment not
permitted by Section 12.01. This Agreement shall create and
-------------
constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and
effect until the Final Payout Date. The rights and remedies with
respect to any breach of any representation and warranty made by
the Company or AnnTaylor pursuant to Article VI and the
----------
indemnification and other provisions of Article XIII and Sections
------------ --------
4.02, 14.05, 14.06, 14.07, 14.08 and 14.15 shall be continuing
- - ---- ----- ----- ----- ----- -----
and shall survive any termination of this Agreement.
SECTION 14.05. Costs, Expenses and Taxes. In addition to
-------------------------
its obligations under Article XIII, the Company agrees to pay on
------------
demand:
(a) all costs and expenses incurred by the
Administrator, the Liquidity Banks and the Lender in
connection with the negotiation, preparation, execution and
delivery, or the enforcement of, or any actual or claimed
breach of, this Agreement and the other Transaction
Documents, including, without limitation (i) the reasonable
fees and expenses of counsel to any of such Persons incurred
in connection with any of the foregoing or in advising such
Persons as to their respective rights and remedies under any
of the Transaction Documents, and (ii) subject to Section
-------
7.01(c), all reasonable out-of-pocket expenses (including
------
reasonable fees and expenses of independent accountants but,
other than as set forth in Section 7.01(c), excluding
---------------
allocations of any expenses relating to salaries of
employees or other overhead expenses), incurred in
connection with any review of the Company's or AnnTaylor's
books and records either prior to the execution and delivery
hereof or pursuant (it being understood that receipts will
be required for expenses over $5, meal expenses will be
limited to $40 per day per person, air travel shall be by
unrestricted coach class and, unless an Event of Default has
occurred and shall be continuing, flight and lodging
arrangements shall be made through AnnTaylor Travel, Inc.);
and
(b) all stamp and other similar taxes and fees payable
or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement
or the other Transaction Documents, and agrees to indemnify
each Indemnified Party against any liabilities with respect
to or resulting from any delay in paying or omission to pay
such taxes and fees; provided that any Indemnified Party
--------
which is a participant shall only be entitled to amounts
under this Section 14.05(b) to the extent that such amounts,
----------------
together with all amounts due to the Person selling such
participation under this Section 14.05, do not exceed the
-------------
amounts that would have been due to such Person under this
Section 14.05 if the participation had not been entered into
-------------
or sold.
SECTION 14.06. No Proceedings. The Company, AnnTaylor,
--------------
Servicer and PNC Bank (individually and as Administrator) each
hereby agrees that it will not institute against Lender, or join
any other Person in instituting against Lender, any insolvency
proceeding (namely, any proceeding of the type referred to in the
definition of Event of Bankruptcy) so long as any Commercial
Paper Notes issued by Lender shall be outstanding or there shall
not have elapsed one year plus one day since the last day on
which any such Commercial Paper Notes shall have been
outstanding. The foregoing shall not limit the Company's or
AnnTaylor's right to file any claim in or otherwise take any
action with respect to any insolvency proceeding that was
instituted by any Person other than the Company or AnnTaylor.
SECTION 14.07. Confidentiality of the Company Information.
------------------------------------------
(a) Confidential Company Information. Each party hereto
--------------------------------
(other than the Company or AnnTaylor) acknowledges that certain
of the information provided to such party by or on behalf of the
Company or AnnTaylor in connection with this Agreement and the
transactions contemplated hereby is or may be confidential, and
each such party severally agrees that, unless the Company or
AnnTaylor shall otherwise agree in writing, and except as
provided in subsection (b), such party will not disclose to any
-------------
other person or entity:
(i) any information regarding, or copies of, any non-
public financial statements, reports and other information
furnished by the Company or AnnTaylor to Lender or the
Administrator pursuant to Section 3.01, 5.01(j), 5.01(k),
------------ ------ -------
6.01(i), 6.01(j), 6.01(m), 6.02(h), 6.02(i), 6.02(j),
------- ------ ------- ------ ------ -------
7.01(c) or 7.03, or
------ ---
(ii) any other information regarding the Company or
AnnTaylor which is designated by the Company or AnnTaylor to
such party in writing as confidential
(the information referred to in clauses (i) and (ii) above,
----------- ---
whether furnished by the Company, AnnTaylor or any attorney for
or other representative of the Company or AnnTaylor (each a
"Company Information Provider"), is collectively referred to as
- - ----------------------------
the "Company Information"; provided, however, the "Company
------------------- -------- ------- -------
Information" shall not include
- - -----------
(A) any information which is or becomes generally
available to the general public or to such party on a
nonconfidential basis from a source other than any Company
Information Provider, or which was known to such party on a
nonconfidential basis prior to its disclosure by any Company
Information Provider, or
(B) information regarding the nature of this
Agreement, the basic terms hereof (including without
limitation the amount and nature of Lender's commitment and
Outstanding Principal and of the recourse or other credit
enhancement provided by the Company hereunder), the nature,
amount and status of the Pool Receivables, and the current
and/or historical ratios of losses to liquidations,
dilutions and/or outstandings with respect to the
Receivables Pool, such other information as may be required
to be disclosed, in the Administrator's reasonable
judgement, under securities laws applicable to Lender.
(b) Disclosure. Notwithstanding subsection (a), each party
--------- --------------
may disclose any of the Company Information:
(i) to any of such party's independent attorneys,
consultants and auditors, and to each Liquidity Bank, each
other Program Support Provider, any dealer or placement
agent for Lender's commercial paper, and any actual or
potential assignees of, or participants in, any of the
rights or obligations of Lender, any Liquidity Bank, any
other Program Support Provider or the Administrator under or
in connection with this Agreement, who (A) in the good faith
belief of such party, have a need to know such Company
Information, (B) are informed by such party of the
confidential nature of the Company Information and the terms
of this Section 14.07, and (C) are subject to
------------
confidentiality restrictions generally consistent with this
Section 14.07,
------------
(ii) to any rating agency that maintains a rating for
Lender's commercial paper or is considering the issuance of
such a rating, for the purposes of reviewing the credit of
Lender in connection with such rating,
(iii) to any other party to this Agreement, for the
purposes contemplated hereby,
(iv) as may be required by any municipal, state,
federal or other regulatory body having or claiming to have
jurisdiction over such party, in order to comply, in the
reasonable judgement of counsel to such party, with any law,
order, regulation, regulatory request or ruling applicable
to such party, or
(v) subject to subsection (c), in the event such party
-------------
is legally compelled (by interrogatories, requests for
information or copies, subpoena, civil investigative demand
or similar process) to disclose such Company Information.
(c) Legal Compulsion. In the event that any party hereto
---------------
(other than the Company or AnnTaylor) or any of its
representatives is requested or becomes legally compelled (by
interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any of
the Company or AnnTaylor Information, such party will (or will
cause its representative to)
(i) provide the Company or AnnTaylor with prompt
written notice so that (A) the Company or any other Company
Information Provider may seek a protective order or other
appropriate remedy, or (B) the Company or AnnTaylor may, if
it so chooses, agree that such party (or its
representatives) may disclose such Company Information
pursuant to such request or legal compulsion; and
(ii) unless the Company or AnnTaylor agrees that such
Company Information may be disclosed, make a timely
objection to the request or compulsion to provide such
Company Information on the basis that such Company
Information is confidential and subject to the agreements
contained in this Section 14.07.
------------
In the event such protective order or remedy is not obtained, or
the Company or AnnTaylor waives compliance with the provisions of
this Section 14.07, such party will furnish only that portion of
-------------
the Company Information which (in such party's good faith
judgment) is legally required to be furnished and will exercise
reasonable efforts to obtain reliable assurance that confidential
treatment will be afforded the Company Information.
(d) This Section 14.07 shall survive termination of this
------------
Agreement.
SECTION 14.08. Confidentiality of Program Information.
--------------------------------------
(a) Confidential Information. Each party hereto
-----------------------
acknowledges that PNC Bank regards the structure of the
transactions contemplated by this Agreement to be proprietary,
and each such party severally agrees that:
(i) it will not disclose without the prior consent of
PNC Bank (other than to the directors, employees, auditors,
counsel or affiliates (collectively, "representatives")) of
such party, each of whom shall be informed by such party of
the confidential nature of the Information (as defined
below) and of the terms of this Section 14.08, (A) any
-------------
information regarding the pricing in, or copies of, the Fee
Letter, (B) any information regarding the organization,
business or operations of Lender generally or the services
performed by the Administrator for Lender, or (C) any
information which is furnished by PNC Bank to such party and
which is designated by PNC Bank to such party in writing as
confidential or as not otherwise available to the general
public (the information referred to in clauses (A), (B) and
---------- ---
(C) is collectively referred to as the "Program
-- -------
Information"); provided, however, that such party may
---------- -------- ------
disclose any such Program Information (I) to any other party
to this Agreement for the purposes contemplated hereby, (II)
as may be required, in the reasonable judgement of counsel
to such party, by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over
such party, (III) in order to comply with any law, order,
regulation, regulatory request or ruling applicable to such
party, (IV) subject to subsection (c), in the event such
-------------
party is legally compelled (by interrogatories, requests for
information or copies, subpoena, civil investigative demand
or similar process) to disclose any such Program
Information, (V) to any of such party's independent
attorneys, consultants and auditors, or (VI) in defending
any action or proceeding relating to the Transaction
Documents;
(ii) it will use the Program Information solely for
the purposes of evaluating, administering and enforcing the
transactions contemplated by this Agreement and making any
necessary business judgments with respect thereto; and
(iii) it will, upon written demand, return (and cause
each of its representatives to return) to PNC Bank, all
documents or other written material received from PNC Bank,
as the case may be, in connection with (a)(i)(B) or (C)
--------- ---
above and all copies thereof made by such party which
contain the Program Information.
The parties hereto acknowledge that AnnTaylor will file a copy of
this Agreement with the Securities and Exchange Commission and
will provide copies hereof to Persons requesting such copies as
may be required by applicable law and to such Persons as may have
a valid business need to review this Agreement; provided that
--------
none of the Company, AnnTaylor nor any Affiliate thereof shall
otherwise distribute copies of this Agreement.
(b) Availability of Confidential Information. This Section
---------------------------------------- -------
14.08 shall be inoperative as to such portions of the Program
- - -----
Information which are or become generally available to the public
or such party on a nonconfidential basis from a source other than
PNC Bank or were known to such party on a nonconfidential basis
prior to its disclosure by PNC Bank.
(c) Legal Compulsion to Disclose. In the event that any
----------------------------
party or anyone to whom such party or its representatives
transmits the Program Information is requested or becomes legally
compelled (by interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar
process) to disclose any of the Information, such party will
(i) provide PNC Bank with prompt written notice so
that PNC Bank may seek a protective order or other
appropriate remedy and/or waive compliance with the
provisions of this Section 14.08; and
-------------
(ii) unless PNC Bank waives compliance by such party
with the provisions of this Section 14.08, make a timely
-------------
objection to the request or confirmation to provide such
Program Information on the basis that such Program
Information is confidential and subject to the agreements
contained in this Section 14.08.
-------------
In the event that such protective order or other remedy is not
obtained, or PNC Bank waives compliance with the provisions of
this Section 14.08, such party will furnish only that portion of
-------------
the Program Information which (in such party's good faith
judgment) is legally required to be furnished and will exercise
reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Program Information.
(d) Survival. This Section 14.08 shall survive termination
-------- -------------
of this Agreement.
SECTION 14.09. Captions and Cross References. The various
-----------------------------
captions (including, without limitation, the table of contents)
in this Agreement are provided solely for convenience of
reference and shall not affect the meaning or interpretation of
any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule
or Exhibit are to such Section of or Appendix, Schedule or
Exhibit to this Agreement, as the case may be, and references in
any Section, subsection, or clause to any subsection, clause or
subclause are to such subsection, clause or subclause of such
Section, subsection or clause.
SECTION 14.10. Governing Law. THIS AGREEMENT, INCLUDING
-------------
THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 14.11. Waiver Of Jury Trial. EACH PARTY HERETO
--------------------
HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, THE NOTE, ANY OTHER TRANSACTION DOCUMENT OR UNDER ANY
AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY BE IN
THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM
ANY BANKING OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND AGREES THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
SECTION 14.12. Consent To Jurisdiction; Waiver Of
----------------------------------
Immunities. EACH OF ANNTAYLOR AND THE COMPANY HEREBY
- - ---------
ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION,
FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF
FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE
COURT, IN EITHER CASE SITTING IN NEW YORK, NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN
SUCH NEW YORK STATE OR FEDERAL COURT AND NOT IN ANY OTHER
COURT, AND (iii) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION, EXECUTION
OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
SECTION 14.13. Execution in Counterparts. This Agreement
--------------------------
may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same
Agreement.
SECTION 14.14. No Recourse Against Other Parties. No
---------------------------------
recourse under any obligation, covenant or agreement of Lender
contained in this Agreement shall be had against any stockholder,
employee, officer, director, or incorporator of Lender, provided,
however, that nothing in this Section 14.14 shall relieve any of
-------------
the foregoing Persons from any liability which such Person may
otherwise have for his/her or its gross negligence or willful
misconduct.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
ANNTAYLOR FUNDING, INC. as the Company
By /s/ Walter J. Parks
-------------------------------
Title: Vice President
414 Chapel Street
New Haven, CT 06511
Telephone No.: (203) 865-0811
Facsimile No.: (203) 865-2756
Attention: President
ANNTAYLOR, INC., as initial Servicer
By /s/ Walter J. Parks
---------------------------------
Title: Senior Vice President
142 West 57th Street
New York, NY 10019
Telephone No.: (212) 541-3300
Facsimile No.: (212) 541-3299
Attention: Senior Vice President
with a copy to:
AnnTaylor, Inc.
414 Chapel Street
New Haven, CT 06511
Telephone No.: (203) 865-0811
Facsimile No.: (203) 865-2756
Attention: Vice President - Controller
MARKET STREET CAPITAL CORP.,
as Lender
By /s/ Douglas K. Johnson
--------------------------------
Title President
c/o AMACAR Group, L.L.C.
6707-D Fairview Road
Charlotte, North Carolina 28210
Facsimile No.: (704) 365-1362
Attention: Douglas K. Johnson
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
By: /s/ Robert O. Finley, Jr.
--------------------------
Title: Vice President
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Facsimile No.: (412) 762-9184
Attention: Robert O. Finley, Jr.
- - --------------------------------------------------------------
APPENDIX A
DEFINITIONS
This is Appendix A to the Amended and Restated Receivables
Financing Agreement dated as of October 31, 1995 among AnnTaylor
Funding, Inc., AnnTaylor, Inc., Market Street Capital Corp. and
PNC Bank, National Association, as Administrator (as further
amended, supplemented or otherwise modified from time to time,
and including the Original Financing Agreement for the time that
it was in effect, this "Agreement"). Each reference in this
---------
Appendix A to any Section, Appendix or Exhibit refers to such
- - ----------
Section of or Appendix or Exhibit to this Agreement.
A. Defined Terms. As used in this Agreement, unless the
-------------
context requires a different meaning, the following terms have
the meanings indicated hereinbelow:
"Account" means each revolving credit card account
-------
established pursuant to a Contract between AnnTaylor and any
Obligor pursuant to which indebtedness may arise for the purchase
of goods.
"Account Age" has the meaning set forth in Schedule 7.03(c).
----------- ----------------
"Administrator" has the meaning set forth in the preamble.
------------- --------
"Administrator's Office" means the office of the
----------------------
Administrator at Fifth Avenue and Wood Street, Pittsburgh,
Pennsylvania 15265, Attention: Market Street, or such other
address as shall be designated by the Administrator in writing to
the Company and Lender.
"Affected Party" means each of Lender, each Liquidity Bank,
--------------
any assignee or participant of Lender or any Liquidity Bank, each
other Program Support Provider, any assignee or participant of
any Program Support Provider, PNC Bank, any successor to PNC Bank
as Administrator and any sub-agent of the Administrator.
"Affiliate" when used with respect to ATSC, AnnTaylor or the
---------
Company means ATSC or any Subsidiary of ATSC and when used with
respect to any other Person means any other Person controlling,
controlled by, or under common control with, such Person.
"Alternate Base Rate" means, on any date, a fluctuating rate
-------------------
of interest per annum equal to the higher of
--- -----
(a) the rate of interest most recently announced by
PNC Bank in Pittsburgh, Pennsylvania, as its prime rate; and
(b) the Federal Funds Rate (as defined below) most
recently determined by PNC Bank plus 1.0% per annum.
--- -----
The Alternate Base Rate is not necessarily intended to be the
lowest rate of interest determined by the Liquidity Agent in
connection with extensions of credit.
"Amount Payable" has the meaning set forth in
--------------
Section 3.01(b).
- - ---------------
"AnnTaylor" has the meaning set forth in the preamble.
--------- --------
"AnnTaylor Credit Agreement" means the Amended and Restated
--------------------------
Credit Agreement, dated as of September 29, 1995, among
AnnTaylor, 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 and Bank of America
National Trust and Savings Association, as Agent.
"Assignment Agreement" has the meaning set forth in
--------------------
paragraph 3 of the Background.
- - ----------- ----------
"ATSC" means AnnTaylor Stores Corporation, a Delaware
----
corporation.
"Bank Rate" for any Interest Period means
---------
(a) in the case of any Interest Period other than a
Interest Period described in clause (b), an interest rate
----------
per annum equal to the sum of (x) the Bank Rate Spread, plus
--- ----- ----
(y) the Eurodollar Rate (Reserve Adjusted) for such Interest
Period;
(b) in the case of
(i) any Interest Period on or prior to the
first day of which Lender or any Liquidity Bank shall
have notified the Administrator that (A) the
introduction of or any change in or in the
interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Person
to fund the applicable Loan (or portion thereof) at the
rate described in clause (a), or (B) due to market
----------
conditions affecting the London interbank eurodollar
market, funds are not reasonably available to such
Person in such market in order to enable it to fund
such Loan (or portion thereof) at the rate described in
clause (a) (and in the case of subclause (A) or (B),
---------- ------------- ---
such Person shall not have subsequently notified the
Administrator that such circumstances no longer exist),
or
(ii) any Interest Period as to which the
Administrator does not receive notice or determine, by
no later than 12:00 noon (New York City time) on the
third Business Day preceding the first day of such
Interest Period, that the applicable Loan (or portion
thereof) will be funded by Liquidity Loans and not by
the issuance of Commercial Paper Notes,
an interest rate per annum equal to (x) the Bank Rate
--- -----
Spread, plus (y) the Alternate Base Rate in effect from time
----
to time during such Interest Period.
"Bank Rate Spread" for purposes of determining the Bank Rate
----------------
for any Interest Period means a rate per annum equal to (i) if
--- -----
the Bank Rate for such Interest Period will be based on the
Eurodollar Rate (Reserve Adjusted), 1.25% per annum, and (ii) if
--- -----
the Bank Rate for such Interest Period will be based on the
Alternate Base Rate, 0.25% per annum.
--- -----
"Board of Directors" means either the Board of Directors of
------------------
the Company or any duly authorized committee of that board.
"Borrowing Base" has the meaning set forth in Section
-------------- -------
1.03(a).
- - -------
"Borrowing Notice" has the meaning set forth in Section
---------------- -------
1.02(a).
- - -------
"Business Day" means a day on which both (a) the
------------
Administrator at its principal office in Pittsburgh, Pennsylvania
is open for business and (b) commercial banks in New York City
and Chicago, Illinois are not authorized or required to be closed
for business.
"Capital Expenditures" shall mean, for any period, on a
--------------------
consolidated basis for AnnTaylor 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 AnnTaylor and
its Restricted Subsidiaries) made by AnnTaylor 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 AnnTaylor 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 Interest Expense" shall mean, for any period, all
---------------------
Interest Expense for such period payable in cash.
"Change in Control" means any of the following:
-----------------
(a) "Change in Control" as defined in the
Indenture dated as of June 15, 1993 from AnnTaylor to
Fleet Bank, N.A., as Trustee relating to the 8-3/4%
Subordinated Notes due 2000 of AnnTaylor as in effect
on the date hereof; or
(b) the failure of AnnTaylor to own directly or
indirectly, 100% of the outstanding voting stock of the
Company.
"Clipper" has the meaning set forth in paragraph 2 of the
------- -----------
Background.
- - ----------
"Collections" means, with respect to any Receivable, all
-----------
funds which either (a) are received by the Company or Servicer
from or on behalf of the related Obligors in payment of any
amounts owed (including, without limitation, purchase prices,
finance charges, interest and all other charges) in respect of
such Receivable, or applied to such amounts owed by such Obligors
(including, without limitation, insurance payments that the
Company or Servicer applies in the ordinary course of its
business to amounts owed in respect of such Receivable and net
proceeds of sale or other disposition of repossessed goods or
other collateral or property of the Obligor or any other party
directly or indirectly liable for payment of such Receivable and
available to be applied thereon), or (b) are deemed to have been
received by the Company or any other Person as a Collection
pursuant to Section 3.02.
------------
"Commercial Paper Notes" means short-term promissory notes
----------------------
issued or to be issued by Lender to fund its investments in
accounts receivable or other financial assets.
"Commitment Fee" has the meaning set forth in the Fee
--------------
Letter.
"Company" has the meaning set forth in the preamble.
------- --------
"Company Information" has the meaning set forth in Section
------------------- -------
14.07(a).
- - --------
"Company Information Provider" has the meaning set forth in
----------------------------
Section 14.07(a).
- - ----------------
"Company's Net Worth" means, at any time, the amount by
-------------------
which the Company's total assets exceed the Company's total
liabilities, as determined in accordance with GAAP.
"Contract" means a contract between AnnTaylor and any Person
--------
pursuant to or under which such Person establishes a revolving
credit card account pursuant to which indebtedness may arise for
the purchase of goods. A "related" Contract with respect to the
Receivables means a Contract under which Receivables in the
Receivables Pool arise or which is relevant to the collection or
enforcement of such Receivables.
"CP Rate" for any period means a rate per annum calculated
------- --- -----
by the Administrator equal to the sum of (i) the rate or, if more
than one rate, the weighted average of the rates, determined by
converting to an interest-bearing equivalent rate per annum the
--- -----
discount rate (or rates) at which Commercial Paper Notes on each
day during such period have been sold by the commercial paper
placement agents selected by the Administrator, plus (ii) the
----
commissions and charges charged by such commercial paper
placement agents with respect to such Commercial Paper Notes,
expressed as a percentage of such face amount and converted to an
interest-bearing equivalent rate per annum.
--- -----
"Credit and Collection Policy" means those credit and
----------------------------
collection policies and practices relating to Contracts and
Receivables described in Schedule 6.01(p)-2, as modified without
------------------
violating Section 7.03(c).
---------------
"Customer Letter of Credit" has the meaning set forth in
-------------------------
Section 3.05(e).
- - ---------------
"Cut-Off Date" means the last day of each Settlement Period.
------------
"Defaulted Receivable" means a Receivable (a) with an
--------------------
Account Age greater than 6, unless a payment has been received in
the past 30 days, and in all cases where the Account Age is
greater than 7, or (b) as to which the computer records of the
Company or the Servicer identify that an Event of Bankruptcy with
respect to the Obligor thereof has occurred and remains
continuing.
"Delinquency Ratio" means the ratio (expressed as a
-----------------
percentage) computed as of any Cut-Off Date by dividing (x) the
sum for each of the four billing dates in the Settlement Period
ending on such Cut-Off Date of the aggregate Unpaid Balance of
all Pool Receivables that are Delinquent Receivables and that
have been billed on one of such four billing dates by (y) the sum
for each of the four billing dates in the Settlement Period
ending on such Cut-Off Date of the aggregate Unpaid Balance of
all Pool Receivables that have been billed on one of such four
billing dates.
"Delinquent Receivable" means a Receivable that is not a
---------------------
Defaulted Receivable and which has an Account Age of 2 or more.
"Dilution Ratio" means the ratio (expressed as a percentage)
--------------
computed as of any Cut-Off Date by dividing (x) the aggregate
reductions in Unpaid Balance of all Pool Receivables on account
of returns, allowances, revisions or cancellations during the
three Settlement Periods ending on such Cut-Off Date by (y) the
sum of the aggregate Unpaid Balance of all Pool Receivables on
the last day of each of such three Settlement Periods.
"Distribution Center" shall mean the distribution center,
-------------------
and related systems and equipment, in Louisville, Kentucky.
"Dollars" means dollars in lawful money of the United States
-------
of America.
"Downgraded Liquidity Bank" means a Liquidity Bank which has
-------------------------
been the subject of a Downgrading Event.
"Downgrading Event" with respect to any Person means the
-----------------
lowering of the rating with regard to the short-term securities
of such Person to below (i) A-1 by Standard & Poor's Corporation,
or (ii) P-1 by Moody's Investors Service, Inc.
"Due Amount" with respect to any Settlement Period means the
----------
sum of (i) the amount of interest on the Loans that will be due
on the Settlement Date relating to such Settlement Period,
together with any interest previously accrued and remaining
unpaid, plus (ii) the amount of principal that will be due and
----
owing with respect to the Loans on the Settlement Date relating
to such Settlement Period, together with any principal previously
due and remaining unpaid, plus (iii) all fees and other amounts
----
that will be payable by the Company on the Settlement Date
relating to such Settlement Period pursuant to the Agreement,
plus (iv) the amount required to be deposited into the Spread
- - ----
Account and/or reimbursed to the issuer of the Customer Letter of
Credit on the Settlement Date relating to such Settlement Period
to bring the sum of the amount of funds on deposit in the Spread
Account plus the stated amount of the Customer Letter of Credit
up to the Enhancement Limit.
"Earned Discount Rate" means with respect to any Settlement
--------------------
Period, the weighted average of the interest rates applicable to
the Loans during such Settlement Period.
"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) all
income tax expense and (iv) extraordinary losses, minus (c)
-----
extraordinary gains (net of taxes).
"Eligible Contract" means a Contract in one of the forms set
-----------------
forth in Schedule 6.01(p)-1 or otherwise approved by the
------------------
Administrator.
"Eligible Receivable" means, at any time, a Pool Receivable:
-------------------
(a) which was generated by AnnTaylor in the ordinary
course of business and was sold to the Company pursuant to
the Purchase Agreement;
(b) which, (i) if the perfection of Lender's security
interest therein is governed by the laws of a jurisdiction
where the Uniform Commercial Code -- Secured Transactions is
in force, constitutes an account or general intangible as
defined in the Uniform Commercial Code as in effect in such
jurisdiction, and (ii) if the perfection of Lender's
security interest therein is governed by the law of any
jurisdiction where the Uniform Commercial Code -- Secured
Transactions is not in force, the Company has furnished to
the Administrator such opinions of counsel and other
evidence as has reasonably been requested, establishing to
the reasonable satisfaction of the Administrator that
Lender's security interest and other rights with respect
thereto are not significantly less protected and favorable
than such rights under the Uniform Commercial Code;
(c) the Obligor of which is resident of the United
States of America, or any of its possessions or territories,
is not an Affiliate of the Company, and is not a government
or a governmental subdivision or agency;
(d) which is not a Defaulted Receivable or a
Delinquent Receivable;
(e) with regard to which the warranty of the Company
in Section 6.01(l) is true and correct;
---------------
(f) the sale of an undivided interest in which does
not contravene or conflict with any law;
(g) which is denominated and payable only in Dollars
in the United States;
(h) which arises under an Eligible Contract that has
been duly authorized by the parties thereto and that,
together with such Receivable, is in full force and effect
and constitutes the legal, valid and binding obligation of
the Obligor of such Receivable enforceable against such
Obligor in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the
enforcement of creditor's rights generally and by general
principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at
law;
(i) which, together with the Contract related thereto,
does not contravene in any material respect any laws, rules
or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no party
to the Contract related thereto is in violation of any such
law, rule or regulation in any material respect if such
violation would impair the collectability of such
Receivable;
(j) which satisfies all applicable requirements of the
Credit and Collection Policy; and
(k) the Unpaid Balance (or any portion thereof) of
which is not being disputed by the Obligor.
"Enhancement Limit" has the meaning set forth in Section
-----------------
3.05(d).
"ERISA" means the U.S. Employee Retirement Income Security
-----
Act of 1974, as amended from time to time.
"Estimated Amount" means, with respect to any Settlement
----------------
Period, the sum of the (i) the Due Amount that the Company
reasonably estimates will be due on the Settlement Date relating
to such Settlement Period, plus (ii) the amount that the Company
----
reasonably estimates will be necessary to provide funds for all
other expenses of the Company incurred during such Settlement
Period.
"Eurodollar Rate (Reserve Adjusted)" means, with respect to
----------------------------------
any Interest Period and any Loan (or portion thereof), a rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
---------------
(Reserve Adjusted) 1-Eurodollar
Reserve Percentage
where:
-----
"Eurodollar Rate" means, with respect to any Interest Period
---------------
and any Loan (or portion thereof), the rate per annum at
which Dollar deposits in immediately available funds are
offered to the Eurodollar Office of the Administrator two
Eurodollar Business Days prior to the beginning of such
period by prime banks in the interbank eurodollar market at
or about 11:00 a.m., New York City time, for delivery on the
first day of such Interest Period, for the number of days
comprised therein and in an amount equal or comparable to
such Loan (or portion thereof) for such Interest Period.
"Eurodollar Business Day" means a day of the year on which
-----------------------
dealings are carried on in the London eurodollar interbank
market and banks are open for business in London and are not
required or authorized to close in New York City or
Pittsburgh.
"Eurodollar Office" means the Administrator's office located
-----------------
at Fifth Avenue and Wood Street, Pittsburgh, Pennsylvania
15265, or such other office as shall be designated by the
Administrator as its Eurodollar Office pursuant to a written
notice delivered by the Administrator to the Liquidity
Agent, AnnTaylor and the Company.
