CONFORMED
LETTER WAIVER
Dated as of April 16, 2001
To the banks, financial institutions and other institutional lenders
(collectively, the "Lender Parties") party to the Intercreditor
Agreement referred to below and to The Bank of Nova Scotia and Citibank,
N.A., as debt coordinators (the "Debt Coordinators")
Ladies and Gentlemen:
We refer to the (i) Amendment, Modification, Restatement
and General Provisions Agreement dated as of October 6, 2000 (as amended,
supplemented or otherwise modified through the date hereof, the "Facility
Agreement") among The Warnaco Group, Inc. ("Group"), Warnaco Inc., the
other direct and indirect Subsidiaries of Group party thereto, The Bank of
Nova Scotia ("Scotiabank"), as Administrative Agent (the "Administrative
Agent"), Scotiabank and Citibank, N.A., as Debt Coordinators (the "Debt
Coordinators"), for themselves and as representatives of each of the Lender
Parties, and State Street Bank and Trust Company, as Collateral Trustee
(the "Collateral Trustee") and (ii) Intercreditor Agreement referred to in
the Facility Agreement. Capitalized terms not otherwise defined in this
Letter Waiver have the same meanings as specified in Annex A to the
Facility Agreement.
We hereby request that you waive, solely for the period
commencing on the date hereof through May 16, 2001 (the "Waiver Termination
Date"), the requirements of (i) Section 2.7 of the Facility Agreement for
the Fiscal Quarter ended December 31, 2000, (ii) Section 2.8(b) of the
Facility Agreement (provided, however, that Group shall deliver to the
Administrative Agent and the Lender Parties no later than April 16, 2001
the annual audit report for Fiscal Year 2000 containing a Consolidated
balance sheet of Group and its Subsidiaries as of the end of such Fiscal
Year and Consolidated statements of income and cash flows of Group and its
Subsidiaries for such Fiscal Year, together with the opinion of Deloitte &
Touche LLP thereon) and (iii) Section 2.14(c) of the Facility Agreement
with respect to the assets listed on Exhibit A hereto.
We agree that we will (i) not, and will not permit any
other Loan Party to, request the issuance of any letter of credit under any
Covered Facility for the period commencing on the date hereof through the
Waiver Termination Date, other than as specified on Schedule I hereto (it
being further understood that such permitted letters of credit will, to the
extent practicable, be requested, subject to availability (including
availability for issuance of international and foreign letters of credit),
only under the New Trade Credit Facility and the facility numbered B.7 on
Schedule II to the Intercreditor Agreement, such that the dollar amount of
letters of credit requested under such facilities will be as close to
pro-rata as possible), (ii) deliver weekly on each Tuesday (or if Tuesday
is not a Business Day, on the next succeeding Business Day), an 8-week
rolling forecast of domestic cash flow for Group, duly certified by a
Responsible Officer as having been prepared in a manner consistent with the
cash flow forecasts previously delivered to the Debt Coordinators, and
otherwise in form satisfactory to the Debt Coordinators, (iii) deliver by
no later than April 20, 2001 to the Debt Coordinators and each of the
Lender Parties a revised annual business plan for Fiscal Year 2001 and
2002, as prepared by management of Group in a manner consistent with the
business plans previously delivered to the Debt Coordinators, and otherwise
in form satisfactory to the Debt Coordinators and (iv) cooperate with and
assist any financial consulting firm (the "Financial Adviser") retained by
or on behalf of the Debt Coordinators pursuant to any engagement agreed to
among Group, the Debt Coordinators and the Financial Adviser, in the
performance of its services, including, without limitation, providing such
Financial Adviser with adequate facilities and timely access to data,
information and personnel of, in each case, the major operating divisions
of Group and its Subsidiaries, all as may be reasonably requested by the
Financial Adviser. The undersigned further agrees and acknowledges that the
covenants set forth in this paragraph shall be treated for all purposes
(including Article V of the Facility Agreement) as if they were covenants
in the Facility Agreement.
This Letter Waiver and the agreements contained herein
shall become effective as of the date first above written when, and only
when, on or before the date hereof, the Administrative Agent shall have
received (i) counterparts of this Letter Waiver executed by all of the Loan
Parties and the Supermajority Lenders or, as to any of the Lender Parties,
advice satisfactory to the Debt Coordinators that such Lender Party has
executed this Letter Waiver and (ii) payment of all fees and expenses of
the Debt Coordinators for which statements have been delivered on or prior
to the date hereof (including the accrued fees and expenses and retainers
of counsel and other advisers to the Debt Coordinators). This Letter Waiver
is requested pursuant to the provisions of Section 2.2 of the Intercreditor
Agreement.
