AMENDMENT AND WAIVER
This AGREEMENT AND WAIVER dated as of August 27, 2001 (this
"Agreement"), among Warnaco Inc., a Delaware corporation, as debtor and debtor
in possession under chapter 11 of the Bankruptcy Code (the "Borrower"), The
Warnaco Group Inc. ("Group") and the Domestic Subsidiaries (as defined in the
Credit Agreement referred to below) of Group, as debtors and debtors in
possession under chapter 11 of the Bankruptcy Code (the "Subsidiary Guarantors"
and, together with Group, the "Guarantors"), the Lenders (as defined in the
Credit Agreement referred to below) party hereto and Citibank N .A., as
Administrative Agent (as defined below) amends, and waives compliance with,
certain provisions of the Senior Secured Super-Priority Debtor In Possession
Revolving Credit Agreement dated as of June 11, 2001, among the Borrower, Group
and the Subsidiary, Guarantors, the Lenders, the Issuers (as defined therein),
Citibank, N.A. as administrative agent for the Lenders and the Issuers (in such
capacity, the "Administrative Agent"), and Xxxxxxx Xxxxx Xxxxxx Inc., The Bank
of Nova Scotia and X.X. Xxxxxx Securities, Inc. as joint lead arrangers (such
agreement, the "Credit Agreement").
W I T N E S S E T H
WHEREAS, the Borrower has advised the Administrative Agent and the
Lenders that on the Petition Date, the Loan Parties filed motions seeking
approval by the Bankruptcy Court of certain pre-petition Claims other than those
included in the definition of "Permitted Prepetition Claim Payments" set forth
in the Credit Agreement; that orders to such effect were entered by the
bankruptcy Court as part of the First Day Orders (the "First Day Prepetition
Claims Motions and Orders"); and, that it is possible that as a consequence of
the foregoing, there may have occurred an Event of Default under Section 9.1(i)
of the Credit Agreement;
WHEREAS, the Borrower seeks (i) confirmation that the Requisite Lenders
consent to the First Day Prepetition Claims Motions and Orders and (ii) a waiver
with respect to any Event of Default under Section 9.1 which may have occurred
as a result of the First Day Prepetition Claims Motions and Orders and has
further requested that the Administrative Agent and Requisite Lenders agree to
amend the definition of "Permitted Prepetition Claim Payments" to include those
prepetition claims not previously included but in respect of which the
Bankruptcy Court has authorized payment;
WHEREAS, the Borrower and the Lenders agree that the definition of
"Tranche A Collateral" should be clarified in order to more accurately reflect
the agreement between the parties;
WHEREAS, pursuant to Section 13.1 of the Credit Agreement, the consent
of the Requisite Lenders is required to amend and waive the provisions of the
Credit Agreement as set forth herein;
NOW, THEREFORE, in consideration of the above premises, the Borrower,
the Requisite Lenders party hereto and the Administrative Agent agree as
follows:
Section 1. Definitions. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to such terms in the Credit
Agreement.
Section 2. Amendments to the Credit Agreement. Effective as of the
Effective Date and subject to the terms and conditions set forth herein, the
Credit Agreement is hereby amended as follows:
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(a) By amending the definition of "Net Cash Proceeds"
contained in Section 1.1 of the Credit Agreement by deleting the phrase "Asset
Sate permitted under clause (b) and (f) of Section 8.4" and replacing it with
the phrase "Asset Sale other than an Asset Sale permitted under clauses (a),
(c), (d) (e), and (g) of Section 8.4."
(b) By amending the definition of "Permitted
Prepetition Claim Payment" contained in Section 1.1 of the Credit Agreement by
deleting it in its entirety and replacing it with the following:
"Permitted Prepetition Claim Payment" means a payment (as xxx
xxxxx protection or otherwise) on account of any unsecured Claim
against a Loan Party arising or deemed to have arisen prior to the
Petition Date, which is made (a) pursuant to authority granted by a
Non-Stayed Order of the Bankruptcy Court and (b) when aggregated with
all such payments does not exceed $10,000,000 excluding (i) payments
for goods as to which a Loan Party is jointly and severally liable,
(ii) payments in respect of executory contracts prior to the rejection
thereof, (iii) reclamation payments, (iv) compensation payments to, or
for the benefit of, employees or agents of Group or a Subsidiary
thereof as specified in the First Day Orders and (v) shipping charges,
customs duties, import obligations, warehousing charges and related
claims up to a maximum of $10,350,000; provided, however, that no such
payment shall be made after the occurrence and during the continu ance
of a Default or an Event of Default.