"Eurodollar Reserve Percentage" means, with respect to any
-----------------------------
Interest Period, the applicable percentage (expressed as a
decimal) prescribed by the Federal Reserve Board for
determining reserve requirements applicable to "Eurocurrency
Liabilities" pursuant to Regulation D, on the first day of
such Interest Period.
"Event of Bankruptcy" shall be deemed to have occurred with
-------------------
respect to a Person if either:
(a) a case or other proceeding shall be commenced,
without the application or consent of such Person, in any
court, seeking the liquidation, reorganization, debt
arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of
a trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for such Person or all or
substantially all of its assets, or any similar action with
respect to such Person under any law relating to bankruptcy,
insolvency, reorganization, winding up or composition or
adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a
period of 60 consecutive days; or an order for relief in
respect of such Person shall be entered in an involuntary
case under the federal bankruptcy laws or other similar laws
now or hereafter in effect; or
(b) such Person shall commence a voluntary case or
other proceeding under any applicable bankruptcy,
insolvency, reorganization, debt arrangement, dissolution
or other similar law now or hereafter in effect, or shall
consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) for, such Person or
for any substantial part of its property, or shall make any
general assignment for the benefit of creditors, or shall
fail to, or admit in writing its inability to, pay its debts
generally as they become due, or, if a corporation or
similar entity, its board of directors shall vote to
implement any of the foregoing.
"Event of Default" has the meaning set forth in Section
---------------- -------
10.01.
- - -----
"Exchange Act" means the Securities and Exchange Act of
------------
1934, as amended.
"Federal Funds Rate" means, for any period, a fluctuating
------------------
interest rate per annum equal (for each day during such period)
--- -----
to
(a) the weighted average of the rates on overnight
federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which
is a Business Day, the average of the quotations for such
day on such transactions received by PNC Bank from three
federal funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the
---------------------
Federal Reserve System, or any successor thereto or to the
functions thereof.
"Fee Letter" has the meaning set forth in Section 4.01.
---------- ------------
"Final Payout Date" means the date following the Termination
-----------------
Date on which Outstanding Principal shall have been reduced to
zero and all other amounts payable by the Company under the
Transaction Documents shall have been paid in full or all of the
Pool Receivables existing on or prior to the Termination Date
have been written off as uncollectible in accordance with the
Credit and Collection Policy, whichever occurs first.
"Finance Charge Receivables" shall mean all amounts billed
--------------------------
to the Obligors on any Account in respect of finance charges,
late charges, and other fees and charges with respect to the
Accounts.
"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 payable during such period, plus
----
(ii) scheduled payments made during such period for principal on
Indebtedness excluding any payment made upon termination of the
transactions contemplated by this Agreement, plus (iii) Cash
----
Interest Expense during such period, plus (iv) income tax expense
----
during such period.
"GAAP" means generally accepted accounting principles set
----
forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified 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.
"Gross Default-to-Liquidation Ratio" means the ratio
----------------------------------
(expressed as a percentage) computed as of a Cut-Off Date by
dividing (x) the aggregate Unpaid Balance of all Pool Receivables
that became Defaulted Receivables during the three Settlement
Periods ending on such Cut-Off Date by (y) the aggregate
Collections of all Pool Receivables during such three Settlement
Periods.
"Indemnified Amounts" has the meaning set forth in Section
------------------- -------
13.01.
- - -----
"Indemnified Party" has the meaning set forth in Section
----------------- -------
13.01.
- - -----
"Information Package" has the meaning set forth in Section
------------------- -------
3.01.
- - ----
"Interest Expense" shall mean, for any period for ATSC,
----------------
AnnTaylor 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 Period" means
---------------
(a) the period from, and including, the date hereof to
the next occurring Settlement Date; and
(b) thereafter, each period from, and including, a
Settlement Date to, but excluding, the next Settlement Date;
provided, however, that the last Interest Period shall end on the
- - -------- -------
date on which the Loans have been reduced to zero and all other
fees and expenses owed by the Company hereunder shall have been
paid in full.
"Lender" has the meaning set forth in the preamble.
------ --------
"Lending Limit" has the meaning set forth in Section 1.01.
------------- ------------
"Lien" means any mortgage, lien, pledge, encumbrance,
----
charge, retained security title of a conditional vendor or lessor
or other security interest of any kind, whether arising under a
security agreement, mortgage, deed of trust, chattel mortgage,
assignment, pledge, retention or security title, financing or
similar statement or notice or arising as a matter of law,
judicial process or otherwise.
"Liquidation Fee" means, for each Loan (or portion thereof)
---------------
for each day in any Interest Period the amount, if any, by which:
(a) the additional interest (calculated without taking
into account any Liquidation Fee) which would have accrued
on any portion of the Loan prepaid during such Interest
Period (as so computed) if such prepayments had not been
made exceeds,
(b) the income, if any, received by Lender from
investing the proceeds of such prepayments of the Loan.
"Liquidity Agent" means PNC Bank, as agent for the Liquidity
---------------
Banks under the Liquidity Agreement, or any successor to PNC Bank
in such capacity.
"Liquidity Agreement" means and includes (a) the Liquidity
-------------------
Agreement dated as of October 31, 1995 among Lender, as borrower,
the Liquidity Agent, and the Liquidity Banks, and (b) any other
agreement hereafter entered into by Lender providing for the
making of loans or other extensions of credit to Lender secured
by a direct or indirect security interest in the Loans (or any
portion thereof), to support all or part of Lender's payment
obligations under the Commercial Paper Notes or to provide an
alternate means of funding Lender's investments in accounts
receivable or other financial assets, and under which the amount
available from such extensions of credit is limited to an amount
calculated by reference to the value or eligible unpaid balance
of such accounts receivable or other financial assets or any
portion thereof or the level of deal-specific credit enhancement
available with respect thereto, as such Liquidity Agreement or
other agreement may be amended, supplemented or otherwise
modified from time to time.
"Liquidity Bank" means any one of, and "Liquidity Banks"
-------------- ---------------
means all of, PNC Bank, United States National Bank of Oregon and
the other commercial lending institutions that are at any time
parties to the Liquidity Agreement.
"Liquidity Loan" means a loan made by the Liquidity Bank (or
--------------
simultaneous loans made by the Liquidity Banks) pursuant to the
Liquidity Agreement.
"Loan" has the meaning set forth in Section 1.01.
---- ------------
"Loan Termination Date" means that day on which an Event of
---------------------
Default has occurred and is continuing, and
(a) the Administrator declares a Loan Termination Date
in a notice to the Company in accordance with Section
-------
10.02(a); or
--------
(b) in accordance with Section 10.02(b), becomes the
----------------
Loan Termination Date automatically.
"Lock-Box Agreement" means a letter agreement, in
------------------
substantially the form of Exhibit 5.01(g), between the Company
---------------
and any Lock-Box Bank.
"Lock-Box Bank" means any of the banks holding one or more
-------------
lock-box accounts for receiving Collections from Pool
Receivables.
"Loss Reserve" means on any day, an amount equal to the
------------
product of the Outstanding Principal multiplied by the sum of
-------------
(1) 16.5%; plus
----
(2) if a positive number, 4.5% minus the Net Yield as of such
-----
day, plus
----
(3) if a positive number, the Dilution Ratio on such day minus
-----
12.5%, plus
----
(4) if a positive number, the Delinquency Ratio minus 11.0%.
-----
"Material Adverse Effect" means, with respect to any event
-----------------------
or circumstance, a material adverse effect on:
(i) the business, assets, financial condition,
operations or prospects of the Company;
(ii) the ability of the Company to perform its
obligations under this Agreement, the Note or any other
Transaction Document;
(iii) the validity or enforceability of this
Agreement, the Note or any other Transaction Document;
(iv) the status, existence, perfection, priority or
enforceability of Lender's interest in the Receivables Pool;
or
(v) the collectability of a significant portion of
the Pool Receivables.
"Net Default-to-Liquidation Ratio" means the ratio
--------------------------------
(expressed as a percentage) computed as of a Cut-Off Date by
dividing (x) the aggregate Unpaid Balance of all Pool Receivables
that became net charge-offs during the three Settlement Periods
ending on the most recent Cut-Off Date by (y) the aggregate
Collections of all Pool Receivables during such three Settlement
Periods.
"Net Income" means, for any period on a consolidated basis
----------
for ATSC, AnnTaylor and its Restricted Subsidiaries, the
consolidated net income (or loss) of AnnTaylor 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 Pool Balance" at any time means an amount equal to the
----------------
aggregate Unpaid Balance of the Eligible Receivables in the
Receivables Pool as set forth in the most recent delivered
Information Package reduced by the amount by which the Unpaid
Balance of the Eligible Receivables with respect to which
interest payments have been deferred exceeds 3% of Outstanding
Principal.
"Net Worth" shall mean, as at any date of determination, the
---------
amount by which (a) the total consolidated assets of ATSC,
AnnTaylor and its Restricted Subsidiaries exceed (b) the total
consolidated liabilities of ATSC, AnnTaylor and its Restricted
Subsidiaries, as determined in conformity with GAAP, but
excluding for the purposes of this definition, unrealized foreign
exchange translation gains and losses from investments in foreign
Subsidiaries.
"Net Yield" means, with respect to any Settlement Period,
---------
the Portfolio Yield minus the Servicer's Fee Rate, the Earned
Discount Rate and the Program Fee rate.
"Note" has the meaning set forth in Section 1.04.
---- ------------
"Obligor" means a Person obligated to make payments with
-------
respect to a Receivable, including any guarantor thereof.
"Original Financing Agreement" has the meaning set forth in
----------------------------
paragraph 2 of the Background.
- - ----------- ----------
"Original Note" means the promissory note issued by the
-------------
Company and delivered to Clipper pursuant to the Original
Financing Agreement.
"Outstanding Principal" means at any time an amount equal to
---------------------
the aggregate principal amount of the Loans outstanding at such
time.
"Payment Rate" means, with respect to any Settlement Period,
------------
the ratio, expressed as a percentage, of (x) the Collections
received during such Settlement Period to (y) the aggregate
Unpaid Balance of all Pool Receivables as of the last day of the
previous Settlement Period.
"Person" means an individual, partnership, corporation
------
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, government or any
agency or political subdivision thereof or any other entity.
"PNC Bank" has the meaning set forth in the preamble.
-------- --------
"Pool Receivable" means each Receivable described in Section
---------------
1.1(a) or (b) of the Purchase Agreement.
"Portfolio Yield" means, with respect to any Settlement
---------------
Period, the annualized percentage equivalent of a fraction, the
numerator of which is the amount of Finance Charge Receivables
accrued during the immediately preceding Settlement Period, after
subtracting therefrom the aggregate Unpaid Balance of Receivables
which were net charge offs in such Settlement Period, and the
denominator of which is the aggregate Unpaid Balance of Pool
Receivables as of the last day of the immediately preceding
Settlement Period.
"Principal Receivables" means amounts (other than any
---------------------
amounts which represent Finance Charge Receivables) billed to the
Obligor on any Account in respect of purchases of goods.
"Program Fee" has the meaning set forth in the Fee Letter.
-----------
"Program Information" has the meaning set forth in Section
------------------- -------
14.08.
- - -----
"Program Support Provider" means and includes any Liquidity
------------------------
Bank and any other or additional Person (other than any customer
of Lender) now or hereafter extending credit or having a
commitment to extend credit to or for the account of, or to make
purchases from, Lender or issuing a letter of credit, surety bond
or other instrument to support any obligations arising under or
in connection with Lender's securitization program.
"Program Support Agreement" means and includes the Liquidity
-------------------------
Agreement and any other agreement entered into by any Program
Support Provider providing for the issuance of one or more
letters of credit for the account of Lender, the issuance of one
or more surety bonds for which Lender is obligated to reimburse
the applicable Program Support Provider for any drawings
thereunder, the sale by Lender to any Program Support Provider of
the Loans (or portions thereof) and/or the making of loans and/or
other extensions of credit to Lender in connection with Lender's
securitization program, together with any letter of credit,
surety bond or other instrument issued thereunder [(but excluding
any discretionary advance facility provided by the
Administrator).
"Purchase Agreement" means the Purchase and Sale Agreement,
------------------
dated as of January 27, 1994 between the Company and AnnTaylor,
as seller, as it may be amended, supplemented or otherwise
modified from time to time.
"Qualifying Liquidity Bank" means a Liquidity Bank with a
-------------------------
rating of its short-term securities equal to or higher than (i) A-
1 by Standard & Poor's Corporation and (ii) P-1 by Moody's
Investors Service, Inc.
"Receivable" means any right to payment from a Person,
----------
whether constituting an account, chattel paper, instrument or a
general intangible, arising under an Account, and includes the
right to payment of any interest or finance charges and other
obligations of such Person with respect thereto.
"Receivables Pool" means at any time all then outstanding
----------------
Pool Receivables, the Contracts related thereto, Related
Security, the Spread Account, all amounts payable to, or for the
benefit of, the Company under the interest rate agreements, if
any, entered into by the Company, all rights and claims of the
Company in and under the Purchase Agreement, all Collections, all
books and records related to any of the foregoing, and all
proceeds of the foregoing, in each case whether now or hereafter
existing.
"Regulation D" means Regulation D of the Federal Reserve
------------
Board, or any other regulation of the Federal Reserve Board that
prescribes reserve requirements applicable to nonpersonal time
deposits or "Eurocurrency Liabilities" as presently defined in
Regulation D, as in effect from time to time.
"Regulatory Change" means, relative to any Affected Party
-----------------
(a) any change in (or the adoption, implementation,
change in phase-in or commencement of effectiveness of) any
(i) United States federal or state law or
foreign law applicable to such Affected Party;
(ii) regulation, interpretation, directive,
requirement or request (whether or not having the force
of law) applicable to such Affected Party of (A) any
court, government authority charged with the
interpretation or administration of any law referred to
in clause (a)(i) or of (B) any fiscal, monetary or
-------------
other authority having jurisdiction over such Affected
Party; or
(iii) generally accepted accounting
principles or regulatory accounting principles
applicable to such Affected Party and affecting the
application to such Affected Party of any law,
regulation, interpretation, directive, requirement or
request referred to in clause (a)(i) or (a)(ii) above;
------------- -------
or
(b) any change in the application to such Affected
Party of any existing law, regulation, interpretation,
directive, requirement, request or accounting principles
referred to in clause (a)(i), (a)(ii) or (a)(iii) above.
------------- ------- --------
"Related Security" means, with respect to any Pool
----------------
Receivable: (a) all right, title and interest in and to all
Contracts that relate to such Pool Receivable; (b) all interests
in returned merchandise, if any, relating to the sale which gave
rise to such Pool Receivable; (c) all other security interests or
liens and property subject thereto from time to time purporting
to secure payment of such Pool Receivable, whether pursuant to
the Contract related to such Pool Receivable or otherwise; (d)
all UCC financing statements covering any collateral securing
payment of such Pool Receivable; and (e) all guarantees and other
agreements or arrangements of whatever character from time to
time supporting or securing payment of such Pool Receivable
whether pursuant to the Contract related to such Pool Receivable
or otherwise.
"Reporting Date" has the meaning set forth in Section
-------------- -------
3.01(a).
- - -------
"Responsible Officer" means (a) with respect to AnnTaylor or
-------------------
ATSC: the Chief Financial Officer, Treasurer, Vice President -
Financial Reporting or Vice President - Credit and (b) with
respect to the Company: the President, Treasurer or any Vice
President.
"Restricted Subsidiary" shall mean any Subsidiary of
---------------------
AnnTaylor 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.
"Secured Parties" means Lender, the Administrator, the
---------------
Indemnified Parties and the Affected Parties.
"Servicer" has the meaning set forth in Section 8.01(a).
-------- ---------------
"Servicer Material Adverse Effect" means, with respect to
--------------------------------
any event or circumstance, a material adverse effect on:
(i) the business, assets, financial condition,
operations or prospects of the Servicer;
(ii) the ability of the Servicer to perform its
obligations under this Agreement or any other Transaction
Document to which the Servicer, in its capacity as such, is
a party;
(iii) the validity or enforceability as against the
Servicer of this Agreement or any other Transaction Document
to which the Servicer, in its capacity as such, is a party;
(iv) the status, existence, perfection, priority or
enforceability of Lender's interest in the Receivables Pool;
or
(v) the collectability of a significant portion of
the Pool Receivables.
"Servicer Transfer Event" has the meaning set forth in
-----------------------
Section 8.01(b).
- - ---------------
"Servicer's Fee" accrued for any day means an amount equal
--------------
to (x) the Servicer's Fee Rate, times (y) the Net Pool Balance at
-----
the close of business on such day, times (z) 1/360.
-----
"Servicer's Fee Rate" means (a) 2% per annum if AnnTaylor is
-------------------
the Servicer and (b) up to 3% per annum if a Person other than
AnnTaylor is the Servicer.
"Settlement Date" means the second Business Day following
---------------
each Reporting Date.
"Settlement Period" means
-----------------
(a) the period from, but excluding, October 24, 1995
to, and including, November 24, 1995; and
(b) thereafter, each period from, but excluding, the
last day of the next preceding Settlement Period to, and
including, the 24th day of the next following calendar
month.
"Spread Account" has the meaning set forth in Section
-------------- -------
3.05(a).
- - -------
"Spread Account Agreement" has the meaning set forth in
------------------------
Section 3.05(a).
- - ---------------
"State Street" has the meaning set forth in paragraph 2 of
------------ -----------
the Background.
----------
"Subsidiary" means a corporation of which AnnTaylor and/or
----------
its other Subsidiaries own, directly or indirectly, such number
of outstanding shares as have more than 50% of the ordinary
voting power for the election of directors.
"Successor Notice" has the meaning set forth in Section
---------------- -------
8.01(b).
- - -------
"Termination Date" means the earliest of
----------------
(a) the date of termination (whether by scheduled
expiration, termination on default or otherwise) of either
the Liquidity Banks' commitments under the Liquidity
Agreement or any other Program Support Provider's commitment
under any other Program Support Agreement;
(b) the Loan Termination Date;
(c) January 27, 1997;
(d) 3 Business Days after the Administrator has
received a written request by the Company to terminate the
commitment of Lender under this Agreement;
(e) failure to obtain a Liquidity Agreement in
substitution for the then existing Liquidity Agreement on or
before 30-days prior to the expiration of the commitments of
the Liquidity Banks thereunder; or
(f) (i) a Downgrading Event with respect to a
Liquidity Bank shall have occurred and been continuing for
not less than 45 days, (ii) the Downgraded Liquidity Bank
shall not have been replaced by a Qualifying Liquidity Bank
pursuant to a Liquidity Agreement in form and substance
acceptable to Lender and the Administrator, and (iii) the
commitment of such Downgraded Liquidity Bank under the
Liquidity Agreement shall not have been funded or
collateralized in such a manner that such Downgrading Event
will not result in a reduction or withdrawal of the credit
rating applied to the Commercial Paper Notes by any of the
rating agencies then rating the Commercial Paper Notes; or
(g) Lender shall become an "investment company" within
the meaning of the Investment Company Act of 1940, as
amended.
"Transaction Documents" means this Agreement, the Lock-Box
---------------------
Agreements, the Purchase Agreement, the Fee Letter, the Note, the
Spread Account Agreement and the other documents to be executed
and delivered in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time
---
in effect in the applicable jurisdiction or jurisdictions.
"Unmatured Event of Default" means any event which, with the
--------------------------
giving of notice or lapse of time, or both, would become an Event
of Default.
"Unpaid Balance" of any Receivable means at any time (a) in
--------------
the case of any Principal Receivable, the unpaid amount thereof
and (b) in the case of any Finance Charge Receivable, the amount
thereof accrued in accordance with the related Contract and
unpaid at such time.
"Unrestricted Subsidiary" shall mean a Subsidiary of
-----------------------
AnnTaylor which has been designated as such by resolution duly
adopted by the board of directors of AnnTaylor, 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, AnnTaylor or any Restricted Subsidiary provided no
--------
Subsidiary of AnnTaylor shall be (or, if already an Unrestricted
Subsidiary shall immediately cease to be) an Unrestricted
Subsidiary if, at any time, ATSC, AnnTaylor or any other
Restricted Subsidiary of AnnTaylor 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.
B. Other Terms. The following terms shall have the
-----------
meanings assigned thereto in the AnnTaylor Credit Agreement, as
in effect on the date hereof, and such definitions are hereby
incorporated by reference: "Indebtedness", "Interest Rate
------------ --------------
Contracts" and "Restricted Payment". All accounting terms not
- - --------- ------------------
specifically defined herein shall be construed in accordance with
generally accepted accounting principles. All terms used in
Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such
Article 9.
C. Computation of Time Periods. Unless otherwise stated
---------------------------
in this Agreement, in the computation of a period 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 means
"to but excluding".
- - ----------------------------------------------------------------
Schedule 6.01(n)
----------------
List of Offices Where
Records are Kept
----------------------
AnnTaylor Funding, Inc.
- - -----------------------
Chief place of business and chief executive office:
414 Chapel Street
New Haven, Connecticut 06511
or
142 West 57th Street
New York, New York 10019
location of books and records, etc.
142 West 57th Street
New York, New York 10019
414 Chapel Street
New Haven, Connecticut 06511
=================================================================
Schedule 6.01(o)
----------------
List of Lock-Box Banks
----------------------
AmSouth Bank N.A.
1900 Fifth Avenue North
Birmingham, Alabama 35203
Account Number: 55976026
=====================================================================
Schedule 6.01(p)-1
------------------
Forms of Contracts
------------------
(See AnnTaylor Credit Card Application)
======================================================================
Schedule 6.01(p)-2
-------------------
Credit and Collection Policy and Method of Aging
------------------------------------------------
(Contact AnnTaylor Corporate Offices for copy of Credit And Collection
Policy and Method of Aging)
======================================================================
Schedule 6.01(r)
----------------
TRADE NAMES
-----------
AnnTaylor Funding, Inc.
- - -----------------------
None
=====================================================================
Schedule 6.02(k)
----------------
List of Offices of the Services Where Records Are Kept
------------------------------------------------------
AnnTaylor, Inc.
- - ---------------
Chief place of business and chief executive office:
142 West 57th Street
New York, New York 10019
location of books and records, etc.:
142 West 57th Street
New York, New York 10019
414 Chapel Street
New Haven, Connecticut 06511
=====================================================================
Schedule 6.02(L)
----------------
List of Bank Accounts
---------------------
(See attached)
1 New Haven Peoples 42-7004109
950 Chapel Street 786-2600 Brian
New Haven, CT 06510
2 Westport Chase Manhattan 5601016602
P.O. Box 871
Bridgeport, CT 06601
3 New Canaan Shawmut Bank 006561-0893
Customer Center
P.O. Box 1365
Framingham, MA 01701
4 Greenwich Fleet Bank 1429965
Attn: Donna Flynn
Mail Code: CT E8HX15A
One Constitution Plaza
Hartford, CT 06115-1600
5 Braintree Baybank 3869-909-1
2 Technology Place (800) 833-3336
Mail Code: A-504
Waltham, MA 02154
6 Warwick Citizens Bank & Trust 018-901-4
One Citizens Drive (401) 456-7171
Riverside, RI 02915- 401-456-7500
3000
10 Burlington Baybank 921-258-2
2 Technology Place (617) 273-1700
Mail Code: A-504 1-800-833-3336
Waltham, MA 02154
12 Cambridge Baybank 100-03555
2 Technology Place (617) 661-3300
Mail Code: A-504 (617) 893-7750
Waltham, MA 02154
13 Pheasant Lane First N.H. Bank 20163164801
One Hampshire Plaza (800) FIRSTNH
Manchester, NH 03105
14 80th & Chase Manhattan 034-1-208015
Madison Box 241
New York, NY 10081
15 Eastchester North Fork Bank 2424004097
696 White Plains Rd
Scarsdale, NY 10583
16 Holyoke Mall Springfield Institute 49815723
1441 Main Street
Springfield, MA 01103
20 Riverside United Jersey Bank 111 013224
401 Hackensack Avenue
Hackensack, NJ 07602
21 Georgetown Riggs National Bank 1218-077
Service Line Dept. (202) 835-4000
P.O. Box 96758 Glen Johnson
Washington, DC 20090-
6758
22 Newbury Fleet Bank, MA 2661-5294
Street Attn: Donna Flynn (617) 267-5261
Mail Code: CT E8HX15A
One Constitution Plaza
Hartford, CT 06115-
1600
23 Hartford Shawmut Bank 00-6552-7183
Customer Center
P.O. Box 1365
Framingham, MA 01701
24 Wellesley Shawmut Bank 05-0096-3922
Square Customer Center
P.O. Box 1365
Framingham, MA 01701
25 Michigan First Nat'l Bank of 80-08086
Avenue Chicago (312) 407-1604
Mail Suite 0205
Chicago, IL 60670
28 Oak Street Northern Trust Company 00004319-31
50 South LaSalle Street (312) 630-6652
Chicago, IL 60675 Barbara Perkin
29 Manhasset Crossland Bank 0337701957
2030 Northern Blvd.
Manhasset, NY 11030
30 Tyson's Riggs National Bank 01755552
Service Line Dept. (202) 835-6530
P.O. Box 96758 Glenn Johnson
Washington, DC 20090-
6758
31 White Flint Citizens Bank & Trust 057-4-919
Co. (800) 777-1962
of Maryland
White Flint Mall
Kensington, MO 20895
33 Continental Bank of America 77-93189
Bank 231 South LaSalle St.
Chicago, IL 60697
36 Mazza Riggs National Bank 17184432
Service Line Dept.
