EXHIBIT 10.1
PORTIONS OF THIS EXHIBIT 10.1 MARKED BY AN *** HAVE BEEN OMITTED PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
EXECUTION VERSION
CREDIT AGREEMENT
Dated as of August 26, 2008
among
Warnaco Inc.,
as Borrower
as Borrower
The Warnaco Group, Inc.,
as a Guarantor
as a Guarantor
The Lenders and Issuers from Time to Time Party Hereto
Bank of America, N.A.,
as Administrative Agent
as Administrative Agent
Bank of America, N.A.,
as Collateral Agent
as Collateral Agent
Banc of America Securities LLC and Deutsche Bank Securities Inc.,
as Joint Lead Arrangers
as Joint Lead Arrangers
Banc of America Securities LLC, Deutsche Bank Securities Inc. and
J.P. Morgan Securities Inc,
as Joint Bookrunners
J.P. Morgan Securities Inc,
as Joint Bookrunners
deutsche bank Securities inc.,
as Sole Syndication Agent
as Sole Syndication Agent
and
HSBC Business Credit (USA) Inc.,
JPMorgan Chase Bank, N.A.
and
RBS Business Capital,
a division of RBS Asset Finance Inc.,
as Co-Documentation Agents
JPMorgan Chase Bank, N.A.
and
RBS Business Capital,
a division of RBS Asset Finance Inc.,
as Co-Documentation Agents
Kaye Scholer LLP
425 Park Avenue
New York, New York 10022
425 Park Avenue
New York, New York 10022
Credit Agreement, dated as of August 26, 2008, among Warnaco Inc., a Delaware
corporation (the “Borrower”), The Warnaco Group, Inc., a Delaware corporation (“Group”), the
Lenders (as defined below), the Issuers (as defined below), Bank of America, N.A. (“BofA”), as
administrative agent for the Revolving Credit Facility (as defined below) (in such capacity, the
“Administrative Agent”) and as collateral agent for the Lenders and the Issuers (in such capacity,
the “Collateral Agent”), Banc of America Securities LLC (“BAS”) and Deutsche Bank Securities Inc.
(“DBSI”), as joint lead arrangers (in such capacity, the “Arrangers”), BAS, DBSI and J.P. Morgan
Securities Inc., as joint bookrunners (in such capacity, collectively, the “Joint Bookrunners”),
DBSI, as sole syndication agent for the Lenders and the Issuers (in such capacity, the “Syndication
Agent” and together with the Administrative Agent and the Collateral Agent, collectively, the
“Agents”), and HSBC Business Credit (USA) Inc., JPMorgan Chase Bank, N.A. and RBS Business Capital,
a division of RBS Asset Finance Inc., each as a co-documentation agent for the Lenders and Issuers
(in such capacity, collectively, the “Co-Documentation Agents”).
W i t n e s s e t h:
Whereas, the Borrower has requested that the Lenders and the Issuers make available
to the Borrower for the purposes specified in this Agreement (as defined below) a revolving credit
and letter of credit facility;
Whereas, the Lenders and Issuers are willing to make available to the Borrower such
revolving credit and letter of credit facility upon the terms and subject to the conditions set
forth herein;
Now, Therefore, in consideration of the premises and the covenants and agreements
contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
Section 1.1 Defined Terms. As used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and plural forms of the terms
defined):
“Accelerated Borrowing Base Certificate Delivery Date” means any date on which the Available
Credit has been less than 15% of the Aggregate Borrowing Limit for five consecutive Business Days.
“Accelerated Borrowing Base Certificate Delivery Period” means the period commencing on an
Accelerated Borrowing Base Certificate Delivery Date and ending on the first day after any 45
consecutive day period, commencing after such Accelerated Borrowing Base Certificate Delivery Date,
during which the Available Credit equals or exceeds 15% of the Aggregate Borrowing Limit for each
day during such 45 consecutive day period and no Event of Default has occurred or existed (or
ending such earlier time after the commencement of such Accelerated Borrowing Base Certificate
Delivery Date that the Available Credit equals or exceeds 15% of the Aggregate Borrowing Limit as
the Administrative Agent shall agree in writing in its sole discretion).
“Account” has the meaning specified in the Pledge and Security Agreement.
“Account Debtor” has the meaning specified in the Pledge and Security Agreement.
“Adjusted Orderly Liquidation Value Rate” means 90% of the Orderly Liquidation Value Rate (or,
in the case of Eligible Inventory consisting of Documented Non-Letter of Credit Inventory or
Inventory covered by Documentary Letters of Credit, 85% of the Orderly Liquidation Value Rate).
“Administrative Agent” has the meaning specified in the preamble to this Agreement.
“Advance Rate” means, for each category of Collateral set forth below, the rate set forth
below (as a percentage of book value) opposite such category of Collateral:
| Category | Rate | |||
Eligible Receivables |
85 | % | ||
Eligible Inventory (other than Documented Non-Letter of
Credit Inventory and Inventory covered by Documentary
Letters of Credit) |
80 | % | ||
provided, that (a) if at any time the product of (i) the Adjusted Orderly Liquidation Value Rate
and (ii) the sum of Eligible Inventory (other than Documented Non-Letter of Credit Inventory and
Inventory covered by Documentary Letters of Credit) of each Loan Party (valued, in each case, at
the lower of cost and market on a first-in, first-out basis) is less than the aggregate Borrowing
Base attributable to such Inventory under clause (a)(ii)(x) of the definition of Borrowing Base
(calculated using the above Advance Rate), then, at the sole discretion of the Administrative
Agent, exercised reasonably, the effective Advance Rate for Eligible Inventory will be adjusted
(until delivery of the next Appraisal) to a level that would cause such Advance Rate to effectively
equal the Adjusted Orderly Liquidation Value Rate; and (b) any reduction in the foregoing advance
rates (or any increase up to the rates set forth above) shall be determined by the Administrative
Agent in its sole discretion exercised reasonably and shall take effect 10 Business Days (or, if
pursuant to clause (a) above, three (3) Business Days) after the Administrative Agent delivers
written notice thereof to the Borrower.
“Affiliate” means, with respect to any Person, any other Person which, directly or indirectly,
controls, is controlled by or is under common control with such Person, each officer, director,
general partner or joint-venturer of such Person, and each Person who is the beneficial owner of
10% or more of any class of Voting Stock of such Person. For the purposes of this definition,
“control” means the possession of the power to direct or cause the direction of management and
policies of such Person, whether through the ownership of voting securities, by contract or
otherwise.
“Affiliated Account Debtor” means, (a) in relation to an Account Debtor that is a Governmental
Authority, any other Account Debtor that is a Governmental Authority, and (b) in relation to an
Account Debtor that is not a Governmental Authority, each Account Debtor that is an Affiliate of
such Account Debtor.
“Agent Affiliate” has the meaning specified in Section 10.9(c).
“Agents” has the meaning specified in the preamble to this Agreement.
“Agreement” means this Credit Agreement, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
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“Agreement Accounting Principles” means, subject to Section 1.3, GAAP or, if (x) the
Securities and Exchange Commission requires or permits United States reporting companies to utilize
the IFRS in lieu of GAAP for reporting purposes and (y) Group adopts the IFRS with the agreement of
its independent public accountants, the IFRS, each as in effect from time to time, applied in a
manner consistent with that used in the preparation of the audited annual Financial Statements
referred to in Section 6.1(c); provided that if the adoption by Group of the IFRS results in a
change in any of the calculations required by Article V, Article VI or Article VIII or in the
definition of “Applicable Margin” or “Permitted Acquisition”, the parties hereto agree to enter
into negotiations in order to amend such provisions so as to equitably reflect such change with the
desired result that the criteria for evaluating compliance with such covenants by Group and the
Borrower or the determination of the “Applicable Margin” or the calculation of the Fixed Charge
Coverage Ratio in the definition of “Permitted Acquisition” shall be the same after such adoption
as if such adoption had not been made; and provided, further, that the adoption of the IFRS (to the
extent that such adoption would affect a calculation that measures compliance with any covenant
contained in Article V, Article VI or Article VIII or in the definition of “Applicable Margin” or
“Permitted Acquisition”) shall not be given effect until such provisions are amended to reflect
such adoption.
“Aggregate Borrowing Base” means, at any time, the aggregate of the Borrowing Base and the
Borrowing Base (as defined in the Canadian Facility) at such time.
“Aggregate Borrowing Limit” means, at any time, the lesser of (i) the sum of the Revolving
Credit Commitments and Revolving Credit Commitments (as defined in the Canadian Facility) in effect
at such time and (ii) the Aggregate Borrowing Base at such time.
“Alternative Currency” means the lawful currency of each of the European Union, the United
Kingdom, Canada and Hong Kong, provided that in each case such currency is freely transferable into
Dollars.
“Anniversary Date” means each anniversary of the Closing Date.
“Applicable Lending Office” means, with respect to each Lender, its Domestic Lending Office,
in the case of a Base Rate Loan, and its Eurodollar Lending Office, in the case of a Eurodollar
Rate Loan.
“Applicable Margin” means, as of any date of determination, (a) from and after the Closing
Date but prior to the date 10 Business Days after delivery by Group to the Administrative Agent of
Financial Statements pursuant to Section 6.1(b) for the Fiscal Quarter ending on or about March 31,
2009, a per annum rate equal to 1.75% (in the case of Eurodollar Rate Loans) and .75% (in the case
of Base Rate Loans) and (b) from and after the date 10 Business Days after delivery by Group to the
Administrative Agent of Financial Statements pursuant to Section 6.1(b) for the Fiscal Quarter
ending on or about March 31, 2009, a per annum rate equal to the rate set forth below opposite the
applicable type of Loan and the then applicable Leverage Ratio of Group (determined on the last day
of the most recent Fiscal Quarter for which Financial Statements have been delivered pursuant to
Section 6.1(b) or Section 6.1(c)) set forth below:
| Base Rate | Eurodollar | |||||||
| Leverage Ratio | Loans | Rate Loans | ||||||
Greater than 1.75 to 1 |
1.00 | % | 2.00 | % | ||||
Less than or equal to 1.75 to 1 and greater than 0.50 to 1 |
.75 | % | 1.75 | % | ||||
Less than or equal to 0.50 to 1 |
.50 | % | 1.50 | % | ||||
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Changes in the Applicable Margin resulting from a change in the Leverage Ratio on the last day of
any subsequent Fiscal Quarter shall become effective 10 Business Days after delivery by Group to
the Administrative Agent of new Financial Statements pursuant to Section 6.1(b) or Section 6.1(c)
as applicable. Notwithstanding anything to the contrary set forth in this Agreement (including the
then effective Leverage Ratio of Group), if Group shall fail to deliver such Financial Statements
within any of the time periods required under Section 6.1(b) or Section 6.1(c) (as either such
section has been amended, waived or otherwise modified), the Applicable Margin from and including
the day on which such Financial Statements were due, to but not including the date 10 Business Days
after Group delivers to the Administrative Agent such Financial Statements, shall equal the highest
possible Applicable Margin provided for by this definition.
“Applicable Unused Commitment Fee Rate” means, as of any date of determination, a per annum
rate equal to the rate set forth below opposite the respective Level (i.e., Level 1 or Level 2, as
the case may be) of Average Revolver Usage for the calendar quarter most recently ended (or, for
the first payment of the Unused Commitment Fee under Section 2.12(a), for the period commencing on
the Closing Date and ending on the last day of the calendar quarter in which the Closing Date
occurred); provided that the Applicable Unused Commitment Fee Rate shall not change until 5
Business Days after the end of such calendar quarter (or shorter period).
| Average | ||||||
| Level | Revolver Usage | Unused Commitment Fee | ||||
Level 1 |
Less than 50% | 0.50 | % | |||
Level 2 |
Equal to or greater than 50% | 0.375 | % | |||
“Appraisal” means each appraisal that is conducted prior to, on or after the Closing Date
pursuant to Section 6.12(b) for purposes of determining the Borrowing Base, in form and substance
acceptable to the Administrative Agent and performed by an appraiser that is satisfactory to the
Administrative Agent.
