EXHIBIT 10.28.4
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BORROWER PLEDGE AGREEMENT
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THIS SECURITY AND PLEDGE AGREEMENT (as such agreement may be
amended, supplemented or otherwise modified from time to time,
this "Agreement"), dated as of June 30, 1998 is made by
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ANNTAYLOR, INC., a Delaware corporation, with its principal place
of business located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (the "Grantor"), in favor of BANK OF AMERICA NATIONAL TRUST
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AND SAVINGS ASSOCIATION, with an office located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in its capacity as
administrative agent for the Lenders under the Credit Agreement
(as defined below) (in such capacity, the "Administrative
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Agent").
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R E C I T A L S :
A. The Grantor, certain financial institutions currently
and in the future to be the parties to the Credit Agreement (such
financial institutions being collectively referred to as the
"Lenders"), the Administrative Agent, BancAmerica ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇, as Arranger (in such capacity, the "Arranger"),
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Citicorp USA and First Union Capital Markets, in their respective
capacities as Syndication Agents (in such capacities, the
"Syndication Agents"), and Bank of America National Trust and
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Savings Association, Citibank, N.A. and First Union National
Bank, in their respective capacities as Issuing Banks (in such
capacities, the "Issuing Banks") have entered into a certain
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Credit Agreement, dated as of June 30, 1998 (as such agreement
may be amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"; the capitalized terms not otherwise
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defined herein are being used as defined in the Credit
Agreement);
B. The Lenders have agreed to make certain extensions of
credit to the Borrower on the terms and conditions set forth in
the Credit Agreement; and
C. It is a condition precedent to the effectiveness of the
Credit Agreement and to the making of Loans by the Lenders and
the issuing of Letters of Credit by any Issuing Bank that this
Agreement shall have been executed and delivered;
NOW, THEREFORE, in consideration of the above premises and
in order to induce the Lenders to make Loans and each Issuing
Bank to issue Letters of Credit under the Credit Agreement, the
Grantor hereby agrees with the Administrative Agent for its
benefit and for the benefit of the Lenders, the Issuing Banks,
the Arranger and the Syndication Agents, by acceptance hereof, as
follows:
Section 1. Grant of Security. To secure the prompt and
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complete payment, observance and performance when due (whether at
the stated maturity, by acceleration or otherwise) of all the
Obligations, the Grantor hereby assigns and pledges to the
Administrative Agent, and hereby grants to the Administrative
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Agent, for its benefit and the benefit of the Lenders, the
Issuing Banks, the Arranger and the Syndication Agents, a
security interest in all of the Grantor's right, title and
interest in and to the following, whether now owned or existing
or hereafter arising or acquired and wheresoever located
(collectively, the "Collateral"):
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ACCOUNTS: All accounts receivable and other rights to
payment arising out of the sale or lease of goods and services,
whether or not earned by performance, and all Credit Card
Accounts, including, without limitation, all "accounts", as such
term is defined in the Uniform Commercial Code in effect on the
date hereof in the State of New York (the "UCC") (in each
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instance, however, and wherever arising, collectively,
"Accounts");
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CHATTEL PAPER, INSTRUMENTS, INVESTMENT PROPERTY AND
DOCUMENTS: All chattel paper, all instruments, all investment
property and all documents (including, without limitation, (a)
the shares of stock described in Annex I-A hereto (the "Pledged
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Shares") and all dividends, instruments and other property from
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time to time distributed in respect thereof or in exchange
therefor, and (b) the notes and debt instruments described in
Annex I-B hereto (the "Pledged Debt") and all payments thereunder
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and instruments and other property from time to time delivered in
respect thereof or in exchange therefor), and all bills of
lading, warehouse receipts and other documents of title and
documents, including, without limitation, all "chattel paper",
"instruments", "investment property" and "documents", as such
terms are defined in the UCC, in each instance whether now owned
or hereafter acquired by the Grantor, other than any promissory
note with an original principal amount of less than $1,000,000
owing to the Grantor from a senior executive or key employee of
the Grantor (an "Excluded Note") (collectively, "Chattel Paper,
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Instruments, Investment Property and Documents");
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EQUIPMENT: All machinery and equipment, all manufacturing,
distribution, selling, data processing and office equipment, all
furniture, furnishings, appliances, tools, tooling, molds, dies,
vehicles, vessels, aircraft and all other goods of every type and
description, in each instance whether now owned or hereafter
acquired by the Grantor and wherever located, including all
"equipment", as such term is defined in the UCC; provided that
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equipment shall not include "fixtures" as defined in Section 9-
313 of the UCC (collectively, "Equipment");
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GENERAL INTANGIBLES: All rights, interests, choses in
action, causes of action, claims and all other intangible
property of the Grantor of every kind and nature, in each
instance whether now owned or hereafter acquired by the Grantor,
including, without limitation, all corporate and other business
records; all loans, royalties, and other obligations receivable;
all inventions, designs, patents, patent applications, service
marks, trade names and trademarks (including any applications for
the foregoing and whether or not registered) and the goodwill of
the Grantor's business connected with and symbolized by such
trademarks, trade secrets, computer programs, software, printouts
and other computer materials, goodwill, registrations, U.S.