P.O. Box 96758
Washington, DC 20090-
6758
40 Central Fleet Bank 263624-7
Office Attn: Donna Flynn (203) 351-1254
Mail Code: CT E8HX15A Mary McArdle
One Constitution Plaza
Hartford, CT 06115-
1600
41 Troy Michigan National Bank 59631-1465-6
2038 West Big Beaver (313) 643-8660
Troy, MI 48984
43 Ardmore Mellon Bank 2-125-649
Mellon Square, Customer (215) 553-8000
Service
Pittsburgh, PA 15259-
0003
44 King of Mellon Bank 2-540-672
Prussia Mellon Square, Customer
Service
Pittsburgh, PA 15259-
0003
46 Oxford Center Dollar Bank 2661397701
340 Fourth Avenue
Pittsburgh, PA 15222
48 North Clark First Nat'l Bank of 1115000631979
Street Chicago (312) 407-4000
1660 N. LaSalle St.
Suite 0294
Chicago, IL 60670-0294
49 Third Avenue European American 106-01414-5
Bank & Trust Co. (212) 688-0992 Ed
800 Third Avenue Kline
New York, NY 10022
51 Ross Park Mellon Bank 1561627
Mellon Square, Customer (412) 366-9710
Service Caroline
Pittsburgh, PA 15259-
0003
52 Walnut Street First Fidelity Bank 3308285
Chester Operations (215) 734-6100
Center
1 West 4th Street
Chester, PA 19013
55 Mt. Lebanon PNC Bank 001-240786
P.O. Box 609 (412) 762-2435
Pittsburgh, PA 15230-
9738
56 Glen Eagle PNC Bank 8559245451
Square P.O. Box 8319
Philadelphia, PA 19101
57 Nanuet Mall Chemical Bank 654-0640488-65
41 South Middletown Rd.
Nanuet, NY 10954
58 Woodbridge First Fidelity Bank 84075-006-91
10 Main Street
Woodbridge, NJ 07095
59 Menlo Park First Fidelity Bank 8503500135
477 Menlo Park (908) 549-1366
Menlo Park Shopping
Center
Edison, NJ 08837
63 Mayfair Coconut Grove Bank 010022006206
Village Branch (305) 858-6666
2701 S. Bayshore Drive
Miami, FL 33133
69 Altamonte Sun Bank 0760-760020586
Mall 498 Palm Springs Drive
Altamonte Springs, FL
32701
70 Westwood Bank of America 1233-9-54955
Attn: Robert Simpson (310) 552-4421
P.O. Box 27128
Concord, CA 94520
71 Woodland Bank of America 1140-8-00-593
Hills Attn: Robert Simpson (818) 712-6070
P.O. Box 27128
Concord, CA 94520
73 Beverly Hills Bank of Los Angeles 137-012-051126
Beverly Hills Office (213) 351-2359
9601 Wilshire Boulevard
Beverly Hills, CA 90210
75 Del Amo Bank of America 09930-10494
Attn: Robert Simpson (310) 212-4802
P.O. Box 27128
Concord, CA 94520
76 Beverly National Bank of 1005308
Center California
Beverly Center
P.O. Box 48929
Los Angeles, CA 90048
79 Horton Plaza Wells Fargo Bank 0780-010542
101 W. Broadway #303 (619) 589-5150
San Diego, CA 92101
83 Houston Town First Interstate Bank 2110064350
& P.O. Box 3326 (713) 464-9431
Country Houston, TX 77253
86 San Antonio Security Sevice FCU 4198691071
474 No. Star Mall
San Antonio, TX 78216
89 New Orleans First Bank of Commerce 1102-93185
Ctr P.O. Box 60279 (504) 561-1641
New Orleans, LA 70160
90 Sutter Street Bank of America 02600-15257
Attn: Robert Simpson (415) 396-2972
P.O. Box 27128 (415) 781-2235
Concord, CA 94520
92 Ghirardelli Wells Fargo Bank 0043-054006
Square #2 Grant Avenue (415) 396-2972
San Francisco, CA 94108 Jennifer
94 Palo Alto Bank of America 05203-11068
Attn: Robert Simpson (415) 853-5811
P.O. Box 27128r
Concord, CA 94520
95 Mail Order Fleet Bank 000-2247852
Attn: Donna Flynn
Mail Code: CT E8HX15A
One Constitution Plaza
Hartford, CT 06115-1600
98 Lakeside Mall Hibernia Bank 67212-709-2
P.O. Box 61540
New Orleans, LA 70161
99 Staten Island Dime Savings Bank 02-00-00103906-4
EAB Plaza (718) 761-6200
12th Floor
Uniondale, NY 11553
100 Old Hyde Park Southern Exchange Bank 100153-2
1509 West Suann Avenue (813) 254-4040
Tampa, FL 33601
101 Fashion Mall Safra Bank 303-517171
300 N.W. 82nd Avenue Cathy Shimko
Plantation, FL 33324
102 Boynton Beach Barnett Bank 1611799545
Corresondence
P.O. Box 30318
Tampa, FL 33633-0663
103 The Avenues Barnett Bank 2181703593
Correspondence (904) 464-7693
P.O. Box 30318
Tampa, FL 33633-0663
104 University Barnett Bank 1406172621
Square Correspondence (813) 225-2200
P.O. Box 30318
Tampa, FL 33633-0663
105 Cherry Hill Midlantic National Bank 14030-9651-2
Cherry Hill Mall
Route 38
Cherry Hill, NJ 08002
106 Mall @ St. Pioneer Bank 3194019
Vincent P.O. Box 31750
Shreveport, LA 71130
108 Cambridgeside East Cambridge Savings 04-80-8001076
292 Cambridge St. (617) 354-7700
Cambridge, MA 02141-
1263
110 Larimer Colorado National Bank 1-227-0088-0646
Square 1515 Arapahoe Street (303) 820-4229
Denver, CO 80292
111 Charleston Harris Bank 158739
Center Mall 1 East Main Street
St. Charles, IL 60174
112 Siena Square Norwest Bank of Boulder 1823473562
1242 Pearl Street
Box 227
Boulder, CO 80306
114 Cherry Creek Cherry Creek National 16-803085
Bank
3033 East First Avenue
Denver, CO 80206-5698
115 Trolley First Security Bank 131-00283-43
Square 445 Trolley Square (801) 350-6600
Salt Lake City, UT
84102
116 Town Square NBD 000410001709287
2000 S. Naperville Road
Wheaton, IL 60187
117 Lincoln Place First Interstate Bank 043-443
150 Washington Ave.
Santa Fe, MN 87501
118 Ocean County First Fidelity Bank 3000-5-12065
1201 Hooper Avenue (908) 905-4274
Tom's River, NJ 08753
119 Las Vegas Bank of America 150199602
2500 W. Spring Mountain Rd.
Las Vegas, NV 89193
121 St. Louis Mercantile Trust Co. NA 1001281409
Center 8th & Locust
P.O. Box 524
St. Louis, MO 63166
122 West County Colonial Bank 01-06944-601
Ctr 12330 Manchester Road (314) 966-8100
Des Peres, MO 63131
123 One Pacific Firstier Bank 0827622
Place 9 Farnam at Seventeenth (402) 345-1100
Omaha, NE 68102
124 Country Club Country Club Bank 078501
414 Nichols Road (816) 931-4060
Kansas City, MI 64112
126 Tower Place Fifth Third Bank 714-16492
7708 Montgomery Rd.
Cincinnati, OH 45230
127 Tucson Mall Bank of America 125-709559
4201 No. Circle Rd.
Tucson, AZ 85705
128 Freehold First Fidelity Bank 3000398408
72 West Main St.
Freehold, NJ 07728
129 Rockingham Shawmut Bank 510017916
Park Mall Customer Center (800) 685-5595
P.O. Box 1365
Framingham, MA 01701
130 Regency Nations Bank 02052218
Square P.O. Box 27025 (804) 788-2030
Richmond, VA 23261-7025
131 Owings Mills First Fidelity Bank 4063798294
P.O. Box 896
Baltimore, MD 21203
132 Harbour Place Nations Bank 00-0140-8032
P.O. Box 27025 (800) 241-5788
Richmond, VA 23261-7025
133 Chesterfield Peoples Bank 004031413712
5756 Hopkins Road
Richmond, VA 23234
134 Union Station Adams National Bank 0100161201
1627 K Street, NW (202) 466-4090,
Washington, DC 20006 ext 160
136 Reston Town First Union Bank of 2070478000217
Ctr Virginia (800) 677-3778
7711 Plantation Rd.
Roanoke, VA 24019
137 Montgomery First Fidelity Bank 4063795803
P.O.Box 896
Baltimore, MD 21203
138 Towson Town Maryland National Bank 09111774
Center P.O. Box 987 (410) 828-9666
Baltimore, MD 21203 Ann O'Neil
140 Woodbury Chemical Bank 141062437865
Commons 7600 Jericho Turnpike (516) 364-0012
Woodbury, NY 11797
143 West Farms Farmington Savings Bank 30-57-000093
P.O. Box 8 677-4541
Farmington, CT 06034-
0008
144 Buckland Savings Bank of 662002398
Hills Manchester (203) 647-1050
923 Main St. P.O. #231
Manchester, CT 06044-
0231
145 75th Street Marine Midland Bank 027712770
1340 Third Ave. (800) 872-0228
New York, NY 10021
151 Ridgedale AmeriBank 1017039
1809 Plymouth Road South ( ) 546-6060
Minnetonka, MN 55343
152 Conservatory Firstar Bank 180000027
1550 E. 79th Street
Bloomington, MN 55425
153 South Bend First Source Bank 119-865-4
P.O. Box 1602
South Bend, IN 46634
154 Fairlane Town NBD 2567524
Center 18800 Hubbard Dr.
Dearborn, MI 48126
155 Briarwood NBD 205000023148
P.O. Box 8601 (313) 995-8100
Ann Arbor, MI 48107 Bob Connor
159 Springfield Nations Bank 11060385
Mall P.O. Box 27025
Richmond,VA 23261-7025
163 Cumberland Sun Trust Bank 9300313351
Mall Mail Code 011 (414) 438-6859
P.O. Box 4418
Atlanta, GA 30302
165 Augusta First Union Bank of GA 2080000090669
699 Broad Street
Augusta, GA 30901
167 Mall of First Bank 1359-30107747
America 9633 Lyndale Ave. South
Bloomington, MN 55420
172 Main Place Bank of America 1233-5-54957
Attn: Robert Simpson (714) 558-2155
P.O Box 27128
Concord, CA 94520
173 La Jolla Wells Fargo Bank 0734-011133
7714 Girard Ave. (619) 454-2265
La Jolla, CA 92037
174 Biltmore First Interstate Bank 096466018
Biltmore Office (602) 528-7400
5050 N. 24th Street
P.O. Box 53412
Phoenix, AZ 85072-3412
177 South Lake Wells Fargo Bank 0613058866
Avenue 82 South Lake Avenue (619) 745-3911
Pasadena, CA 91101
178 Ala Moana Bank of America 8870100646
P.O. Box 539
Honolulu, HI 96809-0539
179 Brea Bank of America 952-2-35581
Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
180 Desert Bank of America 09506-01505
Fashion Mall Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
181 Santa Monica Santa Monica Bank 09008586
Place 152 Santa Monica Place
Santa Monica, CA 90401
182 Palos Verdes Union Bank 0730010656
507 Silver Spur Road
Rolling Hills Estates,
CA 90274
183 Media City Wells Fargo Bank 0933-040495
Center 900 N. San Fernando
Blvd.
Burbank, CA 91504
184 No. County Wells Fargo Bank 0760-017830
Fair 1991 E. Valley Pkwy
Escondido, CA 92027
185 University Wells Fargo Bank 0721-113330
Towne 4315 La Jolla Village
Center Dr.
San Diego, CA 92122
187 The Oaks Bank of America 1011-1-11247
Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
192 Stonestown Bank of America 0252900245
Attn: Robert Simpson (415) 956-4433
P.O. Box 27128
Concord, CA 94520
193 San Francisco Bank of America 00666-18805
Ctr Attn: Robert Simpson (415) 622-4894
P.O. Box 27128
Concord, CA 94520
194 Pacific First Seafirst Bank 63497713
Ctr 701 Fifth Avenue (206) 358-7800
Seattle, WA 98104 (800) 235-0785
195 Arden Fair Wells Fargo Bank 347056947
1795 Arden Way (916) 440-4670
Sacramento, CA 95815
196 Pioneer Place U.S. Bank of Oregon 0700008980
309 S.W. Sixth Avenue (503) 275-6671
P.O. Box 4412
Portland, OR 97208
197 Stoneridge First Interstate Bank 713515701
Mall 5790 Stoneridge Mall (510) 463-1170
Pleasanton, CA 94566
200 Fifth Avenue Chemical Bank 134069245265
401 Madison Avenue (212) 949-2539
New York, NY 10017
201 Cedarhurst NatWest Bank 2011-60-8235
400 Central Avenue (516) 569-4200
Cedarhurst, LI 11559
203 Upper West Chemical Bank 067-0648979-65
Side 2045 Broadway (212) 974-1616
New York, NY 10023
204 Crossgate Albany Savings Bank 280000-222-8
120 Washington Avenue (518) 426-6401
Ext. Gerrianne
Albany, NY 12203
205 Walden Key Bank 12-100223-3
Galleria 2000 Walden Ave., Suite (716) 683-0480
B 216
Cheektowaga, NY 14225
207 A & S Plaza Chemical Bank 023071029165
349 Fifth Avenue
New York, NY 10016
208 87th Street Citibank 3360-8426
2350 Broadway (212) 868-1100
New York, NY 10024
209 Roosevelt Crossland Bank 0417702354
Field Roosevelt Field Mall
Garden City, NY 11530
241 Fashion Mall NBD 700002-634-309
One Indiana Square - J-
400
Indianapolis, IN 46266
242 Twelve Oaks Comerica Inc. 1840312803
27768 Novi Road
Novi, MI 48050
243 Grosse Point NBD 4163494
P.O. Box 206A (800) CALL-NBD
Detroit, MI 48232 (313) 862-4NBD
244 Kenwood Town Fifth Third Bank 71652145
Center 7708 Montgomery Rd. (513) 891-5600
Cincinnati, OH 45230
245 Columbus City Bank One 11-86775
65 East State Street (800) TRY-8400
Columbus, OH 43271-1040 Shari
(800) 248-2880
246 Woodland Mall Michigan National Bank 5856-160097
2627 E. Beltline SE
Grand Rapids, MI 49546
248 Westgate Dollar Bank 2593219871
20981 Westgate (216) 331-9494
Fairview Park, OH 44126
249 Laurel Park NBD 0010679-14
37458 Six Mile Road (313) 953-0620
Livonia, MI 48152 Jean Phillips
260 Saddlecreek Victory Bank 0200020958
7550 West Farmington
Boulevard
Germantown, TN 38138
261 Bellevue First Tennessee Bank 9111646
Center 8160 Sawyer Brown Rd. (615) 748-4121
Nashville, TN 37230
262 Penn Place Bank of Oklahoma 822007911
3535 NW 58 #200
P.O. Box 24128
Oklahoma City, OK 73124
263 Utica Square F & M Bank and Trust 400029793
Box 4500 (918) 748-4290
Tulsa, OK 74159
266 Willowbrook Charter Bank 40044865
P.O. Box 4525
Houston, TX 77210
271 Hanes Mall First Union Bank of NC. 7188418502
No. Wilkesboro Service
Center
P.O. Box 106
No. Wilkesboro, NC
28659-0106
273 Park Plaza Twin City Bank 90139376
P.O. Box 5581 (501) 661-0265
Capital & Broadway
No. Little Rock, AK
72119
275 Fayette Mall National City Bank 704-08416
P.O. Box 36000
Louisville, KY 40233-
6000
277 Asheville Nations Bank 430062612
1104 Brevard Rd.
Asheville, NC 28802
278 Hamilton First Tennessee Bank 0006213
Place 701 Market Street
Chattanooga, TN 37401
279 Coolsprings First Tennessee Bank 0722596
P.O. Box 100
Franklin, TN 37065-0100
280 Madison First Alabama Bank 0401403478
Square Mall P.O. Box 680
Huntsville, AL 35804-
0680
281 Houston Laredo Bank 801-175-9
Galleria P.O. Box 59
700 San Bernardo
Laredo, TX 78042
282 Hillsdale Wells Fargo Bank 0525-031290
Hillsdale Office (415) 325-2004
SW Hillsdale Boulevard
San Mateo, CA 94403
283 Dallas Nations Bank 059-0001347
Galleria 5304 Alpha Road (214) 647-4488
Dallas, TX 75240
284 Perimeter Sun Trust Bank 8801928410
Mall Mail Code 049
P.O. Box 4418
Atlanta, GA 30302
285 Bellevue Seafirst Bank 67545715
Square P.O. Box 907
Bellevue, WA 01970
286 South Coast Bank of America 0694-2-08817
Plaza Attn: Robert Simpson (714) 840-6447
P.O. 27128
Concord, CA 94520
288 North Shore Salem Five 0089-00710145-7
210 Essex Street
Salem, MA 01970
289 Century City Glendale Federal 1047023283
1801 Avenue of the Stars
Los Angeles, CA 90067-
5902
291 Downtown Bank of America 1233-2-17890
Plaza Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
292 Fairfield Star Bank 48361-0374
Commons 425 Walnut Street
Cincinnati, OH 45203
293 Stamford Town Fleet Bank 886-1005
Center Attn: Donna Flynn (203) 244-5825
Mail Code: CT E8HX15A
One Constitution Plaza
Hartford, CT 06115-
1600
294 Lenox Square Sun Trust Bank 8800781216
Mail Code 049 (404) 588-7521
P.O. Box 4418
Atlanta, GA 30302
295 Worthington NBD 4000003758
Square 175 South Third Street
Columbus, OPH 43215
296 The Grove Shrewsbury State 0110-74426
465 Broad St. (908) 842-7700
Shrewsbury, NJ
297 Ridgewood Natwest Bank 4000019513
10 Exchange Place
Jersey City, NJ
298 Winter Park Barnett Bank 2830666787
Correspondence (407) 646-3281
P.O. Box 30318
Tampa, FL 33633-0663
299 Broadway Bank of America 02240-04907
Plaza Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
300 River Oaks Nations Bank 266-308-5222
West Gray
P.O. Box 2578
Houston, TX 77252-2518
301 Annapolis First Fidelity Bank 0039-29744
Mall P.O. Box 896 (800) 492-1653
Baltimore, MD 21203
302 North Point Sun Trust Bank 8801067144
Mail Code 049
P.O. Box 4418
Atlanta, GA 30302
303 Dadeland Dadeland Bank 10164397500
7439 Dadeland Mall
Miami, FL 33156
304 Boca Town Barnett Bank 1611773989
Center Correspondence
P.O. Box 30318
Tampa, FL 33633-0663
305 Chestnut Hill Baybank 325-699-5
2 Technology Place (617) 273-1700
Mail Code: A-504
Waltham, MA 02154
307 Oakbrook Republic Bank 1930011379
6501 So. Pulaski Rd. (312) 581-4500
Chicago, IL 60629
308 Glendale Wells Fargo Bank 0795-055698
420 North Brand (818) 246-7361
Glendale, CA 91203
309 World Trade Chemical Bank 024-033715
Ctr 100 World Trade Center (212) 912-0163
New York, NY 10048
310 Waterside BancFlorida 070137393
Shops 5801 Pelican Bay Blvd (800) 368-5800
Box 413004
Naples, FL 33941-3004
311 Ft. Barnett Bank 1800122224
Lauderdale Correspondence (305) 522-5550
P.O. Box 30318
Tampa, FL 33633-0663
312 Tysons II Riggs National Bank 01808389
Service Line Dept.
P.O. Box 96758
Washington, DC 20090-
6758
313 Short Hills Investors Savings Bank 0056109969
Mall & Short Hills
Short Hills, NJ 07078
314 La Cumbre I Bank of America 1233-1-18994
Attn: Robert Simpson (800) 262-2726
P.O. Box 27128
Concord, CA 94520
315 Plaza Mark Twain Bank 361-400-5591
Frontenac 1630 S. Lindbergh Road (314) 997-7444
St. Louis, MO 63131
317 Bal Harbour Sun Bank 0599-000137380
Bal Harbour Office (305) 591-6000
9600 Collins Avenue
Bal Harbour, FL 33154
318 Natick Baybank 3867-3408
2 Technology Place
Mail Code: A-504
Waltham, MA 02154
319 Fashion Wells Fargo Bank 0769-259009
Valley 1350 Fashion Valley Road
San Diego, CA 92108
320 North Park Comerica Bank 783101-0215
P.O. Box 650282
Dallas, TX 75265-0282
321 Tower City National City Bank 4601217
P.O. Box 5756
Cleveland, OH 44101-
0756
322 Valley Fair Bank of America 05750-01049
Attn: Robert Simpson (408) 277-7329
P.O. Box 27128
Concord, CA 94520
323 Bridgewater PNC Bank 80-0159-8151
P.O Box 1032
Morristown, NJ 08057-
0932
324 Embarcadero Bank of America 1233-8-54960
Sqr. Attn: Robert Simpson (415) 445-4043
P.O. Box 27218
Concord, CA 94520
325 Charleston First Citizens Bank 079013275701
182 Meeting St. (803) 577-4560
Charleston, SC
326 Santa Anita Bank of America 1233-5-19468
Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
327 Pearlridge Bank of America 5955117841
Kam Highway
Aeia, HI 96701
328 Raleigh First Union Bank of NC. 2000000-407737
4401 Glenwood Ave.
Raleigh, NC 27612
329 Prudential Fleet Bank, MA 936361-2920
Center Attn: Donna Flynn
Mail Code: CT EHX15A
One Constitution Plaza
Hartford, CT 06115-1600
330 Corte Madera Bank of America 978-0-08430
Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
331 Scottsdale Bank of America 235100550
69100 E. Camelback
Scottsdale, AZ 85251
332 Faneuil Hall Shawmut Bank 200495677
Customer Center
P.O. Box 1365
Framingham, MA 01701
333 Old Orchard First American Bank 12-437-001
4949 Old Orchard Road (312) 679-2200
Skokie, IL 60077
334 K Street Crestar Bank 0520-21442
15th St. & New York Ave. (703) 838-3141
N.W.
Washington, DC 20005
335 Rosedale MidAmerica 8400780612
2440 N. Fairview Ave.
Roseville, MN 55713
336 Northgate Village Bank 1092871
1058 W. Club Blvd.
Durham, NC 27701
337 Coronado Sunwest Bank 0162700363
P.O. Box 2550
Albuquerque, NM 87125-
0550
338 Carousel Key Bank 221-025156
Center 1510 W. Genesee St. (315) 470-5478
Syracuse, NY 13204 Richard Cizensk
340 Fashion Place First Security Bank 0640002614
6161 South St.
Murray, UT 84107
341 Fashion Show Bank of America 150240885
P.O. Box 98600
Las Vegas, NV 89195-
0001
342 Sherman Oaks Bank of America 0397914183
Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
343 Trumbull Lafayette Bank & Trust 051008068
Co. (203) 336-6200
P.O. Box 1899
Bridgeport, CT 06601-
9964
344 Arboreteum Bank One 0690014402
Market P.O. Box 2266
Austin, TX 78780-9989
345 Canal Place Premier Bank 54- 19105377
P.O. Box 3399 (504) 569-0483
Baton Rouge, LA 70821
346 Woodland Boatman's Bank 170182756214
Hills 6701 Sou Memorial Dr.
P.O. Box 35829
Tulsa, OK 74133-2000
347 Brandon Town Nations Bank 3603705653
Center 2105 West Brandon Blvd
Brandon, FL 33511-4703
348 Shadyside Integra Bank 84-48889
300 Fourth Avenue (412) 621-3370
Pittsburgh, PA 15278
349 The Bank of New York 6700681597
Westchester 158 Westchester Avenue
White Plains, NY 10601
350 Collin Creek Plano Bank & Trust 0767129
Mall P.O. Box 869111
Plano, TX 75086-9111
351 Shelter Cove Nations Bank 745040798
23C Shelter Cove Lane
Hilton Head, SC 29938
352 Southpark First Union Bank of NC. 2070490732110
Mall Deposit Accounting
Center
Charlotte, NC 28288-
0455
353 Somerset Shawmut Bank 7103-2265
Square Customer Center
P.O. Box 1365
Framingham, MA 01701
354 Beachwood Society National Bank 163200361
26300 Cedar Road (216) 464-9330
Beachwood, OH 44122
355 Riverchase Southtrust Bank 60306603
Galleria 420 North 20 th Street,
Sixth Floor
Birmingham, AL 35203
356 Highland Mall First State Bank 0108-3392
P.O. Box 3550 (512) 495-6050
Austin, TX 78764
357 Hulen Mall Overton Park 00058818
4840 Overton Plaza
Fort Worth, TX 76109-
4990
358 Northbrook Firstar Bank 327046828
1819 Lake Cook Road
Northbrook, IL 60062
359 Four Seasons Wachovia Bank of North 3569-022658
Town Center Carolina
600 Four Seasons Blvd.
Greensboro, NC 27407
360 Oxmoor Center PNC Bank 309547-8353
Customer Service (502) 581-2347
P.O. Box 33000
Louisville, KY 40232-
3000
361 Willow Grove First Valley Bank 069700273
One Bethlehem Plaza
Bethlehem, PA 18018-
5781
362 Madison Chemical Bank 026078694565
Avenue 598 Madison Avenue
New York, NY 10022
363 The Falls Sun Bank 6990010119595
8820 SW 136th Street
Miami, FL 331765
364 Oakview Mall Firstier Bank 053-7-651
1700 Farnam Street
Omaha, NE 68102-2183
366 Palmer Square PNC Bank 80-0053-0825
P.O. Box 1032
Morristown, NJ 08-57-
0932
367 Church Street Merchants Bank 01497676
Marketplace 123 Church Street
P.O. Box 1009
Burlington, VT 05402-
1009
368 Baybrook Bay Area Bank & Trust 079189
218 Nasa Road One
Webster, TX 77598
369 Palisades National Westminster 4370202198
Ave. Bank
42 North Dean Street
Englewood, NJ 07631
380 West Town First Tennessee Bank 67-48767
Mall 800 South Gay Street
Knoxville, TN 37929
381 Charlottesvil Jefferson National Bank 16302-0345-01
le P.O. Box 711
Charlottesville, VA
22902-0711
382 Greenville First Union Bank of SC 2010000140369
652 Haywood Road
Greenville, SC 29607
383 Carmel Place Bank of America 6395-01497
Carmel by the Sea Branch
7th & Mission Street
Carmel, CA 93921
384 Greenhills Third National Bank 1761625
P.O. Box 305110
Nashville, TN 37230-
5110
385 Highland Park Nations Bank 109-15538
P.O. Box 831547
Dallas, TX 75283-7547
386 Erieview Dollar Bank 266-081-4986
1301 E. Ninth St.
Cleveland, OH 44114
387 Larchmont, NY Bank of New York 6701157247
124 Chatsworth Avenue
Larchmont, NY 10538
388 Washington First Interstate Bank 5270159530
Square 9200 S.W.Washington
Sq.Rd
P.O. Box 23037
Tigard, OR 97223-0008
389 Circle Center National City Bank 501877347
101 West Washington
Street
Indianapolis, IN 46255
390 University First Interstate Bank 4040045306
Village 1661 South University
Drive
Ft. Worth, TX 76107
391 Seminole Town Sun Bank 0039004023633
Center 4240 W. Lake Mary
Boulevard
Lake Mary, FL 32746
392 Woodfield NBD 003700001-15479
Higgins & Meacham Roads (312) 882-6400
Schaumburg, IL 60196
393 Eastview Mall Canandaigua National 09-502521-01
Bank
338 Eastview Mall
Victor, NY 14564
394 Southdale First Bank 1-367-30735026
7001 France Avenue South
Edina, MN 55435
395 Northridge Bank of America 24404-04783
Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
396 Walt Whitman Republic Bank for 1366001368
Savings (516) 423-7200
Walt Whitman Mall
Route 110
Hungtington Station, NY
11746
397 South Street Citibank 49615556
Seaport 30 Fulton Street
New York, NY 10038
398 The Gardens First Federal of the 2070000757
Palm Beaches (800) 221-8511
P.O. Drawer F
West Palm Beach, FL
33402-3515
401 Mayfair Mall Firstar Bank 112047743
2300 North Mayfair Road (414) 258-1440
Wauwatosa, WI 53226
402 Danbury Fair First Fidelity Bank 2-082-007
Sugar Hollow Rd. 744-1230, ext.
Danbury, CT 06810 2221 Irene
403 St. Louis Commerce Bank 270177458
Galleria 7910 Clayton Road
St. Louis MO 63117-1385
404 Citicorp Bank of America 1233-1-54959
Plaza Attn: Robert Simpson (213) 735-1144
P.O. Box 27128
Concord, CA 94520
406 North Park Trustmark 1001447374
Mall P.O. Box 1200
Jackson, MS 39215
407 Fashion Ctr Chevy Chase 1074300513
Pentagon 1100 S. Hayes Street (800) 825-9000
Arlington, VA 22202 Brian
409 West Shore Barnett Bank 1407137925
Plaza Correspondence
P.O. Box 30318
Tampa, FL 33633-0663
410 Oaks Mall Gainesville State Bank 0400502901
2814 S.W. 34th Street
P.O. Box 147002
Gainesville, FL 32614-
7002
412 Montclair Wells Fargo Bank 0984041046
Plaza PO Box 340214
Sacramento, CA 95834-
0214
502 Kenwood Town Fifth Third Bank 71652268
Ctr 7708 Montgomery Rd.
Cincinnati, OH 45236
503 Columbus Bank One 0236515
Center 65 East State Street
Columbus, OH 43271-
1040
504 Beverly National Bank of 2519291
Center California
145 S. Fairfax Ave.
Los Angeles, CA 90036
505 La Cumbre II Bank of America 1233-0-19239
Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
506 Georgetown Riggs National Bank 17187190
Park Service Line Dept.
P.O. Box 96758
Washington, DC 20090-
6758
507 The Grove @ Shrewsbury State Bank 011077220
Shrewsbury 465 Broad Street
Shrewsbury, NJ 07702
508 Plaza Mark Twain Bank 3614020335
Frontenac 1630 S. Lindbergh Road
St. Louis, MO 63131
509 Broadway Bank of America 12333-20533
Plaza Attn: Robert Simpson
P.O.Box 27128
Concord, CA 94520
510 Union Station Adams National Bank 0100768801
1627 K Street, NW
Washington, D.C. 20006
700 Franklin Mellon Bank 8455628
Mills Mellon Square, Customer
Service
Pittsburgh, PA 15259-
0003
701 Sawgrass Barnett Bank 387-1201-716
Mills Correspondence
P.O. Box 30318
Tampa, FL 33633-0663
704 Gurnee Mills NBD 34000600479
513 Central Avenue
Highland Park, IL 60035
705 Potomac Mills Riggs National Bank 1-801-589
Service Line Dept.
P.O. Box 96758
Washington, DC 20090-
6758
706 Millstream Fulton Bank 2318-77085
P.O. Box 4887 (717) 291-2591
Lancaster, PA 17604
707 San Marcos State Bank & Trust 1505920
P.O. Box 649 (512) 396-4411
San Marcos, TX 78667
708 Gulf Coast Barnett Bank 195-919-3980
Factory Correspondence (800)628-5677
P.O. Box 30318
Tampa, FL 36333-0663
709 Woodbury Warwick Savings 032-14-20085
Commons P.O. Box 1008
Highland Mills, NY
10930
710 CastleRock First Bank of Castlerock 285-550-2403
P.O. Box 1300 (303) 688-5000
Castlerock, CO 80104 (800) 964-3444
711 Destin AmSouth Bank of Florida 3400071757
San Destin Branch
5050 highway 98 East
Destin, FL 32541
712 West Fifth Third Bank 758-86328
Lancaster P.O. Box 182026 426-6384
Columbus, OH 43218
713 Birch Run First of America Bank 3130046661
12010 Church Ave. (800) 736-3534
Birch Run, MI 48708
714 Petaluma Bank of America 1233-1-19526
Attn: Robert Simpson
P.O. Box 27128
Concord, CA
715 Gilroy Bank of America 00116-3740
Attn: Robert Simpson (800) 237-8052
P.O. Box 27128
Concord, CA 94520
716 St. Augustine First Union Bank of 2090000394915
Florida (800) 735-1012
P.O. Box 2870
Jacksonville, FL 32231
717 Citadel Bank of California 089002428
Outlets Citadel Office (213) 255-0333
500 Citadel Drive
Commerce, CA 90040
718 Osage Beach First Bank Centre 01005784001
One Financial Centre 348-2265
Osage Beach, MO 65065
719 Grove City Integra Bank 0071726391
201 S. Broad St. (800) 352-0186
P.O. Box 349
Grove City, PA
720 Worchester Bank of Boston 541-65139
P.O. Box 15073
Boston, MA 02106
721 Tuscola Tuscola Nat'l Bank 04-674-4
214 Main St. (217) 253-4711
P.O. Box 110
Tuscola, IL 61953
722 Vero Beach First Union Bank of 2090000468113
Florida
P.O. Box 1269
Vero Beach, FL
723 Riverhead Suffolk County Nat'l 110125911
Bank
6 West Second Street
Riverhead, NY 11901
724 Branson Capital Bank 6411284368
P.O. Box 70
Branson, MO 65616-0070
725 Barstow Bank of America 1233-9-20233
Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
726 Gainesville Bank of America Texas 315143632
101 East Broadway
Gainesville, TX 76240-
4010
727 Aurora Farms Second National Bank 2006444601
P.O. Box 1311
Warren, OH 44482-1311
728 Fremont Norwest 85575369
P.O. Box 120
Angola, IN 46703-6740
729 Edinburgh Irwin Union Bank & Trust 39698170
500 Washington Street
Box 929
Columbus, IN 47202
730 Michigan City First of America Bank 7930011551
800 Lincolnway
LaPorte, Indiana 46350
731 Orlando Barnett Bank 2834599958
Correspondence
P.O. Box 30318
Tampa, FL 36333-0663
732 Cabazon North County Bank 610103589
1735 W. Ramsey Street
Banning, CA 92220
737 Rehoboth Midway Mellon Bank 01029153
4537 Highway One
Rehoboth Beach, DE 19971
738 Auburn Seafirst Bank 69727600
Supermall 800 5th Avenue
Seattle, WA 98104
739 Napa Bank of America 00315-09435
Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
740 San Leandro Bank of America 1233720791
Attn: Robert Simpson
P.O. Box 27128
Concord, CA 94520
741 Camarillo Santa Barbara Bank & 32005159
Trust
2310 E. Ponderosa Drive
Camarillo, CA 93010
742 Arizona Bank of America 946026509
Factory Shops 3511 W. Peoria Avenue
Phoenix, AZ 85029
743 Magnolia Southeastern Bank 705896
Bluffs P.O. Box 455
Darien, GA 31305
798 Milpitas Wells Fargo Bank 4030-010789
3535 Lincoln Plaza
500 North Akard
Dallas, TX 75201
- - ------------------------------------------------------------
Exhibit 1.02(a)
---------------
[FORM OF BORROWING NOTICE]
[Date]
PNC Bank, National Association,
as Administrator
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Robert O. Finley, Jr.