“Approved Electronic Communications” means each notice, demand, communication, information,
document and other material that any Loan Party is obligated to, or otherwise chooses to, provide
to any Agent pursuant to any Loan Document or the transactions contemplated therein, including (a)
any supplement to the Guaranty, any joinder to the Pledge and Security Agreement and any other
written Contractual Obligation delivered or required to be delivered in respect of any Loan
Document or the transactions contemplated therein and (b) any Financial Statement, financial and
other report, notice, request, certificate and other information material, provided, however, that,
“Approved Electronic Communication” shall exclude (i) any Notice of Borrowing, Letter of Credit
Request, Swing Loan Request, Notice of Conversion or Continuation, and any other notice, demand,
communication, information, document and other material relating to a request for a new, or a
conversion of an existing, Borrowing (other than a Notice of Borrowing, Swing Loan Request or
Notice of Conversion or Continuation sent by e-mail in accordance with the terms hereof; provided,
that (A) the Borrower shall confirm each such notice by prompt delivery to the Administrative Agent
of a Notice of Borrowing, Swing Loan Request or Notice of Conversion or Continuation, as
applicable, in a manner permitted by Section 11.8 (other than by electronic mail, Approved
Electronic Platform, internet website or other electronic transmission), but if it differs in any
material respect from the action taken by any Facility Agent or Lender, the records of the
applicable Facility Agents and Lenders shall
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govern, (B) each Facility Agent and Lender shall be
entitled to rely
on such e-mail notice (and regardless of whether any confirmation is received by the
Administrative Agent) and (C) no Facility Agent or Lender shall have any liability for any loss
suffered by the Borrower or any other Loan Party as a result of a Facility Agent or any Lender
acting upon such e-mailed instructions), (ii) any notice pursuant to Section 2.8 or Section 2.9 and
any other notice relating to the payment of any principal or other amount due under any Loan
Document prior to the scheduled date therefor, (iii) any notice of any Default or Event of Default
and (iv) any notice, demand, communication, information, document and other material required to be
delivered to satisfy any of the conditions set forth in Article II or Section 2.4(a) or any other
condition to any Borrowing or other extension of credit hereunder or any condition precedent to the
effectiveness of this Agreement.
“Approved Electronic Platform” has the meaning specified in Section 10.9.
“Approved Fund” means any Fund that is advised or managed by (a) an Agent or a Lender, (b) an
Affiliate of any Agent or any Lender or (c) an entity or Affiliate of an entity that administers or
manages a Lender.
“Arrangers” has the meaning specified in the preamble to this Agreement.
“Asset Sale” has the meaning specified in Section 8.4.
“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an
Eligible Assignee, and accepted by the Administrative Agent, in substantially the form of Exhibit
A.
“Assumption Agreement” means an assumption agreement entered into by a Lender or an Eligible
Assignee pursuant to Section 2.18, in form acceptable to the Administrative Agent.
“Availability Reserves” means, as of three (3) Business Days after the date of written notice
of any determination thereof to the Borrower by the Administrative Agent (except that no such
advance notice shall be required with respect to any amounts established on or prior to the Closing
Date so long as the Administrative Agent notifies the Borrower of such amounts on or prior to the
Closing Date, which amounts shall be in effect as of the Closing Date), such amounts as the
Administrative Agent may from time to time establish against the Revolving Credit Facility, in the
Administrative Agent’s sole discretion exercised reasonably, in order to (a) preserve the value of
the Collateral or the Collateral Agent’s Lien thereon and/or (b) provide for the payment of
unanticipated liabilities of any of the Loan Parties arising after the Closing Date and, to the
extent that the Administrative Agent is not aware of same on the Closing Date, arising on or prior
to the Closing Date and/or (c) provide for the effect, or anticipated effect, of the loss of the
benefit to the Warnaco Entities of a Material License.
“Available Credit” means, at any time, the sum of the Available U.S. Credit at such time and
the Dollar Equivalent of the Available Canadian Credit (as defined in the Canadian Facility) at
such time; provided that in no event shall the Dollar Equivalent of the amount of Available
Canadian Credit included in the determination of “Available Credit” at any time exceed 25% of the
Available Credit at such time.
“Available U.S. Credit” means, at any time, (a) the lesser of (i) the Revolving Credit
Commitments in effect at such time and (ii) the Borrowing Base at such time minus (b) the sum of
(i) the aggregate Revolving Credit Outstandings at such time and (ii) the aggregate amount of any
Availability Reserve in effect at such time.
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“Average Revolver Usage” means, for any period, an amount equal to (i) the quotient of (x) the
sum of the Revolving Credit Outstandings (excluding the amount of any outstanding Swing Loans) for
each day during such period, divided by (y) the number of days in such period, divided by (ii) the
quotient of (x) the sum of the Revolving Credit Commitments of the Lenders for each day during such
period, divided by (y) the number of days in such period, all as determined by the Administrative
Agent.
“Bailee’s Letter” means a letter in form and substance acceptable to the Administrative Agent
and executed by any Person (other than a Loan Party) that is in possession of Inventory on behalf
of a Loan Party pursuant to which such Person acknowledges, among other things, the Collateral
Agent’s Lien with respect thereto.
“Bankruptcy Code” means title 11, United States Code, as amended from time to time.
“BAS” has the meaning specified in the preamble to this Agreement.
“Base Rate” means, for any day, the greater of (a) the rate of interest in effect for such
day as publicly announced from time to time by BofA in Charlotte, North Carolina as its “prime
rate” (the “prime rate” being a rate set by BofA based upon various factors including BofA’s costs
and desired return, general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced rate) or (b) the
Federal Funds Rate in effect for such day, plus 0.50% per annum, provided, that, in the
Administrative Agent’s sole discretion, such amount is subject to change at any time without notice
to the Borrower (it being understood and agreed that no change shall be made under this proviso
except as a result of a change in the above “prime rate” or Federal Funds Rate). With respect to
any determination of any interest rate which is based on the Base Rate, any change in the prime
rate announced by BofA shall take effect at the opening of business on the day specified in the
public announcement of such change, and any change in the Federal Funds Rate shall take effect as
of the date of such change.
“Base Rate Loan” means any Loan during any period in which it bears interest based on the Base
Rate.
“Blocked Account” has the meaning specified in the Pledge and Security Agreement.
“Blocked Account Bank” has the meaning specified in the Pledge and Security Agreement.
“Blocked Account Letter” has the meaning specified in the Pledge and Security Agreement.
“BofA” has the meaning specified in the preamble to this Agreement.
“Borrower” has the meaning specified in the preamble to this Agreement.
“Borrowing” means a Revolving Credit Borrowing.
6
“Borrowing Base” means, at any time, the Dollar Equivalent of (a) the sum of (i) the product
of the Advance Rate then in effect for Eligible Receivables and the face amount of all Eligible
Receivables of each Loan Party (calculated net of all finance charges, late fees and other fees
which are unearned, sales, excise or similar taxes, and credits or allowances granted at such
time), (ii) the
sum of (x) the product of the Advance Rate then in effect for Eligible Inventory and the value
of the Eligible Inventory (other than Documented Non-Letter of Credit Inventory and Inventory
covered by Documentary Letters of Credit) of each Loan Party (valued, in each case, at the lower of
cost and market on a first-in, first-out basis) and (y) subject to the proviso in the last sentence
of the definition of Eligible Inventory, the product of the Adjusted Orderly Liquidation Value Rate
then in effect and the sum of (1) the value of the Eligible Inventory consisting of Documented
Non-Letter of Credit Inventory of each Loan Party (valued, in each case, at the lower of cost and
market on a first-in, first-out basis) and (2) the value of the Eligible Inventory consisting of
Inventory covered by Documentary Letters of Credit of each Loan Party (which value under this
clause (2) shall be deemed to be the aggregate undrawn amount of such Documentary Letters of Credit
at such time) and (iii) the lesser of (x) that amount which is the excess of $35,000,000 over the
Dollar Equivalent of the aggregate amount of cash and Permitted Cash Equivalents (as defined in the
Canadian Facility) held in the Special Cash Collateral Account (as defined in the Canadian
Facility) at such time and (y) the aggregate amount of cash and Permitted Cash Equivalents held in
the Special Cash Collateral Account at such time (but only so long as such cash, Permitted Cash
Equivalents and account are subject to a valid and perfected first priority Lien in favor of the
Collateral Agent) minus (b) any Eligibility Reserve, and, in the case of Eligible Receivables, any
Dilution Reserve then in effect.
“Borrowing Base Certificate” means a certificate to be executed and delivered from time to
time by the Borrower to the Administrative Agent substantially in the form of Exhibit E.
“Business Day” means a day of the year on which banks are not required or authorized to close
in New York, New York or Charlotte, North Carolina, and, (a) in the case of Letters of Credit
Issued in Euros or within the European Union, in London, (b) in the case of Letters of Credit
Issued in Canadian dollars or in Canada, in the Province of Ontario, Canada, (c) in the case of
Letters of Credit Issued in Hong Kong dollars or in Hong Kong, in Hong Kong, and, (d) if the
applicable Business Day relates to notices, determinations, fundings and payments in connection
with the Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in Dollar deposits
are also carried on in the London interbank market.
“Canadian Borrower” means Warnaco of Canada Company.
“Canadian Facility” means the Credit Agreement, dated as of the date hereof, among the
Canadian Borrower, Group, the lenders and letter of credit issuers party thereto from time to time,
BofA, as administrative agent and as collateral agent, and the other parties thereto, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
“Canadian Secured Obligations” means the Secured Obligations (as defined in the Canadian
Facility).
“Capital Expenditures” means, with respect to any Person for any period, the aggregate of
amounts that would be reflected as additions to property, plant or equipment on a consolidated
balance sheet of such Person and its Subsidiaries on a consolidated basis prepared in conformity
with Agreement Accounting Principles, excluding (i) interest capitalized during construction, (ii)
amounts expended on leasehold improvements for which such Person has received a commitment of
reimbursement from the landlord; provided, that if any such amount is not reimbursed within six
months after the expenditure (the “Reimbursement Expiration Date”), such amount will be counted
towards Capital Expenditures as if such amount had been expended on the Reimbursement Expiration
Date, (iii) amounts credited to, or received by, any Warnaco Entity in connection with a
substantially contemporaneous trade in and (iv) reinvestments of Net Cash Proceeds in replacement
assets pursuant to Section 2.9(c)(i) and Section 2.9(c)(i) of the Canadian Facility.
7
“Capital Lease” means, with respect to any Person, any lease of property by such Person as
lessee which would be accounted for as a capital lease on a balance sheet of such Person prepared
in conformity with Agreement Accounting Principles.
“Capital Lease Obligations” means, with respect to any Person, the capitalized amount of all
obligations of such Person or any of its Subsidiaries under Capital Leases, as determined on a
consolidated basis in conformity with Agreement Accounting Principles.
“Cash Collateral Account” has the meaning specified in the Pledge and Security Agreement.