(c) By amending the definition of "Proceeds"
contained in Section 1.1 of the Credit Agreement by deleting the words "Section
9-306 of".
(d) By amending the definition of "Tranche A
Collateral" contained in Section 1.1 of the Credit Agreement by deleting it in
its entirety and replacing it with the following:
"Tranche A Collateral" means (a) all Inventory, (b) all
Receivables, (c) all General Intangibles necessary for the sale or
other disposition of, or realization on, all Inventory and all
Receivables, by the Administrative Agent and (d) all Proceeds of the
foregoing.
(e) By deleting the definitions of "Super Majority
Tranche A Lenders" and "Super Majority Tranche B Lenders" contained in Section
1.1 of the Credit Agreement.
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(f) By amending clause (b) of Section 2.9 of the
Credit Agreement by deleting it in its entirety and replacing it with the
following:
(b) (i) Subject to Section 2.13(g) and (h), any prepayments
made by the Borrower required to be applied in accordance with this
Section 2.9(b) shall be applied as follows: first, to repay the
outstanding principal balance of the Swing Loans until such Swing Loans
shall have been repaid in full; second, to repay the outstanding
principal balance of the Tranche B Loans until such Tranche B Loans
shall have been repaid in full; third, to repay the outstanding
principal balance of the Tranche A Loans until such Tranche A Loans
shall have been paid in full; and then, to provide cash collateral for
any Letter of Credit Obligations in the manner set forth in Section 9.3
until all such Letter of Credit Obligations have been fully cash
collateralized in the manner set forth therein, to the extent the
Tranche A Outstandings exceed the Tranche A Commitments.
(ii) Notwithstanding clause (b)(i) above, if (A) any
prepayment is the result of Group or any of its Subsidiaries receiving Net Cash
Proceeds from the sale of an asset that, directly or indirectly, forms part of
the Tranche A Collateral, (B) as a consequence of such sale, the Borrowing Base
is reduced and (C) as a result of the reduction in the Borrowing Base, the
Tranche A Outstandings exceed the Maximum Tranche A Credit at such time, then
the Borrower shall, following any prepayment of the Swing Loans but prior to any
prepayment in respect of the Tranche B Loans. prepay the Tranche A Loans then
outstanding solely in an amount equal to such excess.
(iii) All repayments of Tranche B Loans required to be made
pursuant to this Section 2.9(b) shall result in a permanent reduction of the
Tranche B Commitments to the extent provided in Section 2.5(c).
(g) By amending the first seven lines of clause (g)
of Section 2.13 of the Credit Agreement by deleting them in their entirety and
replacing it with the following:
(g) After the occurrence and during the continuance of an
Event of Default, the Borrower hereby irrevocably waives the right to
direct the application of any and all payments in respect of the
Obligations and any proceeds of Tranche A Collateral, and agrees that
the Administrative Agent shall, upon the termination of the Commitments
or the acceleration of the
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Obligations pursuant to Section 9.2, apply all funds on deposit in any
Tranche A Cash Collateral Account and all other proceeds of Tranche A
Collateral in the following order:
(h) By amending the first seven lines of clause (h)
of Section 2.13 of the Credit Agreement by deleting them in their entirety and
replacing it with the following:
(h) After the occurrence and during the continuance of an
Event of Default, the Borrower hereby irrevocably waives the right to
direct the application of any and all payments in respect of the
Obligations and any proceeds of Tranche B Collateral, and agrees that
the Administrative Agent shall, upon the termination of the Commitments
or the acceleration of the Obligations pursuant to Section 9.2, apply
all funds on deposit in any Tranche B Cash Collateral Account and all
other proceeds of Tranche B Collateral in the following order:
(i) By amending clause (h) of Section 8.1 by
replacing the term "Pledged Debt" with the term "Pledged Notes".