registered copyrights, licenses relating to trademarks and U.S.
registered copyrights, franchises, customer lists, credit files,
correspondence and advertising materials; all customer and
supplier contracts, firm sale orders, rights under license and
franchise agreements, and other contracts and contract rights;
all interests in partnerships, joint ventures and other entities;
all tax refunds and tax refund claims; all right, title and
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interest under leases, subleases, licenses and concessions and
other agreements relating to real or personal property; all pay
ments due or made to the Grantor in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of
any property by any person or governmental authority; all deposit
accounts (general or special) with any bank or other financial
institution; all credits with and other claims against carriers
and shippers; all rights to indemnification; all reversionary
interests in pension and profit sharing plans and reversionary,
beneficial and residual interest in trusts; all proceeds of
insurance of which the Grantor is beneficiary; and all letters of
credit, guaranties, liens, security interests and other security
held by or granted to the Grantor; and all other intangible
property, whether or not similar to the foregoing, including,
without limitation, all "general intangibles", as such term is
defined in the UCC (in each instance, however and wherever
arising, collectively, "General Intangibles"); provided, that the
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foregoing limitation shall not affect, limit, restrict or impair
the grant by such Grantor of a security interest pursuant to this
Agreement in any receivable or any money or other amounts due or
to become due under any such contract, agreement, instrument or
indenture.
INVENTORY: All inventory, finished goods, raw materials,
work in process and other goods, including, without limitation,
all "inventory", as such term is defined in the UCC (in each
instance, however, and wherever arising, collectively,
"Inventory"); and
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OTHER PROPERTY: All property or interests in property now
owned or hereafter acquired by the Grantor which now may be owned
or hereafter may come into the possession, custody or control of
the Administrative Agent, any of the Lenders, any Issuing Bank or
any agent or Affiliate of any of them in any way or for any
purpose (whether for safekeeping, deposit, custody, pledge,
transmission, collection or otherwise); and all rights and
interests of the Grantor, now existing or hereafter arising and
however and wherever arising, in respect of any and all (i)
notes, drafts, letters of credit, bank accounts, stocks, bonds,
and debt and equity securities, whether or not certificated, and
warrants, options, puts and calls and other rights to acquire or
otherwise relating to the same; (ii) money; (iii) proceeds of
loans, including without limitation, all the Loans made to the
Grantor under the Credit Agreement; and (iv) insurance proceeds
and books and records relating to any of the property covered by
this Agreement (collectively, "Other Property");
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together, in each instance, with all accessions and additions
thereto, substitutions therefor, and replacements, proceeds and
products thereof; provided, however, that the foregoing grant of
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a security interest shall not include a security interest in any
contract, any lease and any property subject to an enforceable
lease which by their terms expressly prohibit the right of the
Grantor to grant a security interest in such contract, lease or
property. The Borrower agrees to use its commercially reasonable
efforts to ensure that no future lease contains any restrictions
on the Borrower's right to grant a security interest in any
equipment placed on the leased premises.
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Section 2. Grantor Remains Liable. Anything herein to the
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contrary notwithstanding, (a) the Grantor shall remain liable
under the contracts and agreements included in the Collateral to
the extent set forth therein to perform its duties and
obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by the Administrative
Agent of any of its rights hereunder shall not release the
Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral (except to the extent
that such exercise prevents the Grantor from satisfying such
duties and obligations), and (c) the Administrative Agent shall
not have any obligation or liability under the contracts and
agreements included in the Collateral by reason of this
Agreement, nor shall the Administrative Agent be obligated to
perform any of the obligations or duties of the Grantor
thereunder, to make any payment, to make any inquiry as to the
nature or sufficiency of any payment received by the Grantor or
the sufficiency of any performance by any party under any such
contract or agreement or to take any action to collect or enforce
any claim for payment assigned hereunder.
Section 3. Delivery of Pledged Collateral. All
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certificates, notes and other instruments representing or
evidencing the Pledged Shares or the Pledged Debt and all other
instruments now owned or at any time hereafter acquired by the
Grantor other than any Excluded Notes (collectively, the "Pledged
Collateral") shall be delivered to and held by or on behalf of
the Administrative Agent pursuant hereto (except as otherwise
provided in the last sentence of Section 4(f) hereof) and shall
be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or
assignments in blank, all in form and substance satisfactory to
the Administrative Agent. Upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent
shall have the right, at any time in its discretion and without
notice to the Grantor, to transfer to or to register in the name
of the Administrative Agent or any nominee of the Administrative
Agent any or all of the Pledged Collateral, subject only to the
revocable rights specified in Section 8 hereof. In addition,
upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right at any
time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations.
