Receivables Financing Agreement – AnnTaylor Funding Inc., AnnTaylor Inc., Clipper Receivables Corp., State Street Boston Capital Corp. and PNC Bank NA
SECOND AMENDMENT TO RECEIVABLES FINANCING AGREEMENT
THIS SECOND AMENDMENT TO RECEIVABLES FINANCING AGREEMENT,
dated as of March 31, 1995 (this 'Amendment'), is among AnnTaylor
Funding, Inc. a Delaware corporation (the 'Company'), AnnTaylor,
Inc., a Delaware corporation ('AnnTaylor'), Clipper Receivables
Corporation, a Delaware corporation ('Lender'), State Street
Boston Capital Corporation, a Massachusetts corporation, as
administrator for Lender (the 'Administrator') and PNC Bank,
National Association, a national banking association (the
'Relationship Bank').
BACKGROUND
1. The Company, AnnTaylor, Lender, the Administrator and
the Relationship Bank entered into a Receivables Financing
Agreement, dated as of January 27, 1994, as amended by the First
Amendment to Receivables Financing Agreement, dated as of May 31,
1994 (the 'Agreement').
2. The Company, AnnTaylor, Lender, the Administrator and
the Relationship Bank desire to amend the Agreement in certain
respects 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. The capitalized terms used in this
Amendment and not otherwise defined herein shall have the
meanings assigned thereto in the Agreement.
SECTION 2. Mergers. Section 7.05(b) of the Agreement is
hereby amended by deleting such Section in its entirety, and
substituting therefor the following:
'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
into or with AnnTaylor, so long as AnnTaylor is the
surviving corporation.
SECTION 3. Net Worth. Section 7.05(d) of the Agreement is
hereby amended by deleting such Section in its entirety, and
substituting therefor the following:
'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.'
SECTION 4. Fixed Charge Coverage Ratio. Section 7.05(e) of
the Agreement is hereby amended by deleting such Section in its
entirety, and substituting therefor the following:
'Permit the Fixed Charge Coverage Ratio, as determined
at the end of any fiscal quarter for the preceding four
fiscal quarters to be less than the ratio set forth opposite
the month in which such fiscal quarter ends:
Quarter Ended Minimum Ratio
October 1994 1.00 to 1.00
January 1995 1.00 to 1.00
April 1995 1.00 to 1.00
July 1995 1.00 to 1.00
October 1995 1.00 to 1.00
January 1996 1.00 to 1.00
April 1996 1.00 to 1.00
July 1996 1.05 to 1.00
October 1996 and thereafter 1.10 to 1.00
SECTION 5. Events of Default. Section 10.01(f) of the
Agreement is hereby amended deleting the number '0%' where it
appears therein and substituting therefor the number '-2%'.
Section 10.01(h) of the Agreement is hereby amended by deleting
the number '27%' where it appears therein and substituting
therefor the number '22%'.
SECTION 6. Certain Definitions. The following definitions
that appear in Appendix A to the Agreement are hereby amended as
follows:
(i) the definition of 'AnnTaylor Credit Agreement' is
hereby amended by (1) deleting the date 'June 28, 1993' and
substituting therefor the date 'July 29, 1994'; (2) by
deleting the phrase 'Bank of Montreal' where it appears
therein and substituting therefor the phrase 'Fleet Bank,
National Association'; and (3) by deleting the phrase 'as
heretofore amended' where it appears at the end thereof and
substituting therefor the phrase 'as amended by the First
Amendment to Credit Agreement, dated as of January 27,
1995';
(ii) the definition of 'Defaulted Receivable' that
appears in Appendix A to the Agreement is hereby amended by
deleting the number '5' where it appears in the second line
thereof and substituting therefor the number '6' and by
deleting the number '6' where it appears in the fourth line
thereof and substituting therefor the number '7';
(iii) the definition of 'EBITDA' is hereby amended by
deleting the phrase 'all income tax' where it appears in
clause (iii) thereof and substituting therefor the phrase
'income tax expense';
(iv) the definition of 'Fixed Charge Coverage Ratio'
that appears in Appendix A to the Agreement is hereby
amended by deleting such definition in its entirety, and
substituting therefor the following:
'Fixed Charge Coverage Ratio' shall mean, for any
period, the quotient obtained by dividing (a) EBITDA by (b)
the sum of (i) Capital Expenditures paid or accrued during
such period excluding any Capital Expenditures made in
respect of the Distribution Center, plus (ii) scheduled
payments made since July 29, 1994 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.';
(v) the definition of 'Interest Expense' is hereby
amended by inserting the word 'ATSC,' before the word
'AnnTaylor' in the first line thereof;
(vi) the definition of 'Net Income' is hereby amended
by adding the word 'ATSC,' before the word 'AnnTaylor' in
the second line thereof; and
(vii) the definition of 'Net Worth' is hereby amended
by adding the following phrase at the end thereof before the
period: ', but excluding, for the purposes of this
definition, unrealized foreign exchange translation gains
and losses from investments in foreign Subsidiaries'.
The following definitions are hereby added to Appendix A in the
appropriate alphabetical order:
'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.
'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.
SECTION 7. Credit and Collection Policy. Lender and the
Administrator hereby consent to the changes to the Credit and
Collection Policy described in the letter from the Company to
Lender, dated January 16, 1995, a copy of which is attached
hereto as Exhibit A.
SECTION 8. Miscellaneous. The Agreement, as amended
hereby, remains in full force and effect. Any reference to the
Agreement from and after the date hereof shall be deemed to refer
to the Agreement as amended hereby unless otherwise expressly
stated. This Amendment may be executed in any number of
counterparts and by the different parties hereto on 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. This Amendment shall be
governed by the laws of the State of New York. The Company
hereby agrees to pay, promptly upon demand, all costs and
expenses incurred by Lender, the Administrator or the
Relationship Bank in connection with this Amendment.
IN WITNESS WHEREOF, the parties have caused this Amendment
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
---------------------
ANNTAYLOR, INC.
By: /s/ Walter J. Parks
------------------------
CLIPPER RECEIVABLES CORPORATION
By: /s/ Lannhi Tran
----------------------
STATE STREET BOSTON CAPITAL
CORPORATION, as Administrator
By: /s/ David B. Coleman
-------------------------
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Mark Williams
------------------------
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