Ladies and Gentlemen:
Reference is made to the Amended and Restated Receivables
Financing Agreement, dated as of October 31, 1995, among the
undersigned, AnnTaylor, Inc., as Servicer, Market Street Capital
Corp., as Lender, and PNC Bank, National Association, as
Administrator (as the same may be further amended, supplemented
or otherwise modified from time to time, the "Receivables Financing
---------------------
Agreement"). All capitalized terms used but not otherwise
- - ---------
defined herein which are defined in the Receivables Financing
Agreement have the same meanings when used herein.
The undersigned, AnnTaylor Funding, Inc., refers to the
Receivables Financing Agreement and hereby gives you notice,
irrevocably, pursuant to Section 1.02(a) of the Receivables
---------------
Financing Agreement, that the undersigned hereby requests that a
Loan be made in the aggregate principal amount of $_____________
on _____________, 199_.
The undersigned hereby certifies as of the date hereof, and as
of the date such Loan is made, as follows:
(a) the representations and warranties contained in the
Receivables Financing Agreement are correct, before and after giving
effect to such Loan and to the application of the proceeds therefrom,
as though made on and as of such dates and shall be deemed to have
been made on such dates;
(b) no event has occurred and is continuing, or would
result from such Loan or from the application of the proceeds
therefrom, that constitutes an Event of Default or an Unmatured
Event of Default;
(c) The borrowing Base as of the date hereof is
$_________________.
(d) after giving effect to such Loan, the Outstanding
Principal is $_____________; and
(e) the Termination Date has not occurred.
IN WITNESS WHEREOF, the undersigned has caused this Borrowing
Notice to be executed and delivered by a Responsible Officer on the
date first written above.
ANNTAYLOR FUNDING, INC.
By: __________________
Title: ________________
- - ---------------------------------------------------------------
Exhibit 1.04
-------------
[FORM OF NOTE]
$40,000,000 New York, New York
October 31, 1995
FOR VALUE RECEIVED, the undersigned, ANNTAYLOR FUNDING, INC.
(the "Issuer"), hereby promises to pay to the order of MARKET STREET
------
CAPITAL CORP. (together with its successors and assigns, the "Noteholder"),
----------
on or before January 27, 1997, the principal amount of FORTY MILLION
DOLLARS ($40,000,000) or, if less, the aggregate unpaid principal amount
of all of the Loans (as defined in the Amended and Restated Receivables
Financing Agreement, dated as of October 31, 1995, among the Issuer,
AnnTaylor, Inc., as Servicer, the Noteholder and PNC Bank, National
Association, as Administrator (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Amended and
-----------
Restated Receivables Financing Agreement") made by the Noteholder to
- - ----------------------------------------
the Issuer pursuant to the Amended and Restated Receivables Financing
Agreement.
The undersigned also promises to pay interest on the unpaid
principal amount of each Loan evidenced by this Note from the date
of such Loan until such Loan is paid in full, at the rates and
payable on the dates specified in the Amended and Restated Receivables
Financing Agreement.
This Note evidences indebtedness incurred as Loans under, and
is entitled to the benefits of, the Amended and Restated Receivables
Financing Agreement, to which Amended and Restated Receivables
Financing Agreement reference is hereby made for a statement of its
terms and conditions, including those under which the maturity of this
Note may be accelerated. Upon the occurrence of an Event of Default as
specified in the Amended and Restated Receivables Financing Agreement,
the principal balance hereof and the interest accrued hereon may be
declared to be forthwith due and payable.
This Note is secured by and entitled to the benefits specified
in Section 9.01 of the Amended and Restated Receivables Financing
Agreement, and reference is hereby made to such Section for a
description of the nature and extent of the collateral and the
rights of the parties to and beneficiaries of the Amended and
Restated Receivables Financing Agreement in respect of such
collateral.
In addition to and not in limitation of the foregoing and
the provisions of the Amended and Restated Receivables Financing
Agreement, the undersigned further agrees, subject only to any
limitation imposed by applicable law, to pay on demand all
expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder of this note and endeavoring to
collect any amounts payable hereunder which are not paid when
due, whether by acceleration or otherwise.
All parties hereto, whether as makers, endorsers or otherwise,
severally waive presentment for payment, demand, protest and notice
of dishonor.
This Note shall be governed by and construed in accordance with
the laws of the State of New York.
This Note is issued in replacement of the original Note issued by
the Issuer to Clipper Receivables Corporation on January 27, 1994
pursuant to the Receivables Financing Agreement, dated as of January
27, 1994, among the Issuer, AnnTaylor, Inc., as Servicer, Clipper
Receivables Corporation, State Street Boston Capital Corporation,
as Administrator, and PNC Bank, National Association, as
Relationship Bank, which has been amended and restated by the Amended
and Restated Receivables Financing Agreement and designed by Clipper
Receivables Corporation to the Noteholder pursuant to an Assignment
and Assumption Agreement dated as of October 31, 1995. This Note
evidences the same indebtedness evidenced by such original Note
and is not intended to be, nor shall it be deemed to be, a
novation or payment of such original note.
ANNTAYLOR FUNDING, INC.
By: /s/ Walter J. Parks
------------------
Name: Walter J. Parks
Title: V.P. and Treasurer
=====================================================================
SCHEDULE
Schedule attached to Note dated October 31, 1995 of ANNTAYLOR
FUNDING, INC. payable to the order of MARKET STREET CAPITAL CORP.
- - --------------------------------------------------------------------------
Date of | Amount of | | Amount of |Outstanding | Notation
Loan | Loan | Rate | Repayment | Principal | Made by
- - ---------|--------------|-------|-------------|------------|------------
- - ---------|--------------|-------|-------------|------------|------------
- - ---------|--------------|-------|-------------|------------|------------
====================================================================
Exhibit 3.01(a)
---------------
FORM OF INFORMATION PACKAGE
---------------------------
(See attached)
=================================================================
ANNTAYLOR FUNDING, INC.
RECEIVABLES REPORT AS OF ____________
FOR
Portfolio Information
I. Outstanding Principal $_________________
II. Begining Receivables Balance $_________________
III. New Receivables to add $_________________
IV. Collections to deduct $_________________
V. Defaulted Receivables to deduct $_________________
VI. +/- Other Adjustments $_________________
VII. Delinquent Receivables to deduct $_________________
VIII. Other ineligible Receivables to $_________________
deduct (Not including Defaulted
Receivables)
IX. Aging Schedule $_________________
Current Age 1 Age 2 Age 3 Age 4 Age 5 Age 6 Age 7+
Calculations Reflecting Current Activity
X. Eligible Receivables balance $_________________
(II)+(III)-(IV)-(V)+(VI)-(VII)-(VIII)
XI. Loss Reserve (.165 of X) $_________________
Borrowing Base (X)-(XI) $_________________
XII. Excess Collateral (Borowing Base - I.) $_________________
Compliance
XIII. Delinquency Ratio $_________________
One Month Calculation (less than 11.5%) $_________________
3 Month Rolling Average (less than 11%) $_________________
(If greater than 11% directly increase
the loss reserve by the amount over
11%)
XIV. Gross Default-to-Liquidation Ratio $_________________
One Month Calculation $_________________
3 Month rolling Average(less than: 2.00%) $_________________
Net Default-to-Liquidation Ratio $_________________
One Month Calculation $_________________
3 Month rolling Agerage (less than:1.45%) $_________________
XV. Dilution Ratio $_________________
One Month Calculation $_________________
3 Month rolling Average (less than 15.0%) $_________________
(If greater than 12.5% directly increase
the loss reserve by the amount over
12.5%)
XVI. Payment Rate (not less than 22%) $_________________
XVII. Net Yield (not less than -2%) $_________________
(If less than 4.5% directly increase
the loss reserve by the amount less
than 4.5%)
XVIII. Spread Account Balance $_________________
The undersigned hereby represents and warrants that the foregoing is a true
and accurate accounting with respect to outstandings as of _______________
in accordance with the Amended and Restated Receivables Financing Agreement
dated as of 10/31/95 and that all representations and warranties are
restated and reaffirmed.
ANNTAYLOR FUNDING, Inc.
Signed by: _______________________________
Title:____________________________________
=========================================================================
EXHIBIT 3.05
-------------
[FORM OF AMENDED AND RESTATED
SPREAD ACCOUNT AGREEMENT]
------------------------
THIS AMENDED AND RESTATED SPREAD ACCOUNT AGREEMENT, dated as of October 31,
1995 (as it may be further amended, supplemented or otherwise modified from
time to time, this "Agreement"), is among ANNTAYLOR FUNDING, INC., a Delaware
---------
corporation (the "Company" ), MARKET STREET CAPITAL CORP., a Delaware
-------
corporation (together with its successors and assigns, the "Lender"), PNC
------
BANK, NATIONAL ASSOCIATION ("PNC BANK"), a national banking association, as
--------
administrator (the "Administrator") for the Lender, and PNC BANK, in its
-------------
individual capacity (the "Bank"), and amends and restates in its entirety
----
the Spread Account Agreement, dated as of January 27, 1994 (as heretofore
amended, the "Original Spread Account Agreement"), among the Company, Clipper
---------------------------------
Receivables Corporation ("Clipper"), State Street Boston Capital Corporation
-------
("State Street Boston"), as administrator for Clipper, and the Bank.
-------------------
BACKGROUND
1. The Company, AnnTaylor, Inc., as Servicer, the Lender and the
Administrator have entered into an Amended and Restated Receivables
Financing Agreement, dated as of the date hereof (as it may be further
amended, supplemented or otherwise modified from time to time, the
"Financing Agreement"). The Financing Agreement amends and restates
-------------------
the Receivables Financing Agreement, dated as of January 27, 1994
(as heretofore amended, the "Original Financing Agreement"), among
----------------------------
the Company, AnnTaylor, Inc., as Servicer, Clipper, State Street Boston,
as administrator for Clipper, and PNC Bank, as relationship bank,
which has been assigned by Clipper, together with the Original Spread
Account Agreement, to the Lender pursuant to an Assignment and Assumption
Agreement dated as of the date hereof (the "Assignment").
----------
2. Pursuant to the Financing Agreement, the Lender has agreed to make
certain loans to the Company on the terms and conditions set forth in
the Financing Agreement, which loans are and shall be secured by certain
assets of the Company.
3. In connection with the Original Financing Agreement and the Original
Spread Account Agreement, the Company established a segregated account
at the Bank, number 1001144887 titled in the name of "AnnTaylor
Funding, Inc. and Clipper Receivables Corporation as Secured Party UA
1/27/94" (the "Spread Account") The Company desires to pledge such
--------------
account, together with the investments therein and earnings thereon,
to the Lender to secure the Company's obligations pursuant to the
Financing Agreement and the other transaction documents related thereto.
4. In light of the execution of the Assignment and the Financing Agreement,
the parties hereto hereby desire to amend and restate the Original Spread
Account Agreement and to set forth their understanding with respect to the
Spread Account and the investments therein as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used in this Agreement and
-----------
not otherwise defined herein shall have the meanings assigned thereto
in Appendix A to the Financing Agreement.
SECTION 2. Establishment of Account. The Company and the Bank hereby retitle
------------------------
the Spread Account as: "AnnTaylor Funding, Inc. and PNC Bank, National
Association, as Administrator, as Secured Party UA 10/31/95". The Company
hereby transfers exclusive dominion and control over the Spread Account to
the Administrator (for the benefit of the Lender). The Bank shall be entitled
to rely on, and to assume, the authority of any purported employee of
the Administrator and is hereby authorized to act on any notice purportedly
executed on behalf of the Administrator with respect to the Spread Account.
SECTION 3. Deposits in, and Withdrawals from, the Spread Account:
-----------------------------------------------------
Communications. Certain funds may be deposited from time to time into
the Spread Account pursuant to Section 3.01 of the Financing Agreement.
Amounts may only be withdrawn from the Spread Account by the Administrator
pursuant to Article III of the Financing Agreement including, without
limitation, Section 3.05(d).
---------------
(b) The Bank hereby covenants and agrees that it shall send all
communications with respect to the Spread Account, including, without
limitation, all account statements and confirmations to each of
the Company, the Lender and the Administrator.
SECTION 4. Permitted Investments. So long as the Bank does not receive
---------------------
written notice that an Event of Default shall have occurred and be
continuing, the funds in the Spread Account shall be invested and reinvested
by the Bank pursuant to written instructions executed by a Responsible
Officer of the Company in one or more Eligible Investments (as defined
below). Subject to the restrictions on the maturity of investments set
forth in Section 5, the Company may authorize the Bank to make specific
---------
Eligible Investments set forth in its notice, to make Eligible Investments
from time to time consistent with general instructions set forth therein
or to make specific Eligible Investments pursuant to instructions
received in writing from a Responsible Officer of the Company, in each
case in such amounts as the Company shall specify. The Company agrees to
report as income for financial reporting and tax purposes (to the extent
reportable) all investment earnings on amounts in the Spread Account.
In the event that the Company shall fail to give investment directions to
the Bank by 10:00 a.m., Pittsburgh time, on any Business Day on which
there may be uninvested cash, the Bank shall invest such funds in
Eligible Investments described in clause (v) of the definition thereof.
----------
The Bank shall invest interest and reinvest proceeds of investments
in the Spread Account, together with all other funds on deposit in
the Spread Account, in Eligible Investments pursuant to the terms hereof.
If the Bank has received written notice that an Event of Default has
occurred and is continuing, the Bank shall invest the funds in the
Spread Account as directed by the Administrator. All investments made by
the Bank shall mature no later than the maturity date therefore permitted
by Section 5.
---------
SECTION 5. Maturity of Investments. No investment of any amount held in
-----------------------
the Spread Account shall mature later than the Business Day immediately
preceding the Settlement Date which is scheduled to occur immediately
following the date of investment (or, with respect to mutual fund
investments or other investments redeemable (without penalty) shall be
redeemable no later than such date). All income or other gain from the
investment of monies deposited in the Spread Account shall be deposited
by the Bank in such account immediately upon receipt and shall be
invested pursuant to Section 4. Any net loss (determined on a month-by-month
---------
basis) resulting from such investment of amounts in the Spread Account
shall be charged to the Company, which, within five Business Days of
notice thereof by the Bank, shall reimburse such account for such
loss.
SECTION 6. Eligible Investments. The term "Eligible Investments" shall
-------------------- --------------------
mean any one or more of the following obligations or securities:
(i) direct non-callable obligations of, and noncallable obligations
fully guaranteed by, the United States of America, or any agency or
instrumentality of the United States of America the obligations
of which are backed by the full faith and credit of the United States
of America;
(ii) demand and time deposits in, certificates of deposit of,
and bankers' acceptances issued by, the Bank or any depository
institution or trust company incorporated under the laws of the
United States of America or any state thereof, having a combined
capital and surplus of at least $500,000,000, and subject to
supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or contractual
commitment providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution that is the
principal subsidiary of a holding company, the commercial paper or
other short-term debt obligations of such holding company) have the
highest short-term credit rating available from Moody's Investors
Service, Inc. and not less than A-1 from Standard & Poor's;
(iii) repurchase obligations with respect to and collateralized by
(A) any security described in clause (i) above or (B) any other security
----------
issued or guaranteed by an agency or instrumentality of the United States
of America, in each case entered into with a depository institution or
trust company (acting as principal) of the type described in clause
------
(ii) above, provided that the Bank has taken delivery of such security;
---- -------
(iv) commercial paper (including both non-interestbearing discount
obligations and interest-bearing obligations) payable on demand or on a
specified date not more than one year after the date of issuance thereof
having the highest short-term credit rating from Moody's Investors Service,
Inc. and not less than A-1 from Standard & Poor's at the time of such
investment; and
(v) shares in the Treasury Trust Fund, so long as such
fund is rated AA by Standard & Poor's and invests solely in short term
securities of the United States government and/or securities described
in clause (iii) above, or in a mutual fund investing solely in short term
------------
securities of the United States government and/or securities described
in clause (iii) above where the mutual fund custodian has taken delivery
------------
of the collateralizing securities, provided that (i) such fund shall have
-------------
the highest short-term credit rating available from Moody's Investors
Service, Inc. and not less than A-1 from Standard & Poor's and (ii) such
shares shall be freely transferable by the holder on a daily basis .
SECTION 7. Designee Under the Uniform Commercial Code. The parties
------------------------------------------
hereto hereby acknowledge that the Company has granted, and hereby does
grant, a security interest in the Spread Account, and all funds,
certificates, securities, other instruments, general intangibles and other
items, properties and assets credited thereto or on deposit therein and all
investments thereof, all claims thereunder and all interest, dividends,
monies, instruments, securities and other property from time to time
received, receivable or otherwise distributable in respect of or in exchange
for any of the foregoing, together with all proceeds thereof (collectively,
the "Spread Account Property"), to the Lender and that the ----------------
Bank shall maintain the Spread Account Property (and shall designate the
Spread Account on its records as being held) for the benefit of, and subject
to the interest of, the Lender. The Bank shall hold the Spread Account
Property as the agent, designee and financial intermediary for the Lender
pursuant to Section 8-313, or as bailee for the account of the Lender under
Section 9-305, of the Uniform Commercial Code as in effect in any applicable
jurisdiction (the "UCC").
---
SECTION 8. Duties of the Bank. The Bank's duties and responsibilities
------------------
shall be limited to those expressly set forth in this Agreement, and the Bank
shall not be subject to nor obligated to recognize, monitor or enforce the
terms of any other agreement between, or direction or instruction
of, any or all of the parties hereto. The Bank shall not in any way be held
liable by reason of any insufficiency in the Spread Account resulting from
losses on investments made strictly in accordance with the provisions of this
Agreement. The Bank shall not be personally liable for any act taken or omitted
hereunder or taken or omitted by the Bank in good faith and without gross
negligence. The Bank shall be fully protected in relying upon any written
notice, demand, certificate or document which the Bank in good faith believes
to be genuine. The Bank shall not be responsible for the sufficiency or
accuracy of the form, execution, validity or genuineness of documents or
securities now or hereafter deposited hereunder, or of any endorsements
thereon, or any lack of endorsement thereon, or any description therein,
nor shall the Bank be responsible or liable in any respect on account of
the identity, authority or rights of the persons executing or delivering
or purporting to execute or deliver any such document, security or
endorsement. The Bank may consult with counsel and shall be fully
protected in respect of any action taken or suffered or omitted to be
taken by the Bank hereunder in good faith and without gross negligence
and in accordance with the opinion of such counsel.
SECTION 9. Indemnity. The Company hereby agrees to indemnify the
---------
Bank for, and defend the Bank and hold it harmless against, any loss,
liability or expense incurred that arises out of or in connection with
the performance of its duties hereunder, including, without limitation,
the costs and expenses of defending itself against or investigating any
claim or liability, except to the extent that a court of competent
jurisdiction shall have determined that such loss, liability or expense
resulted solely from the gross negligence or willful misconduct of
the Bank. The Bank shall notify the Company promptly of any claim for
which it may seek indemnity hereunder and, upon any such notification,
the provisions of Section 13.01(d) of the Financing Agreement with
respect to the Bank as an indemnified party, shall apply mutatis
-------
mutandis, as if such provision were set forth herein.
- - --------
SECTION 10. Resignation. The Bank shall have the right
-----------
to resign at any time by giving written notice of such resignation
to the Company and the Administrator. Within 30 days after receiving
such notice, the Company agrees to appoint a successor bank that shall
be acceptable to the Administrator (which acceptance shall not be
unreasonably withheld). Upon the appointment of such a successor, the
Bank shall distribute the property then held hereunder, less any fees,
costs and expenses due to the Bank hereunder, if any, to such successor.
If a successor bank has not been appointed, and has not accepted such
appointment by the end of such 30-day period, the Bank may apply to the
court of competent jurisdiction for the appointment of a successor bank,
and the costs, expenses and reasonable attorneys' fees incurred in
connection with such a proceeding shall be paid by the Company.
SECTION 11. Termination. This Agreement shall terminate on the
-----------
Final Payout Date, at which time the property then held hereunder shall
be distributed to the Administrator unless the Administrator has given
the Bank written notice that all liabilities of the Company pursuant to
the Financing Agreement and the Transaction Documents have been paid in
- - -full, in which event, all funds hereunder shall be distributed to the
Company.
SECTION 12. Miscellaneous. This Agreement shall be governed by,
-------------
and construed in accordance with, the laws of the State of New York.
This Agreement may not be amended, waived or modified without the written
consent of the parties hereto. All notices and other communications
provided for herein shall, unless otherwise stated herein, be in writing
and shall be personally delivered, sent by express mail or courier or
by certified mail, postage prepaid, or by facsimile, to the intended party
at the address or facsimile number of such party set forth under its
name on the signature pages hereof or such other address or facsimile
number as shall be designated by such party in written notice to the
other parties hereto. All such notices and communications shall be
effective (a) if personally delivered or sent by express mail or
courier or if sent by certified mail, when received and (b) if
transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors
and assigns, provided, however, that the Company shall not assign its
-------- -------
rights and obligations hereunder without the prior written consent of
the Bank and the Administrator. This Agreement may be executed in any
number of counterparts, and by the different parties on different
counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and
the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the
date first above written.
ANNTAYLOR FUNDING, INC.
By: /s/Walter J. Parks
--------------------
Name Printed: Walter J. Parks
Title: V.P. & Treasurer
414 Chapel Street
New Haven, CT 06511
Telephone: (203) 865-0811
Facsimile: .(203) 865-2756
PNC BANK, NATIONAL ASSOCIATION
By: /s/ M.J. Williams
-----------------
Name Printed: M.J. Williams
Title: Vice President
Fifth Avenue and Wood Street
Pittsburgh, PA 15265
Telephone: (412) 762-2047
Facsimile: (412) 762-9184
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
By: /s/ M. J. Williams
---------------------
Name Printed: M. J. Williams
Title: Vice President
Fifth Avenue and Wood Street
Pittsburgh, PA 15265
Telephone: (412) 762-2047
Facsimile: (412) 762-9184
MARKET STREET CAPITAL CORP.
By: /s/ Douglas K. Johnson
----------------------
Name Printed: Douglas K.Johnson
Title: President
c/o AMACAR Group, L.L.C.
6707-D Fairview Road
Charlotte, North Carolina 28210
Facsimile No.: (704) 365-0569
===========================================================================
EXHIBIT 5.01(g)
--------------
[Form of Amended and Restated Lock-Box Agreement]
[Letterhead of AnnTaylor Funding, Inc.]
October _, 1995
AmSouth Bank, N.A.
1900 Fifth Avenue North
Birmingham, Alabama 35203
Ladies and Gentlemen:
Reference is made to our lock-box account no. 55976026, together with
the post office box related thereto, maintained with you (the "Account").
-------
Reference is also made to an Amended and Restated Receivables Financing
Agreement dated as of ; October 31, 1995 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Receivables
Financing Agreement") among us, as borrower, AnnTaylor, Inc., as Servicer,
Market Street Capital Corp., as lender (together with its successors and
assigns, the "Lender"), and as assignee of Clipper Receivables
------
Corporation's interest as lender under the Original Financing Agreement
(defined in the Receivables Financing Agreement) pursuant to an Assignment
and Assumption Agreement dated as of October 31, 1995, and PNC Bank,
National Association, as administrator (the "Administrator") for
-------------
the Lender. Pursuant to the Receivables Financing Agreement, we
have pledged and granted a security interest to the Lender in the
accounts, chattel paper, instruments and/or general intangibles
(collectively, "Receivables") with respect to which payments are
-----------
or may hereafter be made to the Account. Your execution of this
letter agreement, which amends and restates in its entirety the
letter agreement dated January 25, 1994 among us, AnnTaylor,
Inc., as Servicer, Clipper Receivables Corporation, State Street
Boston Capital Corporation, as Administrator, and you, is a
condition precedent to our continued maintenance of the Account
with you.
We hereby transfer exclusive ownership and control of the
Account to the Administrator, subject only to the condition subsequent
that the Administrator shall have given you notice of its election to
assume such ownership and control, which notice may be in the form
attached hereto as Annex A or in any other form that gives you reasonable
notice of such election.
We hereby irrevocably instruct you, at all times from and after
the date of your receipt of notice from the Administrator as described
above, to make all payments to be made by you out of or in connection with
the Account directly to the Administrator, at its address set forth below
its signature hereto or as the Administrator otherwise notifies you, for
the account of the Lender, or otherwise in accordance with the instructions
of the Administrator.
We also hereby notify you that, at all times from and after the
date of your receipt of notice from the Administrator as described above,
the Administrator shall be irrevocably entitled to exercise in our place
and stead any and all rights in respect of or in connection with the
Account, including, without limitation, (a) the right to specify when
payments are to be made out of or in connection with the Account and
(b) the right to require preparation of duplicate monthly bank statements
on the Account for the Administrator's audit purposes and mailing of such
statements directly to an address specified by the Administrator (provided
that you will continue to send copies of monthly bank statements to us).
Notice from the Administrator may be personally served or
sent by facsimile or U.S. mail, certified return receipt requested or
by express mail or courier, to the address or facsimile number set forth
under your signature to this letter agreement (or to such other address
or facsimile number as to which you shall notify the Administrator in
writing). If notice is given by facsimile, it will be deemed to have
been received when the notice is sent and the receipt is confirmed by
telephone or other electronic means. All other notices will be deemed to
have been received when actually received or, in the case of
personal delivery, delivered.
By executing this letter agreement, you acknowledge the existence of
the Administrator's right to ownership and control of the Account and its
ownership of and security interest in the amounts from time to time on
deposit therein and agree that from the date hereof the Account shall be
maintained by you for the benefit of, and amounts from time to time
therein held by you as agent for, the Administrator on the terms provided
herein. The Account is to be retitled 'XAnnTaylor Funding, Inc. and PNC Bank,
National Association, as Administrator, as Secured Party". Except as
otherwise provided in this letter agreement, payments to the Account are
to be processed in accordance with the standard procedures currently in
effect. All service charges and fees with respect to the Account shall
continue to be payable by us as under the arrangements currently in effect.
By executing this letter agreement, you irrevocably waive and agree
not to assert, claim or endeavor to exercise, irrevocably bar and estop
yourself from asserting, claiming or exercising, and acknowledge that you
have not heretofore received a notice, writ, order or any form of legal
process from any other party asserting, claiming or exercising, any right
of set-off, banker's lien or other purported form of claim with respect to
the Account or any funds from time to time therein. Except for your right
to payment of your service charges and fees and to make deductions for
returned items and overdrafts, you shall have no rights in the Account or
funds therein. To the extent you may ever have such rights, you hereby
expressly subordinate all such rights to all rights of the Administrator.
You may terminate this letter agreement by cancelling the Account
maintained with you, which cancellation and termination shall become
effective only upon sixty days' prior written notice thereof from you to
us and the Administrator. Incoming mail addressed to the Account received
after such cancellation shall be forwarded in accordance with the
Administrator's instructions; provided that if no instructions are
received from the Administrator by the seventh day prior to the effective
date of such cancellation or termination, such mail shall be forwarded in
accordance with our instructions. This letter agreement may also be
terminated upon written notice to you by the Administrator stating that
the Receivables Financing Agreement pursuant to which this letter agreement
was obtained is no longer in effect. Except as otherwise provided in this
paragraph, this letter agreement may not be terminated or amended
without the prior written consent of the Administrator and us.
Please acknowledge your agreement to the terms set forth in this
letter agreement by signing the two copies of this letter agreement
enclosed herewith in the space provided below, sending one such signed
copy to the Administrator at its address provided beneath its signature
below and returning the other signed copy to us.
Very truly yours,
ANNTAYLOR FUNDING, INC.
By: /s/Walter J. Parks
--------------------
Title: V.P. and Treasurer
Address for notice:
414 Chapel Street
New Haven, Connecticut 06511
Facsimile No.: (203) 865-2756
Accepted and confirmed as of ;
the date first written above:
MARKET STREET CAPITAL CORP., as Lender
By: /s/ Douglas K. Johnson
----------------------
Title: President
Address for notice:
c/o AMACAR Group, L.L.C.
6707-D Fairview Road
Charlotte, North Carolina 28210
Facsimile No.: (704) 365-1362
ANNTAYLOR, INC.
By: /s/ Walter J. Parks
---------------------
Title: Sr. V.P. - Finance
Address for notice:
142 West 57th Street
New York, New York 10019
Facsimile No.: (212) 541-3299
PNC BANK, NATIONAL ASSOCIATION, as Administrator
By: /s/ M. J. Williams
------------------
Title: Vice President
Address for notice:
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Facsimile No.: (412) 762-9184
Acknowledged and agreed to as of
the date first written above:
AMSOUTH BANK, N.A.