(j) By amending clause (a)(ii) of Section 13.1 of the
Credit Agreement by deleting it in its entirety and replacing it with the
following:
(ii) increase the Commitments of such Lender or subject such
Lender to any additional obligation; provided, however, that (A) any
aggre gate increase with respect to the Tranche A Commitments shall
also require the consent of each of the Tranche A Lenders and (B) any
aggregate increase with respect to the Tranche B Commitments shall also
require the consent of each of the Tranche B Lenders;
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(k) By amending clause (a)(x) of Section 13.1 of the
Credit Agreement by deleting it in its entirety and replacing it with the
following:
(x) amend Section 13.7 or this Section 13.1 or the definition
of the terms "Requisite Lenders", "Requisite Tranche A Lenders",
"Requisite Trance B Lenders" or "Ratable Portion";
(l) By further amending Section 13,1 of the Credit
Agreement by adding the following paragraph (c) to the end of such section:
(c) In connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change") requiring the consent of
all affected Lenders, all Tranche A Lenders or all Tranche B Lenders,
if the consent of Requisite Lenders is obtained, but the consent of
other applicable Lenders whose consent is required is not obtained (any
such Lender whose consent is not obtained as described in this Section
13.1 being referred to as a "No-Consenting Lender"), then, as long as
the Lender that is acting as the Administrative Agent is not a
Non-Consenting Lender, at the Borrower's request, the Administrative
Agent or an Eligible Assignee that is acceptable to the Administrative
Agent shall have the right with the Administrative Agent's consent and
in the Administrative Agent's sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lender, and such
Non-Consenting Lender agrees that it shall, upon the Administrative
Agent's request, sell and assign to the Lender that is acting as the
Administrative Agent or such Eligible Assignee, all of the Commitments,
the Tranche A Outstandings and the Tranche B Outstandings of such
Non-Consenting Lender for an amount equal to the principal balance of
all Loans held by the Non-Consenting Lender and all accrued interest
and fees with respect thereto through the date of sale, such purchase
and sale to be consummated pursuant to an executed Assignment and
Acceptance.
(m) By amending clause (a) of Section 13.2 of the
Credit Agreement by adding the words "(which consent shall not be unreasonably
with held)" immediately after the phrase "subject to the prior consent of the
Arrangers".
Section 3. Consent and Waiver. Effective as of the Effective Date and
subject to the terms and conditions set forth herein, the Requisite Lenders
hereby consent to each of the following occurrences and, solely in connection
therewith, waive compliance with any contrary provision in the Loan Document:
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(a) the filing of the motion for art order pursuant
to 11 U.S.C. 'SS'105(a), 364(b) and 503(b): (I) authorizing, but not directing,
payment of certain pre-petition shipping charges, import obligations and related
possessory liens; (II) confirming grant of administrative expense status to
obligations arising from post-petition delivery of goods; and (III) establishing
authority to pay certain ex penses in the ordinary course of business;
(b) the filing of the motion for an order pursuant to
11 U.S.C. 'SS'105(a) and the doctrine of necessity granting debtors authority
for the payment of pre-petition claims of essential trade creditors and
licensors; and
(c) the making of the orders by the Bankruptcy Court
in connection with the foregoing motions,
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in each case, to the extent the prepetition Claims sought or authorized to be
paid are not included in the definition of Permitted Prepetition Claim Payments
set forth in the Credit Agreement in effect prior to this Agreement.
Section 4. Conditions Precedent to the Effectiveness of this Agree
ment. This Agreement shall become effective as of the date when the following
conditions precedent have been satisfied (the "Effective Date"):
(a) Certain Documents. The Administrative Agent shall
have received on or before the Effective Date all of the following, all of which
shall be in form and substance satisfactory to the Administrative Agent, in
sufficient executed copies for each of the Lenders:
(i) this Agreement executed by the Borrower
and each Lender;
(ii) the Consent, Agreement and
Reaffirmation of Guaranty to this Agreement executed by each Guarantor;
and
(iii) such additional documentation as the
Adminis trative Agent or the Requisite Lenders may reasonably require.
(b) Representations and Warranties. Each of the
represen tations and warranties made by the Borrower or any Guarantor in or
pursuant to the Credit Agreement and the other Loan Documents to which the
Borrower or any Guarantor is a party or by which the Borrower, or any Guarantor
is bound, shall be true and correct in all material respects, after giving
effect to the terms of this Agreement, on and as of the Effective Date (other
than representations and warran ties in any such Loan Document which expressly
speak as of a different date).
(c) No Events of Default. No Event of Default or
Default shall have occurred and be continuing on the Effective Date after giving
effect to the terms of this Agreement.
Section 5. Representations and Warranties. Each Borrower hereby
represents and warrants to the Administrative Agent and the Lenders that as of
the date hereof, after giving effect to the terms of this Agreement, (x) no
Event of Default or Default under the Credit Agreement shall have occurred and
be continuing and (y) all of the representations and warranties of the Loan
Parties contained in Article IV of the Credit Agreement and in any other Loan
Document continue to be
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true and correct as of the date of execution hereof in all material respects, as
though made on and as of such date (other than representations and warranties in
any such Loan Document which expressly speak as of a different date).
Section 6. Reference to and Effect on the Loan Documents.
(a) Upon the effectiveness of this Agreement, on and
after the date hereof, each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof" or words of like import, and each reference in
each other Loan Document, shall mean and be a reference to the Credit Agreement
as amended hereby.