Section 4. Representations and Warranties. The Grantor
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represents and warrants as follows:
(a) As of the date of this Agreement, the locations
listed on Annex II constitute all locations at which its
Inventory (other than raw materials and work in process) or
Equipment is located, except for (i) Inventory or Equipment
temporarily in transit from one location listed on such
Annex to another location listed on such Annex or (ii)
Inventory or Equipment in transit with common or other
carriers to a location listed on such Annex. As of the date
of this Agreement, the chief place of business and chief
executive office of the Grantor are located at the address
first specified above for the Grantor.
(b) The Grantor is the legal and beneficial owner of
the Collateral free and clear of all liens, security
interests or other encumbrances, except as expressly
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permitted by subsection 8.02(b) of the Credit Agreement.
For the past five years the business of the Grantor has been
conducted only by the following corporations and under the
following corporate names and not under any trade name or
other name:
1) AnnTaylor, Inc.
2) AnnTaylor Factory Stores
3) AnnTaylor Loft
4) AnnTaylor Studio
5) AnnTaylor Global Sourcing, Inc.
6) AnnTaylor Funding, Inc.
(c) The Grantor has exclusive possession and control
of the Inventory (other than raw materials and work in
process) and Equipment, except for (i) Equipment in the
possession and control of the Grantor's lessees and
licensees under written lease and license agreements entered
into in the ordinary course of business and consistent with
past practice and (ii) Inventory or Equipment in transit
with common or other carriers.
(d) The Pledged Shares have been duly authorized and
validly issued and are fully paid and non-assessable. The
Pledged Debt of the Grantor's Subsidiaries (if any), and, to
the best of the Grantor's knowledge, all other Pledged Debt,
has been duly authorized, issued and delivered, and is the
legal, valid, binding and enforceable obligation of the
issuers thereof.
(e) The Pledged Shares indicated on Annex I-A hereto
constitute all of the shares of stock held by the Grantor of
the respective issuers thereof and constitute 65% of all of
the shares of stock of the respective issuers who are
Foreign Subsidiaries. The Pledged Shares and the Pledged
Debt constitute all of the Pledged Collateral except for
Pledged Collateral consisting of checks and drafts received
in the ordinary course of business and with respect to which
the Administrative Agent has not at any time requested
possession and which are not a material portion of the
Collateral under this Agreement or the Trademark Assignment
executed by the Grantor, taken as a whole (the "Personal
Property Collateral"), either singly or in the aggregate.
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(f) This Agreement creates a valid security interest
in the Collateral (other than the Pledged Collateral),
securing the payment of the Obligations, and all filings and
other actions necessary or desirable to perfect such
security interest under the Uniform Commercial Code as
enacted in each relevant jurisdiction have been duly taken
or will be duly taken not later than five Business Days
after the date hereof. The pledge and delivery of the
Pledged Collateral pursuant to this Agreement and all other
filings and other actions taken by the Grantor to perfect
such security interest prior to the date hereof, create a
valid and perfected first priority security interest in the
Pledged Collateral, securing the payment of the Obligations
except for Pledged Collateral consisting of checks and
drafts received in the ordinary course of business with
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respect to which the Administrative Agent has not at any
time requested possession and which are not a material
portion of the Personal Property Collateral, either singly
or in the aggregate.
(g) Other than the filings with the United States
Patent and Trademark Office, filings and registrations
within the United States Copyright Office and filings under
the Uniform Commercial Code in effect in each relevant
jurisdiction, no authorization, approval or other action by,
and no notice to or filing with, any federal, state or local
governmental authority in the United States that have not
already been taken or made and which are in full force and
effect, is required (i) for the pledge by the Grantor of the
Pledged Collateral or for the grant by the Grantor of the
security interest in the Collateral granted hereby or for
the execution, delivery or performance of this Agreement by
the Grantor, (ii) for the exercise by the Administrative
Agent of the voting or other rights provided in this
Agreement with respect to the Pledged Collateral or the
remedies in respect of the Pledged Collateral pursuant to
this Agreement (except as may be required in connection with
the disposition thereof by laws affecting the offering and
sale of securities generally), or (iii) for the exercise by
the Administrative Agent of any of its other rights or
remedies hereunder.
(h) (i) No amount payable to the Grantor under or in
connection with any Account is evidenced by any "instrument"
or "chattel paper", as such terms are defined in the UCC,
which has not been delivered to the Administrative Agent.
(ii) The amounts represented by the Grantor to the
Lenders from time to time as owing to such Grantor in
respect of the Accounts will at such times be accurate.
Section 5. Further Assurances.