By: /s/ Adraine P. Alexander
-------------------------
Title: Vice President
Address for notice:
1900 Fifth Avenue North
Birmingham, Alabama 35203
Attention: Adraine R. Alexander
Facsimile No.: (205) 326-5601
===================================================================
ANNEX A to
Lock-Box Agreement
[Letterhead of PNC Bank, National Association]
AmSouth Bank, N.A.
1900 Fifth Avenue North
Birmingham, Alabama 35203
Re: AnnTaylor Funding, Inc./Lock-Box Account No. 55976026
Ladies and Gentlemen:
Reference is made to the amended and restated letter agreement,
dated October 31, 1995 (as heretofore amended, the "Letter Agreement"),
----------------
among Ann Taylor Funding, Inc., Ann Taylor, Inc., as Servicer, Market
Street Capital Corp. (together with its successors and assigns, the
"Lender"), the undersigned, as Administrator for the Lender, and you
------
concerning the above described lock-box account (the "Account"). We hereby
-------
give you notice of our assumption of ownership and control of the Account
as provided in the Letter Agreement.
We hereby instruct you to make all payments to be made by you
out of or in connection with the Account [directly to the undersigned, at
[our address set forth above], for the account of the Lender (account
no.__________ )].
[other instructions]
Very truly yours,
PNC BANK, NATIONAL
ASSOCIATION, as Administrator
By:
Name:
Title:
- - --------------------------------------------------------
Schedule 5.01(h)-(i)
-------------------
Form of Opinion of
Skadden, Arps, Slate, Meagher & Flom - Enforceability
-----------------------------------------------------
(See attached)
=========================================================
October 31, 1995
The Persons Listed on
Schedule I Hereto
Re: Receivables Facility of
AnnTaylor, Inc. and
AnnTaylor Funding, Inc.
------------------------
Ladies and Gentlemen:
We have acted as special counsel to AnnTaylor
Funding, Inc., a Delaware corporation (the "Company"),
and AnnTaylor, Inc., a Delaware corporation ("AnnTaylor",
and together with the Company, the "Credit Parties") in
connection with the preparation, execution and delivery
of the Amended and Restated Receivables Financing Agree
ment, dated as of October 31, 1995 (the "Receivables Fi
nancing Agreement"), among the Company, Market Street
Capital Corp. (the "Lender"), AnnTaylor, as Servicer, and
PNC Bank, National Association (the "Administrator") and
(ii) certain other agreements, instruments and documents
related to the Receivables Financing Agreement. This
opinion is being delivered pursuant to Section 5.01(h)(i)
of the Receivables Financing Agreement. Capitalized
terms used herein and not otherwise defined herein shall
have the same meanings herein as set forth in Appendix A
to the Receivables Financing Agreement.
In our examination we have assumed the genuine
ness 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
facsimile, certified or photostatic copies, and the au
thenticity of the originals of such copies. As to any
facts material to this opinion which we did not indepen
dently establish or verify, we have relied upon state
ments and representations of the Credit Parties and their
respective officers and other representatives and of
public officials, including the facts set forth in the
Company's Certificate and AnnTaylor's Certificate, each
as described below.
In rendering opinions set forth herein, we have
examined and relied on originals or copies of the follow
ing:
(a) the Receivables Financing Agreement;
(b) Amendment No. 1, dated as
of October 31, 1995, to the Purchase
Agreement;
(c) the Spread Account Agreement;
(d) the Note;
(e) the Fee Letter;
(f) the certificate of the Company executed
by an officer of the Company dated the date hereof, a copy of which
is attached as Exhibit A hereto (the "Company's Certificate");
(g) the certificate of AnnTaylor executed
by an officer of AnnTaylor, dated the date hereof, a copy
of which is attached as Exhibit B hereto ("AnnTaylor's
Certificate");
(h) the Certificate of Incorporation and
By-laws of each of the Credit Parties;
(i) certain resolutions of the Board of
Directors of the Company adopted on October 27, 1995;
(j) certain resolutions of the Board of
Directors of AnnTaylor adopted on October 27, 1995;
(k) a certificate from the Secretary of
State of the State of Delaware as to the good standing of
the Company in such jurisdiction; and
(l) such other documents as we have
deemed necessary or appropriate as a basis for the opin
ions set forth below.
Unless otherwise indicated, references in this
opinion to the "New York UCC" shall mean the Uniform Com
mercial Code as in effect on the date hereof in the State
of New York. The documents listed in paragraphs (a)
through (e) above shall hereinafter be referred to collec
tively as the "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 spe
cifically referred to herein.
The opinions set forth below are subject to the
following qualifications:
(i) enforcement of each of the
Documents and of any interests created thereby may
be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general
principles of equity (regardless of whether enforce
ment is sought in equity or at law);
(ii) certain of the remedial provi
sions with respect to the security including waivers
with respect to the exercise of remedies against the
collateral contained in each of the Documents may be
unenforceable in whole or in part, but the inclusion
of such provisions does not affect the validity of
the Documents, each taken as a whole, and, subject
to the other qualifications and exceptions contained
in this opinion, each of the Documents, each taken
as a whole, together with applicable law, contains
adequate provisions for the practical realization of
the benefits of the security created thereby;
(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;
(iv) enforcement of the Documents
may be subject to the terms of instruments, leases,
contracts or other agreements between the Credit Par
ties and the other parties to such agreements, the
rights of such other parties and any claims or
defenses of such other parties against the Credit
Parties arising under or outside such instruments,
leases or contracts or other agreements; and
(v) we express no opinion as to the
enforceability of any rights to contribution or
indemnification provided for in the Documents which
are violative of the public policy underlying any
law, rule or regulation (including any federal or
state securities law, rule or regulation).
Based upon the foregoing and subject to the
limitations, qualifications, exceptions and assumptions
set forth herein, we are of the opinion that:
1. The Company has been incorporated and is
validly existing and is in good standing under the laws
of the State of Delaware.
2. Each of the Credit Parties has the corpo
rate power and corporate authority to execute, deliver
and perform all of its obligations under each of the Docu
ments to which it is a party. The execution and delivery
by each of the Credit Parties of each of the Documents to
which it is a party and the consummation of the transac
tions contemplated thereby have been duly authorized by
all requisite corporate action on the part of each such
Credit Party. Each of the Documents has been duly exe
cuted and delivered by each Credit Party which is a party
thereto.
3. Each of the Documents constitutes the
valid and binding obligation of each Credit Party that is
a party thereto enforceable against such Credit Party in
accordance with its terms.
4. The execution and delivery by each of the
Credit Parties of each of the Documents to which it is a
party and the performance by each such Credit Party of
its obligations under each such Document, each in accor
dance with its terms, do not (i) conflict with the Cer
tificate of Incorporation or By-laws of such Credit
Party, (ii) constitute a violation of or a default under
any Applicable Contract (as hereinafter defined) or (iii)
cause the creation of any security interest or lien
(other than the liens granted under, created by or per
mitted by the 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 execu
tion, delivery or performance by any Credit Party of any
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 opera
tions of such Credit Party or the effect of any such
violation or default on the opinions expressed herein.
In rendering the opinion set forth in this paragraph 4
that the execution and delivery by each of the Credit
Paries of each of the Documents to which it is a party
and the performance by each such Credit Party of its
obligations under each such Document do not constitute a
violation of or a default under any Applicable Contract,
we have relied on the conclusion of AnnTaylor set forth
in the letter dated October 27, 1995 from AnnTaylor to
Bank of America, National Trust and Savings Association,
as Agent under the AnnTaylor Credit Agreement, that the
terms and conditions set forth in each of the Documents
are substantially the same terms and conditions as in the
1994 Receivables Transaction (as such term is defined in
the AnnTaylor Credit Agreement) for purposes of the
AnnTaylor Credit Agreement. For purposes of this para
graph 4, "Applicable Contracts" means those agreements or
instruments set forth on Schedule I to the Company's
Certificate with respect to the Company and on Schedule I
to AnnTaylor's Certificate with respect to AnnTaylor and
which have been identified to us as all the agreements
and instruments (other than the Documents) which are mate
rial to the business or financial condition of the Compa
ny and AnnTaylor respectively.
5. Neither the execution, delivery or perfor
mance by any Credit Party of any of the Documents to
which it is a party nor the compliance by such Credit
Party with the terms and provisions thereof will contra
vene any provision of any Applicable Law (as hereinafter
defined). For purposes of this paragraph 5 and para
graph 6, "Applicable Laws" means 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)
which, in our experience, are normally applicable to
transactions of the type contemplated by the Documents
and are not the subject of a specific opinion herein
referring expressly to a particular law or laws.
6. No Governmental Approval (as hereinafter
defined) 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 Documents by any Credit Party.
For the purposes of this paragraph 6, the term "Govern
mental 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, adminis
trative or regulatory body.
7. Neither the execution, delivery or perfor
mance by any Credit Party of its obligations under the
Documents to which it is a party nor compliance by such
Credit Party with the terms thereof will contravene any
Applicable Order (as hereinafter defined) 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
Company's Certificate with respect to the Company and on
Schedule II to AnnTaylor's Certificate with respect to
AnnTaylor.
8. The provisions of the Receivables Financ
ing Agreement are effective to create, in favor of the
Lender, as security for the obligations of the Company
described in Section 9.01 thereof, a valid security inter
est in that portion of the Pool Receivables constituting
accounts or general intangibles (as each such term is
defined in Section 9-106 of the New York UCC) (the "Re
ceivables Collateral"), and the proceeds thereof.
The opinions expressed in paragraph 8 are sub
ject to the following qualifications:
(a) we have assumed that the Receivables
Collateral exists and the Company has sufficient rights
in the Receivables Collateral for the security interest
of the Lender to attach, and, we express no opinion as to
the nature or extent of the Company's rights in or title
to any Receivables Collateral;
(b) we call to your attention that Sec
tion 552 of the Bankruptcy Code limits the extent to
which property acquired by a debtor after the commence
ment of a case under the Bankruptcy Code may be subject
to a security interest arising from a security agreement
entered into by such debtor before the commencement of
such case;
(c) we call to your attention that the
security interest of the Lender in proceeds is limited to
the extent set forth in Section 9-306 of the New York UCC
and to property of a type subject to the New York UCC;
(d) we call to your attention that the
security interest of the Lender may be subject to the
rights of account debtors, claims and defenses of account
debtors and the terms of agreements with account debtors;
(e) we express no opinion regarding the
security interest of the Lender in any of the Receivables
Collateral consisting of claims against any government or
governmental agency (including, without limitation, the
United States of America or any state thereof or any
agency or department of the United States of America or
any state thereof); and
(f) in the case of any account or general
intangible which is itself secured by other property, we
express no opinion with respect to the rights of the
Lender in and to such underlying property.
9. No registration of AnnTaylor or the Compa
ny under the Investment Company Act of 1940, as amended,
is required as of the date of the Receivables Financing
Agreement.
In rendering the foregoing opinions, we have as
sumed, with your consent, that:
(a) AnnTaylor has been incorporated in
the State of Delaware and is validly existing and in
good standing under the laws of all jurisdictions in
which it owns or leases property of a nature, or
transacts business of a type, that would make such
qualification necessary;
(b) the execution, delivery and perfor
mance of each Credit Party's obligations under the
Documents to which it is a party 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 make no such assumption),
(ii) any rule, law or regulation to which such
Credit Party is subject (other than Applicable Laws,
as to which we make no such assumption), or (iii)
any judicial or administrative order or decree of
any governmental authority (other than Applicable
Orders, as to which we make no such assumption); and
(c) no authorization, consent or other ap
proval of, notice to or filing with any court,
governmental authority or regulatory body (other
than Governmental Approvals, as to which we make no
such assumption) is required to authorize or is re
quired in connection with the execution, delivery or
performance by any Credit Party of any Document to
which it is a party or the transactions contemplated
thereby.
Our opinions are also subject to the
following assumptions and qualifications:
(a) we have assumed each of the Documents
constitutes the legal, valid and binding obligation
of each party to such Document (other than the
Credit Parties) enforceable against such party 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 Administrator,
the Liquidity Bank, the Lock-Box Bank, the Lender,
any Program Support Provider or any other party
(other than the Credit Parties) to the 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 any such
Person.
This opinion is being furnished only to you and
is solely for your benefit and is not to be used, quoted,
relied upon or otherwise referred to by any other Person
(except that a copy of this letter may be delivered to
Standard & Poor's and Moody's Investors Service, Inc. in
connection with the rating of Commercial Paper Notes) or
for any other purpose without our prior written consent,
except that an assignee of the Lender which becomes a
party to the Receivables Financing Agreement may rely on
this opinion as if it were addressed to such assignee and
delivered on the date hereof.
Very truly yours,
Skadden, Arps, Slate, Meagher
and Flom
=========================================================
SCHEDULE I
Market Street Capital Corp.
c/o AMACAR Group, L.L.C.
6707-D Fairview Road
Charlotte, North Carolina 28210
PNC Bank, National Association
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
United States National Bank of Oregon
555 S.W. Oak Street
Suite 400
Portland, Oregon 97204
=========================================================
Exhibit A to Opinion of
Special Counsel to AnnTaylor Funding, Inc.
------------------------------------------
Officer's Certificate
---------------------
I, Jocelyn F.L. Barandiaran, am Corporate
Secretary of AnnTaylor Funding, Inc., a Delaware corpora
tion ("Funding"). I understand that pursuant to Section
5.01(h)(i) of that certain Amended and Restated Receiv
ables Financing Agreement, dated as of October 31, 1995
(the "Receivables Financing Agreement"), among Funding,
AnnTaylor, Inc. ("AnnTaylor") as servicer, Market Street
Capital Corp. and PNC Bank, National Association,
Skadden, Arps, Slate, Meagher & Flom is rendering an
opinion (the "Opinion"). Capitalized terms used herein
but not otherwise defined shall have the meanings set
forth in Appendix A to the Receivables Financing Agree
ment. I further understand that Skadden, Arps, Slate,
Meagher & Flom is relying on this certificate and the
statements made herein in rendering the Opinion.
With regard to the foregoing, on behalf of
Funding, I certify that:
1. The chief executive office of Funding is
located at 414 Chapel Street, New Haven, Connecticut
06511.
2. Set forth on Schedule I hereto are all of
the agreements and instruments (other than the Transac
tion Documents) to which Funding is a party which are
material to the business or financial condition of Fund
ing.
3. 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 Funding.
4. Funding holds no stock in any company.
5. Funding (i) is not engaged in the business
of issuing Redeemable Securities, Face-Amount Certif
icates of the Installment Type or Periodic Payment Plan
Certificates (as each of such terms is hereinafter de
fined) and (ii) is primarily engaged in the business of
purchasing or otherwise acquiring notes, drafts, accep
tances, open accounts receivables, and other obligations
representing part or all of the sales price of merchan
dise, insurance, and services.
As used in this Certificate, the following
terms shall have the following meanings:
"Face-Amount Certificate of the Installment
Type" means any certificate, investment contract, or
other Security that represents an obligation on the part
of its issuer to pay a stated or determinable sum or sums
at a fixed or determinable date or dates more than 24
months after the date of issuance, in consideration of
the payment of periodic installments of a stated or
determinable amount;
"Periodic Payment Plan Certificate" means (A)
any certificate, investment contract, or other security
providing for a series of periodic payments by the hold
er, and representing an undivided interest in certain
specified securities or in a unit or fund of securities
purchased wholly or partly with the proceeds of such
payments, and (B) any security the issuer of which is
also issuing securities of the character described in
clause (A) and the holder of which has substantially the
same rights and privileges as those which holders of
securities of the character described in clause (A) have
upon completing the periodic payments for which such
securities provide;
"Redeemable Security" means any security, other
than short-term paper, under the terms of which the
holder, upon its presentation to the issuer or to a
person designated by the issuer, is entitled (whether
absolutely or only out of surplus) to receive approxi
mately his proportionate share of the issuer's current
net assets, or the cash equivalent thereof.
6. Funding does not directly or indirectly
own or operate facilities used for the generation, trans
mission 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 Funding
does not own any interest in any company which owns or
operates such facilities.
IN WITNESS WHEREOF, I have executed this cer
tificate this day of October 1995.
By: /s/ Jocelyn F.L. Barandiaran
----------------------------
Name: Jocelyn F.L. Barandiaran
Title: Corporate Secretary
==========================================================
Schedule I
Applicable Contracts
--------------------
None
=========================================================
Schedule II
Applicable Orders
------------------
None
==============================================================
Exhibit B to Opinion of
Special Counsel to AnnTaylor, Inc.
----------------------------------
Officer's Certificate
----------------------
I, Jocelyn F.L. Barandiaran, am Vice President,
General Counsel and Corporate Secretary of AnnTaylor, Inc., a
Delaware corporation ("AnnTaylor"). I understand that
pursuant to (i) Section 5.01(h)(i) of that certain Amended and
Restated Receivables Financing Agreement, dated as of October
31, 1995 (the "Receivables Financing Agreement"), among
AnnTaylor Funding, Inc. ("Funding"), AnnTaylor, as servicer,
Market Street Capital Corp. and PNC Bank, National Associ
ation, Skadden, Arps, Slate, Meagher & Flom is rendering an
opinion (the "Opinion"). Capitalized terms used herein but
not otherwise defined shall have the meanings set forth in
Appendix A to the Receivables Financing Agreement. I further
understand that Skadden, Arps, Slate, Meagher & Flom is rely
ing on this certificate and the statements made herein in ren
dering the Opinion.
With regard to the foregoing, on behalf of
AnnTaylor, I certify that:
1. The chief executive office of AnnTaylor is
located at 142 West 57th Street, New York, New York 10019.
2. As of the date hereof, AnnTaylor has not re
ceived any objection to the letter dated October 27, 1995 from
AnnTaylor to the Agent under the AnnTaylor Credit Agreement as
described in paragraph 4 of the Opinion.
3. Set forth on Schedule I hereto are all of the
agreements and instruments (other than the Transaction
Documents) to which AnnTaylor is a party which are material to
the business or financial condition of AnnTaylor.
4. 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 AnnTaylor.
5. AnnTaylor holds no stock in any company other
than the stock represented by the certificates set forth on
Schedule III hereto; none of such stock is traded on a
national securities exchange.
6. AnnTaylor (i) is not and does not hold itself
out as being, engaged primarily nor does it propose to engage
primarily, in the business of investing, reinvesting or
trading in Securities (as hereinafter defined), (ii) has not
and is not engaged in, and does not propose to engage in, the
business of issuing Face-Amount Certificates of the
Installment Type (as hereinafter defined) and has no such
certificate outstanding and (iii) is not engaged and does not
propose to engage in the business of investing, reinvesting,
owning, holding or trading in Securities, whether or not as
its primary activity, and does not own or propose to acquire
Investment Securities (as hereinafter defined) having a Value
exceeding 40% of the Value of the total assets of AnnTaylor
(exclusive of Government Securities (as hereinafter defined))
on an unconsolidated basis.
As used in this Certificate, the following terms
shall have the following meanings:
"Control" means the power to exercise a controlling
influence over the management or policies of a company, unless
such power is solely the result of an official position with
such company;
"Face-Amount Certificate of the Installment Type"
means any certificate, investment contract, or other Security
that represents an obligation on the part of its issuer to pay
a stated or determinable sum or sums at a fixed or
determinable date or dates more than 24 months after the date
of issuance, in consideration of the payment of periodic
installments of a stated or determinable amount;
"Government Securities" means all Securities issued
or guaranteed as to principal or interest by the United
States, or by a person controlled or supervised by and acting
as an instrumentality of the government of the United States
pursuant to authority granted by the Congress of the United
States; or any certificate of deposit for any of the
foregoing;
"Investment Securities" includes all Securities
except (A) Government Securities, (B) Securities issued by
employees' securities companies, and (C) Securities issued by
Majority-Owned Subsidiaries of AnnTaylor which are not engaged
and do not propose to be engaged in activities within the
scope of clauses (i), (ii) or (iii) of paragraph 5 of this
Certificate;
"Majority-Owned Subsidiary" of a person means a
company 50% or more of the outstanding Voting Securities of
which are owned by such person, or by a company which, within
the meaning of this paragraph, is a Majority-Owned Subsidiary
of such person. Notwithstanding the foregoing, a company
shall not be considered a Majority-Owned Subsidiary of a
person if Control of such company rests with someone other
than such person;
"Security" means any note, stock, treasury stock,
bond, debenture, evidence of indebtedness, certificate of
interest or participation in any profit-sharing agreement,
collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-
trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral
rights, any put, call, straddle, option, or privilege on any
security (including a certificate of deposit) or on any group
or index of securities (including any interest therein or
based on the value thereof), or any put, call, straddle,
option, or privilege entered into on a national securities ex
change relating to foreign currency, or, in general, any
interest or instrument commonly known as a "security," or any
certificate of interest or participation in, temporary or
interim certificate for, receipt for, guarantee of, or warrant
or right to subscribe to or purchase, any of the foregoing;
"Value" means (i) with respect to Securities owned
at the end of the last preceding fiscal quarter for which
market quotations are readily available, the market value at
the end of such quarter; (ii) with respect to other Securities
and assets owned at the end of the last preceding fiscal
quarter, fair value at the end of such quarter, as determined
in good faith by or under the direction of the board
directors; and (iii) with respect to securities and other
assets acquired after the end of the last preceding fiscal
quarter, the cost thereof;
"Voting Security" means any security presently
entitling the owner or holder thereof to vote for the election
of directors of a company.
7. AnnTaylor 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 AnnTaylor does not own any
interest in any company which owns or operates such
facilities.
IN WITNESS WHEREOF, I have executed this certificate
this day of October, 1995.
By: /s/Jocelyn F.L. Barandiaran
-------------------------
Name: Jocelyn F.L. Barandiaran
Title: V.P., Gen'l Counsel & Corp. Secty
=====================================================================
Schedule I
Applicable Contracts
--------------------
1. Amended and Restated Credit Agreement, dated as of Septem
ber 29, 1995, among AnnTaylor, Bank of America National
Trust and Savings Association ("Bank of America") and
Fleet Bank, National Association, as Co-Agents, the finan
cial institutions party thereto, BA Securities, Inc., as
Arranger, and Bank of America, as Agent (the "Agent").
2. Borrower Pledge Agreement, dated as of September 29,
1995, made by AnnTaylor in favor of the Agent.
3. Trademark Security Agreement, dated as of September 29,
1995, made by AnnTaylor in favor of the Agent.
4. Tax Sharing Agreement, dated as of July 12, 1989, between
the Company and AnnTaylor Stores Corporation.
5. Agreement, dated as of July 13, 1993, among Cygne De
signs, Inc., Cygne Design F.E., Limited, CAT US Inc.,
C.A.T. (Far East) Limited and AnnTaylor.
6. Stock Subscription Agreement, dated as of January 24,
1994, between Funding and AnnTaylor.
7. Indenture, dated as of June 15, 1993, between AnnTaylor
and Fleet Bank, N.A., as Trustee.
8. Lease, dated as of March 17, 1989, between Carven Associ
ates and AnnTaylor concerning the West 57th Street head
quarters, 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 agree
ment dated as of October 1, 1993, the Extension and
Amendment to Lease dated October 1, 1993, the Modifica
tion and Extension Amendment dated April 14, 1994 and the
letter agreement dated February 8, 1994. License Agree
ments dated April 6, 1994 and July 9, 1994. Fifth Amend
ment to Lease dated March 14, 1995, and Letter Agreement
for Tenant Alterations dated March 1, 1995.
9. Agreement of Sublease dated March 15, 1995 between
AnnTaylor, Inc. and Manhattan Pacific Amalgamated Broker
age Co., Inc.
10. Lease, dated June 12, 1986, between SMR 85-1 Limited Part
nership and AnnTaylor (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.
=============================================================
Schedule II
Applicable Orders
-----------------
None
============================================================
Schedule III
Stock Certificates(1)
-------------------
Company Certificate Nos. 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
- - --------------------
(1) All of these stock certificates have been pledged to Bank of
America National Trust and Savings Association, as agent, pursuant
to the Borrower Pledge Agreement, dated as of September 29, 1995.
III- 1
=====================================================================
Schedule 5.01 (h) -(ii)
-----------------------------
FORM OF OPINION OF
GENERAL COUNSEL OF ANNTAYLOR
----------------------------
(See Attached)
====================================================================
October 31, 1995
Market Street Capital Corp.
c/o AMACAR Group L.L.C.
6707-D Fairview Road
Charlotte, North Carolina 282210
PNC Bank, National Association
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
United States National Bank of Oregon
555 S. W. Oak Street
Suite 400
Portland, Oregon 97204
Dear Sirs and Madams:
I am Vice President, General Counsel and Corporate Secretary of
AnnTaylor, Inc., a Delaware corporation ("Ann Taylor"). I am
delivering this opinion in connection with the preparation,
execution and delivery of (i) the Amended and Restated
Receivables Financing Agreement, dated as of October 31, 1995
(the "Receivables Financing Agreement"), among AnnTaylor Funding,
Inc., a Delaware corporation, Market Street Capital Corp. (the
"Lender"), Ann Taylor, as Servicer, and PNC Bank, National
Association, and (ii) certain other agreements, instruments and
documents related to the Receivables Financing Agreement. This
opinion is being delivered pursuant to Section 5.01(h)(ii) of the
Receivables Financing Agreement. Capitalized terms used herein
and not otherwise defined herein shall have the same meanings as
set forth in Appendix A to the Receivables Financing Agreement.
In this connection, I have examined and am familiar with
originals or copies, certified or otherwise identified to my
satisfaction, of (i) the Receivables Financing Agreement, (ii)
Amendment No. 1, dated as of October 31, 1995, to the Purchase
Agreement (the "Purchase Agreement Amendment"), (iii) the
Certificate of Incorporation and By-Laws of Ann Taylor, as
presently in effect, and (iv) resolutions of the Board of
Directors of Ann Taylor relating to the Receivables Financing
Agreement and the Purchase Agreement Amendment. I have also
examined and am familiar with originals or copies, certified or
otherwise identified to my satisfaction, of such records of Ann
Taylor and such agreements, certificates of public officials,
certificates of officers or representatives of Ann Taylor and
others, and such other documents, certificates and corporate or
other records as I have deemed necessary or appropriate as a
basis for the opinions set forth below.
=================================================================
Market Street Capital Corp.
PNC National Association
United States National Bank of Oregon
October 31, 1995
Page Two
In my examination, I have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me
as certified or photostatic copies and the authenticity of the
originals of such copies. As to any facts material to this
opinion that I did not independently establish or verify, I have
relied upon certificates, statements and representations of
officers and other representatives of Ann Taylor and others.
I am admitted to the Bar of the State of New York and express no
opinion as to the laws of any other jurisdiction except the
General Corporation Law of the State of Delaware and the laws of
the United States of America to the extent specifically referred
to herein.
Based upon and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, I am of the opinion
that:
1.Ann Taylor is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware.
2.Ann Taylor is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction
in which it owns or leases property of a nature, or transacts
business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify
or be in good standing would not have a material adverse
effect on Ann Taylor.
This opinion is being furnished by me as Vice President, General
Counsel and Corporate Secretary of Ann Taylor to you solely for
your benefit, and is not to be used or relied upon by any other
person without my express prior written consent, except that a
copy of this letter may be delivered to Standard & Poor's and
Moody's Investors Service in connection with the rating of
Commercial Paper Notes, and except that an assignee of the Lender
that becomes a party to the Receivables Financing Agreement may
rely on this opinion as if it were addressed to such assignee and
delivered on the date hereof.
Very truly yours,
Jocelyn F.L. Barandiaran
Vice President / General Counsel
===================================================================
Schedule 5.01(h)-(iii)
----------------------
FORM OF TRUE SALE OPINION OF
SKADDEN, ARPS, SLATE, MEAGHER, & FLOM
--------------------------------------
(See attached)
=========================================================
October 31, 1995
The Persons listed on
Schedule I hereto
Re: AnnTaylor, Inc./AnnTaylor Funding, Inc.
----------------------------------------
Reference is made to (i) the Purchase and Sale
Agreement, dated as of January 27, 1994 (the "Purchase
Agreement") between AnnTaylor, Inc. ("AnnTaylor"), as
seller, and AnnTaylor Funding, Inc. ("Funding") and (ii)
the Receivables Financing Agreement, dated as of Janu
ary 27, 1994 (the "Receivables Financing Agreement")
among Funding, AnnTaylor, as servicer, Clipper Receiv
ables Corporation, as lender, State Street Boston Capital
Corporation, as administrator and PNC Bank, National
Association, as relationship bank. Capitalized terms
used and not otherwise defined herein have the respective
meanings assigned thereto in Appendix A to the Receiv
ables Financing Agreement.
In connection with the initial closing under
the Purchase Agreement and the Receivables Financing
Agreement which occurred on January 27, 1994, we deliv
ered to the Persons listed on Schedule I to each of the
following opinion letters (i) our opinion letter address
ing whether the Pool Receivables would be property of
AnnTaylor's estate if AnnTaylor were to become a debtor
in a case under the Bankruptcy Code (the "True Sale Opin
ion") and (ii) our opinion letter addressing whether
Funding would be substantively consolidated with
AnnTaylor if AnnTaylor were to become a debtor in a case
under the Bankruptcy Code (the "Nonconsolidation Opin
ion").