“Cash Equivalents” means (a) securities issued or fully guaranteed or insured by the United
States government or any agency thereof (including, without limitation, the Federal Home Loan
Mortgage Association, the Federal Home Loan Bank, the Federal National Mortgage Association and the
Governmental National Mortgage Association) or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the government of the United States or,
in the case of a Foreign Subsidiary, securities issued or fully guaranteed or insured by the
federal government of the country under which such Foreign Subsidiary was formed or any agency
thereof or instrumentality thereof or obligations unconditionally guaranteed by the full faith and
credit of such federal government, (b) certificates of deposit, eurodollar time deposits, overnight
bank deposits and bankers’ acceptances of any commercial bank organized under the laws of the
United States, any state thereof, the District of Columbia, any foreign bank, or its branches or
agencies (fully protected against currency fluctuations) which, at the time of acquisition, are
rated at least “A-1” by Standard & Poor’s Rating Services (“S&P”) or “P-1” by Moody’s Investors
Services, Inc. (“Moody’s”), (c) commercial paper of an issuer rated at least “A-1” by S&P or “P-1”
by Moody’s, and (d) shares of any money market fund that (i) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (a) through (c) above,
(ii) has net assets of not less than $500,000,000 and (iii) is rated at least “A-1” by S&P or “P-1”
by Moody’s; provided, however, that the maturities of all obligations of the type specified in
clauses (a) through (c) above shall not exceed 365 days.
“Cash Interest Expense” means, with respect to any Person for any period, the Interest Expense
of such Person for such period less the Non-Cash Interest Expense of such Person for such period.
“Cash Management Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of such Person in respect of cash management services
(including treasury, depository, overdraft, credit or debit card, electronic funds transfer,
automatic clearing house and other cash management arrangements) provided by any Agent, Lender or
any Affiliate of any Agent or Lender in connection with this Agreement or any Loan Document,
including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and
disbursements in connection therewith.
“Cash on Hand” means an amount equal to the amount of cash and Cash Equivalents on deposit in
the Cash Collateral Accounts less the aggregate amount of accounts payable and other unpaid
expenses of the Warnaco Entities which, in Group’s reasonable judgment, are in excess of ordinary
course accounts payable and unpaid expenses as certified in a certificate of a Responsible Officer
of Group delivered to the Administrative Agent prior to the repurchase of any Senior Notes.
“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time.
8
“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability
Information System maintained by the U.S. Environmental Protection Agency.
“Change of Control” means any of the following: (a) Group shall at any time cease to have
legal and beneficial ownership of 100% of the capital stock of the Borrower, or, directly or
indirectly, any other Loan Party (except if such other Loan Party shall be disposed of pursuant to
an Asset Sale permitted by Section 8.4 or if such parties shall merge, liquidate or dissolve in
accordance with Section 8.7); or (b) any Person, or two or more Persons acting in concert, shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Stock of
Group (or other securities convertible into such Voting Stock) representing 35% or more of the
combined voting power of all Voting Stock of Group; or (c) any Person, or two or more Persons
acting in concert, shall have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in its or their acquisition of, the
power to exercise, directly or indirectly, a controlling influence over the management or policies
of Group, or control over Voting Stock of Group (or other securities convertible into such
securities) representing 35% or more of combined voting power of all Voting Stock of Group or (d)
so long as the Senior Note Indenture is in effect or any Senior Notes are outstanding, any “Change
of Control” as defined in the Senior Note Indenture.
“Chargeback” means a deduction from a Receivable taken by a customer.
“Chattel Paper” has the meaning specified in the Pledge and Security Agreement.
“Closing Date” means the first date on which each of the conditions set forth in Section 3.1
have been satisfied.
“Co-Documentation Agents” has the meaning specified in the preamble to this Agreement.
“Code” means the Internal Revenue Code of 1986 (or any successor legislation thereto), as
amended from time to time.
“Collateral” means all property and interests in property and proceeds thereof now owned or
hereafter acquired by any Loan Party in or upon which a Lien is granted under any Collateral
Document.
“Collateral Agent” has the meaning specified in the preamble to this Agreement.
“Collateral Documents” means the Pledge and Security Agreement, other pledge or security
agreements, the Mortgages, the Blocked Account Letters, the Restricted Account Letters, the Control
Account Agreements and any other document executed and delivered by a Loan Party granting a Lien on
any of its property to secure payment of any of the Secured Obligations.
“Collections” means, with respect to any Receivable: (a) all funds that are received by any
Loan Party in payment of any amounts owed in respect of such Receivable (including purchase price,
finance charges, interest and all other charges), or applied to amounts owed in respect of such
Receivable (including insurance payments and net proceeds of the sale or other disposition of
repossessed goods or other collateral or property of the related Account Debtor or any other Person
directly or indirectly liable for the payment of such Receivable and available to be applied
thereon) and (b) all other proceeds of such Receivable.
9
“Commitment” means, with respect to any Lender, such Lender’s Revolving Credit Commitment and
“Commitments” means the aggregate Revolving Credit Commitments of all Lenders.
“Compliance Certificate” has the meaning specified in Section 6.1(d).
“Consolidated Net Income” means, for any Person for any period, the net income (or loss) of
such Person and its Subsidiaries for such period, determined on a consolidated basis in conformity
with Agreement Accounting Principles; provided, however, that (a) the net income of any other
Person in which such Person or one of its Subsidiaries has a joint interest with a third party
(which interest does not cause the net income of such other Person to be consolidated into the net
income of such Person in accordance with Agreement Accounting Principles) shall be included only to
the extent of the amount of dividends or distributions paid to such Person or Subsidiary, (b) the
net income of any Subsidiary of such Person that is subject to any restriction or limitation on the
payment of dividends or the making of other distributions shall be excluded to the extent of such
restriction or limitation, (c) any net gain (or loss) resulting from an Asset Sale by such Person
or any of its Subsidiaries other than in the ordinary course of business shall be excluded, and (d)
extraordinary gains and losses and any one-time increase or decrease to net income which is
required to be recorded because of the adoption of new accounting policies, practices or standards
required by Agreement Accounting Principles shall be excluded.
“Constituent Documents” means, with respect to any Person, (a) the articles/certificate of
incorporation (or the equivalent organizational documents) of such Person, (b) the by-laws (or the
equivalent governing documents) of such Person and (c) any document setting forth the manner of
election and duties of the directors or managing members of such Person (if any) and the
designation, amount and/or relative rights, limitations and preferences of any class or series of
such Person’s Stock.
“Contaminant” means any material, substance or waste that is classified, regulated or
otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant or a
pollutant or by other words of similar meaning or regulatory effect, including any petroleum or
petroleum-derived substance or waste, asbestos and polychlorinated biphenyls.
“Contractual Obligation” of any Person means any obligation, agreement, undertaking or similar
provision of any Security issued by such Person or of any agreement, undertaking, contract, lease,
indenture, mortgage, deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any of its properties
is subject.
“Control Account” has the meaning specified in the Pledge and Security Agreement.
“Control Account Agreement” has the meaning specified in the Pledge and Security Agreement.
“Corporate Chart” means a corporate organizational chart, list or other similar document in
each case in form reasonably acceptable to the Administrative Agent and setting forth, for each
Person that is a Loan Party, that is subject to Section 7.11 or that is a Subsidiary of any of
them, (a) the full legal name of such Person (and any trade name, fictitious name or other name
such Person may have had or operated under), (b) the jurisdiction of organization, the
organizational number (if any) and the tax identification number (if any) of such Person, (c) the
location of such Person’s chief executive office (or sole place of business) and (d) the number of
shares of each class of such Person’s
Stock authorized (if applicable), the number outstanding as of the date of delivery and the
number and percentage of such outstanding shares for each such class owned (directly or indirectly)
by any Loan Party or any Subsidiary of any of them.
10
“Credit and Collection Policy” means, as the context may require, those receivables credit and
collection policies and practices of the Loan Parties in effect on the Closing Date and as
disclosed in writing to the Lenders, as such credit and collection policies and practices may be
modified in any material respect with the prior written consent of the Administrative Agent (which
consent shall not be unreasonably withheld or delayed) and with a copy of any such modification
(whether material or not) to be delivered to the Administrative Agent promptly after its
effectiveness.
“Customary Permitted Liens” means, with respect to any Person, any of the following Liens:
(a) Liens with respect to the payment of taxes, assessments or governmental charges in all
cases which are not yet due and payable or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other appropriate provisions are being
maintained to the extent required by Agreement Accounting Principles;
(b) Liens of landlords arising by statute and liens of suppliers, mechanics, carriers,
materialmen, warehousemen or workmen and other like liens imposed by law or otherwise incurred, in
each instance, in the ordinary course of business for amounts not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained to the extent required by Agreement Accounting
Principles, or deposits or pledges to obtain the release of any such Liens;
(c) deposits made in the ordinary course of business in connection with worker’s compensation,
unemployment insurance or other types of social security benefits or to secure the performance of
bids, tenders, sales, contracts (other than for the repayment of borrowed money), public or
statutory obligations, and surety, stay, appeal, customs or performance bonds, or similar
obligations arising in each case in the ordinary course of business;
(d) encumbrances arising by reason of zoning restrictions, easements, licenses, reservations,
covenants, rights-of-way, utility easements, building restrictions and other similar encumbrances
or such other matters as disclosed in Mortgagee’s Title Insurance Policy on the use of Real
Property which do not materially detract from the value of such Real Property or interfere with the
ordinary conduct of the business conducted and proposed to be conducted at such Real Property;
(e) encumbrances arising under leases or subleases of Real Property which do not in the
aggregate materially detract from the value of such Real Property or interfere with the ordinary
conduct of the business conducted and proposed to be conducted at such Real Property; and
(f) financing statements of a lessor’s rights in and to personal property leased to such
Person in the ordinary course of such Person’s business.
“DBSI” has the meaning specified in the preamble to this Agreement.
“Default” means any event which with the passing of time or the giving of notice or both would
become an Event of Default.
11
“Defaulted Receivable” means a Receivable:
(a) in the case of a Receivable that is not an Extended Term Receivable, as to which any
payment, or part thereof, remains unpaid for 91 days or more from the original due date for such
payment,
(b) in the case of a Receivable that is an Extended Term Receivable, as to which any payment,
or part thereof, remains unpaid for 30 days or more from the original due date for such payment,
(c) unless otherwise agreed in writing by the Administrative Agent in its sole discretion
exercised reasonably, the Account Debtor of such Receivable (or any other Person obligated thereon
or owning any Related Security with respect thereto) has: (i) filed a petition for bankruptcy or
any other relief under the Bankruptcy Code or any other law relating to bankruptcy, insolvency,
reorganization or relief of debtors; (ii) made an assignment for the benefit of creditors; (iii)
had filed against it any petition or other application for relief under the Bankruptcy Code or any
such other law; (iv) has failed, suspended business operations, become insolvent, called a meeting
of its creditors for the purpose of obtaining any financial concession or accommodation; or (v) had
or suffered a receiver or a trustee to be appointed for all or a significant portion of its assets
or affairs, or
(d) which, has been, or, consistent with the Credit and Collection Policy would be, written
off a Loan Party’s books as uncollectible.
“Deposit Account” has the meaning given to such term in the UCC.
“Dilution” means, at any given time in respect of all Accounts of the Loan Parties, 100 times
a quotient, (a) the numerator of which is the sum (for the most recent twelve months) of any net
credits, rebates, markdowns, freight charges, cash discounts, volume, early payment and other
discounts, cooperative advertising expenses, warranties, warehouse and other allowances, disputes,
chargebacks, defective returns, other returned or repossessed goods, reductions in balance in
respect of billing errors or adjustments to estimated billing settlements for defective products or
other reasons, allowances for early payments and other similar allowances that are made or
coordinated with the usual practices of the Loan Party owning such Account and (b) the denominator
of which is the sum (for the most recent twelve months) of the gross amount of any sales made on
account (including, without limitation, the original balances of such Accounts).