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(a) The Grantor agrees that from time to time, at the
expense of the Grantor, the Grantor will promptly execute
and deliver all further instruments and documents, and take
all further action, that may be necessary or reasonably
desirable, or that the Administrative Agent may reasonably
request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to
enable the Administrative Agent to exercise and enforce its
rights and remedies hereunder with respect to any
Collateral; provided, however, that the Grantor shall in no
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event be required to execute any leasehold mortgage with
respect to any lease. Without limiting the generality of
the foregoing, at the request of the Administrative Agent,
the Grantor shall: (i) if an Event of Default shall have
occurred and be continuing, ▇▇▇▇ conspicuously each document
included in the Collateral and, at the request of the
Administrative Agent made at any time, and whether or not an
Event of Default shall have occurred, ▇▇▇▇ each of its
records pertaining to the Collateral with a legend, in form
and substance satisfactory to the Administrative Agent,
indicating that such document or Collateral is subject to
the security interest granted hereby; (ii) execute and file
such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be
necessary or desirable, or as the Administrative Agent may
reasonably request, in order to perfect and preserve the
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security interests granted or purported to be granted
hereby; and (iii) in the case of investment property and any
other relevant Collateral, taking any actions necessary to
enable the Administrative Agent to obtain "control" (within
the meaning of the applicable Uniform Commercial Code) with
respect thereto. The Grantor shall maintain the security
interest created by this Agreement as a perfected security
interest and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) The Grantor hereby authorizes the Administrative
Agent to file one or more financing or continuation
statements, and amendments thereto, relative to all or any
part of the Collateral without the signature of the Grantor
where permitted by law. A carbon, photographic or other
reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Grantor shall furnish to the Administrative
Agent from time to time statements and schedules further
identifying and describing the Collateral and such other
reports in connection with the Collateral as the
Administrative Agent may request, all in reasonable detail.
Section 6. As to Inventory, Equipment and Accounts. The
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Grantor shall:
(a) Keep its Inventory and Equipment (other than raw
materials and work in process and Inventory sold in the
ordinary course of business and Equipment sold in accordance
with Section 8.02(a) of the Credit Agreement) at the places
specified in Section 4(a) hereof and deliver written notice
to the Administrative Agent at least 30 days prior to
establishing any other location at which it reasonably
expects to maintain Inventory (other than raw materials and
work in process) or Equipment in which jurisdiction all
action required by Section 5 hereof shall have been taken
with respect to all such Inventory or Equipment, as the case
may be, in order to perfect the security interest granted
therein under this Agreement.
(b) Maintain or cause to be maintained in good repair,
working order and condition, excepting ordinary wear and
tear and damage due to casualty, all of the Equipment, and
make or cause to be made all appropriate repairs, renewals
and replacements thereof, to the extent not obsolete and
consistent with past practice of the Grantor, as quickly as
practicable after the occurrence of any loss or damage
thereto which are necessary or desirable to such end. The
Grantor shall promptly furnish to the Administrative Agent a
statement respecting any material loss or damage as a result
of a single occurrence to any of its Inventory or Equipment
which has an aggregate fair market value exceeding $250,000.
(c) The Grantor will not, except upon 30 days' prior
written notice to the Administrative Agent and delivery to
the Administrative Agent of all additional executed
financing statements and other documents reasonably
requested by the Administrative Agent to maintain the
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validity, perfection and priority of the security interests
provided for herein:
(i) change its jurisdiction of organization or the
location of its chief executive office or sole place of
business from that referred to in Section 4(a) hereof; or
(ii) change its name, identity or corporate structure
to such an extent that any financing statement filed by the
Administrative Agent in connection with this Agreement would
become misleading.
Section 7. As to the Pledged Collateral.
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(a) So long as no Event of Default shall have occurred
and be continuing:
(i) The Grantor and not the Administrative
Agent shall be entitled to exercise any and all voting
and other rights of consent or approval pertaining to
the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this
Agreement or the Credit Agreement; provided, however,
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that the Grantor shall not exercise or refrain from
exercising any such right without the consent of the
Administrative Agent if such action or inaction would
have a material adverse effect on the value of the
Pledged Collateral or the benefits to the
Administrative Agent, the Lenders, the Issuing Banks,
the Arranger and the Syndication Agents, including,
without limitation, the validity, priority or
perfection of the security interest granted hereby or
the remedies of the Administrative Agent hereunder.
(ii) The Grantor and not the Administrative
Agent shall be entitled to receive and retain any and
all dividends and interest paid in respect of the
Pledged Collateral; provided, however, that any and all
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(A) dividends and interest paid or
payable other than in cash in respect of, and
instruments and other property received,
receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Collateral,
(B) dividends and other
distributions paid or payable in cash in respect
of any Pledged Collateral consisting of stock of
any Subsidiary of the Grantor and dividends and
other distributions paid or payable in cash in
respect of any other Pledged Collateral in
connection with a partial or total liquidation or
dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
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(C) cash paid, payable or
otherwise distributed in respect of principal of,
or in redemption of, or in exchange for, any
Pledged Collateral,
shall forthwith be delivered to the Administrative
Agent, in the case of (A) above, to hold as Pledged
Collateral and shall, if received by the Grantor, be
received in trust for the benefit of the Administrative
Agent, the Lenders, the Issuing Banks, the Arranger and
the Syndication Agents, be segregated from the other
property or funds of the Grantor, and be forthwith
delivered to the Administrative Agent, as Pledged
Collateral in the same form as so received (with any
necessary indorsement) and, in the case of (B) and (C)
above, to the extent required under the terms of the
Credit Agreement, shall forthwith be delivered to the
Administrative Agent to be applied to the Obligations
in such order as provided in subsection 2.05(b) of the
Credit Agreement.
