$7,000,000.00 November 20, 1995
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
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,
(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
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:
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 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
(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
(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
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.
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,
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
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.
As used herein, the term 'Lender' shall mean the holder and
owner of this Note.
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