The Facility Agreement and each of the other Loan
Documents, except to the extent of the waiver specifically provided above,
are and shall continue to be in full force and effect and are hereby in all
respects ratified and confirmed. The execution, delivery and effectiveness
of this Letter Waiver shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Lender Party, the
Debt Coordinators, the Administrative Agent or the Collateral Trustee under
any of the Loan Documents or Covered Documents, nor constitute a waiver of
any provision of any of the Loan Documents or Covered Documents.
On the day following the Waiver Termination Date, without
any further action by any Lender Party, the Debt Coordinators, the
Administrative Agent or the Collateral Trustee, all of the terms and
provisions set forth in the Loan Documents shall have the same force and
effect as if this Letter Waiver had not been entered into by the parties
hereto, and each Lender Party, the Debt Coordinators, the Administrative
Agent and the Collateral Trustee shall have all of the rights and remedies
afforded to them under the Loan Documents and Covered Documents as though
no waiver had been granted hereunder.
Each of the undersigned Loan Parties, as Guarantors under
the Parent Guaranty or the Subsidiary Guaranty, as applicable, hereby
consents to the execution and delivery of this Letter Waiver and hereby
confirms and agrees that (a) notwithstanding the effectiveness of this
Letter Waiver, the Guaranty to which such Loan Party is a party is, and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects and (b) the Collateral Documents to which such
Grantor is a party and all of the Collateral described therein do, and
shall continue to, secure the payment of all of the Secured Obligations (in
each case, as defined therein).
If you agree to the terms and provisions of this Letter
Waiver, please evidence such agreement by (i) faxing your signature page to
Xxxxxx Fine (tel. 000-000-0000; fax 000-000-0000) by no later than 12:00
noon (NY time) on Thursday, April 12 and (ii) executing and returning two
counterparts of this Letter Waiver to Xxxxxx Fine, Shearman & Sterling, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at your earliest convenience.
This Letter Waiver may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery
of an executed counterpart of a signature page to this Letter Waiver by
telecopier shall be effective as delivery of a manually executed
counterpart of this Letter Waiver.
[remainder of this page intentionally left blank]
This Letter Waiver shall be governed by, and construed in
accordance with, the laws of the State of New York.
Very truly yours,
THE WARNACO GROUP, INC.
By /s/ Xxxxxxx Xxxxxxxxxxx
----------------------
Title: Vice President and Secretary
Agreed as of the date first above written:
WARNACO INC.
DESIGNER HOLDINGS LTD.
OUTLET STORES, INC.
OUTLET HOLDINGS, INC.
RIO SPORTSWEAR, INC.
AEI MANAGEMENT CORPORATION
JEANSWEAR HOLDINGS, INC.
XXXXXX XXXXX JEANSWEAR COMPANY
CKJ HOLDINGS, INC.
CKJ SOURCING, INC.
ABBEVILLE MANUFACTURING COMPANY
KAI JAY MANUFACTURING COMPANY
XXXXXXX INC.
000 XXXXXX XXXXXX INC.
WARNACO INTERNATIONAL INC.
WARMANA LIMITED
WARNACO SOURCING INC.
WARNER'S DE COSTA RICA INC.
AUTHENTIC FITNESS CORPORATION
AUTHENTIC FITNESS PRODUCTS INC.
WARNACO U.S., INC.
WARNACO MEN'S SPORTSWEAR, INC.
X.X. XXXXXXXX COMPANY
WARNACO VENTURES LTD.
VENTURES LTD.
A.B.S. CLOTHING COLLECTION, INC.
WARNACO INTERNATIONAL, L.L.C.
AUTHENTIC FITNESS RETAIL INC.
AUTHENTIC FITNESS ON-LINE, INC.
CCC ACQUISITION CORP.
CCC ACQUISITION REALTY CORP.
UBERTECH PRODUCTS, INC.
WARNACO PUERTO RICO, INC.
By: /s/ Xxxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Vice President and Secretary
MYTRLE AVENUE, INC.
By:/s/ Xxxx Xxxxxxx
----------------------------
Name: Xxxx Xxxxxxx
Title: Assistant Treasurer
XXXXXXX STREET, INC.
By:/s/ Xxxx Xxxxxxx
----------------------------
Name: Xxxx Xxxxxxx
Title: Treasurer
PENHALIGON'S BY REQUEST, INC.
By:/s/ Xxxxxxx Xxxxxxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Attorney-in-Fact
XXXXX VISTA DE TLAXCALA, S.A. DE C.V.
WAC INTERNATINAL DISTRIBUCION DE PUEBLA, S.A. DE C.V.
CENTRO DE CORTE TETLA, S.A. DE C.V.
VISTA DE HUAMANTLA, S.A. DE C.V.
VISTA DE PUEBLA, S.A. DE C.V.
XXXXX VISTA DE VERACRUZ, S.A. DE C.V.