(iii) The Administrative Agent shall
promptly execute and deliver (or cause to be executed
and delivered) to the Grantor all such proxies and
other instruments as the Grantor may reasonably request
for the purpose of enabling the Grantor to exercise the
voting and other rights which it is entitled to
exercise pursuant to paragraph (i) above and to receive
the dividends or interest payments which it is
authorized to receive and retain pursuant to paragraph
(ii) above.
(b) Upon the occurrence and during the continuance of
an Event of Default and at the Administrative Agent's
option:
(i) All rights of the Grantor to exercise
the voting and other rights of consent or approval
which it would otherwise be entitled to exercise
pursuant to Section 8(a)(i) hereof and to receive the
dividends and interest payments which it would
otherwise be authorized to receive and retain pursuant
to Section 8(a)(ii) hereof shall cease, and all such
rights shall thereupon become vested in the
Administrative Agent, who shall thereupon have the sole
right to exercise such voting and other rights of
consent or approval and to receive and hold as Pledged
Collateral such dividends and interest payments.
(ii) All dividends and interest payments
which are received by the Grantor contrary to the
provisions of paragraph (i) of this Section 8(b) hereof
shall be received in trust for the benefit of the
Administrative Agent, the Lenders, the Issuing Banks,
the Arranger and the Syndication Agents and shall be
segregated from other funds of the Grantor and shall be
forthwith paid over to the Administrative Agent as
Pledged Collateral in the same form as so received
(with any necessary indorsement).
Section 8. Additional Shares. The Grantor agrees that it
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will (i) cause each issuer of the Pledged Shares subject to its
control not to issue any stock or other securities in addition to
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or in substitution for the Pledged Shares issued by such issuer,
except to the Grantor or as otherwise permitted under the Credit
Agreement, and (ii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities of each issuer of
the Pledged Shares; provided that in no event shall the Grantor
be required to pledge more than 65% of the shares of any Foreign
Subsidiary. The Grantor hereby authorizes the Administrative
Agent to modify this Agreement by amending Annex I to include
such additional shares or other securities.
Section 9. The Administrative Agent Appointed
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Attorney-in-Fact. The Grantor hereby irrevocably appoints the
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Administrative Agent the Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name
of the Grantor or otherwise, from time to time in the
Administrative Agent's discretion, to take, upon the occurrence
and during the continuance of an Event of Default, any action and
to execute any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this
Agreement (subject to the rights of the Grantor under Section 7
hereof), including, without limitation:
(i) to obtain and adjust insurance required
to be paid to the Administrative Agent pursuant to
Section 7.05 of the Credit Agreement, with the
understanding that all insurance maintained by the
Grantor with respect to the Collateral shall (a)
provide that no cancellation, material reduction in
amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof, (b)
name the Administrative Agent as insured party or loss
payee, (c) if reasonably requested by the
Administrative Agent, include a breach of warranty
clause and (d) be reasonably satisfactory in all other
respects to the Administrative Agent,
(ii) to ask, demand, collect, ▇▇▇ for,
recover, compromise, receive and give acquittance and
dreceipts for moneys due and to become due under or in
respect of any of the Collateral,
(iii) to receive, indorse, and collect
any drafts or other instruments, documents and chattel
paper, in connection with clause (i) or (ii) above,
(iv) to file any claims or take any action or
institute any proceedings which the Administrative
Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to
enforce the rights of the Administrative Agent with
respect to any of the Collateral, and
(v) to receive, indorse and collect all
instruments made payable to the Grantor representing
any dividend, interest payment or other distribution in
respect of the Pledged Collateral or any part thereof
and to give full discharge for the same.
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Nothing set forth in this Section 9 and no exercise by the
Administrative Agent of the rights and powers granted in this
Section 9 shall limit or impair the Grantor's rights under
Section 7 hereof. The Grantor hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof.
All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and shall be irrevocable
until the Obligations are paid in full, no Letters of Credit are
outstanding, and the commitments of the Lenders to extend credit
under the Credit Agreement are terminated.
Section 10. The Administrative Agent May Perform. If the
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Grantor fails to perform any agreement contained herein, the
Administrative Agent, upon written notice to the Grantor if
practicable, may itself perform, or cause performance of, such
agreement, and the expenses of the Administrative Agent incurred
in connection therewith shall be payable by the Grantor under
Section 14 hereof.
Section 11. The Administrative Agent's Duties. The powers
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conferred on the Administrative Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any
duty upon it, in the absence of willful misconduct or gross
negligence, to exercise any such powers. Except for the safe
custody of any Collateral in its possession and the accounting
for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral. The
Administrative Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially
equal to that which the Administrative Agent accords its own
property, it being understood that the Administrative Agent shall
be under no obligation to (i) ascertain or take action with
respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not
the Administrative Agent has or is deemed to have knowledge of
such matters, or (ii) take any necessary steps to preserve rights
against prior parties or any other rights pertaining to any
Collateral, but may do so at its option, and all reasonable
expenses incurred in connection therewith shall be for the sole
account of the Grantor and shall be added to the Obligations.