“Dilution Reserve” means, effective as of three (3) Business Days following the date of
written notice of any determination thereof to the Borrower by the Administrative Agent (except
that no such advance notice shall be required with respect to any amounts established on or prior
to the Closing Date, which amounts shall be in effect as of the Closing Date), such amounts as the
Administrative Agent may from time to time establish against the gross amounts of Eligible
Receivables, calculated as an aggregate amount equal to the product of (x) the gross amount of
Eligible Receivables times (y) the percentage (but not below 0%) equal to that percentage of
Dilution reported in the most recent Borrowing Base Certificate delivered to the Administrative
Agent that is in excess of 5% of Dilution.
“Document” has the meaning specified in Article 9 of the UCC.
12
“Documentary Letter of Credit Inventory Conditions” means, with respect to any Inventory
covered by a Documentary Letter of Credit, that such Inventory (a) is subject to a negotiable
Document showing the Collateral Agent (or, with the consent of the Administrative Agent, the
applicable Loan Party) as consignee, which Document is in the possession of the Collateral Agent or
such other Person as the Administrative Agent shall approve; (b) is insured in a manner reasonably
satisfactory to the Administrative Agent; (c) is owned by the applicable Loan Party (that is,
title has passed to such Loan Party); (d) is not sold by a vendor that has a right to reclaim,
divert shipment of, repossess, stop delivery, claim any reservation of title or otherwise assert
Lien rights against the Inventory; (e) is not subject to any import restrictions or requirements
that the applicable Loan Party, in the Administrative Agent’s good faith judgment, is unable to
comply with; (f) is shipped by a common carrier that is not controlled by the vendor; and (g) is
subject to a valid and perfected first priority Lien in favor of the Collateral Agent under the
UCC.
“Documentary Letter of Credit” means any Letter of Credit Issued by an Issuer pursuant to
Section 2.4 for the account of the Borrower, which is drawable upon presentation of documents
evidencing the sale or shipment of goods purchased by Group or any of its Subsidiaries in the
ordinary course of its business.
“Documented Non-Letter of Credit Inventory” means Inventory of a Loan Party (i) that is not
covered by a Documentary Letter of Credit, (ii) that is in transit from a vendor from outside the
United States of America, (iii) that is subject to a valid and perfected first priority Lien in
favor of the Collateral Agent under the UCC and (iv) as to which such other conditions (including,
without limitation, receipt of documentation) as the Administrative Agent shall request, in its
sole discretion exercised reasonably, have been satisfied.
“Dollar Equivalent” of any amount means, at the time of determination thereof, (a) if such
amount is expressed in Dollars, such amount, (b) if such amount is expressed in an Alternative
Currency, the equivalent of such amount in Dollars determined by using the mid-range rate of
exchange quoted by the Wall Street Journal for such Alternative Currency under its “Exchange Rates”
column on the Business Day preceding the date of determination and (c) if such amount is
denominated in any other currency, the equivalent of such amount in Dollars as determined by the
Administrative Agent using any method of determination it reasonably deems appropriate; provided,
however, if such amount is expressed in an Alternative Currency and such amount relates to the
Issuance of a Letter of Credit by any Issuer, the “Dollar Equivalent” shall mean the equivalent of
such amount in Dollars as determined by such Issuer using any customary method of determination it
reasonably deems appropriate.
“Dollars” and the sign “$” each mean the lawful money of the United States of America.
“Domestic Lending Office” means, with respect to any Lender, the office of such Lender
specified as its “Domestic Lending Office” opposite its name on Schedule II (Applicable Lending
Offices and Addresses for Notices) or on the Assignment and Acceptance or Assumption Agreement by
which it became a Lender or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
“Domestic Subsidiary” means any Subsidiary of Group organized under the laws of any state of
the United States of America or the District of Columbia.
“Earnout Obligations” means earn-outs and deferred compensation incurred in connection with
any Permitted Acquisition or Investment permitted under Section 8.3(l) consummated after the
Closing Date under non-compete agreements, consulting agreements, earn-out agreements and similar
deferred compensation arrangements (including such as may be contained in the purchase agreement or
related documents for such Permitted Acquisition). The unpaid amount of Earnout Obligations to be
determined at any time with respect to any such Permitted Acquisition shall be
calculated on the basis of the maximum determinable amount payable with respect to such
Permitted Acquisition, or such lesser amount thereof agreed to by the Administrative Agent in its
sole discretion.
13
“EBITDA” means, with respect to any Person for any period, an amount equal to (a) Consolidated
Net Income of such Person for such period plus (b) the sum of, in each case to the extent included
in the calculation of such Consolidated Net Income but without duplication, (i) any provision for
income taxes, (ii) Interest Expense, (iii) loss from extraordinary items, (iv) loss from the sale,
exchange or other disposition of capital assets, (v) depreciation, depletion and amortization of
intangibles or financing or acquisition costs, (vi) all other non-cash charges and non-cash losses
for such period, including non-cash charges relating to any change in the methodology of estimating
reserves against Receivables and Inventory and non-cash charges for employee stock compensation,
and (vii) any restructuring charges not to exceed $20,000,000 in the aggregate in any Fiscal Year
minus (c) the sum of, in each case to the extent included in the calculation of such Consolidated
Net Income but without duplication, (i) any credit for income tax, (ii) interest income, (iii)
gains from extraordinary items for such period, (iv) any aggregate net gain from the sale, exchange
or other disposition of capital assets by such Person, (v) any other non-cash gains which have been
added in determining Consolidated Net Income and (vi) cash payments for charges that have been
reserved.
“Eligibility Reserve” means, effective as of three (3) Business Days after the date of written
notice of any determination thereof to the Borrower by the Administrative Agent (except that no
such advance notice shall be required with respect to amounts established on or prior to the
Closing Date, which amounts shall be in effect as of the Closing Date), such amounts as the
Administrative Agent, in its sole discretion exercised reasonably, may from time to time establish
against the gross amounts of Eligible Receivables or Eligible Inventory, to reflect (a) risks or
contingencies which may affect any one or class of such items and which have not already been taken
into account in the calculation of the Borrowing Base, (b) Cash Management Obligations owing to any
of the Facility Agents that constitute Secured Obligations and (c) (i) at any time that Available
Credit is less than $50,000,000 or during an Event of Default, upon the written request of any
Lender that is (or whose Affiliate is) party to a Hedging Contract, the aggregate obligations of
the Borrower or any other Loan Party under such Hedging Contract calculated on a mark to market
basis or (ii) at any time that any such Hedging Contract has been terminated, the amount due and
owing pursuant to such Hedging Contract.
“Eligible Assignee” means (a) a Lender or an Affiliate or Approved Fund of any Lender or
Agent, (b) a commercial bank having total assets whose Dollar Equivalent exceeds $5,000,000,000,
(c) a finance company or insurance company, in each case reasonably acceptable to the
Administrative Agent, and regularly engaged in making, purchasing or investing in loans and having
a net worth, determined in accordance with GAAP, whose Dollar Equivalent exceeds $500,000,000 (or,
to the extent net worth is less than such amount, a finance company or insurance company,
reasonably acceptable to the Administrative Agent), (d) a savings and loan association or savings
bank organized under the laws of the United States or any State thereof having a net worth,
determined in accordance with GAAP, whose Dollar Equivalent exceeds $500,000,000 or (e) any other
financial institution or Fund, in each case reasonably acceptable to the Administrative Agent and
each Issuer, and regularly engaged in making, purchasing or investing in loans and having a net
worth, determined in accordance with GAAP, whose Dollar Equivalent exceeds $500,000,000 (or, to the
extent net worth is less than such amount, any other financial institution or Fund, reasonably
acceptable to the Administrative Agent and each Issuer).
“Eligible Foreign Account Debtor” means an Account Debtor (i) who is organized under the laws
of a country other than the United States or any state thereof, (ii) whose Receivables are
denominated and payable only in Dollars in the United States, and (iii) the obligations of which
are supported by a letter of credit which letter of credit names the Collateral Agent as
beneficiary for the benefit of the Secured Parties or in respect of which the issuer has consented
to the assignment to the Collateral Agent of the proceeds thereof.
14
“Eligible Inventory“ means the Inventory of a Loan Party (other than any Inventory
which has been consigned by such Loan Party) consisting of finished goods:
(a) which is owned solely by such Loan Party,
(b) with respect to which the Collateral Agent has a valid and perfected first priority Lien,
(c) with respect to which no representation or warranty contained in any of the Loan Documents
has been breached,
(d) which is not, in the Administrative Agent’s sole discretion exercised reasonably, obsolete
or unmerchantable,
(e) with respect to which (in respect of any Inventory labeled with a brand name or trademark
and sold by such Loan Party pursuant to a trademark owned by a Loan Party or a license granted to a
Loan Party) the Collateral Agent would have rights pursuant to this Agreement or any other
agreement satisfactory to the Administrative Agent to sell such Inventory in connection with a
liquidation thereof, and
(f) which the Administrative Agent has not deemed to be ineligible based on such credit and
collateral considerations relating thereto as the Administrative Agent may, in its sole discretion
exercised reasonably, deem appropriate and as to which the Administrative Agent provides the
Borrower three (3) Business Days prior notice.
No Inventory of a Loan Party shall be Eligible Inventory if such Inventory consists of (i) goods
returned or rejected by customers other than goods that are undamaged or are resalable in the
normal course of business, (ii) goods to be returned to suppliers, (iii) goods in transit (other
than goods in transit from one location of a Loan Party to another location of a Loan Party and
Documented Non-Letter of Credit Inventory) or goods located outside of the continental United
States (other than Documented Non-Letter of Credit Inventory) or (iv) goods located, stored, used
or held at the premises of a third party unless (A) the Collateral Agent shall have received a
Landlord Waiver or Bailee’s Letter or (B) in the case of Inventory located at a leased premises, an
Eligibility Reserve in an amount equal to the aggregate of three months gross lease payments (or,
in the case of Eligible Inventory located at the premises at 5305 Rivergrade Road, Irwindale,
California, a maximum of $250,000) or otherwise satisfactory to the Administrative Agent shall have
been established with respect thereto. Notwithstanding the foregoing, Eligible Inventory shall at
any time be deemed to include Eligible Inventory of a Loan Party covered by Documentary Letters of
Credit in an amount equal to the aggregate undrawn amount of such Documentary Letters of Credit at
such time; provided, however, that if the Available Credit shall be less than 25% of the Aggregate
Borrowing Limit for 5 consecutive Business Days and until Available Credit shall thereafter be at
least 25% of the Aggregate Borrowing Limit for 45 consecutive days, the Administrative Agent may,
in its sole discretion and upon not less than 3 Business Days prior written notice to the Borrower,
exclude from the calculation of the Borrowing Base any such Inventory which does not satisfy the
Documentary Letter of Credit Inventory Conditions.
