CONSENT AND WAIVER
THIS CONSENT AND WAIVER (this "Agreement"), dated as of
January 21, 2002, is between Warnaco Inc., a Delaware corporation ("Warnaco
Inc."), Warner's (U.K.) Ltd., a corporation organized and existing under the
laws of the United Kingdom ("Warner's U.K.") and Warnaco (HK) Ltd., a
corporation organized and existing under the laws of Barbados ("Warnaco HK")
(together, Warnaco Inc., Warner's U.K. and Warnaco HK are referred to as the
"Sellers"), and Luen Thai Overseas Limited, a corporation organized and existing
under the laws of Bahamas (the "Purchaser"). Capitalized terms used herein shall
have the meanings assigned thereto in the Sale Agreement (as defined below).
WHEREAS, the Sellers and the Purchaser entered into that
certain Stock and Asset Sale Agreement, dated as of December 21, 2001 (the "Sale
Agreement");
WHEREAS, pursuant to 'SS'6.5(a) of the Sale Agreement, no
later than ten business days prior to the Closing Date (the "Ten Day
Requirement"), the Purchaser shall make an Employment Offer to each of the
Offered Employees on terms and conditions (including, but not limited to
salary or wages and incentive opportunities) that are in the aggregate no
less favorable than those provided by the Sellers on the date of the
Sale Agreement;
WHEREAS, pursuant to 'SS'6.5(f) of the Sale Agreement, the
Sellers and Purchaser agree to certain undertakings concerning employee benefits
and pension plans including but not limited to the creation of a Purchaser
Pension Plan and the transfer of funds in the Warnaco Pension Plan to the
Purchaser Pension Plan; and
WHEREAS, the Sellers and the Purchaser desire to (i) revise
'SS'6.5(a) of the Sale Agreement by deleting the Ten Day Requirement and
replacing it with a requirement that the Purchaser make the Employment Offers to
the Offered Employees no later than the day prior to the Closing Date (the
"Pre-Closing Requirement") and (ii) replace the existing 'SS'6.5(f) of the
Sale Agreement with the revised 'SS'6.5(f) set forth on Schedule A hereto.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual agreements and covenants contained herein, and for other good and
valuable consider ation, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Consent and Waiver. (a) In accordance with 'SS'9.7 of the
Sale Agreement, the Sellers and the Purchaser hereby (i) revise 'SS'6.5(a) of
the Sale Agreement by deleting the Ten Day Requirement and replacing it with
the Pre-Closing Requirement
and (ii) consent to the replacement of 'SS'6.5(f) of the Sale Agreement with the
revised 'SS'6.5(f) of the Sale Agreement as set forth on Schedule A hereto;
(b) All other provisions of the Sale Agreement shall remain in
full force and effect and shall be unaffected by this Agreement.
2. Amendment; Modification. No provision of this Agreement may
be amended or modified unless such amendment or modification is in writing and
signed by the parties hereto.
3. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns.
4. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the choice of law principles thereof.
5. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall,
taken together, be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Sellers and the Purchaser have caused
this Agreement to be executed on their behalf by their officers thereunto duly
authorized, as of the date first above written.
WARNACO INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President
WARNER'S (U.K.) LTD.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Director
WARNACO (HK) LTD.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Director and Secretary
LUEN THAI OVERSEAS LIMITED
By: /s/ Sunny Tan
--------------------------
Name:
Title:
SCHEDULE A
Section 6.5(f) As soon as practicable after the Closing Date, and in
any event effective as of the Closing Date, the Purchaser shall, or shall cause
an Affiliate to, establish a defined benefit pension plan and trust intended to
qualify under IRC Sections 401(a) and 501(a) ("Purchaser Pension Plan"). The
Purchaser shall use its best efforts as soon as practicable following the
Closing to obtain a determination letter from the Internal Revenue Service to
the effect that the Purchaser Pension Plan and its related trust is qualified
under IRC Sections 401(a) and 501(a). The Purchaser Pension Plan shall provide
benefits to the Transferred Employees who are participants in the Employee
Retirement Plan of Warnaco Inc. (the "Warnaco Pension Plan") as of the Closing
Date (such Transferred Employees, the "Warnaco Pension Employees") that are
substantially similar in the aggregate to those provided as of the date hereof
under the Warnaco Pension Plan. The Warnaco Pension Employees shall begin to
accrue benefits under the Purchaser Pension Plan as of immediately following the
Closing Date. Purchaser shall, and shall cause the Purchaser Pension Plan to,
recognize credit for all service by each Warnaco Pension Employee with the
Sellers or any predecessor or Affiliate of the Sellers, as the case may be, for
all purposes under the Purchaser Pension Plan, provided that such service credit
does not result in the duplication of benefits which were accrued by the Warnaco
Pension Employees under the Warnaco Pension Plan prior to the Closing Date.