Section 12. Remedies. If any Event of Default shall have
--------
occurred and be continuing:
(a) The Administrative Agent may exercise in respect
of the Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the
rights and remedies of a secured party upon default under
the Uniform Commercial Code as in effect from time to time
in the State of New York (the "Code") (whether or not the
----
Code applies to the affected Collateral) and also may (i)
require the Grantor to, and the Grantor hereby agrees that
it will at its expense and upon request of the
Administrative Agent forthwith, assemble all or any part of
the Collateral as directed by the Administrative Agent and
make it available to the Administrative Agent at a place to
be designated by the Administrative Agent which is
reasonably convenient to both parties and (ii) without
notice except as specified below, sell, lease, assign, grant
an option or options to purchase or otherwise dispose of the
Collateral or any part thereof in one or more parcels at
public or private sale, at any exchange, broker's board or
at any of the Administrative Agent's offices or elsewhere,
================================================================
-12-
for cash, on credit or for future delivery, and upon such
other terms as may be commercially reasonable. The
Administrative Agent may be the purchaser of any or all of
the Collateral so sold at any public sale (or, if the
Collateral is of a type customarily sold in a recognized
market or is of a type which is the subject of widely
distributed standard price quotations, at any private sale)
and thereafter hold the same, absolutely, free from any
right or claim of whatsoever kind. The Administrative Agent
is authorized, at any such sale, if it deems it advisable so
to do, to restrict the prospective bidders or purchasers of
any of the Pledged Collateral to persons who will represent
and agree that they are purchasing for their own account for
investment, and not with a view to the distribution or sale
of any such Pledged Collateral and to take such other
actions as it may deem appropriate to exempt the offer and
sale of the Collateral from any registration requirements of
state or federal securities laws (including, if it deems it
appropriate, actions to comply with Regulation D of the
Securities and Exchange Commission under the Securities Act
of 1933, as from time to time amended (the "Securities
----------
Act")). To the extent permitted by law, the Grantor hereby
---
specifically waives all rights of redemption, stay or
appraisal which it has or may have under any rule of law or
statute now existing or hereafter in force. The Grantor
agrees that, to the extent notice of sale shall be required
by law, at least ten days' written notice to the Grantor of
the time and place of any public sale or the time after
which any private sale is to be made shall constitute
reasonable notification. The Administrative Agent shall not
be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Administrative Agent
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor and such
sale may, without further notice, be made at the time and
place to which it was so adjourned. In case of any sale of
all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by the
Administrative Agent until the selling price is paid by the
purchaser thereof, but the Administrative Agent shall not
incur any liability in case of the failure of such purchaser
to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may again be sold upon
like notice. The Administrative Agent instead of exercising
the power of sale herein conferred upon it, may proceed by a
suit or suits at law or in equity to foreclose the security
interests herein granted and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.
(b) Any cash held by the Administrative Agent as
Collateral and all cash proceeds received by the
Administrative Agent in respect of any sale of, collection
from, or other realization upon all or any part of the
Collateral may, in the discretion of the Administrative
Agent, be held by the Administrative Agent as Collateral
for, and/or then or at any time thereafter applied against
(after payment of any amounts payable to the Administrative
Agent pursuant to Section 15 hereof) in whole or in part by
the Administrative Agent, for the benefit of the
Administrative Agent, the Lenders and the Issuing Banks, all
or any part of the Obligations in such order as is provided
in subsection 2.05(b) of the Credit Agreement. Any surplus
of such cash or cash proceeds held by the Administrative
Agent and remaining after payment in full of all the
====================================================================
-13-
Obligations under this Agreement, the expiration or
termination of all outstanding Letters of Credit and the
termination of the commitments of the Lenders to extend
credit under the Credit Agreement shall be promptly paid
over to the Grantor or to whomsoever may be lawfully
entitled to receive such surplus.
(c) (i) Subject to Section 7.06 of the Credit
Agreement, the Administrative Agent shall have the right to
make test verifications of the Accounts in any manner and
through any medium that it reasonably considers advisable,
and the Grantor shall furnish all such assistance and
information as the Administrative Agent may require in
connection with such test verifications. Subject to Section
7.06 of the Credit Agreement, at any time and from time to
time, upon the Administrative Agent's request and at the
expense of the Grantor, the Grantor shall cause independent
public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent
reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts.