(b) Except as specifically amended hereby, all of the
terms of the Credit Agreement and all other Loan Documents shall remain
unchanged and in full force and effect.
(c) The execution, delivery and effectiveness of this
Agreement shall not, except as expressly provided herein, operate as a amendment
or waiver of any right, power or remedy of any Lender, any Issuer or the
Administrative Agent under the Credit Agreement or any of the Loan Documents,
nor constitute an amendment or waiver of any provision of the Credit Agreement
or any of the Loan Documents.
(d) This Agreement is a Loan Document.
Section 7. Costs and Expenses. The Borrower agrees to pay on demand in
accordance with the terms of Section 13.3 of the Credit Agreement all costs and
expenses of the Administrative Agent in connection with the preparation,
reproduction, execution and delivery of this Agreement and all other Loan
Documents entered into in connection herewith, including the reasonable fees,
expenses and disbursements of Weil, Gotshal & Xxxxxx LLP, counsel for the
Administrative Agent with respect thereto.
Section 8. Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
Section 9. Execution in Counterparts. This Agreement may be
executed and delivered in any number of counterparts and by different
parties hereto
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in separate counterparts, each of which when so executed and delivered shall be
deemed an original and all of which taken together shall constitute one and the
same original agreement.
Section 10. Notices. All communications and notices to the Administra
tive Agent hereunder shall be given as provided in the Credit Agreement.
Section 11. Severability. If any term or provision set forth in this
Agreement shall be invalid or unenforceable, the remainder of this Agreement, or
the application of such terms or provisions to persons or circumstances, other
than those to which it is held unenforceable, shall not in any way be affected
or impaired thereby.
Section 12. Successors. The terms of this Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
succes sors or assigns.
Section 13. Governing Law. This Agreement shall be interpreted, and the
rights and liabilities of the parties determined, in accordance with the
internal law of the State of New York.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
WARNACO INC.,
as Borrower
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------------
Name:
Title:
CITIBANK, N.A.,
as Administrative Agent
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name:
Title:
Lenders
CITIBANK, N.A.,
as a Lender
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name:
Title:
00
XXX XXXX XX XXXX XXXXXX,
as a Lender
By: /s/ X. X. Xxxxxxxxx
-----------------------------------------
Name: X. X. Xxxxxxxxx
Title: Managing Director
THE CHASE MANHATTAN BANK,
as a Lender
By: /s/ Houston X. Xxxxxxxx
-----------------------------------------
Name: Houston X. Xxxxxxxx
Title: Managing Director
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CONSENT, AGREEMENT AND AFFIRMATION OF GUARANTY.
Each of the undersigned Guarantors hereby consents to the
terms of the foregoing Amendment and Waiver Agreement in its capacity as a
guarantor under the Credit Agreement and agrees that the terms of such agreement
shall not affect in any way its obligations and liabilities under its guaranty,
all of which obligations and liabilities shall remain in full force and effect
and each of which is hereby reaffirmed.
THE WARNACO GROUP, INC.
as a Guarantor
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------------
000 XXXXXX XXXXXX INC.
A.B.S. CLOTHING COLLECTION, INC.
ABBEVILLE MANUFACTURING COMPANY
AEI MANAGEMENT CORPORATION
AUTHENTIC FITNESS CORPORATION
AUTHENTIC FITNESS PRODUCTS INC.
AUTHENTIC FITNESS RETAIL, INC.
XXXXXXX INC.
CCC ACQUISITION CORP.
CCC ACQUISITION REALTY CORP.
X.X. XXXXXXXX COMPANY
XXXXXX XXXXX JEANSWEAR COMPANY
CKI HOLDINGS, INC.
CKI SOURCING, INC.
DESIGNER HOLDINGS, LTD.
JEANSWEAR HOLDINGS, INC.
KAI JAY MANUFACTURING COMPANY
MYRTLE AVENUE, INC.
OUTLET HOLDINGS, INC.
OUTLET STORES, INC.
RIO SPORTSWEAR, INC.
UBERTECH PRODUCTS, INC.
VENTURES LTD.
WARMANA LIMITED
WARNACO INTERNATIONAL INC.
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WARNACO MEN'S SPORTSWEAR, INC.
WARNACO SOURCING, INC.
WARNACO U.S., INC.
WARNACO VENTURES LTD.
WARNER'S DE COSTA RICA INC.
WARNACO INTERNATIONAL, L.L.C.
as Guarantors
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------------
Name:
Title:
XXXXXXX STREET, INC.,
as a Guarantor
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Name:
Title:
PENHALIGON'S BY REQUEST, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------------
Name:
Title:
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