The Purchase Agreement is being amended by an
amendment, dated as of October 31, 1995 (the "Amendment")
between AnnTaylor and Funding, and the Receivables Financ
ing Agreement is being amended and restated by an Amended
and Restated Receivables Financing Agreement, dated as of
October 31, 1995 (the "Amended Receivables Financing
Agreement") among Funding, AnnTaylor, as servicer, Market
Street Capital Corp., as lender (the "Lender"), and PNC
Bank, National Association, as administrator. We are
acting as special counsel to Funding and AnnTaylor in con
nection with the Amendment and the Amended Receivables
Financing Agreement. This opinion is being delivered to
you pursuant to Section 5.01(h)(i) of the Amended Receiv
ables Financing Agreement. For purposes of this letter,
we have reviewed originals of the Amendment and the
Amended Credit Agreement, in each case as executed by the
respective parties thereto.
Based on such review, it is our opinion that
the execution and delivery of the Amendment and the
Amended Receivables Financing Agreement by each of
AnnTaylor and Funding, the modifications to the original
provisions of the Purchase Agreement and the Receivables
Financing Agreement being effected by the Amendment and
the Amended Receivables Financing Agreement, and the per
formance by each of AnnTaylor and Funding of their respec
tive obligations under the Purchase Agreement as amended
by the Amendment and under the Amended Receivables
Financing Agreement would not, in and of themselves, ad
versely affect the opinions we previously expressed in
the True Sale Opinion and the Nonconsolidation Opinion
(subject to the assumptions, qualifications and limita
tions set forth in such opinion letters). We hereby
agree that each of the Persons listed on Schedule I
hereto may rely on the True Sale Opinion and the
Nonconsolidation Opinion as if each of such opinions were
addressed to such Person and delivered on January 27,
1994.
This letter is being furnished only to you and
is solely for your benefit and is not to be used, quoted,
relied upon or otherwise referred to by any other Person
(except that a copy of this letter may be delivered to
Standard & Poor's and Moody's Investors Service, Inc. in
connection with the rating of Commercial Paper Notes) or
for any other purpose without our prior written consent,
except that an assignee of the Lender which becomes a
party to the Receivables Financing Agreement may rely on
this letter as if it were addressed to such assignee and
delivered on the date hereof.
Very truly yours,
Skadden, Arps, Slate,
Meagher and Flom
=======================================================
SCHEDULE I
Market Street Capital Corp.
c/o AMACAR Group, L.L.C.
6707-D Fairview Road
Charlotte, North Carolina 28210
PNC Bank, National Association
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
United States National Bank of Oregon
555 S.W. Oak Street
Suite 400
Portland, Oregon 97204
- - ----------------------------------------------------
Schedule 5.01 (h)-(iv)
---------------------
FORM OF SUBSTANTIVE CONSOLIDATION
OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM
-----------------------------------------------
(See attached)
=========================================================
October 31, 1995
The Persons listed on
Schedule I hereto
Re: AnnTaylor, Inc./AnnTaylor Funding, Inc.
---------------------------------------
Reference is made to (i) the Purchase and Sale
Agreement, dated as of January 27, 1994 (the "Purchase
Agreement") between AnnTaylor, Inc. ("AnnTaylor"), as
seller, and AnnTaylor Funding, Inc. ("Funding") and (ii)
the Receivables Financing Agreement, dated as of Janu
ary 27, 1994 (the "Receivables Financing Agreement")
among Funding, AnnTaylor, as servicer, Clipper Receiv
ables Corporation, as lender, State Street Boston Capital
Corporation, as administrator and PNC Bank, National
Association, as relationship bank. Capitalized terms
used and not otherwise defined herein have the respective
meanings assigned thereto in Appendix A to the Receiv
ables Financing Agreement.
In connection with the initial closing under
the Purchase Agreement and the Receivables Financing
Agreement which occurred on January 27, 1994, we deliv
ered to the Persons listed on Schedule I to each of the
following opinion letters (i) our opinion letter address
ing whether the Pool Receivables would be property of
AnnTaylor's estate if AnnTaylor were to become a debtor
in a case under the Bankruptcy Code (the "True Sale Opin
ion") and (ii) our opinion letter addressing whether
Funding would be substantively consolidated with
AnnTaylor if AnnTaylor were to become a debtor in a case
under the Bankruptcy Code (the "Nonconsolidation Opin
ion").
The Purchase Agreement is being amended by an
amendment, dated as of October 31, 1995 (the "Amendment")
between AnnTaylor and Funding, and the Receivables Financ
ing Agreement is being amended and restated by an Amended
and Restated Receivables Financing Agreement, dated as of
October 31, 1995 (the "Amended Receivables Financing
Agreement") among Funding, AnnTaylor, as servicer, Market
Street Capital Corp., as lender (the "Lender"), and PNC
Bank, National Association, as administrator. We are
acting as special counsel to Funding and AnnTaylor in con
nection with the Amendment and the Amended Receivables
Financing Agreement. This opinion is being delivered to
you pursuant to Section 5.01(h)(i) of the Amended Receiv
ables Financing Agreement. For purposes of this letter,
we have reviewed originals of the Amendment and the
Amended Credit Agreement, in each case as executed by the
respective parties thereto.
Based on such review, it is our opinion that
the execution and delivery of the Amendment and the
Amended Receivables Financing Agreement by each of
AnnTaylor and Funding, the modifications to the original
provisions of the Purchase Agreement and the Receivables
Financing Agreement being effected by the Amendment and
the Amended Receivables Financing Agreement, and the per
formance by each of AnnTaylor and Funding of their respec
tive obligations under the Purchase Agreement as amended
by the Amendment and under the Amended Receivables
Financing Agreement would not, in and of themselves, ad
versely affect the opinions we previously expressed in
the True Sale Opinion and the Nonconsolidation Opinion
(subject to the assumptions, qualifications and limita
tions set forth in such opinion letters). We hereby
agree that each of the Persons listed on Schedule I
hereto may rely on the True Sale Opinion and the
Nonconsolidation Opinion as if each of such opinions were
addressed to such Person and delivered on January 27,
1994.
This letter is being furnished only to you and
is solely for your benefit and is not to be used, quoted,
relied upon or otherwise referred to by any other Person
(except that a copy of this letter may be delivered to
Standard & Poor's and Moody's Investors Service, Inc. in
connection with the rating of Commercial Paper Notes) or
for any other purpose without our prior written consent,
except that an assignee of the Lender which becomes a
party to the Receivables Financing Agreement may rely on
this letter as if it were addressed to such assignee and
delivered on the date hereof.
Very truly yours,
Skadden, Arps, Slate,
Meagher and Flom
========================================================
SCHEDULE I
Market Street Capital Corp.
c/o AMACAR Group, L.L.C.
6707-D Fairview Road
Charlotte, North Carolina 28210
PNC Bank, National Association
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
United States National Bank of Oregon
555 S.W. Oak Street
Suite 400
Portland, Oregon 97204
===============================================================
Schedule 5.01 (h)-(v)
--------------------
October 31, 1995
Persons Listed on
Schedule I Hereto
Re: Receivables Facility of AnnTaylor, Inc. and
AnnTaylor Funding, Inc.
-------------------------------------------
Ladies and Gentlemen:
We have acted as special Connecticut counsel to AnnTaylor
Funding, Inc., a Delaware corporation (the "Company"), to advise
the Company with respect to the perfection, in Connecticut, of
the security interest to be granted by the Company to Market
Street Capital Corp. (the "Lender") pursuant to the Amended and
Restated Receivables Financing Agreement, dated as of October 31,
1995 (the "Receivables Financing Agreement"), among the Company,
the Lender, AnnTaylor, Inc. ("AnnTaylor"), as Servicer, and PNC
Bank, National Association (the "Administrator"), and certain
other agreements, instruments and documents related to the
Receivables Financing Agreement. This opinion is being delivered
pursuant to Section 5.01(h)(iii) of the Receivables Financing
Agreement. Capitalized terms used herein are not otherwise
defined herein shall have the same meanings herein as set forth
in Appendix A to the Receivable Financing 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 establish
or verify, we have relied upon statements and representations of
the Company and its officers and other representatives and of
public officials.
In rendering the opinions set forth herein, we have examined
and relied on originals or copies of the following:
(a) the Receivables Financing Agreement;
(b) signed, unfiled copies of the UCC-1 financing
statement under the Uniform Commercial Code as in effect in the
State of Connecticut, naming the Company as debtor and the Lender
as the secured party, which we understand and have assumed will
be filed within ten days of the grant of a security interest in
the Pool Receivables from the Company to the Lender, in the
office of the Secretary of the State of the State of Connecticut
(the "Filing Office") (such financing statement, the "Financing
Statement");
(c) a search report provided by Lexis Document
Services, dated October 21, 1995 and covering the period through
August 24, 1995 at 5:00 p.m. listing financing statements that
name the Company as debtor and that are filed in the Filing
Office, together with copies of such financing statements, a
summary of which search report is attached as Exhibit A hereto
(the "Search Report"); and
(d) such other documents as we have deemed necessary
or appropriate as a basis for the opinions set forth below.
Unless otherwise indicated, references in this opinion to
the "Connecticut UCC" shall mean the Uniform Commercial Code as
in effect on the date hereof in the State of Connecticut.
Members of our firm are admitted to the bar of the State of
Connecticut. We express no opinion as to the laws of any
jurisdiction other than (i) the laws of the State of Connecticut,
and (ii) the federal laws of the United States of America to the
extent specifically referred to herein.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we
are of the opinion that:
1. The Financing Statement is in appropriate form for
filing in the Filing Office under the Connecticut UCC.
2. The security interest in favor of the Lender in the
portion of the Pool Receivables that constitutes accounts or
general intangibles (each as defined in Article 9 of the
Connecticut UCC) (the "Article 9 Filing Collateral") will be
perfected upon the later of (i) attachment of the security
interest and (ii) the filing of the Financing Statement in the
Filing Office. No other security interest of any other
transferee from the Company is equal or prior to the security
interest of the Lender in such Article 9 Filing Collateral.
The opinions expressed herein are subject to the following
qualifications, exceptions and limitations:
(a) we have assumed, with your consent and without
investigation, that the security interest granted by the Company
to Clipper Receivables Corporation ("Clipper"), as evidenced by
UCC-1 financing statement no. 1044374 which was filed in the
Filing Office on January 31, 1994 has been validly assigned by
Clipper to the Lender and that a form UCC-3 evidencing such
assignment has been duly filed in the Filing Office, and we
express no opinion as to the validity or effect of any such
assignment;
(b) we express no opinion with respect to the validity
of the security interest of the Lender but have assumed for
purposes of the opinions set forth herein that such security
interest is valid under the laws of the State of New York;
(c) we have assumed that the Article 9 Filing
Collateral exists and the Company has sufficient rights in the
Article 9 Filing Collateral for the security interest of the
Lender to attach, and we express no opinion as to the nature or
extent of the Company's rights in or title to any Article 9
Filing Collateral;
(d) we call to your attention that Section 552 of the
United States Bankruptcy Code limits the extent to which property
acquired by the debtor after the commencement of a case under the
United States Bankruptcy Code may be subject to a security
interest arising from a security agreement entered into by such
debtor before the commencement of such case;
(e) we call to your attention that the security
interest of the Lender in proceeds, and the perfection of such
security interest, is limited to the extent set forth in
Section 9-306 of the Connecticut UCC and to property of a type
subject to the Connecticut UCC;
(f) we call to your attention that the security
interest of the Lender may be subject to the rights of account
debtors, claims and defenses of account debtors and the terms of
agreements with account debtors;
(g) we express no opinion regarding the security
interest of the Lender in any of the Article 9 Filing Collateral
consisting of claims against any government or governmental
agency (including, without limitation, the United States of
America or any state thereof or any agency or department of the
United States of America or any state thereof);
(h) in the case of any account or general intangible
which is itself secured by other property, we express no opinion
with respect to the rights of the Lender in and to such
underlying property;
(i) we have assumed, with your consent and without
investigation, that the chief executive office of the Company as
of the date of filing of the Financing Statement is located in
the State of Connecticut, and we express no opinion with respect
to the perfection or priority of the security interest of the
Lender in the Article 9 Filing Collateral if it were to be
determined that the chief executive office of the Company is
located in any jurisdiction other than the State of Connecticut;
(j) we call to your attention that the perfection of
the security interest of the Lender in Article 9 Filing
Collateral may be governed by laws other than the Connecticut UCC
if the chief executive office of the Company is or becomes
located in a jurisdiction other than Connecticut;
(k) we call to your attention that (i) the perfection
of the security interest of the Lender as to the Article 9 Filing
Collateral will be terminated as to any such property acquired by
the Company more than four months after the Company changes its
name, identity or corporate structure so as to make the Financing
Statement seriously misleading unless new appropriate financing
statements indicating the new name, identity or corporate
structure of the Company are properly filed before the expiration
of such four months, and (ii) the Connecticut UCC requires the
filing of continuation statements within the period of six months
prior to the expiration of five years from the date of the filing
of the original Financing Statement or the filing of any
continuation statements in order to maintain the effectiveness of
the original Financing Statement;
(l) we express no opinion as to the priority of the
security interest of the Lender in the Article 9 Filing
Collateral against: (i) any liens, claims or other interests
that arise by operation of law and do not require any filing or
possession in order to take priority over security interests
perfected through the filing of a financing statement; (ii) any
lien, claim or encumbrance in favor of the United States of
America or 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. 3713); (iii) a lien
creditor who attached or levied prior to the perfection of the
security interest of the Lender; (iv) a lien creditor with
respect to future advances to the extent set forth in Section 9-
301(4) of the Connecticut UCC; (v) another secured creditor with
respect to any future advances to the extent set forth in
Section 9-312(7) of the Connecticut UCC; (vi) a security interest
perfected under the laws of another jurisdiction to the extent
that the Company had its chief executive office in such
jurisdiction within four months prior to the date of the
perfection of the security interest of the Lender; (vii) a
security interest perfected without filing any financing
statement pursuant to Section 9-302(1) of the Connecticut UCC;
(viii) a security interest perfected by filing a financing
statement naming the Company as debtor using a trade name,
fictitious name or previous name; (ix) the holder of a perfected
"purchase money security interest" as such term is defined in
Section 9-107 of the Connecticut UCC; (x) another secured party
with a perfected security interest in other property of the
Company to the extent the Pool Receivables are proceeds of such
other creditor's collateral; (xi) any person who has entered into
a subordination or intercreditor agreement with the Lender;
(xii) any claim for wages, salary or other compensation; (xiii) a
purchaser of accounts purchased as part of the sale of the
business out of which they arose; (xiv) an assignment of accounts
for purposes of collection only or a transfer of a single
account; (xv) any claim arising out of tort or any surety who is
subrogated to the rights of the Company; or (xvi) the security
interest of a creditor who filed a financing statement based on a
prior or incorrect location of the chief executive office of the
Company to the extent such other financing statement would be
effective under Section 9-401(2) or (3) of the Connecticut UCC;
(xvii) a security interest or lien existing by reason of a
security interest in or lien upon such collateral or upon any
goods the sale or disposition of which has given rise to such
collateral, which security interest or lien was created by or
levied against any prior owner of any interest in such collateral
or goods; and
(m) we have assumed that (i) all relevant financing
statements in which the Company is named as debtor have been
properly filed(except for the Financing Statements), indexed and
recorded in the Filing Office and are identified in the Search
Report and (ii) no financing statements naming the Company as
debtor were filed in the filing Office between the effective date
of the Search Report and the date of the filing of the Financing
Statement in the Filing Office.
This opinion is being furnished only to you and is solely
for your benefit and is not to be used, quoted, relied upon or
otherwise referred to by any other Person (except that a copy of
this letter may be delivered to Standard & Poor's and Moody's
Investors Service, Inc. in connection with the rating of
Commercial Paper Notes) or for any other purposes without our
prior written consent, except that an assignee of the Lender
which becomes a party to the Receivables Financing Agreement may
rely on this opinion as if it were addressed to such assignee and
delivered on the date hereof.
Very truly yours,
TYLER COOPER & ALCORN
By /s/ Joseph C. Lee
-------------------
Joseph C. Lee,
A Partner
==============================================================
SCHEDULE I
Market Street Capital Corp.
c/o AMACAR Group, L.L.C.
6707-D Fairview Road
Charlotte, North Carolina 28210
PNC Bank, National Association
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
United States National Bank of Oregon
555 S.W. Oak Street
Suite 400
Portland, Oregon 97204
========================= END DOCUMENT ============================
Recording Requested By and
When Recorded Mail To:
Oppenheimer Wolff & Donnelly
- - -----------------------------
45 South Seventh Street
- - -----------------------------
Plaza VII, Suite 3400
- - -----------------------------
Minneapolis, Minnesota 55402
- - -----------------------------
Attn: Duane L. Paulson
- - -----------------------------
GECA Loan No. 2331
- - ---------------------------------------------------------------------------
MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,
SECURITY AGREEMENT
AND FIXTURE FINANCING STATEMENT
THIS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, SECURITY
AGREEMENT AND FIXTURE FINANCING STATEMENT (this "Mortgage") is
made this 20th day of November, 1995, between ANNTAYLOR
DISTRIBUTION SERVICES, INC., a Delaware corporation as Mortgagor,
whose address is 414 Chapel Street, New Haven, Connecticut 06511;
and GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY, a Delaware
corporation, as Mortgagee, whose address is P.O. Box 490,
Seattle, King County, Washington 98111-0490.
Mortgagee is making a loan (the "Loan") in the principal
amount of Seven Million and No/100 Dollars ($7,000,000.00) to be
secured by that certain real property (the "Realty") described in
Exhibit A attached hereto. The Loan, if not sooner paid, is due
and payable in full on November 30, 2002. The terms of the Loan
provide for: (i) monthly payments of principal and interest; and
(ii) adjustment in the amount of installment payments to a change
in the amortization period after the second loan year.
In consideration of the Loan and the sum of One and No/100
Dollars ($1.00) in hand paid by the Mortgagee, the receipt of
which is hereby acknowledged, Mortgagor does hereby MORTGAGE,
GRANT, BARGAIN, SELL, AND CONVEY, unto Mortgagee, its successors
and assigns, forever, AND GRANT TO THE MORTGAGEE A SECURITY
INTEREST IN, all of Mortgagor's estate, rights, title, claim,
interest and demand, either in law or in equity, of, in and to
the following property, whether the same be now owned or
hereafter acquired (the "Property"):
(a) The Realty and all rights to the land lying in alleys,
streets and roads adjoining or abutting the Realty;
(b) All buildings, improvements and tenements now or
hereafter located on the Realty;
(c) All fixtures now or hereafter attached to the buildings
actually constituting a part of the buildings, improvements and
Realty which are necessary to the functional use of the building
itself, rather than the specific operation of Mortgagor's
business, which fixtures are generally limited to heating,
cooling, air-conditioning, ventilating, refrigerating, plumbing,
generating, power, lighting, fire prevention and extinguishing,
security and access control, boilers, water heaters and furnaces,
and all shrubbery and plants; all of which items shall be deemed
part of the real property and not severable wholly or in part
without material injury to the freehold;
(d) All easements, all access, air and development rights,
all minerals and oil, gas and other hydrocarbon substances, all
royalties, all water, water rights and water stock, and all other
rights, hereditaments, privileges, permits, licenses, franchises
and appurtenances now or hereafter belonging or in any way
appertaining to the Realty;
(e) All present and future contracts and policies of
insurance which insure Realty or any building, structures or
improvements thereon, or any such fixtures against casualties and
theft, and all monies and proceeds and rights thereto which may
be or become payable by virtue of any such insurance contracts or
policies;
(f) All of the rents, revenues, issues, profits and income of
the Property, and all present and future leases and other
agreements for the occupancy or use of all or any part of the
Realty, including without limitation all cash or security
deposits, advance rentals and deposits or payments of similar
nature and all guaranties of tenants' or occupants' performances
under such leases and agreements; SUBJECT, HOWEVER, to the
assignment of rents and other property to Mortgagee herein
contained;
(g) All general intangibles relating to the development or
use of the Property, including without limitation all permits,
licenses and franchises to the extent necessary to the building
itself which is a part of the Property, all names under or by
which the Property may at any time be operated or known, and all
rights to carry on business under any such names or any variant
thereof, and all trademarks, trade names, logos and good will in
any way relating to the Property, excluding, however, the name
"AnnTaylor";
(h) All awards, compensation and settlements in lieu thereof
made as a result of the taking by power of eminent domain of the
whole or any part of the Property, including any awards for
damages sustained to the Property for a temporary taking, change
in grade of streets or taking of access;
(i) All water stock relating to the Property, all shares of
stock or other evidence of ownership of any part of the Property
that is owned by Mortgagor in common with others, and all
documents of membership in any owners' or members' association or
similar group having responsibility for managing or operating any
part of the Property; and
(j) All products and proceeds of all of the foregoing.
TO HAVE AND TO HOLD all of the aforedescribed Property and
all parts, rights, members and appurtenances thereof, unto the
Mortgagee, its successors and assigns, forever.
TO SECURE THE FOLLOWING (collectively the "Secured
Obligations"):
(1) Payment of the sum of Seven Million and No/100 Dollars
($7,000,000.00) with interest thereon, according to the terms and
provisions of a promissory note of even date herewith, payable to
Mortgagee, or order, and made by Mortgagor and AnnTaylor, Inc., a
Delaware corporation, and all modifications, extensions, renewals
and replacements thereof (collectively the "Note");
(2) Payment of all sums advanced to protect the security of
this Mortgage, together with interest thereon as herein provided;
(3) Payment of all other sums which are or which may become
owing under the Loan Documents;
(4) Performance of all of Mortgagor's other obligations under
the Loan Documents; and
(5) Payment of the principal and interest on all other future
loans or advances made by Mortgagee to Mortgagor when the
promissory note evidencing the loan or advance specifically
states that it is secured by this Mortgage, including all
modifications, extensions, renewals, and replacements of any such
future loan or advance, but the maximum principal amount of the
indebtedness is twice the amount of initial principal amount of
the Loan.
As used herein, the term "Loan Documents" means the Note,
this Mortgage, an Assignment of Rents and Leases (the terms of
which shall control in the event of any conflict with the terms
of Article 6 of this Mortgage), any loan agreement and Uniform
Commercial Code Financing Statements executed in connection
herewith, and any other instrument or document evidencing or
securing the Loan or otherwise executed in connection therewith,
together with all modifications, extensions, renewals and
replacements thereof.
MORTGAGOR HEREBY REPRESENTS, WARRANTS, COVENANTS AND AGREES
AS FOLLOWS:
ARTICLE 1
TITLE AND USE
---------------
1.1 Warranty of Title. Mortgagor represents and warrants to
-----------------
Mortgagee that: (a) except as may otherwise be expressly stated
in this Mortgage, Mortgagor has good and marketable title in fee
simple to Realty and is the sole and absolute owner of all other
Property; (b) the Property is free from liens, encumbrances,
exceptions or other charges of any kind whatsoever other than
non-delinquent installments of ad valorem property taxes and
special assessments, the "Permitted Exceptions," if any,
permitted under the policy of mortgagee's title insurance issued
to Mortgagee in connection with this Mortgage and any other
liens, encumbrances, exceptions or charges expressly permitted by
the terms of this Mortgage, and no others, whether superior or
inferior to this Mortgage, will be created or suffered to be
created by Mortgagor during the life of this Mortgage without the
prior written consent of Mortgagee; (c) no default on the part of
Mortgagor or, to the best of Mortgagor's knowledge, any other
person exists under any of the Permitted Exceptions and as
applicable all are in full force and effect and without
modification; (d) Mortgagor will comply with the terms of the
Permitted Exceptions and will not modify the same without the
Mortgagee's written consent; and (e) Mortgagor has the right to
grant, transfer, convey and assign the Property as herein
provided and will forever warrant and defend the Property unto
Mortgagee against all claims and demands of any other person
whomsoever, subject only to said non-delinquent installments of
taxes and assessments and Permitted Exceptions.
1.2 Hazardous Substances.
---------------------
(a) Representations and Warranties. Mortgagor hereby
------------------------------
represents and warrants to Mortgagee that: (i) to the best
of Mortgagor's knowledge, no asbestos has ever been used in
the construction, repair or maintenance of any building,
structure or other improvement now or heretofore located on
the Property; (ii) no Hazardous Substance (as defined below)
is currently being generated, manufactured, refined,
transported, treated, stored, handled or disposed of,
transferred, produced or processed on, under or in the
Property, except in compliance with all applicable federal,
state and local statutes, ordinances, rules, regulations and
other laws; (iii) neither Mortgagor nor, to the best of
Mortgagor's knowledge, any other person or entity has ever
caused or permitted any Hazardous Substance to be generated,
manufactured, refined, transported, treated, stored, handled
or disposed of, transferred, produced or processed on, under
or in the Property, except in compliance with all applicable
federal, state and local statutes, ordinances, rules,
regulations and other laws; (iv) Mortgagor has not received
any notice of, nor is Mortgagor aware of, any actual or
alleged violation with respect to the Property of any
federal, state or local statute, ordinance, rule, regulation
or other law pertaining to Hazardous Substances; and
(v) neither Mortgagor nor the Property is subject to any
governmental or judicial claim, order, judgment or lien with
respect to the clean-up of Hazardous Substances at or with
respect to the Property. Mortgagor further represents and
warrants to Mortgagee that the foregoing representations and
warranties contained in this paragraph 1.2(a) are made after
and are based upon inspection of the Property by Mortgagor
and a review of the Phase I Environmental Site Assessment
Report dated October 27, 1995, prepared by ATEC Associates,
Inc.
(b) Definition. As used herein, the term "Hazardous
----------
Substance" means any hazardous, toxic or dangerous substance,
waste or material which is or becomes regulated under any
federal, state or local statute, ordinance, rule, regulation
or other law now or hereafter in effect pertaining to
environmental protection, contamination or clean up,
including without limitation any substance, waste or material
which now or hereafter is (i) designated as a "hazardous
substance" under or pursuant to the Federal Water Pollution
Control Act (33 U.S.C. 1251 et seq.), (ii) defined as a
------
"hazardous waste" under or pursuant to the Resource
Conservation and Recovery Act (42 U.S.C. 6901 et seq.), or
-------
(iii) defined as a "hazardous substance" in the Comprehensive
Environmental Response, Compensation and Liability Act (42
U.S.C. 9601 et seq.).
------
1.3 Warranty of Regarding other Debt. Mortgagor represents
---------------------------------
and warrants to Mortgagee that the entering into of the Loan and
granting this Mortgage on the Property does not violate any
covenants or restrictions in any debt instruments or agreements
with or obligations to any other lenders.
ARTICLE 2
MORTGAGOR'S COVENANTS
---------------------
2.1 Payment and Performance of Secured Obligations.
----------------------------------------------------
Mortgagor will pay when due all sums which are now or which may
become owing on the Note, and will pay and perform all other
Secured Obligations, in accordance with their terms.
2.2 Payment of Taxes, Utilities, Liens and Charges.
-----------------------------------------------
(a) Taxes and Assessments. Except as the same may
-----------------------
otherwise be paid under Article 3 relating to reserves,
Mortgagor will pay when due directly to the payee thereof all
taxes and assessments (including without limitation
non-governmental levies or assessments such as maintenance
charges, owner association dues or charges, or fees, levies
or charges resulting from covenants, conditions or
restrictions) levied, assessed or charged against or with
respect to the Property or this Mortgage. Upon request,
Mortgagor shall promptly furnish to Mortgagee all notices of
amounts due under this subparagraph and all receipts
evidencing such payments. However, Mortgagor may contest any
such taxes or assessments by appropriate proceedings duly
instituted and diligently prosecuted at Mortgagor's expense.
Mortgagor shall not be obligated to pay such taxes or
assessments while such contest is pending if the Property is
not thereby subjected to imminent loss or forfeiture and, if
Mortgagor has not provided evidence that it has deposited the
entire amount assessed with the applicable governmental
authority, it deposits the entire amount together with
projected penalties and interest with the Mortgagee or
provides other security satisfactory to the Mortgagee in its
sole discretion.
(b) Utilities. Mortgagor will pay when due all utility
---------
charges and assessments for services furnished the Property.
(c) Liens and Charges. Mortgagor will pay when due the
-----------------
claims of all persons supplying labor or materials to or in
connection with the Property. Without waiving the
restrictions of paragraph 4.1, Mortgagor will promptly
discharge any lien or other charge, whether superior or
inferior to this Mortgage, which may be claimed against the
Property.
2.3 Insurance.
----------
(a) Coverages Required. Mortgagor will keep the
-------------------
following insurance coverages in effect with respect to the
Property:
(i) Insurance against loss by fire and the
hazards now or hereafter embraced by the standard
"extended coverage" form of insurance, in an amount equal
at all times to the full insurable value of the
improvements then located on the Property. All such
insurance coverage shall contain a "replacement cost
endorsement" satisfactory to Mortgagee.
(ii) Flood risk insurance in the maximum
amount of insurance coverage available or the full
replacement cost of the buildings on the Realty,
whichever is less, if the Realty is now or hereafter
designated as being located within a special flood hazard
area under the Flood Disaster Protection Act of 1973 and
if flood insurance is available.
(iii) Loss of rental value insurance and/or
business interruption insurance, as follows: If all or
any portion of the Property is rented or leased, loss of
rental value insurance in an amount equal to six (6)
months' aggregate gross rents from the Property as is so
occupied. If all or any portion of the Property is
occupied by Mortgagor, business interruption insurance in
an amount equal to six (6) months' net income from such
portion of the Property as is so occupied. The amount(s)
of such coverage(s) shall be subject to adjustment, from
time to time at Mortgagee's request, to reflect changes
in the rental and/or income levels during the term of the
Loan.
(iv) Comprehensive public liability insurance
against claims for bodily injury, death or property
damage occurring on, in or about the Property (including
coverage for elevators and escalators, if any, on the
Property), with the coverage being in an amount of not
less than One Million and No/100 Dollars ($1,000,000.00)
combined single-limit liability coverage, or in such
greater amount(s) as Mortgagee may reasonably require.