(ii) At any time after the occurrence and during the
continuance of an Event of Default, the Grantor hereby
authorizes the Administrative Agent to collect the Grantor's
Accounts. If required by the Administrative Agent at any
time after the occurrence and during the continuance of an
Event of Default, any payments of Accounts, when collected
by any Grantor, (i) shall be forthwith (and, in any event,
within two Business Days) deposited by the Grantor in the
exact form received, duly indorsed by such Grantor to the
Administrative Agent if required, in a Collateral Account
maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the
Administrative Agent for the account of the Lenders only as
provided herein, and (ii) until so turned over, shall be
held by the Grantor in trust for the Administrative Agent,
the Lenders, the Issuing Banks, the Arranger and the
Syndication Agents, segregated from other funds of the
Grantor. Each such deposit of proceeds of Accounts shall be
accompanied by a report identifying in reasonable detail the
nature and source of the payments included in the deposit.
(iii) At the Administrative Agent's request, the
Grantor shall deliver to the Administrative Agent all
original and other documents (other than register tapes)
evidencing, and relating to, the agreements and transactions
which gave rise to the Accounts, including, without
limitation, all original orders, invoices and shipping
receipts.
(iv) The Administrative Agent in its own name or in
the name of others may at any time after the occurrence and
during the continuance of an Event of Default communicate
with obligors under the Accounts to verify with them to the
Administrative Agent's satisfaction the existence, amount
and terms of any Accounts.
(v) Upon the request of the Administrative Agent at
any time after the occurrence and during the continuance of
an Event of Default, the Grantor shall notify obligors on
the Accounts that the Accounts have been assigned to the
Administrative Agent for the ratable benefit of the Lenders
==================================================================
-14-
and that payments in respect thereof shall be made directly
to the Administrative Agent.
Section 13. Registration Rights.
-------------------
(a) If the Administrative Agent shall determine to
exercise its right to sell all or any of the Pledged
Collateral pursuant to Section 12 hereof, the Grantor agrees
that, upon request of the Administrative Agent, the Grantor
will, at its own expense:
(i) execute and deliver, and cause each
issuer of the Pledged Collateral which is a Subsidiary
contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments
and documents, and do or cause to be done all such
other acts and things, as may be necessary or, in the
opinion of the Administrative Agent, advisable to
register such Pledged Collateral under the provisions
of the Securities Act, and to cause the registration
statement relating thereto to become effective and to
remain effective for such period as prospectuses are
required by law to be furnished, and to make all
amendments and supplements thereto and to the related
prospectus which, in the opinion of the Administrative
Agent, are necessary or advisable, all in conformity
with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange
Commission applicable thereto;
(ii) use its best efforts to qualify the
Pledged Collateral under the state securities or "Blue
Sky" laws and to obtain all necessary approvals of all
Governmental Authorities for the sale of the Pledged
Collateral, as requested by the Administrative Agent;
(iii) cause each such issuer to make
available to its security holders, as soon as
practicable, an earnings statement which will satisfy
the provisions of Section 11(a) of the Securities Act;
and
(iv) do or cause to be done all such other
acts and things as may be necessary to make such sale
of the Pledged Collateral or any part thereof valid and
binding and in compliance with applicable law.
(b) Determination by the Administrative Agent to
exercise its right to sell any or all of the Pledged
Collateral pursuant to Section 12 hereof without making a
request of the Grantor pursuant to Section 13(a) hereof
shall not by the sole fact of such sale be deemed to be
commercially unreasonable.
Section 14. Binding Effect; Benefits. This Agreement shall
-------------------------
be binding upon the Grantor and its successors and assigns, and
shall inure to the benefit of the Administrative Agent, the
Lenders, the Issuing Banks, the Arranger and the Syndication
Agents. The Grantor's successors and assigns shall include,
==================================================================
-15-
without limitation, a receiver, trustee or debtor-in-possession
of or for the Grantor.
Section 15. Expenses. The Grantor shall upon written
--------
demand pay to the Administrative Agent the amount of any and all
expenses, including the fees and disbursements of its counsel and
of any experts and agents, as provided in Section 12.03 of the
Credit Agreement.
Section 16. Amendments, Etc. No amendment or waiver of any
---------------
provision of this Agreement nor consent to any departure by the
Grantor herefrom shall in any event be effective unless the same
shall be in writing and signed by the party to be charged
therewith, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for
which given.
Section 17. Notices. All notices and other communications
-------
provided for hereunder shall be given in the manner set forth in
the Credit Agreement and to the addresses first above written or,
as to each party, at such other address as may be designated by
such party in a written notice to the other party.
Section 18. Continuing Security Interest; Termination.
-----------------------------------------
(a) This Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full
force and effect until payment in full of the Obligations,
the termination of the commitments of the Lenders to extend
credit under the Credit Agreement, the expiration or
termination of all Letters of Credit and the termination of
the Credit Agreement, (ii) be binding upon the Grantor, its
successors and assigns and (iii) except to the extent that
the rights of any transferor or assignor are limited by
Section 12.01 (concerning assignments) of the Credit
Agreement, inure, together with the rights and remedies of
the Administrative Agent hereunder, to the benefit of the
Administrative Agent, the Lenders, the Issuing Banks, the
Arranger and the Syndication Agents, subject to the terms
and conditions of the Credit Agreement. Without limiting
the generality of the foregoing clause (iii), any Lender may
assign or otherwise transfer any interest in any Loan owing
to such Lender to any other Person, and such other Person
shall thereupon become vested with all the benefits in
respect thereof granted to the Administrative Agent herein
or otherwise, subject, however, to the provisions of Section
12.01 (concerning assignments) of the Credit Agreement.