15
“Eligible Receivable” means, at any time, any Receivable:
(a) in respect of which the Account Debtor (i) (A) is organized under the laws of the United
States or any state thereof and has its principal place of business located in the United States or
(B) is an Eligible Foreign Account Debtor and (ii) is not an Affiliate of Group or any of its
Subsidiaries,
(b) that does not have a stated maturity which is more than 90 days after the original invoice
date of such Receivable unless such Receivable is an Extended Term Receivable, in which case it
does not have a stated maturity which is more than 180 days after the original invoice date of such
Receivable,
(c) that arises under a duly authorized Sales Contract for the sale and delivery of goods and
services in the ordinary course of any Loan Party’s business,
(d) that is a legal, valid and binding obligation of the related Account Debtor, enforceable
against such Account Debtor in accordance with its terms,
(e) that conforms in all material respects with all Requirements of Law,
(f) that is not the subject of any dispute, offset, holdback, defense, Lien (other than a
Customary Permitted Lien) or other claim other than such adjustments in the ordinary course of the
applicable Loan Party’s business as such Loan Party’s business is conducted on the date hereof
(such Receivable to be ineligible to the extent of such dispute, offset, holdback, defense, Lien or
claim),
(g) that satisfies all applicable requirements of the applicable Credit and Collection Policy,
(h) that has not been modified, waived or restructured since its creation,
(i) in which a Loan Party owns good and marketable title, free and clear of any Lien (other
than a Customary Permitted Lien and Liens created by the Loan Documents), and that is freely
assignable by the Loan Party (including without any consent of the related Account Debtor),
(j) for which the Collateral Agent, for the benefit of the Secured Parties, has a valid and
enforceable perfected security interest therein and in the Related Security and Collections with
respect thereto, in each case free and clear of any Lien (other than a Customary Permitted Lien and
Liens created by the Loan Documents),
(k) that constitutes an account as defined in the UCC, and that is not evidenced by
Instruments or Chattel Paper,
(l) that is not a Defaulted Receivable,
(m) that represents all or part of the sales price of merchandise, insurance or services
within the meaning of Section 3(c)(5) of the Investment Company Act of 1940,
(n) for which the aggregate of the Defaulted Receivables owed by the related Account Debtor
and any of its Affiliated Account Debtors does not exceed 50% of the outstanding balance of all
Receivables owed by such Account Debtor,
(o) which is denominated and payable only in Dollars in the United States,
16
(p) that represents amounts earned and payable by the Account Debtor that are not subject to
the performance of additional services by any Loan Party,
(q) that has not been rewritten, canceled or rebilled or is not a Receivable that has resulted
from a rewritten, canceled or rebilled Receivable,
(r) that, when taken together with all other Eligible Receivables owed by such Account Debtor
to the Loan Parties, does not exceed 20% of the Eligible Receivables of the Loan Parties at such
time (it being understood that only the excess of such Eligible Receivables over such 20% threshold
shall be deemed ineligible pursuant to this clause, unless such Eligible Receivable is covered by
credit insurance acceptable to the Administrative Agent, in which case that portion of such
Eligible Receivable in excess of the deductible for such credit insurance shall not be deemed
ineligible pursuant to this clause), and
(s) that is not owed by the government of the United States of America, Canada or any other
foreign country or sovereign state, or of any state, province, municipality or other political
subdivision thereof, or of any department, agency, public corporation, or other instrumentality
thereof, except if such Receivable is owed to a Loan Party by the government of the United States
or any department, agency, public corporation or other instrumentality thereof to the extent the
amount thereof, together with the amount of all such other Receivables of the Loan Parties, does
not exceed $1,000,000 in the aggregate; provided, however, that such Receivables in excess of
$1,000,000 shall not be excluded if the Federal Assignment of Claims Act of 1940, as amended (31
U.S.C. § 3727 et seq.), and any other steps necessary to perfect the Collateral
Agent’s Liens therein have been complied with to the Administrative Agent’s reasonable satisfaction
with respect to such Receivables;
provided, however, that in no event shall any Chargeback qualify as an Eligible Receivable.
“Environmental Action” means any action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential liability, investigation, proceeding,
consent order or consent agreement relating in any way to any Environmental Law, any Environmental
Permit or Contaminant or arising from alleged injury or threat to health, safety or the
environment, including, without limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or third party for damages, contribution, indemnification,
cost recovery, compensation or injunctive relief.
“Environmental Laws” means all applicable Requirements of Law, now or hereafter in effect and
as amended or supplemented from time to time, relating to pollution or the regulation and
protection of human health, safety, the environment or natural resources, including the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. § 9601 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C. § 5101 et
seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. § 136 et
seq.); the Resource Conservation and Recovery Act, as amended (42 U.S.C. § 6901 et seq.); the Toxic
Substance Control Act, as amended (15 U.S.C. § 2601 et seq.); the Clean Air Act, as amended (42
U.S.C. § 7401 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C. § 1251 et
seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. § 651 et seq.); the Safe
Drinking Water Act, as amended (42 U.S.C. § 300f et seq.); and each of their state and local
counterparts or equivalents and any transfer of ownership notification or approval statute,
including the Industrial Site Recovery Act (N.J. Stat. Ann. § 13:1K-6 et seq.).
17
“Environmental Liabilities and Costs” means, with respect to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all fees, disbursements and expenses of
counsel, experts and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by any other Person,
whether based in contract, tort, implied or express warranty, strict liability, criminal or civil
statute and whether arising under any Environmental Law, Permit, order or agreement with any
Governmental Authority or other Person, in each case relating to any environmental, health or
safety condition or to any Release or threatened Release and resulting from the past, present or
future operations of, or ownership of property by, such Person or any of its Subsidiaries.
“Environmental Lien” means any Lien in favor of any Governmental Authority for Environmental
Liabilities and Costs.
“Environmental Permit” means any permit, approval, identification number, license or other
authorization required under any Environmental Law.
“ERISA” means the Employee Retirement Income Security Act of 1974 (or any successor
legislation thereto), as amended from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common
control or treated as a single employer with Group or any of its Subsidiaries within the meaning of
Section 414 (b), (c), (m) or (o) of the Code.
“ERISA Event” means (a) a reportable event described in Section 4043(b) or 4043(c)(1), (2),
(3), (5), (6), (8) or (9) of ERISA with respect to a Title IV Plan or a Multiemployer Plan; (b) the
withdrawal of the Borrower, any of its Subsidiaries or any ERISA Affiliate from a Title IV Plan
subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of the Borrower, any
of its Subsidiaries or any ERISA Affiliate from any Multiemployer Plan; (d) notice of
reorganization or insolvency of a Multiemployer Plan; (e) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination under Section 4041
of ERISA; (f) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by
the PBGC; (g) the failure to make any required contribution to a Title IV Plan or Multiemployer
Plan; (h) the imposition of a lien under Section 412 of the Code or Section 302 of ERISA on Group
or any of its Subsidiaries or any ERISA Affiliate; or (i) any other event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or the
imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA.
“Eurodollar Lending Office” means, with respect to any Lender, the office of such Lender
specified as its “Eurodollar Lending Office” opposite its name on Schedule II (Applicable Lending
Offices and Addresses for Notices) or on the Assignment and Acceptance or Assumption Agreement by
which it became a Lender (or, if no such office is specified, its Domestic Lending Office) or such
other office of such Lender as such Lender may from time to time specify to the Borrower and the
Administrative Agent.
18
“Eurodollar Rate” means, with respect to any Interest Period for any Eurodollar Rate Loan, the
per annum rate of interest (rounded upward, if necessary, to the nearest 1/8th of 1%), determined
by the Administrative Agent at approximately 11:00 a.m. (London time) two Business Days prior to
commencement of such Interest Period, for a term comparable to such Interest Period,
equal to (a) the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or other commercially available source designated by the Administrative Agent); or (b) if BBA
LIBOR is not available for any reason, the interest rate at which Dollar deposits in the
approximate amount of the Eurodollar Rate Loan would be offered by BofA’s London branch to major
banks in the London interbank Eurodollar market. If the Federal Reserve Board imposes a Eurodollar
Reserve Percentage with respect to eurocurrency or LIBOR deposits, then the Eurodollar Rate shall
be the foregoing rate, divided by 1 minus the Eurodollar Reserve Percentage.
“Eurodollar Rate Loan” means any Revolving Loan that, for an Interest Period, bears interest
based on the Eurodollar Rate.
“Eurodollar Reserve Percentage” means the reserve percentage (expressed as a decimal, rounded
upward to the nearest 1/8th of 1%) applicable to member banks under regulations issued from time to
time by the Federal Reserve Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding
(currently referred to as “Eurocurrency liabilities”).
“Event of Default” has the meaning specified in Section 9.1.
“Existing Credit Agreement” means that certain Amended and Restated Credit Agreement, dated as
of January 31, 2006, among the Borrower, Group, the financial institutions from time to time party
thereto as lenders, the financial institutions from time to time party thereto as letter of credit
issuers, Citicorp North America, Inc., as administrative agent and collateral agent, JPMorgan Chase
Bank, N.A., as syndication agent, and BofA, The CIT Group/Commercial Services, Inc., and Wachovia
Capital Finance Corporation (Central) f/k/a Congress Financial Corporation (Central), as
co-documentation agents, as amended, supplemented or otherwise modified from time to time prior to
the date hereof.
“Existing Rollover Letter of Credit” has the meaning specified in Section 2.4(a).
“Extended Term Receivable” means a Receivable that has an original stated maturity that is
greater than 90 days after the original invoice date of such Receivable and less than or equal to
180 days after the original invoice date of such Receivable.
“Facility Agents” means, collectively, the Administrative Agent and the Collateral Agent.
“Facility Increase” has the meaning specified in Section 2.18(a).
“Facility Increase Effective Date” has the meaning specified in Section 2.18(c).
“Fair Market Value” means (a) with respect to any asset or group of assets (other than a
marketable Security) at any date, the value of the consideration obtainable in a sale of such asset
at such date assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and
arranged in an orderly manner over a reasonable period of time having regard to the nature and
characteristics of such asset (provided that in the case of assets with a net book value in excess
of $5,000,000, the “Fair Market Value” thereof shall be as reasonably determined pursuant to the
foregoing criteria by the Board of Directors of Group) or, if such asset shall have been the
subject of a relatively contemporaneous appraisal by an independent third party appraiser, the
basic assumptions underlying which have not materially changed since its date, the value set forth
in such appraisal, and (b) with respect to any marketable Security at any date, the closing sale
price of such Security on the
Business Day next preceding such date, as appearing in any published list of any national
securities exchange or the NASDAQ Stock Market or, if there is no such closing sale price of such
Security, the final price for the purchase of such Security at face value quoted on such Business
Day by a financial institution of recognized standing regularly dealing in Securities of such type
and selected by the Administrative Agent.
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“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to
the nearest 1/8th of 1%) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate charged to BofA on such
day on such transactions as determined by BofA.
“Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or any
successor thereto.
“Fee Letters” means (i) the fee letter dated the Closing Date, addressed to the Borrower, from
BofA and BAS and accepted by the Borrower on the Closing Date with respect to certain fees to be
paid on the Closing Date and otherwise from time to time to one or more of BofA, the Facility
Agents and BAS, as applicable, and (ii) the fee letter dated the Closing Date, addressed to the
Borrower, from Deutsche Bank Trust Company Americas and Deutsche Bank Securities Inc. and accepted
by the Borrower on the Closing Date with respect to certain fees to be paid on the Closing Date to
Deutsche Bank Trust Company Americas and Deutsche Bank Securities Inc.
“Financial Covenant Debt” of any Person means Indebtedness of the type specified in clauses
(a), (b), (d), (e), (f) and (h) of the definition of “Indebtedness,” non-contingent obligations of
the type specified in clause (c) of such definition and Guaranty Obligations of any of the
foregoing.
“Financial Statements” means the financial statements of Group and its Subsidiaries delivered
in accordance with Section 4.4 and Section 6.1.
“Fiscal Quarter” means each of the three-month fiscal periods ending on or about March 31,
June 30, September 30 and December 31.
“Fiscal Year” means the twelve-month fiscal period ending on or about December 31.
“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of
(a) EBITDA of such Person for such period minus (x) Capital Expenditures of such Person for such
period and (y) cash consideration paid during such period by such Person or any of its Subsidiaries
in respect of a Permitted Acquisition for such period (but only to the extent such cash
consideration is funded from proceeds of Loans, as defined herein or in the Canadian Facility)
minus the total income tax liability actually payable by such Person and its Subsidiaries in
respect of such period to (b) the Fixed Charges of such Person for such period.
“Fixed Charges” means, with respect to any Person for any period, the sum, determined on a
consolidated basis in accordance with Agreement Accounting Principles, of (a) the Cash Interest
Expense of such Person and its Subsidiaries for such period and (b) the principal amount
of Financial Covenant Debt of such Person and its Subsidiaries on a consolidated basis having
a scheduled due date during such period.