OLGUITA DE MEXICO, S.A. DE C.V.
JUARMEX, S.A. DE C.V.
AUTHENTIC FITNESS DE MEXICO, S.A. DE C.V.
VISTA DE YUCATAN, S.A. DE X.X.
XXXXXX'X DE MEXICO, S.A. DE C.V.
By: /s/ Xxxxxxx Xxxxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Director
WARNACO (HK) LTD
PENHALIGON'S LIMITED
PENHALIGON'S PACIFIC LIMITED
AUTHENTIC FITNESS (HK) LTD
G.J.M. (H.K.) MANUFACTURING LIMITED
DESIGNER HOLDINGS OVERSEAS LIMITED
WARNER'S AIGLON S.A.
WARNACO FRANCE SARL
EURALIS S.A.S.
LEJABY S.A.S.
XXXXXX XXXXX FRANCE S.N.C.
IZKA S.C.
PMJ S.A.
WARNACO OF CANADA COMPANY
AUTHENTIC FITNESS OF CANADA INC.
WARNACO LAC ONE GMBH
WARNACO LAC TWO GMBH
ERATEX-WARNACO LAC TWO GMBH & CO. KG
WARNER'S (UNITED KINGDOM) LIMITED
PENHALIGON'S & JEAVONS INVESTMENT COMPANY LIMITED
MULMKION B.V.
DONATEX-WARNACO X.X.
XXXXXX'X COMPANY (BELGIUM)
By: /s/ Xxxxxxx Xxxxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Director
WARNACO HOLLAND B.V.
WARNACO NETHERLANDS B.V.
WARNACO B.V.
By: /s/ Xxxxxxx Xxxxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Director
By: /s/ Xxxxxxx Xxxxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Director
Agreed as of the date first above written:
CITICORP USA, INC. THE BANK OF NOVA SCOTIA
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxx Xxxxxx
---------------------- ----------------------
Title: Vice President Title: Managing Director
SCOTIA CAPITAL (USA) INC. SCOTIABANK EUROPE PLC
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxx
---------------------- ----------------------
Title: Chief Executive Officer Title: Director
XXXXXX GUARANTY TRUST SOCIETE GENERALE
COMPANY OF NEW YORK
By: /s/ R. Xxxxx Xxxxxx
By: /s/ Houston X. Xxxxxxxx ----------------------
---------------------- Title: Director
Title: Vice President
COMMERZBANK AG, NEW YORK BANK OF AMERICA, N.A.
& GRAND CAYMAN BRANCHES
By: /s/ Xxxxx X. Xxxxx
By: /s/ Xxxxx Xxxxx ----------------------
---------------------- Title: Principal
Title: Vice President
By: /s/ Xxxxx Xxxxxxxxx
----------------------
Title: Vice President
THE DAI-ICHI KANGYO BANK, LIMITED FLEET NATIONAL BANK
By: /s/ Azlan Ahmad By: /s/ Xxxxx Xxxxx
---------------------- ----------------------
Title: Assistant Vice President Title: Senior Vice President
THE BANK OF NEW YORK GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx Xxxxxxxxx
---------------------- ----------------------
Title: Vice President Title: Duly Authorized
Signatory
SUNTRUST BANK BANK OF TOYKO-MITSUBISHI TRUST
COMPANY
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------- By: /s/ Xxxxxxxx Xxxxxxxx
Title: Director ----------------------
Title: Senior Vice President
HSBC XXX XXX COMMERCIAL BANK, LTD.,
LOS ANGELES BRANCH
By: /s/ Xxxxxxxxx X. Xxxxx
----------------------
Title: Vice President By: /s/ Xxxxxx Xxxxx-i Xxxxx
----------------------
Title: SVP & General Manager
XXXXXX BANK PLC BANK LEUMI USA
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxx Xxx Hong
---------------------- ----------------------
Title: Senior Vice President Title: Vice President
By: /s/ Xxxx Xxxxx
----------------------
Title: Vice President
Schedule I to
Letter Waiver
Letters of Credit
-------------------------------------------------------------------------------
Week ending Week ending Week ending Period ending
April 20, 2001 April 27, 2001 May 4, 2001 May 16, 2001
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Domestic $8,500,000 $9,000,000 $8,500,000 $12,800,000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Foreign $9,000,000 $9,000,000 $7,000,000 $11,200,000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total $17,500,000 $18,000,000 $15,500,000 $24,000,000
-------------------------------------------------------------------------------
Note: amounts of Letters of Credit not used in any period as specified
above (or amounts forecast to be used for the period ending April 16,
2001, as previously disclosed to the Lender Parties in the Letter Waiver
dated March 29, 2001, and not used during such period) may be used in
the next succeeding period.
Exhibit A to
Letter Waiver
Certain Assets
Costa Rica Assets
Paris Apartment