Nothing set forth herein or in any other Loan Document is
intended or shall be construed to give the Grantor's
successors and assigns any right, remedy or claim under, to
or in respect of this Agreement, any other Loan Document or
any Collateral. The Grantor's successors and assigns shall
include, without limitation, a receiver, trustee or
debtor-in-possession thereof or therefor.
(b) Upon the payment in full of the Obligations, the
termination of the commitments of the Lenders to extend
credit under the Credit Agreement, the termination or
expiration of all Letters of Credit and the termination of
the Credit Agreement, the security interest granted hereby
shall terminate and all rights to the Collateral shall
revert to the Grantor. Upon any such termination, the
================================================================
-16-
Administrative Agent shall promptly return to the Grantor,
at the Grantor's expense, such of the Collateral held by the
Administrative Agent as shall not have been sold or
otherwise applied pursuant to the terms hereof. The
Administrative Agent will, at the Grantor's expense, execute
and deliver to the Grantor such other documents as the
Grantor shall reasonably request to evidence such
termination.
(c) Upon any release of the Administrative Agent's
security interest in any part of the Collateral expressly
required to be given by the Administrative Agent pursuant to
Section 11.12(c) of the Credit Agreement, the Administrative
Agent shall execute and deliver to the Grantor, at the
Grantor's expense, all termination statements, assignments
and other documents and instruments as may be necessary or
desirable to release fully the security interests in such
Collateral granted hereby; provided, however, that (i) the
-------- -------
Administrative Agent shall not be required to execute any
such documents on terms which, in the Administrative Agent's
opinion, would expose the Administrative Agent to liability
or create any obligation or entail any consequence other
than the release of such security interests without recourse
or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any security
interests, liens or other encumbrances upon (or obligations
of the Grantor in respect of) all interests retained by the
Grantor, including without limitation, the proceeds of any
sale, all of which shall continue to constitute part of the
Collateral.
Section 19. Applicable Law; Severability. This Agreement
----------------------------
shall be construed in all respects in accordance with, and
governed by, the laws of the State of New York. Whenever
possible, each provision of this Agreement shall be interpreted
in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the
remaining provisions of this Agreement.
Section 20. Consent to Jurisdiction and Service of Process;
-----------------------------------------------
Waiver of Jury Trial. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
--------------------
EACH PARTY HERETO WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY HERETO ACCEPTS, FOR ITSELF IN AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT FROM WHICH NO APPEAL
HAS BEEN TAKEN OR IS AVAILABLE. EACH PARTY HERETO IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS
===================================================================
-17-
NOTICE ADDRESS SPECIFIED ON THE FIRST PAGE HEREOF, SUCH SERVICE
TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. EACH OF
THE GRANTOR AND, BY ACCEPTANCE HEREOF, THE ADMINISTRATIVE AGENT,
THE ARRANGER, THE SYNDICATION AGENTS AND THE LENDERS, IRREVOCABLY
WAIVES (A) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT, AND (B) ANY OBJECTION (INCLUDING WITHOUT
LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
--------------------
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT IN ANY JURISDICTION SET FORTH ABOVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY
PARTY HERETO TO BRING PROCEEDINGS AGAINST ANY OTHER PARTY HERETO
IN THE COURTS OF ANY OTHER JURISDICTION.
Section 21. Waiver of Notice, Hearing and Bond. THE
----------------------------------
GRANTOR WAIVES ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR
TO THE EXERCISE BY THE ADMINISTRATIVE AGENT OR THE LENDERS OF ITS
RIGHTS, FROM AND AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT, TO
REPOSSESS THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY,
ATTACH OR LEVY UPON THE COLLATERAL. THE GRANTOR WAIVES THE
POSTING OF ANY BOND OTHERWISE REQUIRED OF THE ADMINISTRATIVE
AGENT OR THE LENDERS IN CONNECTION WITH THE JUDICIAL PROCESS OR
PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH, OR LEVY UPON
THE COLLATERAL TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF THE ADMINISTRATIVE AGENT OR THE LENDER OR TO
ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER
PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT.
Section 22. Advice of Counsel. THE GRANTOR REPRESENTS TO
-----------------
THE ADMINISTRATIVE AGENT THAT IT HAS DISCUSSED THIS AGREEMENT
WITH ITS ATTORNEYS.
Section 23. Section Titles. The section titles herein are
--------------
for convenience and reference only and shall not affect in any
way the interpretation of any of the provisions hereof.
=================================================================
-18-
IN WITNESS WHEREOF, the Grantor has caused this Agreement to
be duly executed and delivered by its officer thereunto duly
authorized as of the day first above written.
ANNTAYLOR, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President-
Chief Financial Officer
Agreed and accepted to as of
the date first above written:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President