20
“Foreign Plan” means an employee benefit plan to which any Warnaco Entity or any ERISA
Affiliate has any obligation or liability (contingent or otherwise) with respect to employees who
are not employed in the United States.
“Foreign Subsidiary” means a Subsidiary of Group incorporated under the laws of a jurisdiction
that is not within the United States of America.
“Fund” means any Person (other than a natural Person) that is or will be engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in
the ordinary course of its business.
“GAAP” means generally accepted accounting principles in the United States of America as in
effect from time to time set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting profession, which
are applicable to the circumstances as of the date of determination.
“General Intangible” has the meaning specified in the Pledge and Security Agreement.
“Governmental Authority” means any nation, sovereign or government, any state or other
political subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
“Group” has the meaning specified in the preamble to this Agreement.
“Guarantor” means Group and each Domestic Subsidiary of Group other than the Borrower.
“Guaranty” means the guaranty, in substantially the form of Exhibit J, executed by the
Guarantors.
“Guaranty Obligation” means, as applied to any Person, any direct or indirect liability,
contingent or otherwise, of such Person with respect to any Indebtedness of another Person, if the
purpose or intent of such Person in incurring the Guaranty Obligation is to provide assurance to
the obligee of such Indebtedness that such Indebtedness will be paid or discharged, that any
agreement relating thereto will be complied with, or that any holder of such Indebtedness will be
protected (in whole or in part) against loss in respect thereof, including (a) the direct or
indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such Person of
Indebtedness of another Person and (b) any liability of such Person for Indebtedness of another
Person through any agreement (contingent or otherwise) (i) to purchase, repurchase or otherwise
acquire such Indebtedness or any security therefor or to provide funds for the payment or discharge
of such Indebtedness (whether in the form of a loan, advance, stock purchase, capital contribution
or otherwise), (ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar payments, if required,
regardless of non-performance by any other party or parties to an agreement, (iv) to purchase, sell
or lease (as lessor or
21
lessee) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to
assure the holder of such Indebtedness against loss or (v) to supply funds to, or in any other
manner invest in, such other Person (including to pay for property or services irrespective of
whether such property is received or such services are rendered), if in the case of any agreement
described under clause (b)(i), (ii), (iii), (iv) or (v) above the primary purpose or intent thereof
is to provide assurance that Indebtedness of another Person will be paid or discharged, that any
agreement relating thereto will be complied with or that any holder of such Indebtedness will be
protected (in whole or in part) against loss in respect thereof. The amount of any Guaranty
Obligation shall be equal to the amount of the Indebtedness so guaranteed or otherwise supported.
“Hedging Contracts” means all Interest Rate Contracts, foreign exchange contracts, currency
swap or option agreements, forward contracts, commodity swap, purchase or option agreements, other
commodity price hedging arrangements, and all other similar agreements or arrangements designed to
alter the risks of any Person arising from fluctuations in interest rates, currency values or
commodity prices.
“IFRS” means the International Financial Reporting Standards set by the International
Accounting Standards Board as in effect from time to time.
“Indebtedness” of any Person means without duplication (a) all indebtedness of such Person for
borrowed money, (b) all obligations of such Person evidenced by notes, bonds, debentures or similar
instruments or which bear interest, (c) all reimbursement and other obligations with respect to
letters of credit, bankers’ acceptances, surety bonds and performance bonds, whether or not
matured, (d) all indebtedness for the deferred purchase price of property or services, other than
trade payables incurred in the ordinary course of business, (e) all indebtedness of such Person
created or arising under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of such property), (f)
all Capital Lease Obligations of such Person, (g) all Guaranty Obligations of such Person, (h) all
obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any
Stock or Stock Equivalents of such Person, valued, in the case of redeemable preferred stock, at
the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (i) all payments that such Person would have to make in the event of an early
termination on the date Indebtedness of such Person is being determined in respect of Hedging
Contracts of such Person and (j) all Indebtedness of the type referred to above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien upon or in property (including Accounts and General Intangibles) owned by such Person,
even though such Person has not assumed or become liable for the payment of such Indebtedness.
“Indemnitees” has the meaning specified in Section 11.4.
“Instrument” has the meaning specified in the Pledge and Security Agreement.
“Insurance Assets” means sums payable to the insured under an insurance policy, including, any
gross unearned premiums and any payment on account of loss which results in a reduction of unearned
premium with respect to the underlying policy.
“Intellectual Property” has the meaning specified in the Pledge and Security Agreement.
22
“Interest Expense” means, for any Person for any period, (a) total interest expense of such
Person and its Subsidiaries for such period determined on a consolidated basis in conformity with
Agreement Accounting Principles and including, in any event, interest capitalized during
construction for such period and net costs under Interest Rate Contracts for such period minus (b)
the sum of (i) net gains of such Person and its Subsidiaries under Interest Rate Contracts for such
period determined on a consolidated basis in conformity with Agreement Accounting Principles plus
(ii) any interest income of such Person and its Subsidiaries for such period determined on a
consolidated basis in conformity with Agreement Accounting Principles.
“Interest Period” means, in the case of any Eurodollar Rate Loan, (a) initially, the period
commencing on the date such Eurodollar Rate Loan is made or on the date of conversion of a Base
Rate Loan to such Eurodollar Rate Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its Notice of Borrowing or Notice of Conversion or Continuation given
to the Administrative Agent pursuant to Section 2.2 or Section 2.11, and (b) thereafter, if such
Loan is continued, in whole or in part, as a Eurodollar Rate Loan pursuant to Section 2.11, a
period commencing on the last day of the immediately preceding Interest Period therefor and ending
one, two, three or six months thereafter, as selected by the Borrower in its Notice of Conversion
or Continuation given to the Administrative Agent pursuant to Section 2.11; provided, however, that
all of the foregoing provisions relating to Interest Periods in respect of Eurodollar Rate Loans
are subject to the following:
(i) if any Interest Period would otherwise end on a day which is not a Business Day,
such Interest Period shall be extended to the next succeeding Business Day, unless the
result of such extension would be to extend such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately preceding Business
Day;
(ii) any Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of a calendar month;
(iii) the Borrower may not select any Interest Period that ends after the Revolving
Loan Maturity Date;
(iv) the Borrower may not select any Interest Period in respect of Loans having an
aggregate principal amount of less than $10,000,000; and
(v) there shall be outstanding at any one time no more than ten (10) Interest Periods
in the aggregate for all Loans.
“Interest Rate Contracts” means all interest rate swap agreements, interest rate cap
agreements, interest rate collar agreements and interest rate insurance.
“Inventory” has the meaning specified in the Pledge and Security Agreement.
“Investment” means, with respect to any Person, (a) any purchase or other acquisition by that
Person of (i) any Security issued by, (ii) a beneficial interest in any Security issued by, or
(iii) any other equity ownership interest in, any other Person, (b) any purchase by that Person of
assets constituting a business conducted by another Person, (c) any loan, advance (other than
deposits with financial institutions available for withdrawal on demand, prepaid expenses, accounts
receivable and similar items made or incurred in the ordinary course of business as presently
conducted) or capital
contribution by that Person to any other Person, including all Indebtedness of any other
Person to that Person arising from a sale of property by that Person other than in the ordinary
course of its business and (d) any Guaranty Obligation incurred by that Person in respect of
Indebtedness of any other Person.
23
“Investment Grade Debt Securities” means any bond, debenture, note or other evidence of
indebtedness which is rated at least BBB- (stable) by Standard & Poor’s Rating Services and Baa3
(stable) by Moody’s Investors Services, Inc.
“IRS” means the Internal Revenue Service of the United States or any successor thereto.
“Issue” means, with respect to any Letter of Credit, to issue, extend the expiry of, renew or
increase the maximum face amount (including by deleting or reducing any scheduled decrease in such
maximum face amount) of, such Letter of Credit. The terms “Issued” and “Issuance” shall have a
corresponding meaning.
“Issuer” means each Agent, Lender or Affiliate of such Agent or Lender that (a) is listed on
the signature pages hereof as an “Issuer” or (b) hereafter becomes an Issuer with the approval of
the Administrative Agent and the Borrower by agreeing pursuant to an agreement with and in form and
substance satisfactory to the Administrative Agent and the Borrower to be bound by the terms hereof
applicable to Issuers.
“Italian Debt Facility” means the Italian Debt Facility (as defined in Schedule 8.1 (Existing
Indebtedness)).
“Joint Bookrunners” has the meaning specified in the preamble to this Agreement.
“Landlord Waiver” means a letter in form and substance reasonably acceptable to the
Administrative Agent and executed by a landlord in respect of Inventory of a Loan Party located at
any leased premises of a Loan Party pursuant to which such landlord, among other things, waives or
subordinates on terms and conditions reasonably acceptable to the Administrative Agent any Lien
such landlord may have in respect of such Inventory.
“Leases” means, with respect to any Person, all of those leasehold estates in real property of
such Person, as lessee, as such may be amended, supplemented or otherwise modified from time to
time.
“Lender” means the Swing Loan Lender and each other financial institution or other entity that
(a) is listed on the signature pages hereof as a “Lender” or (b) from time to time becomes a party
hereto by execution of an Assignment and Acceptance or an Assumption Agreement.
“Letter of Credit” means any letter of credit Issued pursuant to Section 2.4(d).
“Letter of Credit Obligations” means, at any time, the Dollar Equivalent of the aggregate of
all liabilities at such time of the Borrower to all Issuers with respect to Letters of Credit,
whether or not any such liability is contingent, and includes the sum of (a) the Reimbursement
Obligations at such time and (b) the Letter of Credit Undrawn Amounts at such time; in each case,
the Dollar Equivalent of Letter of Credit Obligations denominated in an Alternative Currency shall
be determined on each day on which a Borrowing Base Certificate is delivered pursuant to Section
6.12.
24
“Letter of Credit Reimbursement Agreement” has the meaning specified in Section 2.4(e).
“Letter of Credit Request” has the meaning specified in Section 2.4(c).
“Letter of Credit Sub-Limit” means, at any time, $150,000,000 less the Dollar Equivalent of
the Letter of Credit Obligations (as defined in the Canadian Facility) at such time.
“Letter of Credit Undrawn Amounts” means, at any time, the aggregate undrawn amount of all
Letters of Credit outstanding at such time.
“Leverage Ratio” means, with respect to any Person as of any date, the ratio of (a)
consolidated Financial Covenant Debt of such Person and its Subsidiaries outstanding as of such
date minus the aggregate amount of cash and Cash Equivalents held by such Person and its
Subsidiaries to the extent that such cash and Cash Equivalents are held in a Deposit Account or a
Securities Account over which the Collateral Agent has a perfected Lien for the benefit of the
Secured Parties to (b) EBITDA for such Person for the last four Fiscal Quarter period ending on or
before such date.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit
arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or
other security agreement or preferential arrangement of any kind or nature whatsoever intended to
assure payment of any Indebtedness or other obligation, including any conditional sale or other
title retention agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any of the foregoing, and the filing of any
financing statement that has been authorized by the applicable debtor under the UCC or comparable
law of any jurisdiction naming the owner of the asset to which such Lien relates as debtor.
“Loan” means any loan made by any Lender pursuant to this Agreement.
“Loan Documents” means, collectively, this Agreement, the Fee Letters, the Guaranty, each
Letter of Credit Reimbursement Agreement, the Collateral Documents and each certificate, agreement
or document executed by a Loan Party and delivered to any Facility Agent or any Lender in
connection with or pursuant to any of the foregoing.
“Loan Party” means the Borrower, Group, each Subsidiary Guarantor and each other Domestic
Subsidiary of Group that executes and delivers a Loan Document.