(v) Boiler and machinery insurance covering
pressure vessels, air tanks, boilers, machinery, pressure
piping, heating, air conditioning and elevator and
escalator equipment, provided the improvements contain
equipment of such nature, and insurance against loss of
occupancy or use arising from breakdown of any of such
items, in such amounts as Mortgagee may reasonably
require.
(vi) Building ordinance coverage endorsement
including contingent liability from operation of building
laws, demolition cost and increased cost of construction,
if, at any time, the Property constitutes a nonconforming
but permitted use under applicable zoning or other
governmental laws.
(vii) Insurance against such similar or other
hazards, casualties, liabilities and contingencies, in
such forms and amounts, as Mortgagee may from time to
time reasonably require.
(viii) To the extent Insurance required as
referred to hereinabove covers the Mortgagor's inventory
and other property not identified as a part of the
Property in this Mortgage, then the proceeds from such
insurance or such other property shall not be payable to
Mortgagee under this Mortgage or the other documents
executed in connection with this Loan.
(b) Policies. Each insurance policy will be in form
--------
acceptable to Mortgagee, and will be issued by a company
acceptable to Mortgagee, which company shall, among other
things, be (i) duly authorized to provide such insurance in
the state in which the Property is located, and (ii) rated
"A" or better with a size rating of "V" or larger by A.M.
Best Company in its most recent publication of ratings
(provided, however, that if A.M. Best Company changes its
designations, the basis for its ratings or ceases to provide
ratings, Mortgagee shall be entitled to select replacement
ratings in the exercise of its reasonable business judgment).
Each hazard insurance policy will include a Form 438BFU or
equivalent mortgagee endorsement in favor of and in form
acceptable to Mortgagee, and each liability insurance policy
will name Mortgagee as an additional insured. All required
policies will provide for at least thirty (30) days' written
notice to Mortgagee prior to the effective date of any
cancellation or material amendment, which term shall include
any reduction in the scope or limits of coverage. Mortgagor
shall furnish to Mortgagee a certificate and evidence of
insurance setting forth the coverage, the limits of
liability, the carrier, the policy number and the expiration
date, and upon the written request of Mortgagee, a copy of
the corresponding policies or sections requested by it. As
security for the Secured Obligations, Mortgagor hereby
assigns to Mortgagee its interest in the insurance policies
but only to the extent they relate to the Property, together
with all proceeds thereof, and to the extent applicable to
blanket policies, rights thereto and all unearned premiums
returnable upon cancellation.
(c) Payment; Renewals. Mortgagor shall promptly furnish
-----------------
to Mortgagee all renewal notices relating to insurance
policies. Except as the same may otherwise be paid under
Article 3 relating to reserves, Mortgagor will pay all
premiums on insurance policies directly to the carrier. At
least thirty (30) days prior to the expiration date of each
such policy, Mortgagor shall furnish to Mortgagee a renewal
policy or certificate and evidence of insurance in a form
acceptable to Mortgagee, together with evidence that the
renewal premium has been paid. However, in the event
Mortgagor provides to Mortgagee an acceptable certification
that coverage will continue for a period of at least thirty
(30) days after written notice of the insurer's intent to
cancel or materially amend such insurance coverage even
though the current terms of the policy or policies may
expire, Mortgagee will accept, in lieu of the policy, or
certificate and evidence, at least fourteen (14) days prior
to the expiration date of each such policy, evidence that it
is processing the renewal of (or obtaining of new) policies
in a form acceptable to Mortgagee in accordance with
Mortgagor's customary practices and Mortgagor shall, upon
Mortgagee's request, furnish evidence that binds the coverage
notwithstanding that such renewal (or new) premium has not
then been paid. Within ninety (90) days following the
expiration date, Mortgagor shall furnish Mortgagee with
evidence that the renewal (or new) premium has been paid.
(d) Insurance Proceeds.
------------------
(i) In the event of any loss, Mortgagor will give
prompt written notice thereof to the insurance carrier
and Mortgagee. Mortgagor hereby authorizes Mortgagee as
Mortgagor's attorney-in-fact to make proof of loss, to
adjust and compromise any claim, to commence, appear in
and prosecute, in Mortgagee's or Mortgagor's name, any
action relating to any claim, and to collect and receive
insurance proceeds; provided, however, that Mortgagee
shall have no obligation to do so. If an event of
default is not continuing, the preceding sentence shall
apply except that the Mortgagee shall not be entitled to
be the Mortgagor's attorney-in-fact and the Mortgagor
shall be entitled to jointly participate with the
Mortgagee in adjusting any loss and appearing in any
proceeding.
(ii) Except as may otherwise be required by
applicable law, Mortgagee shall apply any insurance
proceeds received hereunder first to the payment of the
costs and expenses incurred in the collection of the
proceeds and shall then apply the balance (the "Net
Proceeds"), in its absolute discretion and without regard
to the adequacy of its security, to:
(A) The payment of indebtedness secured
hereby, whether then due and payable or not. Any
such application of proceeds to principal on the Note
shall be without the imposition of any prepayment fee
otherwise payable under the Note, but shall not
extend or postpone the due dates of the installment
payments under the Note, or change the amounts
thereof; or
(B) The reimbursement of Mortgagor, under
Mortgagee's prescribed disbursement control
procedures, for the cost of restoration or repair of
the Property. Mortgagee may, at its option,
condition the reimbursement on Mortgagee's approval
of the plans and specifications of the
reconstruction, contractor's cost estimates,
construction budget and schedule, architects'
certificates, waivers of liens, sworn statements of
mechanics and materialmen, and such other evidence of
costs, percentage completion of construction,
application of payments and satisfaction of liens as
Mortgagee may reasonably require.
(iii) Notwithstanding the provisions of
paragraph 2.3(d)(ii) above, Mortgagee agrees that the Net
Proceeds from a loss described in this paragraph 2.3(d)
will be made available under clause (ii)(B) above to
reimburse Mortgagor for the cost of restoration or repair
of the Property, provided that each of the following
conditions is satisfied:
(A) No event of default has occurred and
is continuing at the time the proceeds are received;
(B) The Net Proceeds are less than the
indebtedness then secured by this Mortgage;
(C) The proceeds are received more than
one (1) year prior to the maturity date of the Note;
(D) Mortgagor gives Mortgagee written
notice within thirty (30) days after the proceeds are
received that it intends to restore or repair the
Property and requests that the Net Proceeds be made
available therefor, and Mortgagor thereafter promptly
commences the restoration or repair and completes the
same with reasonable diligence in accordance with
plans and specifications approved by Mortgagee, which
approval shall not be unreasonably withheld;
(E) The Net Proceeds are sufficient, in
Mortgagee's reasonable business judgment, to restore
or repair the Property substantially to its condition
prior to the damage or destruction or, if in
Mortgagee's reasonable business judgment they are
not, Mortgagor deposits with Mortgagee funds in an
amount equal to the deficiency, which funds Mortgagee
may, at its option, require be expended prior to use
of the Net Proceeds; and
(F) Mortgagee receives evidence
reasonably satisfactory to Mortgagee that, upon
completion of the restoration or repair, the Property
can be operated substantially as it was before and
will produce substantially as much income from tenant
leases as it did before the damage or destruction.
(iv) Except to the extent, if any, that
insurance proceeds are applied to payment of the Secured
Obligations, Mortgagor's obligation to restore, repair
and maintain the Property as provided in paragraph 2.4
shall not be excused, regardless of whether insurance
proceeds are available or insufficient.
(e) Transfer of Title. If the Property is sold pursuant
-----------------
to Article 8 or if Mortgagee otherwise acquires title to the
Property, Mortgagee shall have all of the right, title and
interest of Mortgagor in and to any insurance policies and
unearned premiums thereon and in and to the proceeds
resulting from any damage to the Property prior to such sale
or acquisition.
2.4 Preservation and Maintenance of Property; Right of Entry.
--------------------------------------------------------
(a) Preservation and Maintenance. Mortgagor (i) will not
-----------------------------
commit or suffer any waste or permit any impairment or
deterioration of the Property, (ii) will not abandon the
Property, (iii) will restore or repair promptly and in a good
and workmanlike manner all or any part of the Property to the
equivalent of its original condition, or such other condition
as Mortgagee may approve in writing, in the event of any
damage, injury or loss thereto, whether or not insurance
proceeds are available to cover in whole or in part the costs
of such restoration or repair, (iv) will keep the Property,
including improvements, fixtures, equipment, machinery and
appliances thereon, in good condition and repair and shall
replace fixtures, equipment, machinery and appliances of the
Property when necessary to keep such items in good condition
and repair, and (v) will generally operate and maintain the
Property in a commercially reasonable manner.
(b) Alterations. No building or other improvement on the
-----------
Realty will be structurally altered, removed or demolished,
in whole or in part, without Mortgagee's prior written
consent, nor will any fixture or chattel covered by this
Mortgage and adapted to the use and enjoyment of the Property
be removed at any time without like consent unless actually
replaced by an article of equal suitability, owned by
Mortgagor, free and clear of any lien or security interest
except such as may be approved in writing by Mortgagee.
(c) Right of Entry. Mortgagee is hereby authorized to
--------------
enter the Property, including the interior of any structures,
at reasonable times and after reasonable notice, for the
purpose of inspecting the Property and for the purpose of
performing any of the acts it is authorized to perform
hereunder.
2.5 Hazardous Substances.
--------------------
(a) No Future Hazardous Substances. Mortgagor will not
------------------------------
cause or permit the Property to be used to generate,
manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce or process any Hazardous
Substance, except in compliance with all applicable federal,
state and local statutes, ordinances, rules, regulations and
other laws, nor shall Mortgagor cause or permit, as a result
of any intentional or unintentional act or omission on the
part of Mortgagor or any tenant, subtenant or other user or
occupier of the Property, a releasing, spilling, leaking,
pumping, pouring, emitting, emptying or dumping of any
Hazardous Substance onto the Property or any other property
or into any waters, except in compliance with all such laws.
(b) Notification; Clean Up. Mortgagor will immediately
----------------------
notify Mortgagee should Mortgagor (i) become aware of any
Hazardous Substance or other environmental problem or
liability with respect to the Property, (ii) receive any
notice of, or become aware of, any actual or alleged
violation with respect to the Property of any federal, state
or local statute, ordinance, rule, regulation or other law
pertaining to Hazardous Substances, or (iii) become aware of
any lien or action with respect to any of the foregoing.
Mortgagor will, at its sole expense, take all actions as may
be necessary or advisable for the clean-up of Hazardous
Substances on or with respect to the Property, including
without limitation all removal, containment and remedial
actions in accordance with all applicable laws and in all
events in a manner satisfactory to Mortgagee, and shall
further pay or cause to be paid all clean-up, administrative
and enforcement costs of governmental agencies with respect
to Hazardous Substances on or with respect to the Property if
obligated to do so by contract or by law.
(c) Verification. For the purposes of inspecting the
------------
Property to ascertain the accuracy of all representations and
warranties in this Mortgage relating to Hazardous Substances,
and the observance of all covenants contained in this
paragraph 2.5 (i) Mortgagee is hereby authorized to enter and
inspect the Property, including the interior of any
structures, at reasonable times and after reasonable notice,
and (ii) if and at any time Hazardous Substances are being
handled on the Property, Mortgagor shall furnish Mortgagee
with such information and documents as may be reasonably
requested by Mortgagee to confirm that such Hazardous
Substances, are being handled in compliance with all
applicable federal, state and local statutes, ordinances,
rules, regulations and other laws. Mortgagor shall reimburse
Mortgagee upon demand for all costs and expenses, including
without limitation attorneys' fees, incurred by Mortgagee in
connection with any such entry and inspection and the
obtaining of such information and documents.
2.6 Parking. If any part of the automobile parking areas
-------
included within the Property is taken by condemnation, or before
said areas are otherwise reduced, Mortgagor will take all actions
as are necessary to provide parking facilities in kind, size and
location to comply with all governmental zoning and other
regulations and all leases. Before making any contract for
substitute parking facilities, Mortgagor will furnish to
Mortgagee satisfactory assurance of completion thereof free of
liens and in conformity with all government zoning and other
regulations.
2.7 Use of Property. Mortgagor will comply with all laws,
---------------
ordinances, regulations and requirements of any governmental
body, and all other covenants, conditions and restrictions,
applicable to the Property, and pay all fees and charges in
connection therewith. Unless required by applicable law or
unless Mortgagee has otherwise agreed in writing, Mortgagor will
not allow changes in the use for which all or any part of the
Property was intended at the time this Mortgage was executed.
Mortgagor will not initiate or acquiesce in a change in the
zoning classification of the Property without Mortgagee's prior
written consent.
2.8 Condemnation.
-------------
(a) Proceedings. Mortgagor will promptly notify
-----------
Mortgagee of any action or proceeding relating to any
condemnation or other taking (including without limitation
change of grade), whether direct or indirect, of the Property
or part thereof or interest therein, and Mortgagor will
appear in and prosecute any such action or proceeding unless
otherwise directed by Mortgagee in writing. Mortgagor
authorizes Mortgagee, at Mortgagee's option, as
attorney-in-fact for Mortgagor, to commence, appear in and
prosecute, in Mortgagee's or Mortgagor's name, any action or
proceeding relating to any such condemnation or other taking,
and to settle or compromise any claim in connection with such
condemnation or other taking; provided, however, that
Mortgagee shall have no obligation to do so. All awards,
payments, damages, direct, consequential and otherwise,
claims, and proceeds thereof, in connection with any such
condemnation or other taking, or for conveyances in lieu of
condemnation, are hereby assigned to Mortgagee, and all
proceeds of any such awards, payments, damages or claims
shall be paid to Mortgagee.
(b) Application of Proceeds. Mortgagee shall apply any
-----------------------
such proceeds in the manner and upon the terms and conditions
set forth in paragraph 2.3(d)(ii) relating to the application
of insurance proceeds, without regard to the provisions of
paragraph 2.3(d)(iii).
2.9 Protection of Mortgagee's Security. Mortgagor will give
----------------------------------
notice to Mortgagee of and will, at its expense, appear in and
defend any action or proceeding that might affect the Property or
title thereto or the interests of Mortgagee therein or the rights
or remedies of Mortgagee. If any such action or proceeding is
commenced or if Mortgagee is made a party to any such action or
proceeding by reason of this Mortgage, or if Mortgagor fails to
perform any obligation on its part to be performed hereunder,
then Mortgagee, in its own discretion, may make any appearances,
disburse any sums, make any entries upon the Property and take
any actions as may be necessary or desirable to protect or
enforce the security of this Mortgage, to remedy Mortgagor's
failure to perform its obligations (without, however, waiving any
default by Mortgagor) or otherwise to protect Mortgagee's
interests. Mortgagor agrees to pay all loss, damage, costs and
expenses, including reasonable attorneys' fees, of Mortgagee thus
incurred. This paragraph shall not be construed to require
Mortgagee to incur any expenses, make any appearances or take any
actions.
2.10 Reimbursement of Mortgagee's Expenses. All amounts
-------------------------------------
disbursed by Mortgagee pursuant to paragraph 2.9 or any other
provision of this Mortgage, with interest thereon, shall be
additional indebtedness of Mortgagor secured by this Mortgage.
All such amounts shall be immediately due and payable and shall
bear interest from the date of disbursement at the interest rate
in effect on the Note from time to time, or at the maximum rate
which may be collected from Mortgagor on such amounts by the
payee thereof under applicable law if that is less.
2.11 Books and Records; Financial Statements. Mortgagor
---------------------------------------
will keep and maintain at Mortgagor's address stated above, or
such other place as Mortgagee may approve in writing, books of
accounts and records adequate to reflect correctly the results of
the operation of the Property and copies of all written
contracts, leases and other instruments which affect the
Property. Such books, records, contracts, leases and other
instruments shall be subject to examination, inspection and
copying at any reasonable time by Mortgagee. Mortgagor will
furnish to Mortgagee, within twenty (20) days after Mortgagee's
request therefor, the following documents, each certified to
Mortgagee by Mortgagor as being true, correct and complete:
(a) a copy of all leases and other agreements for the occupancy
or use of all or any part of the Property, (b) a rent roll for
the Property, showing the name of each tenant, and for each
tenant, the suite occupied, the number of square feet rented, the
lease expiration date, the rent payable, the date through which
rent has been paid, the amount of any security deposit and the
number and term of any renewal options, (c) a copy of the most
recent real and personal property tax statements for the
Property, (d) a copy of the most recent statements for the
insurance coverages maintained under paragraph 2.3(a) of this
Mortgage, and (e) a statement of income and expenses of the
Property for the most recently ended fiscal year of Mortgagor.
In addition, Mortgagor and any general partner therein and any
guarantor of the Loan will furnish to Mortgagee, within
twenty (20) days after Mortgagee's request therefor, a complete
and current financial statement, in reasonable detail and
certified as correct by Mortgagor or such partner or guarantor.
ARTICLE 3
RESERVES
--------
3.1 Deposits. Mortgagor will, at the time of making each
---------
installment payment under the Note, deposit with Mortgagee a sum,
as estimated by Mortgagee, equal to (a) the rents under any
ground lease, (b) the taxes and special assessments next due on
the Property, and (c) the premiums that will next become due on
insurance policies as may be required under this Mortgage, less
all sums already deposited therefor, divided by the number of
months to elapse before two (2) months prior to the date when
such rents, taxes, special assessments and premiums will become
delinquent. Mortgagee may require Mortgagor to deposit with
Mortgagee, in advance, such other sums for other taxes,
assessments, premiums, charges and impositions in connection with
Mortgagor or the Property as Mortgagee reasonably deems necessary
to protect Mortgagee's interests (herein "Other Impositions").
Such sums for Other Impositions shall be deposited in a lump sum
or in periodic installments, at Mortgagee's option. If requested
by Mortgagee, Mortgagor will promptly deliver to Mortgagee all
bills and notices with respect to any rents, taxes, assessments,
premiums and Other Impositions. All sums deposited with
Mortgagee under this paragraph 3.1 are hereby pledged as
additional security for the Secured Obligations. The
requirements of this paragraph are subject to any conditional
waiver executed by Mortgagee, limited to the time when ownership
of the Property is as stated in such waiver.
3.2 Application of Deposits. All such deposited sums shall
-----------------------
be held by Mortgagee and applied in such order as Mortgagee
elects to pay such rents, taxes, assessments, premiums and Other
Impositions or, in the event of default hereunder, may be applied
in whole or in part, to indebtedness secured hereby. The
arrangement provided for in this Article 3 is solely for the
added protection of Mortgagee and entails no responsibility on
Mortgagee's part beyond the allowing of due credit, without
interest, for the sums actually received by it. Upon any
assignment of this Mortgage by Mortgagee, any funds on hand shall
be turned over to the assignee and any responsibility of
Mortgagee with respect thereto shall terminate. Each transfer of
the Property shall automatically transfer to the grantee all
rights of Mortgagor with respect to any funds accumulated
hereunder. Upon payment in full of the Secured Obligations,
Mortgagee shall promptly refund to Mortgagor the remaining
balance of any deposits then held by Mortgagee.
3.3 Adjustments to Deposits. If the total deposits held by
-----------------------
Mortgagee exceed the amount deemed necessary by Mortgagee to
provide for the payment of such rents, taxes, assessments,
premiums and Other Impositions as the same fall due, then such
excess shall, provided no event of default then exists hereunder,
be credited by Mortgagee on the next due installment or
installments of such deposits. If at any time the total deposits
held by Mortgagee is less than the amount deemed necessary by
Mortgagee to provide for the payment thereof as the same fall
due, then Mortgagor will deposit the deficiency with Mortgagee
within thirty (30) days after written notice to Mortgagor stating
the amount of the deficiency.
ARTICLE 4
RESTRICTIONS ON TRANSFER OR ENCUMBRANCE
---------------------------------------
4.1 Restrictions on Transfer or Encumbrance of the Property.
-------------------------------------------------------
If the Property or any part thereof or interest therein shall be
encumbered, sold (by contract or otherwise), conveyed, or
otherwise transferred by Mortgagor, or if without Mortgagee's
prior written consent there shall be any change in the ownership
of any stock interest in a corporate Mortgagor, in the ownership
of any general partnership interest in any general or limited
partnership Mortgagor or in the ownership of any beneficial
interest in any other Mortgagor which is not a natural person or
persons, or if without Mortgagee's prior written consent there
shall be any change in the ownership of any such stock, general
partnership or other beneficial interest in any corporation,
partnership or other entity, organization or association directly
or indirectly owning an interest in Mortgagor, then the same
shall be deemed to be a "Transfer" for purposes of this
paragraph. In the event of such a Transfer, Mortgagee may, at
its sole option, declare such Transfer to constitute an event of
default under this Mortgage and invoke any remedy or remedies
provided for in paragraph 8.1 hereof or may, at its sole option,
consent to such Transfer and increase the interest rate on the
indebtedness secured hereby. Neither of the foregoing options
shall apply, however, in the case of a Transfer (a) by devise or
descent or operation of law upon the death of an individual
Mortgagor, a partner of a partnership Mortgagor, a shareholder of
a corporate Mortgagor, the owner of a beneficial interest of any
other Mortgagor which is not a natural person, or the owner of
any stock, partnership or other beneficial interest in any
corporation, partnership or other entity, organization or
association directly or indirectly owning an interest in
Mortgagor, provided that following the Transfer the person(s)
and/or firm(s) having effective managerial control of the
Property are reasonably satisfactory to Mortgagee, (b) a Transfer
of the Property or any portion thereof to AnnTaylor, Inc. or any
of its subsidiaries, (the "Permitted Transferees"), so long as
the transfer is subject to this Mortgage in all respects and the
Permitted Transferee has executed and delivered to the Mortgagee
such documents as are reasonably requested to give effect
thereto, or (c) transfers of shares of stock in AnnTaylor Stores
Corporation so long as its stock is publicly traded on a
recognized stock exchange.
ARTICLE 5
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT
------------------------------------------
5.1 Grant to Mortgagee. This Mortgage constitutes a security
-------------------
agreement pursuant to the Uniform Commercial Code with respect to
all Property constituting "Property" as described herein and
Mortgagor hereby grants Mortgagee a security interest in all such
property as additional security for the Secured Obligations.
Notwithstanding the foregoing, the Mortgagee agrees that it has
no security interest, lien or claim in, on or to the inventory,
personal property, computer equipment, materials-handling
equipment, or similar personal property or fixtures which may now
or in the future be located on the Realty. If requested by
Mortgagor, Mortgagee agrees to execute an instrument in form and
substance reasonably satisfactory to Mortgagee stating that such
items are free from any lien, claim or security interest of
Mortgagee, certifying that Mortgagor is not in default, (if it is
not) and consenting to such transaction conditioned upon
Mortgagee having no responsibility for such property and the
agreement of the secured party that, in the event Mortgagee takes
possession of the Property through exercise of its remedies as a
result of a deed in lieu of foreclosure, it will remove such
property upon Mortgagee's request without damaging the Property,
within a reasonable time after Mortgagee's request or such
property shall be deemed abandoned by the secured party;
provided, however, nothing herein shall be construed to require
any consent from Mortgagee for such transaction or for the
alteration or replacement of any such items.
5.2 Mortgagee's Rights and Remedies. With respect to
----------------------------------
Property subject to the foregoing security interest, Mortgagee
has all of the rights and remedies (i) of a secured party under
the Uniform Commercial Code, (ii) provided herein, including
without limitation the right to cause such Property to be sold
under the power of sale granted by this Mortgage, and
(iii) provided by law. In exercising its remedies, Mortgagee may
proceed against the items of real property and any items of
personal property separately or together and in any order
whatsoever, without in any way affecting the availability of
Mortgagee's remedies. Upon demand by Mortgagee following an
event of default hereunder, Mortgagor will assemble any items of
personal property and make them available to Mortgagee at the
Property, a place which is hereby deemed to be reasonably
convenient to both parties. Mortgagee shall give Mortgagor at
least ten (10) days' prior written notice of the time and place
of any public sale or other disposition of such Property or of
the time of or after which any private sale or any other intended
disposition is to be made. Any person permitted by law to
purchase at any such sale may do so. Such Property may be sold
at any one or more public or private sales as permitted by
applicable law. All expenses incurred in realizing on such
Property shall be borne by Mortgagor.
5.3 Fixture Filing. THIS MORTGAGE SHALL BE EFFECTIVE AS A
---------------
FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL
GOODS WHICH ARE OR ARE TO BECOME FIXTURES RELATED TO THE
PROPERTY. FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE THE
FOLLOWING INFORMATION IS FURNISHED:
(a) The name and address of the record owner of the real
estate described in this instrument is:
AnnTaylor Distribution Services, Inc.
414 Chapel Street
New Haven, Connecticut 06511
(b) the name and address of the Debtor is:
AnnTaylor Distribution Services, Inc.
414 Chapel Street
New Haven, Connecticut 06511
(c) the name and address of the Secured Party is:
General Electric Capital Assurance Company
P. O. Box 490
Seattle, Washington 98111-0490
(d) Information concerning the security interest
evidenced by this instrument may be obtained from the Secured
Party at its address above.
(e) This document covers goods which are or are to become
fixtures.
(f) Proceeds and products of collateral are also covered.
ARTICLE 6
ASSIGNMENT OF RENTS AND LEASES; LEASES OF PROPERTY;
---------------------------------------------------
APPOINTMENT OF RECEIVER; MORTGAGEE IN POSSESSION
------------------------------------------------
6.1 Mortgagor to Comply with Leases. Mortgagor will, at its
-------------------------------
own cost and expense:
(a) Faithfully abide by, perform and discharge each and
every obligation, covenant and agreement under any leases or
other agreements for the occupancy or use of the Property
(collectively "Leases") to be performed by the landlord
thereunder;
(b) Enforce or secure the performance of each and every
material obligation, covenant, condition and agreement of
said Leases by the tenants thereunder to be performed;
(c) Not borrow against, pledge or further assign any
rentals due under said Leases (which shall not prohibit the
transfers referred to in subparagraph (b) of paragraph 4.1
above);
(d) Not permit the prepayment of any rents due under any
of the Leases for more than one month in advance nor for more
than the next accruing installment of rents, nor anticipate,
discount, compromise, forgive or waive any such rents;
(e) Not waive, excuse, condone or in any manner release
or discharge any tenants of or from the obligations,
covenants, conditions and agreements by said tenants to be
performed under the Leases;
(f) Not permit any tenant to assign or sublet its
interest in any of the Leases unless required to do so by the
terms of the Lease and then only if such assignment does not
work to relieve the tenant of any liability for payment of
and performance of its obligations under such Lease;
(g) Not terminate any Lease or accept a surrender thereof
or a discharge of the tenant providing for a term (assuming
that all renewal options, if any, are exercised) of more than
five (5) years nor shall Mortgagor terminate or accept a
surrender in any single twelve (12) month period more than
twenty-five percent (25%) of the aggregate total net rentable
area without the written consent of the Mortgagee;
(h) Not consent to a subordination of the interest of any
tenant to any party other than Mortgagee and then only if
specifically consented to by the Mortgagee; and
(i) Not amend or modify any Lease or alter the
obligations of the parties thereunder, excepting in the
ordinary and prudent course of business with due regard for
the security afforded the Mortgagee by the Lease, and will
not, without the Mortgagee's written consent, enter into,
execute, modify, or extend any Lease now existing or
hereafter made providing for a term (assuming that all
renewal options, if any, are exercised) of more than five (5)
years unless the leased premises is less than twenty-five
percent (25%) of the net rentable area of the building
improvements at the Property.
6.2 Mortgagee's Right to Perform under Leases. Should the
-----------------------------------------
Mortgagor fail to perform, comply with or discharge any
obligations of Mortgagor under any lease or should the Mortgagee
become aware of or be notified by any tenant under any lease of a
failure on the part of Mortgagor to so perform, comply with or
discharge its obligations under said lease, Mortgagee may, but
shall not be obligated to, and without further demand upon the
Mortgagor, and without waiving or releasing Mortgagor from any
obligation in this Mortgage contained, remedy such failure, and
the Mortgagor agrees to repay upon demand all sums incurred by
the Mortgagee in remedying any such failure together with
interest at the then rate in effect on the Note. All such sums,
together with interest as aforesaid shall become so much
additional indebtedness secured by this Mortgage, but no such
advance shall be deemed to relieve the Mortgagor from any default
hereunder.
6.3 Assignment of Leases and Rents. The Mortgagor does
--------------------------------
hereby sell, assign and transfer unto Mortgagee all of the
leases, rents, issues, income and profits now due and which may
hereafter become due under or by virtue of the Leases including
those, if any, described on Exhibit B attached hereto, whether
written or verbal, or any agreement for the use or occupancy of
the Property, it being the intention of this Mortgage to
establish an absolute present transfer and assignment of the
Leases and all of the rents, issues, income and profits from the
Property unto the Mortgagee, and not merely the granting of a
security interest, and the Mortgagor does hereby appoint
irrevocably the Mortgagee its true and lawful attorney in its
name and stead, which appointment is coupled with an interest, to
collect all of said rents and profits; provided, Mortgagee grants
the Mortgagor the privilege, revocable, to collect and retain
such rents, income, and profits unless and until an event of
default exists under this Mortgage. Upon an event of default and
whether before or after the institution of proceedings to sell
the Property or foreclose this Mortgage or during any period of
redemption the Mortgagee, and without regard to waste, adequacy
of the security or solvency of the Mortgagor, may revoke the
privilege granted Mortgagor hereunder to collect the rents,
issues, income and profits of the Property, and may, at its
option, without notice:
(a) in person or by agent, with or without taking
possession of or entering the Property, with or without
bringing any action or proceeding, give, or require Mortgagor
to give, notice to any or all tenants under any lease
authorizing and directing the tenant to pay such rents,
issues, income and profits to Mortgagee; collect all of the
rents, issues and profits; enforce the payment thereof and
exercise all of the rights of the landlord under any lease
and all of the rights of Mortgagee hereunder; enter upon,
take possession of, manage and operate said Property, or any
part thereof; cancel, enforce or modify any leases, and fix
or modify rents, and do any acts which the Mortgagee deems
proper to protect the security hereof with or without taking
possession of said Property; or
(b) apply for the appointment of a receiver in accordance
with the statutes and law made and provided for, which
receivership Mortgagor hereby consents to, who shall collect
the rents, profits and all other income of any kind; manage
the Property so as to prevent waste; and execute leases
within or beyond the period of receivership.
