LETTER OF NEGATIVE PLEDGE
The Hongkong and Shanghai Banking Corporation Limited
140 Broadway
New York, NY 10005-1196
Re: Amended and Restated Credit
Agreement dated as of September 20,
1996 with ANNTAYLOR GLOBAL
SOURCING, INC. (formerly known as
CAT US, Inc.) (the 'Company') up to
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an aggregate amount of $40,000,000
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(the 'Credit Agreement')
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Dear Sir/Madam:
In consideration of your agreeing to grant, continue and/or
further extend credit facilities and other financial
accommodation to the Company, the Company hereby irrevocably and
unconditionally covenants and undertakes with you as follows:
1. The Company shall not:
a. Create or attempt to create, assume or permit to
subsist any mortgage, security interest, charge,
pledge, lien, or other encumbrance upon, or permit any
lien, security interest or other encumbrance (except
for statutory or constitutional liens arising in the
ordinary course of business with respect to any
obligation or indebtedness which is not yet due and
payable) to arise on or affect, the whole or any part
of its respective undertaking, property, assets and
rights, other than pledges created over goods and/or
services acquired pursuant to documentary credits
opened in the ordinary course of business for the
purpose of financing the acquisition or provision of
such goods and services; or
b. Transfer, sell or otherwise dispose of or attempt
or agree to transfer, sell or dispose of the whole or
any part of its respective undertaking, property,
assets and rights, except (i) by way of sale at full
value in the usual and ordinary course of business as
now conducted and for the purpose of carrying on the
relevant business, (ii) obsolete or worn-out property,
tools or equipment no longer used or useful in its
business or (iii) the sale, in a single transaction, of
the CAD-CAM computer equipment described in Exhibit F
to the Stock and Asset Purchase Agreement (as defined
in the Credit Agreement), the value of which equipment
shall not exceed $10,000.00 in the aggregate; or
c. Grant, issue or extend any guarantee or indemnity
or enter into any other form of contractual undertaking
or arrangement of similar effect in respect of any
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indebtedness or obligations, actual or contingent, of
any other Person whatsoever except in the usual and
ordinary course of business as now conducted by the
Company and for the purpose of the carrying on by the
Company of its business.
2. The undertakings set out herein shall not be deemed breached
by reason only of the existence of any mortgage, security
interest, charge, pledge, lien or other encumbrance or
guarantee or indemnity which has been created, assumed or
which subsists or has arisen prior to the date hereof,
provided, that any further or additional encumbrance over or
affecting the relevant asset, or increase in the amount
secured by or other variation of the relevant encumbrance or
guarantee or indemnity of similar effect, shall constitute
such a breach.
3. The Company further authorizes you, in your absolute
discretion, at any time and from time to time to notify any
creditors of the Company of the terms of the undertakings
set out herein in the event that you receive notice of
proposals which, if implemented, would or might be in breach
of such undertakings.
Yours faithfully,
ANNTAYLOR GLOBAL SOURCING, INC.
By /s/
_________________________
Name:
Title:
Date: As of September 20, 1996
Letter of Negative Pledge - Hongkong and Shanghai Banking Corp. Ltd. and AnnTaylor Global Sourcing Inc.
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