“Loan Party Canadian Facility Guaranty” means the Guaranty, dated as of the date hereof, by
the Loan Parties with respect to the guarantee of the payment of the Canadian Secured Obligations,
as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Material Adverse Change” means a material adverse change in any of (a) the business,
condition (financial or otherwise), operations, performance or properties of the Loan Parties,
taken as a whole, or Group and its Subsidiaries, taken as a whole, (b) the ability of the Loan
Parties to perform their respective obligations under the Loan Documents or (c) the ability of the
Administrative Agent, the Collateral Agent or the Lenders to enforce the Loan Documents.
“Material Adverse Effect” means an effect that results in or causes, or could reasonably be
expected to result in or cause, a Material Adverse Change.
25
“Material Leased Property” means all real estate leasehold properties of any Warnaco Entity
other than those with respect to which the aggregate rental payments under the term of the lease in
any year are less than $2,000,000.
“Material License” means the license agreements relating to the Calvin Klein trademark with
respect to jeans (expiring at the end of its renewal term on December 31, 2044 or December 31,
2046) and underwear, and the license agreements relating to the Speedo trademark, granted to the
Warnaco Entities in perpetuity.
“Material Owned Real Property” means all fee-owned real property of any Loan Party having a
fair market value in excess of $2,000,000 as of the Closing Date, or if later, the date of
acquisition thereof.
“Maximum Credit” means, at any time, (a) the lesser of (i) the Revolving Credit Commitments in
effect at such time and (ii) the Borrowing Base at such time, minus (b) the aggregate amount of any
Availability Reserve in effect at such time.
“Mortgagee’s Title Insurance Policy” has the meaning specified in the definition of Mortgage
Supporting Documents.
“Mortgage Supporting Documents” means, with respect to a Mortgage for a parcel of Material
Owned Real Property, each of the following:
(a) (i) a mortgagee’s title policy (or policies) or marked-up unconditional binder (or
binders) for such insurance (or other evidence reasonably acceptable to the Administrative
Agent proving ownership thereof) (“Mortgagee’s Title Insurance Policy”), dated a date
reasonably satisfactory to the Administrative Agent, and shall (A) be in an amount not less
than the appraised value (determined by references to the applicable Appraisals or, if no
such Appraisals are available, by other means reasonably acceptable to the Administrative
Agent) of such parcel of Real Property, (B) be issued at ordinary rates, (C) insure that the
Lien granted pursuant to the Mortgage insured thereby creates a valid perfected Lien on such
parcel of Real Property having at least the priorities described in Section 4.20 of this
Agreement and the Collateral Documents, free and clear of all defects and encumbrances,
except for Customary Permitted Liens and for such defects and encumbrances as may be
approved by the Administrative Agent, (D) name the Collateral Agent for the benefit of the
Secured Parties as the insured thereunder, (E) be in the form of ALTA Loan Policy — 2006 (or
such local equivalent thereof as is reasonably satisfactory to the Administrative Agent),
(F) contain a comprehensive lender’s endorsement (including, but not limited to, a revolving
credit endorsement and a floating rate endorsement), (G) be issued by Chicago Title
Insurance Company, First American Title Insurance Company, Lawyers Title Insurance
Corporation, Stewart Title Company or any other title company reasonably satisfactory to the
Administrative Agent (including any such title companies acting as co-insurers or
reinsurers) and (H) be otherwise in form and substance reasonably satisfactory to the
Administrative Agent and (ii) a copy of all documents referred to, or listed as exceptions
to title, in such title policy (or policies) in each case in form and substance reasonably
satisfactory to the Administrative Agent;
(b) maps or plats of a current as-built survey of such parcel of Real Property
certified to and received by (in a manner reasonably satisfactory to each of them) the
Administrative Agent and the title insurance company issuing the Mortgagee’s Title Insurance
Policy for such Mortgage, dated a date reasonably satisfactory to the Administrative Agent
and such title insurance company, by an independent professional licensed land surveyor
reasonably satisfactory to the Administrative Agent and such title insurance company, which
maps or plats and the surveys on which they are based shall be made in form and substance
reasonably satisfactory to the Administrative Agent;
26
(c) an opinion of counsel in each state in which any such Mortgage is to be recorded in
form and substance and from counsel reasonably satisfactory to the Administrative Agent; and
(d) such other agreements, documents and instruments in form and substance reasonably
satisfactory to the Administrative Agent as the Administrative Agent deems necessary or
appropriate to create, register or otherwise perfect, maintain, evidence the existence,
substance, form or validity of, or enforce a valid and enforceable Lien on such parcel of
Real Property in favor of the Collateral Agent for the benefit of the Secured Parties (or in
favor of such other trustee as may be required or desired under local law) having the
priorities described in Section 4.20 of this Agreement and the Collateral Documents and
subject only to (A) Liens permitted under Section 8.2 and (B) such other Liens as the
Administrative Agent may reasonably approve.
“Mortgages” means the mortgages, deeds of trust or other real estate security documents made
or required herein to be made by a Loan Party, each in form and substance reasonably satisfactory
to the Administrative Agent.
“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to
which Group, any of its Subsidiaries or any ERISA Affiliate has any obligation or liability,
contingent or otherwise.
“Net Cash Proceeds” means proceeds received by any Loan Party after the Closing Date in cash
or Cash Equivalents from any (a) Asset Sale (other than an Asset Sale permitted under clauses (a),
(c) and (h) of Section 8.4) of Receivables or Inventory net of (i) the reasonable cash costs of
sale, assignment or other disposition, (ii) taxes paid or payable as a result thereof and (iii) any
amount required to be paid or prepaid on Indebtedness (other than the Obligations) secured by a
perfected Lien on the assets subject to such Asset Sale; provided, however, that the evidence of
each of (i), (ii) and (iii) are provided to the Administrative Agent in form and substance
satisfactory to it and, if such Asset Sale includes assets in addition to Receivables and
Inventory, only such portion of the amounts in clauses (i), (ii) and (iii) reasonably allocable to
Receivables and Inventory sold may be deducted under such clauses (i), (ii) and (iii); or (b)
Property Loss Event with respect to Inventory.
“Non-Cash Interest Expense” means, with respect to any Person for any period, the sum of the
following amounts to the extent included in the definition of Interest Expense: (a) the amount of
debt discount and debt issuance costs amortized, (b) charges relating to write-ups or write-downs
in the book or carrying value of existing Financial Covenant Debt, (c) interest payable in
evidences of Indebtedness or by addition to the principal of the related Indebtedness and (d) other
non-cash interest.
“Non-Funding Lender” has the meaning specified in Section 2.2(d).
“Non-U.S. Agent” means each Agent that is not a United States person as defined in Section
7701(a)(30) of the Code.
27
“Non-U.S. Lender” means each Lender or each Issuer that is not a United States person as
defined in Section 7701(a)(30) of the Code.
“Notice of Borrowing” has the meaning specified in Section 2.2(a).
“Notice of Conversion or Continuation” has the meaning specified in Section 2.11(b).
“NPL” means the National Priorities List under CERCLA.
“Obligations” means the Loans, the Letter of Credit Obligations and all other amounts and
obligations owing by the Borrower to any Facility Agent, any Lender, any Issuer, an Affiliate of
any of them or any Indemnitee, of every type and description (whether by reason of an extension of
credit, opening or amendment of a letter of credit or payment of any draft drawn or other payment
thereunder, loan, guaranty, indemnification, foreign exchange or currency swap transaction,
interest rate hedging transaction or otherwise), present or future, arising under this Agreement or
any other Loan Document, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising and however
acquired and whether or not evidenced by any note, guaranty or other instrument or for the payment
of money, and includes all letter of credit, cash management and other fees, interest, charges,
expenses, fees, attorneys’ fees and disbursements and other sums chargeable to the Borrower under
this Agreement or any other Loan Document, and all obligations of the Borrower to cash
collateralize Letter of Credit Obligations.
“Orderly Liquidation Value Rate” means (i) with respect to Eligible Inventory (other than
Documented Non-Letter of Credit Inventory and Inventory covered by Documentary Letters of Credit),
the Dollar Equivalent of the orderly liquidation value (net of costs and expenses incurred in
connection with liquidation) of such Eligible Inventory, divided by the aggregate value of such
Eligible Inventory, in each case, determined by reference to the most recent Appraisal received by
the Administrative Agent and (ii) with respect to Eligible Inventory consisting of Documented
Non-Letter of Credit Inventory or Inventory covered by Documentary Letters of Credit, the Dollar
Equivalent of the orderly liquidation value (net of costs and expenses incurred in connection with
liquidation) of such Eligible Inventory, divided by the aggregate value of such Eligible Inventory,
in each case, determined by reference to the most recent Appraisal received by the Administrative
Agent. The Orderly Liquidation Value Rate with respect to Eligible Inventory (other than
Documented Non-Letter of Credit Inventory and Inventory covered by Documentary Letters of Credit)
shall initially be 85.9% and the Orderly Liquidation Value Rate with respect to Eligible Inventory
consisting of Documented Non-Letter of Credit Inventory or Inventory covered by Documentary Letters
of Credit shall initially be 61.0%.
“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Permit” means any permit, approval, authorization, license, variance or permission required
from a Governmental Authority under an applicable Requirement of Law.
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“Permitted Acquisition” means any Proposed Acquisition subject to the satisfaction of each of
the following conditions:
(i) the Administrative Agent shall receive at least 10 Business Days’ prior written
notice of such Proposed Acquisition, which notice shall include, without limitation, a
reasonably detailed description of such Proposed Acquisition;
(ii) such Proposed Acquisition shall have been approved by the applicable board of
directors of the Person constituting or owning the Proposed Acquisition Target;
(iii) no additional Indebtedness or other liabilities shall be incurred, assumed or
otherwise be reflected on a consolidated balance sheet of Group and the Proposed Acquisition
Target after giving effect to such Proposed Acquisition, except (i) Loans made hereunder,
(ii) ordinary course trade payables, contingent obligations and accrued expenses and (iii)
Indebtedness of the Proposed Acquisition Target (or any such Indebtedness assumed by a
Warnaco Entity in connection with such Proposed Acquisition) permitted under Section 8.1;
(iv) both (x) after giving pro forma effect to such Proposed Acquisition and to any
Facility Increase to be effective on the date of the consummation of such Proposed
Acquisition Available Credit is at least 20% of the Aggregate Borrowing Limit at such time
and (y) prior to the consummation of such Proposed Acquisition, Group has delivered to the
Administrative Agent a certificate executed by a Responsible Officer of Group certifying the
satisfaction of such requirement with respect to such Proposed Acquisition and setting forth
in reasonable detail the calculation of such Available Credit;
(v) at or prior to the closing of such Proposed Acquisition, the Warnaco Entity making
such Proposed Acquisition and the Proposed Acquisition Target shall have executed such
documents and taken such actions as may be required under Section 7.11 and Section 7.13;
(vi) the Borrower shall (i) have delivered to the Administrative Agent, upon the
request of the Administrative Agent, promptly upon its becoming available, the acquisition
agreement (including all schedules), all financial information, financial analysis,
projections and similar documentation relating to the proposed acquisition, and (ii) use its
reasonable commercial efforts to provide such additional documentation or other information
relating to such Proposed Acquisition that the Administrative Agent shall reasonably
request, including, without limitation, financial projections on a Pro Forma Basis after
giving effect to the Proposed Acquisition;
(vii) on or prior to the date of such Proposed Acquisition, the Administrative Agent
shall have received copies of the acquisition agreement authorizing assignment of the rights
and obligations thereunder of any Warnaco Entity that is a Loan Party to the Collateral
Agent as security for the Secured Obligations, related Contractual Obligations and
instruments and all opinions, certificates, lien search results and other documents
reasonably requested by the Administrative Agent;
(viii) at the time of such Proposed Acquisition and after giving effect thereto, (i) no
Default or Event of Default shall have occurred and be continuing and (ii) all
representations and warranties contained in Article IV and in the other Loan Documents shall
be true and correct in all material respects (and immediately prior to the consummation of
such Proposed Acquisition, Group has delivered to the Administrative Agent a certificate
executed by a Responsible Officer of Group certifying the satisfaction of the
requirements under this clause (viii) with respect to such Proposed Acquisition); and
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(ix) with respect to any Proposed Acquisition by any Foreign Subsidiary (whether by
acquisition of assets or Stock or the merger of any Proposed Acquisition Target with or into
a Foreign Subsidiary or otherwise), at the time of such Proposed Acquisition and after
giving effect thereto, the Fixed Charge Coverage Ratio for Group shall be at least 1.1 to
1.0 for the most recent four Fiscal Quarter period for which Financial Statements have been
delivered pursuant to Section 6.1 on a Pro Forma Basis (and prior to the consummation of
such Proposed Acquisition, Group has delivered to the Administrative Agent a certificate
executed by a Responsible Officer of Group certifying the satisfaction of the requirements
under this clause (ix) with respect to such Proposed Acquisition and setting forth in
reasonable detail the calculation of such Fixed Charge Coverage Ratio).