The rents, issues, income and profits may be applied, less
costs and expenses of operation, management and collection,
including attorneys fees and the payment of the fees and expenses
of any agent or receiver, to the payment of taxes, assessments,
insurance premiums and expenditures for the management, repair
and upkeep of the Property, to the performance of landlord's
obligations under any Leases and to the Secured Obligations, all
in such order as the Mortgagee may determine. The entering upon
and taking possession of the Property, the collection of such
rents and profits and the application thereof as aforesaid shall
not cure or waive any defaults under this Mortgage nor in any way
operate to prevent the Mortgagee from pursuing any other remedy
which it may now or hereafter have under the terms of this
Mortgage nor shall it in any way be deemed to constitute the
Mortgagee a mortgagee-in-possession. The rights and powers of
the Mortgagee hereunder shall remain in full force and effect
both prior to and after any foreclosure of the Mortgage and any
sale pursuant thereto.
6.4 Leases of the Property. Without the Mortgagee's written
-----------------------
consent, the Mortgagor will not enter into, execute, modify, or
extend any Lease now existing or hereafter made providing a term
(assuming that all renewal options, if any, are exercised) of
more than five (5) years unless the leased premises is less than
twenty-five percent (25%) of the net rentable area of the
building improvements at the Property. Mortgagor shall not
surrender or terminate any Lease now existing or hereafter made
providing a term (assuming that all renewal options, if any, are
exercised) of more than five (5) years nor shall Mortgagor
surrender or terminate in any single twelve-month period more
than twenty-five percent (25%) of the aggregate total net
rentable area without the written consent of the Mortgagee. Each
lease of the Property, at the election of the Mortgagee, will be
either superior or subordinate to the lien of the Mortgage, and
each tenant shall execute an appropriate subordination or
attornment agreement as required by the Mortgagee. Also, to the
extent required by the Mortgagee, each tenant shall execute an
estoppel certificate and acknowledge receipt of a notice of the
assignment of its lease, all satisfactory in form and content to
the Mortgagee.
ARTICLE 7
EVENTS OF DEFAULT
-----------------
7.1 Events of Default. Any one or more of the following is
-------------------
an event of default hereunder:
(a) Failure to make any payment when due under the Note,
this Mortgage or any of the other Loan Documents, followed by
the failure to make such payment within ten (10) days after
written notice thereof given to Mortgagor by Mortgagee;
provided, however, that Mortgagee shall not be obligated to
give Mortgagor written notice prior to exercising its
remedies with respect to such default if Mortgagee had twice
previously given Mortgagor during that calendar year a notice
of default for failure to make a payment of similar type.
(b) Failure to perform any other covenant, agreement or
obligation under the Note, this Mortgage or any of the other
Loan Documents, followed by the failure to cure such default
within thirty (30) days after written notice thereof given to
Mortgagor by Mortgagee (or if such cure cannot be completed
within such thirty (30) day period through the exercise of
diligence, the failure by Mortgagor to commence the required
cure within such thirty (30) day period and thereafter to
continue the cure with diligence and to complete the cure
within ninety (90) days following Mortgagee's notice of
default).
(c) Mortgagor or any trustee of Mortgagor files a
petition in bankruptcy or for an arrangement, reorganization
or any other form of debtor relief; or such a petition is
filed against Mortgagor or any trustee of Mortgagor and the
petition is not dismissed within forty-five (45) days after
filing.
(d) A decree or order is entered for the appointment of a
trustee, receiver or liquidator for Mortgagor or Mortgagor's
property, and such decree or order is not vacated within
forty-five (45) days after the date of entry.
(e) Mortgagor commences any proceeding for dissolution or
liquidation; or any such proceeding is commenced against
Mortgagor and the proceeding is not dismissed within
forty-five (45) days after the date of commencement.
(f) Mortgagor makes an assignment for the benefit of its
creditors, or admits in writing its inability to pay its
debts generally as they become due.
(g) There is an attachment, execution or other judicial
seizure of any portion of Mortgagor's assets and such seizure
is not discharged within ten (10) days.
(h) Any representation or disclosure made to Mortgagee by
Mortgagor or any guarantor of the Loan proves to be
materially false or misleading when made, whether or not that
representation or disclosure is contained herein.
ARTICLE 8
REMEDIES
--------
8.1 Acceleration Upon Default; Additional Remedies. Upon the
-------------------------
occurrence and continuance of an event of default hereunder,
Mortgagee may, at its option and without notice to or demand upon
Mortgagor, take any one or more of the following actions:
(a) Declare any or all indebtedness secured by this
Mortgage to be due and payable immediately.
(b) Bring a court action to enforce the provisions of
this Mortgage or any of the indebtedness or obligations
secured by this Mortgage.
(c) Bring a court action to foreclose this Mortgage.
(d) Foreclose this Mortgage under the power of sale
granted by this Mortgage in any manner permitted by
applicable law.
(e) Exercise any or all of the rights and remedies
provided for herein in the event of default hereunder.
(f) Exercise any other right or remedy available under
law or in equity.
8.2 Right to Foreclose. If an event of default shall occur,
-------------------
the Mortgagee may, either with or without entry or taking
possession, proceed by suit or suits at law or in equity or by
any other appropriate proceedings or remedy to enforce payment of
the Secured Obligations or the performance of any other term
hereof or any other right and the Mortgagor hereby authorizes and
fully empowers the Mortgagee to foreclose this Mortgage and
grants to the Mortgagee full authority to sell the Property at
public auction and convey title to the Property to the purchaser,
either in one parcel or separate lots and parcels, all in
accordance with and in the manner prescribed by law, and out of
the proceeds arising from sale and foreclosure to retain the
principal and interest due on the Note and the Secured
Obligations together with all such sums of money as Mortgagee
shall have expended or advanced pursuant to this Mortgage or
pursuant to statute together with interest thereon at the rate of
interest provided for in the Note and all costs and expenses of
such foreclosure, including lawful attorney's fees, with the
balance, if any, to be paid to the persons entitled thereto by
law. In any such proceeding the Mortgagee may apply all or any
portion of the Secured Obligations to the amount of the purchase
price.
8.3 Application of Proceeds of Foreclosure Sale. The
------------------------------------------------
proceeds of any foreclosure sale of the Property shall be
distributed and applied in the following order of priority unless
otherwise provided by law: (a) to all costs and expenses incident
to the foreclosure proceedings and in all prior efforts to effect
collection of the Secured Obligations, including all such
allowable items as are mentioned in the preceding paragraph
hereof; (b) all other items which under the terms hereof
constitute Secured Obligations additional to that evidenced by
the Note, with interest thereon as provided herein or in the
Note; (c) all interest remaining unpaid on the Note; (d) all
principal remaining unpaid on the Note, to be applied first to
principal which is not the subject of any guaranty by any third
party and thereafter, after all such non-guaranteed principal has
been repaid, to principal that is the subject of any such
guaranty; and (e) the balance, if any, shall be paid over to the
Mortgagor or its successors and assigns. In any event, the
purchaser under any foreclosure sale shall be under no obligation
to see to the proper application of the purchase money.
8.4 Waiver of Order of Sale and Marshaling. Mortgagor waives
--------------------------------------
all rights to direct the order in which any of the Property will
be sold in the event of any sale under this Mortgage, and also
any right to have any of the Property marshaled upon any sale.
8.5 Non-Waiver of Defaults. The entering upon and taking
----------------------
possession of the Property, the collection of Rents or the
proceeds of fire and other insurance policies or compensation or
awards for any taking or damage of the Property, and the
application or release thereof as herein provided, shall not cure
or waive any default or notice of default hereunder or invalidate
any act done pursuant to such notice.
8.6 Foreclosure Subject to Tenancies. Mortgagee shall have
--------------------------------
the right at its option to foreclose this Mortgage subject to the
rights of any tenant or tenants of the Property.
8.7 Evasion of Prepayment Terms. If an event of default
----------------------------
hereunder has occurred and is continuing, a tender of payment of
the amount necessary to satisfy the entire indebtedness secured
hereby made at any time prior to foreclosure sale (including sale
under power of sale) by Mortgagor, its successors or assigns or
by anyone in behalf of Mortgagor, its successors or assigns,
shall constitute an evasion of the prepayment terms of the Note
and be deemed to be a voluntary prepayment thereunder and any
such payment to the extent permitted by law, will, therefore,
include the additional payment required under the prepayment
privilege, if any, contained in the Note.
8.8 Remedies Cumulative. To the extent permitted by law,
--------------------
every right and remedy provided in this Mortgage is distinct and
cumulative to all other rights or remedies under this Mortgage or
afforded by law or equity or any other agreement between
Mortgagee and Mortgagor, and may be exercised concurrently,
independently or successively, in any order whatsoever.
Mortgagee may exercise any of its rights and remedies at its
option without regard to the adequacy of its security.
8.9 Mortgagee's Expenses. Mortgagor will pay all of
---------------------
Mortgagee's expenses incurred in any efforts to enforce any terms
of this Mortgage, whether or not any suit is filed, including
without limitation legal fees and disbursements, foreclosure
costs and title charges. All such sums, with interest thereon,
shall be additional indebtedness of Mortgagor secured by this
Mortgage. Such sums shall be immediately due and payable and
shall bear interest from the date of disbursement at the default
rate of interest stated in the Note, or the maximum rate which
may be collected from Mortgagor under applicable law if that is
less.
8.10 Right to Discontinue Proceedings. In the event
---------------------------------
Mortgagee shall have proceeded to invoke any right, remedy or
recourse permitted under this Mortgage and shall thereafter elect
to discontinue or abandon the same for any reason, Mortgagee
shall have the unqualified right to do so and in such event
Mortgagor and Mortgagee shall be restored to their former
positions with respect to the indebtedness secured by this
Mortgage. This Mortgage, the Property and all rights, remedies
and recourse of the Mortgagee shall continue as if the same had
not been invoked.
ARTICLE 9
GENERAL
-------
9.1 Application of Payments. Except as applicable law or
------------------------
this Mortgage may otherwise provide, all payments received by
Mortgagee under the Note or this Mortgage shall be applied by
Mortgagee in the following order of priority: (a) Mortgagee's
expenses incurred in any efforts to enforce any terms of this
Mortgage; (b) amounts payable to Mortgagee by Mortgagor under
Article 3 for reserves; (c) interest and late charges payable on
the Note; (d) principal of the Note; (e) interest payable on
advances made to protect the security of this Mortgage;
(f) principal of such advances; and (g) any other sums secured by
this Mortgage in such order as Mortgagee, at its option, may
determine; provided, however, that Mortgagee may, at its option,
apply any such payments received to interest on and principal of
advances made to protect the security of this Mortgage prior to
applying such payments to interest on or principal of the Note.
9.2 Release of Mortgage. Upon payment of all sums secured by
-------------------
this Mortgage, this Mortgage and all assignments contained herein
shall be void, and this Mortgage shall be released by the
Mortgagee at the cost and expense of the Mortgagor, otherwise to
remain in full force and effect.
9.3 Mortgagee's Powers. Without affecting the liability of
------------------
any person for payment or performance of the Secured Obligations,
Mortgagee, at its option, may extend the time for payment of the
indebtedness secured hereby or any part thereof, reduce payment
thereon, release anyone liable on any of said indebtedness,
accept a renewal note or notes therefor, modify the terms and
time of payment of the indebtedness, release the lien of this
Mortgage on any part of the Property, take or release other or
additional security, release or cause to be released all or any
part of the Property, or consent to the making of any map or plat
of the Property, or consent to the granting of any easement or
creating of any restriction on the Property, or join in any
subordination or other agreement affecting this Mortgage or the
lien or charge hereof. Mortgagor shall pay Mortgagee a
reasonable service charge, together with such title insurance
premiums and attorneys' fees as may be incurred at Mortgagee's
option, for any such action if taken at Mortgagor's request.
9.4 Subrogation. Mortgagee shall be subrogated for further
------------
security to the lien, although released of record, of any and all
encumbrances discharged, in whole or in part, by the proceeds of
the Loan or any other indebtedness secured hereby.
9.5 No Violation of Usury Laws. Interest, fees and charges
--------------------------
collected or to be collected in connection with the indebtedness
secured hereby shall not exceed the maximum, if any, permitted by
any applicable law. If any such law is interpreted so that said
interest, fees and/or charges would exceed any such maximum and
Mortgagor is entitled to the benefit of such law, then: (a) such
interest, fees and/or charges shall be reduced by the amount
necessary to reduce the same to the permitted maximum; and
(b) any sums already paid to Mortgagee which exceeded the
permitted maximum will be refunded. Mortgagee may choose to make
the refund either by treating the payments, to the extent of the
excess, as prepayments of principal or by making a direct payment
to the person(s) entitled thereto. No prepayment premium shall
be assessed on prepayments under this paragraph. The provisions
of this paragraph shall control over any inconsistent provision
of this Mortgage or the Note or any other Loan Documents.
9.6 Additional Documents; Power of Attorney. Mortgagor, from
---------------------------------------
time to time, will execute, acknowledge and deliver to Mortgagee
upon request, and hereby irrevocably appoints Mortgagee its
attorney-in-fact to execute, acknowledge, deliver and if
appropriate file and record, such security agreements,
assignments for security purposes, assignments absolute,
financing statements, affidavits, certificates and other
documents, in form and substance satisfactory to Mortgagee, as
Mortgagee may request in order to perfect, preserve, continue,
extend or maintain the assignments herein contained, the lien and
security interest under this Mortgage, and the priority thereof,
but for no other purposes. Mortgagor will pay to Mortgagee upon
request therefor all costs and expenses incurred in connection
with the preparation, execution, recording and filing of any such
document.
9.7 Waiver of Statute of Limitations. To the full extent
----------------------------------
Mortgagor may do so, Mortgagor hereby waives the right to assert
any statute of limitations as a defense to the enforcement of the
lien of this Mortgage or to any action brought to enforce the
Note or any other obligation secured by this Mortgage.
9.8 Forbearance by Mortgagee Not a Waiver. Any forbearance
-------------------------------------
by Mortgagee in exercising any right or remedy hereunder, or
otherwise afforded by applicable law, shall not be a waiver of or
preclude the exercise of any right or remedy, and no waiver by
Mortgagee of any particular default by Mortgagor shall constitute
a waiver of any other default or of any similar default in the
future. Without limiting the generality of the foregoing, the
acceptance by Mortgagee of payment of any sum secured by this
Mortgage after the due date thereof shall not be a waiver of
Mortgagee's right to either require prompt payment when due of
all other sums so secured or to declare a default for failure to
make prompt payment. The procurement of insurance or the payment
of taxes or other liens or charges by Mortgagee shall not be a
waiver of Mortgagee's right to accelerate the maturity of the
indebtedness secured by this Mortgage, nor shall Mortgagee's
receipt of any awards, proceeds or damages under paragraphs 2.3
and 2.8 hereof operate to cure or waive Mortgagor's default in
payment of sums secured by this Mortgage.
9.9 Modifications and Waivers. This Mortgage cannot be
--------------------------
waived, changed, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom
enforcement of any waiver, change, discharge or termination is
sought.
9.10 Notice. Except as applicable law may otherwise
------
require, all notices and other communications shall be in writing
and shall be deemed given when delivered by personal service or
when mailed, by certified or registered mail, postage prepaid,
addressed to the address set forth at the beginning of this
Mortgage. Any party may at any time change its address for such
purposes by delivering or mailing to the other parties hereto as
aforesaid a notice of such change.
9.11 Governing Law; Severability; Captions. This Mortgage
-------------------------------------
shall be governed by the laws of the State of Kentucky. If any
provision or clause of this Mortgage conflicts with applicable
law, such conflicts shall not affect other provisions or clauses
hereof which can be given effect without the conflicting
provision, and to this end the provisions hereof are declared to
be severable. The captions and headings of the paragraphs and
articles of this Mortgage are for convenience only and are not to
be used to interpret or define the provisions hereof.
9.12 Definitions. As used herein: the term "Mortgagor"
-----------
means the Mortgagor herein named, together with any subsequent
owner of the Property or any part thereof or interest therein,
and the term "Mortgagee" means the Mortgagee herein named,
together with any subsequent owner or holder of the Note or any
interest therein, including pledgees, assignees and participants.
9.13 Successors and Assigns Bound; Joint and Several
-----------------------------
Liability; Agents. This Mortgage shall bind and inure to the
- - -------- -----
benefit of the parties hereto and their respective heirs,
devisees, legatees, administrators, executors, successors and
assigns, subject to the provisions of Article 4 hereof. All
obligations of Mortgagor hereunder are joint and several. In
exercising any rights hereunder or taking actions provided for
herein, Mortgagee may act through its employees, agents or
independent contractors as authorized by Mortgagee.
9.14 Number; Gender. This Mortgage shall be construed so
--------------
that wherever applicable the use of the singular number shall
include the plural number, and vice versa, and the use of any
gender shall be applicable to all genders.
9.15 Time. Time is of the essence in connection with all
----
obligations of Mortgagor herein.
IN WITNESS WHEREOF, Mortgagor and Mortgagee have executed
this Mortgage as of the day and year first above written.
ANNTAYLOR DISTRIBUTION SERVICES, INC.,
a Delaware corporation
By: /s/ Walter J. Parks
--------------------
Its: Vice President
STATE OF New York )
)SS
COUNTY OF New York )
The foregoing instrument was acknowledged before me this 20th
day of November, 1995, by Walter J. Parks, the Vice President
of ANNTAYLOR DISTRIBUTION SERVICES, INC., a Delaware
corporation, on behalf of the corporation.
Notary Public /s/ Jocelyn F.L. Barandiaran
My Commission Expires Nov. 30, 1996
THIS DOCUMENT WAS DRAFTED BY:
Duane L. Paulson
Oppenheimer Wolff & Donnelly
Plaza VII, Suite 3400
45 South Seventh Street
Minneapolis, Minnesota 55402
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EXHIBIT A
TO
MORTGAGE
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PROPERTY SCHEDULE
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LEGAL DESCRIPTION
- - ------------------
Being LOT 49, as shown on the plat of RIVERPORT, SECTION 2, plat
of which is of record in Plat and Subdivision Book 34, Page 50,
in the Office of the Clerk of Jefferson County, Kentucky.
Being the same property acquired by ANNTAYLOR DISTRIBUTION
SERVICES, INC., a Delaware corporation, by Deed dated June 1,
1994, of record in Deed Book 6460, Page 547, in the Office of the
Clerk of Jefferson County, Kentucky.
Being the same property acquired by _________________________ by Deed
dated _______________ of record in Deed Book _______, Page______ in
the Office of the Clerk of Jefferson, County, Kentucky.
Z3484\11269\498\MORTGAGE\11-21-95\DLP
PROMISSORY NOTE
$7,000,000.00 November 20, 1995
Louisville, Kentucky
GECA Loan No. 2331
1. Promise to Pay.
---------------
FOR VALUE RECEIVED, the undersigned, ANNTAYLOR, INC., a
Delaware corporation, and ANNTAYLOR DISTRIBUTION SERVICES, INC.,
a Delaware corporation (collectively "Borrower"), jointly and
severally, promise to pay in lawful money of the United States of
America to the order of GENERAL ELECTRIC CAPITAL ASSURANCE
COMPANY, a Delaware corporation ("Lender"), at P. O. Box 490,
Seattle, Washington 98111-0490, or such other place either within
or without the State of Washington as Lender may designate in
writing from time to time, the principal sum of Seven Million and
No/100 Dollars ($7,000,000.00), with interest from the date
hereof on the unpaid principal balance at the rate set forth
below.
2. Interest.
---------
Interest shall accrue on the unpaid principal balance at a
rate from the date hereof to the Maturity Date at Seven and
One-Half Percent (7.5%) per annum.
3. Payments and Term.
-----------------
Principal and interest shall be due and payable as follows:
(a) A payment of all interest to accrue hereon from the
Disbursement Date to and including the last day of the
month during which the Disbursement Date occurs shall be
due and payable on the Disbursement Date. For purposes
hereof, the "Disbursement Date" shall be the date on
which disbursement of loan proceeds occurs.
(b) Monthly payments of principal and interest in the
sum of Sixty-four Thousand Eight Hundred Ninety-one and
No/100 Dollars ($64,891.00) each shall be due and payable
on the first day of each calendar month, commencing on
the first day of the second calendar month following the
Disbursement Date and continuing on the first day of each
calendar month thereafter to and including December 1,
1997.
(c) Monthly payments of principal and interest in that
amount which would be sufficient to amortize the then-
remaining principal balance hereon as of December 1,
1997, at the interest rate over an amortization period of
five (5) years shall be due and payable beginning with
the monthly payment due on January 1, 1998, and
continuing on the first day of each calendar month
thereafter to and including November 1, 2002.
(d) The entire indebtedness evidenced by this Note, if
not sooner paid, shall be due and payable on November 30,
2002, the Maturity Date.
All payments on account of the indebtedness evidenced by this
Note shall be first applied to interest, costs and prepayment
fees (if any) and then to principal. Interest shall be computed
on the basis of a 360-day year consisting of twelve 30-day
months, except that interest for a portion of a month (such as
may be required under paragraph 3 (a) above) shall be computed on
the basis of a 365-day year (or a 366-day year during a leap
year).
4. Prepayment.
----------
The indebtedness evidenced by this Note may be prepaid, in
whole or in part, upon three (3) days prior written notice to
Lender and upon payment of a prepayment fee calculated in accor
dance with the following schedule:
Loan
Year Prepayment Fee
- - ---- ---------------
1 FIVE PERCENT (5%) of principal prepaid
2 FIVE PERCENT (5%) of principal prepaid
3 FOUR PERCENT (4%) of principal prepaid
4 THREE PERCENT (3%) of principal prepaid
5 TWO PERCENT (2%) of principal prepaid
6 ONE PERCENT (1%) of principal prepaid
7 NO PREPAYMENT FEE REQUIRED
Provided, however, that there shall be no prepayment fee
payable on principal prepaid during the last sixty (60) days of
the term of this Note. Any partial prepayment shall be applied
upon payments due hereon in the inverse order of their respective
due dates. For purposes hereof, the term "Loan Year" means each
successive period of twelve (12) months, with the first such
period beginning on December 1, 1995.
5. Restrictions on Transfer and Encumbrance.
------------------------------------------
Borrower and Lender acknowledge and agree that the Mortgage
referred to in paragraph 9 below contains the following paragraph
4.1:
4.1 Restrictions on Transfer or Encumbrance of the Property.
--------------------------------------------------------
If the Property or any part thereof or
interest therein shall be encumbered, sold (by contract
or otherwise), conveyed, or otherwise transferred by
Mortgagor, or if without Mortgagee's prior written
consent there shall be any change in the ownership of any
stock interest in a corporate Mortgagor, in the ownership
of any general partnership interest in any general or
limited partnership Mortgagor or in the ownership of any
beneficial interest in any other Mortgagor which is not a
natural person or persons, or if without Mortgagee's
prior written consent there shall be any change in the
ownership of any such stock, general partnership or other
beneficial interest in any corporation, partnership or
other entity, organization or association directly or
indirectly owning an interest in Mortgagor, then the same
shall be deemed to be a "Transfer" for purposes of this
paragraph. In the event of such a Transfer, Mortgagee
may, at its sole option, declare such Transfer to
constitute an event of default under this Mortgage and
invoke any remedy or remedies provided for in paragraph
8.1 hereof or may, at its sole option, consent to such
Transfer and increase the interest rate on the
indebtedness secured hereby. Neither of the foregoing
options shall apply, however, in the case of a Transfer
(a) by devise or descent or operation of law upon the
death of an individual Mortgagor, a partner of a
partnership Mortgagor, a shareholder of a corporate
Mortgagor, the owner of a beneficial interest of any
other Mortgagor which is not a natural person, or the
owner of any stock, partnership or other beneficial
interest in any corporation, partnership or other entity,
organization or association directly or indirectly owning
an interest in Mortgagor, provided that following the
Transfer the person(s) and/or firm(s) having effective
managerial control of the Property are reasonably
satisfactory to Mortgagee, (b) a Transfer of the Property
or any portion thereof to AnnTaylor, Inc. or any of its
subsidiaries, (the "Permitted Transferees"), so long as
the transfer is subject to this Mortgage in all respects
and the Permitted Transferee has executed and delivered
to the Mortgagee such documents as are reasonably
requested to give effect thereto, or (c) transfers of
shares of stock in AnnTaylor Stores Corporation so long
as its stock is publicly traded on a recognized stock
exchange.
6. Default.
--------
(a) The occurrence of any one or more of the following
shall constitute an event of default under this Note:
(i) Failure to make any payment of principal
or interest when due hereon, followed by the
failure to make such payment within ten (10) days
after written notice thereof given to Borrower by
Lender; provided, however, that Lender shall not be
obligated to give Borrower written notice prior to
exercising its remedies with respect to such
default if Lender had twice previously given
Borrower during that calendar year a notice of
default for failure to make a payment of principal
or interest hereon.
(ii) The occurrence of any other event of
default under the Mortgage referred to in paragraph
9 below.
(b) Time is of the essence. If an event of default
occurs under this Note, (i) the entire principal balance
hereof and all accrued interest shall, at the option of
Lender, without notice, bear interest at a rate from time
to time equal to five (5) percentage points over what
would otherwise be the Note rate (or the maximum rate
permitted by applicable law if that is less) from the
date of the event of default until such event of default
is cured and (ii) the entire principal balance hereof and
all accrued interest shall immediately become due and
payable at the option of Lender, without notice.
Lender's failure to exercise any option hereunder shall
not constitute a waiver of the right to exercise the same
for any subsequent event of default.
7. Late Charges.
------------
Borrower acknowledges that, if any payment under this Note is
not made when due, Lender will as a result thereof incur costs
not contemplated by this Note, the exact amount of which would be
extremely difficult or impracticable to ascertain. Such costs
include without limitation processing and accounting charges.
Accordingly, Borrower hereby agrees to pay to Lender with respect
to each payment which is not received by Lender within ten (10)
days after such payment is due under this Note a late charge
equal to FIVE PERCENT (5%) of the amount of the payment.
Borrower and Lender agree that such late charge represents a fair
and reasonable estimate of the costs Lender will incur by reason
of such late payment. Acceptance of such late charge by Lender
shall in no event constitute a waiver of the default with respect
to the overdue amount, and shall not prevent Lender from
exercising any of the other rights and remedies available to
Lender.
8. Costs and Attorneys' Fees.
--------------------------
If an event of default occurs under this Note and Lender
consults an attorney regarding the enforcement of any of its
rights under this Note or the Mortgage, or if this Note is placed
in the hands of an attorney for collection, or if suit be brought
to enforce this Note or the Mortgage, Borrower promises to pay
all costs thereof, including attorneys' fees. Said costs and
attorneys' fees shall include, without limitation, costs and
attorneys' fees in any appeal or in a proceeding under any
present or future federal bankruptcy act or state receivership.
9. Security.
---------
This Note is secured by a Mortgage, Assignment of Rents and
Leases, Security Agreement and Fixture Financing Statement,
("Mortgage") and a separate Assignment of Rents and Leases
("Assignment") covering property located in Jefferson County,
Kentucky ("Property").
10. Waiver of Presentment, Etc.
---------------------------
Borrower hereby waives presentment and demand for payment,
notice of dishonor, protest and notice of protest.
11. Joint and Several Liability.
---------------------------
The liability of each of the undersigned corporations
constituting Borrower is joint and several with respect to all
obligations hereunder.
12. Loan Charges.
-------------
Interest, fees and charges collected or to be collected in
connection with the indebtedness evidenced hereby shall not
exceed the maximum, if any, permitted by any applicable law. If
any such law is interpreted so that said interest, fees and/or
charges would exceed any such maximum and Borrower is entitled to
the benefit of such law, then: (i) such interest, fees and/or
charges shall be reduced by the amount necessary to reduce the
same to the permitted maximum; and (ii) any sums already
collected from Borrower which exceeded the permitted maximum will
be refunded. Lender may choose to make the refund either by
treating the payments, to the extent of the excess, as
prepayments of principal or by making a direct payment to
Borrower. No prepayment premium shall be assessed on prepayments
under this paragraph. The provisions of this paragraph shall
control over any inconsistent provision of this Note or the
Mortgage or any other document executed in connection with the
indebtedness evidenced hereby.
13. Representation and Warranty.
---------------------------
The undersigned both represent and warrant to Lender that the
execution of this Note, the entering into of the loan documents
by the undersigned, and particularly the granting of the Mortgage
on the Property by AnnTaylor Distribution Services, Inc., do not
violate any covenants or restrictions in any debt instruments or
agreements with or obligations to any other lenders.
14. Governing Law.
-------------
This Note shall be construed, enforced and otherwise governed
by the laws of the State of Kentucky.
15. Lender.
--------
As used herein, the term "Lender" shall mean the holder and
owner of this Note.
ANNTAYLOR, INC.,
a Delaware corporation
By: /s/ Walter J. Parks
---------------------
Its: Sr. V.P. - Finance
ANNTAYLOR DISTRIBUTION SERVICES,INC.,
a Delaware corporation
By: /s/ Walter J. Parks
---------------------
Its: Vice President