“Permitted Cash Equivalents” means time deposits of, or certificates of deposit issued by,
BofA that, in each instance, are acceptable to the Administrative Agent.
“Person” means an individual, partnership, corporation (including a business trust), joint
stock company, estate, trust, limited liability company, unincorporated association, joint venture
or other entity or a Governmental Authority.
“Pledge and Security Agreement” means a pledge and security agreement, in substantially the
form of Exhibit I, executed by the Borrower and each Guarantor.
“Pledged Debt Instruments” has the meaning specified in the Pledge and Security Agreement.
“Pledged Stock” has the meaning specified in the Pledge and Security Agreement.
“Pro Forma Basis” means, with respect to any determination for any period, that such
determination shall be made giving pro forma effect to each acquisition consummated during such
period, together with all transactions relating thereto consummated during such period (including
any incurrence, assumption, refinancing or repayment of Indebtedness), as if such acquisition and
related transactions had been consummated on the first day of such period, in each case based on
historical results accounted for in accordance with Agreement Accounting Principles and, to the
extent applicable, reasonable assumptions that are specified in the relevant Compliance
Certificate, Financial Statement or other document provided to the Administrative Agent or any
Lender in connection herewith in accordance with Regulation S-X of the Securities Act of 1933.
“Projections” means those financial projections dated August 2008 covering the fiscal years
ending in 2008 through 2013 inclusive, delivered to the Lenders by Group prior to the Closing Date.
“Property Loss Event” means any loss of or damage to property of Group or any Subsidiary
thereof that results in the receipt by such Person of proceeds of insurance in excess of $2,000,000
or any taking of property of Group or any Subsidiary thereof that results in the receipt by such
Person of a compensation payment in respect thereof in excess of $2,000,000.
“Proposed Acquisition” means the proposed acquisition by the Borrower or any of its
Subsidiaries of all or substantially all of the assets or Stock of any Proposed Acquisition Target,
or the merger of any Proposed Acquisition Target with or into the Borrower or any Subsidiary of the
Borrower (and, in the case of a merger with the Borrower, with the Borrower being the
surviving corporation).
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“Proposed Acquisition Target” means any Person, any trademark (including any trademark license
in respect of which the licensee makes an up-front payment not credited against future royalties),
or any assets constituting a business, division, branch or other unit of operation of any Person,
in each case, subject to a Proposed Acquisition.
“Protective Advances” means all expenses, disbursements and advances incurred by the
Administrative Agent pursuant to the Loan Documents after the occurrence and during the continuance
of an Event of Default that the Administrative Agent, in its sole discretion, exercised reasonably,
deems necessary or desirable to preserve or protect the Collateral or any portion thereof or to
enhance the likelihood, or maximize the amount, of repayment of the Obligations.
“Ratable Portion” or (other than in the expression “equally and ratably”) “ratably” means,
with respect to any Lender, the percentage obtained by dividing (i) the Revolving Credit Commitment
of such Lender by (ii) the aggregate Revolving Credit Commitments of all Lenders (or, at any time
after the Revolving Credit Termination Date, the percentage obtained by dividing the aggregate
outstanding principal balance of the Revolving Credit Outstandings owing to such Lender by the
aggregate outstanding principal balance of the Revolving Credit Outstandings owing to all Lenders).
“Real Property” means all of those plots, pieces or parcels of land now owned or leased or
hereafter acquired or leased by Group or any of its Subsidiaries (the “Land”), together with the
right, title and interest of any Warnaco Entity, if any, in and to the streets, the land lying in
the bed of any streets, roads or avenues, opened or proposed, in front of, the air space and
development rights pertaining to the Land and the right to use such air space and development
rights, all rights of way, privileges, liberties, tenements, hereditaments and appurtenances
belonging or in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and enjoyment of the Land,
including all alley, vault, drainage, mineral, water, oil and gas rights, together with all of the
buildings and other improvements now or hereafter erected on the Land, and any fixtures appurtenant
thereto.
“Receivable” means any indebtedness and other obligations owed to any Loan Party from or on
behalf of, or any right of any Loan Party to payment from or on behalf of, an Account Debtor,
whether constituting an Account, Chattel Paper, Instrument or General Intangible, arising in
connection with the sale of goods or the rendering of services by any Loan Party or any Subsidiary
thereof, and includes the obligation to pay any finance charges, fees and other charges with
respect thereto.
“Register” has the meaning specified in Section 11.2(c).
“Reimbursement Obligations” means all matured reimbursement or repayment obligations of the
Borrower to any Issuer with respect to amounts drawn under Letters of Credit.
“Reinvestment Deferred Amount” means, with respect to any Net Cash Proceeds of any
Reinvestment Event, the portion of such Net Cash Proceeds subject to a Reinvestment Notice.
“Reinvestment Event” means any Asset Sale or Property Loss Event in respect of which the
Borrower has delivered a Reinvestment Notice.
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“Reinvestment Notice” means a written notice executed by a Responsible Officer of the Borrower
stating that no Event of Default has occurred and is continuing and that the Borrower (directly or
indirectly through one of the Warnaco Entities) intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale or Property Loss Event to consummate a Permitted
Acquisition (in the case of an Asset Sale only) or to acquire replacement or fixed assets useful in
its or one of its Subsidiaries’ businesses or, in the case of a Property Loss Event, to effect
repairs or replacements.
“Reinvestment Prepayment Amount” means, with respect to any Net Cash Proceeds of any
Reinvestment Event, the Reinvestment Deferred Amount for such Net Cash Proceeds less any amount
expended or required to be expended pursuant to a Contractual Obligation entered into prior to the
relevant Reinvestment Prepayment Date for such Net Cash Proceeds to consummate, to the extent
otherwise permitted hereunder, a Permitted Acquisition (in the case of an Asset Sale only) or to
acquire, to the extent otherwise permitted hereunder, replacement or fixed assets useful in the
business of the Borrower or any of its Subsidiaries or, in the case of a Property Loss Event, to
effect repairs or replacements.
“Reinvestment Prepayment Date” means, with respect to any Net Cash Proceeds of any
Reinvestment Event, the earlier of (a) the date occurring 180 days after such Reinvestment Event
and (b) the date that is five Business Days after the date on which the Borrower shall have
notified the Administrative Agent of the Borrower’s determination not to consummate a Permitted
Acquisition (in the case of an Asset Sale only) or to acquire replacement or fixed assets useful in
the Borrower’s or a Subsidiary’s business (or, in the case of a Property Loss Event, not to effect
repairs or replacements) with all or any portion of the relevant Reinvestment Deferred Amount for
such Net Cash Proceeds.
“Related Security” means, with respect to any Receivable:
(a) all of each Loan Party’s interest in any goods (including returned goods), and
documentation of title evidencing the shipment or storage of any goods (including returned
goods), relating to any sale giving rise to such Receivable,
(b) all Instruments and Chattel Paper that may evidence such Receivable,
(c) all other Liens and property subject thereto from time to time purporting to secure
payment of such Receivable, whether pursuant to the Sales Contract related to such
Receivable or otherwise, together with all UCC financing statements or similar filings
relating thereto, and
(d) all of each Loan Party’s rights, interests and claims under the Sales Contracts and
all guaranties, indemnities and other agreements (including the related Sales Contract) or
arrangements of whatever character from time to time supporting or securing payment of such
Receivable or otherwise relating to such Receivable, whether pursuant to the Sales Contract
related to such Receivable or otherwise.
“Release” means, with respect to any Person, any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration, in each case, of any
Contaminant into the indoor or outdoor environment or into or out of any property owned or leased
by such Person, including the movement of Contaminants through or in the air, soil, surface water,
ground water or property.
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“Remedial Action” means all actions required to (a) clean up, remove, treat or in any other
way address any Contaminant in the indoor or outdoor environment, (b) prevent the Release or threat
of Release or minimize the further Release so that a Contaminant does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor environment or (c) perform
pre-remedial studies and investigations and post-remedial monitoring and care.
“Requirement of Law” means, with respect to any Person, the common and civil law and all
federal, state, provincial, local and foreign laws, rules and regulations, orders, judgments,
decrees and other legal requirements or determinations of any Governmental Authority or arbitrator,
applicable to or binding upon such Person or any of its property or to which such Person or any of
its property is subject.
“Requisite Lenders” means, collectively, (a) on and prior to the Revolving Credit Termination
Date, Lenders having more than fifty percent (50%) of the aggregate outstanding amount of the
Revolving Credit Commitments and (b) after the Revolving Credit Termination Date, Lenders having
more than fifty percent (50%) of the aggregate Revolving Credit Outstandings. A Non-Funding Lender
shall not be included in the calculation of “Requisite Lenders”.
“Responsible Officer” means, with respect to any Person, any of the principal executive
officers, managing members or general partners of such Person, but in any event, with respect to
financial matters, the chief financial officer, treasurer or controller of such Person.
“Restricted Account” has the meaning specified in the Pledge and Security Agreement.
“Restricted Account Letter” has the meaning specified in the Pledge and Security Agreement.
“Restricted Payment” means (a) any dividend, distribution or any other payment whether direct
or indirect, on account of any Stock or Stock Equivalent of Group or any of its Subsidiaries now or
hereafter outstanding and (b) any redemption, retirement, sinking fund or similar payment, purchase
or other acquisition for value, direct or indirect, of any Stock or Stock Equivalent of Group or
any of its Subsidiaries now or hereafter outstanding.
“Revolving Credit Borrowing” means a borrowing consisting of Revolving Loans made on the same
day by the Lenders ratably according to their respective Revolving Credit Commitments.
“Revolving Credit Commitment” means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans and to acquire interests in other Revolving Credit Outstandings in
the aggregate principal amount outstanding not to exceed the amount set forth opposite such
Lender’s name on Schedule I (Commitments) under the caption “Revolving Credit Commitment,” as
amended to reflect each Assignment and Acceptance or Assumption Agreement executed by such Lender
and as such amount may be adjusted pursuant to this Agreement.
“Revolving Credit Facility” means the Revolving Credit Commitments and the provisions herein
related to the Revolving Loans, Swing Loans and Letters of Credit.
“Revolving Credit Facility Register” has the meaning specified in Section 11.2(c).
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“Revolving Credit Outstandings” means, at any particular time, the sum of (a) the principal
amount of the Revolving Loans outstanding at such time, (b) the Letter of Credit Obligations
outstanding at such time and (c) the principal amount of the Swing Loans outstanding at such time.
“Revolving Credit Termination Date” shall mean the earliest of (a) the Revolving Loan Maturity
Date, (b) the date of termination of the Commitments pursuant to Section 2.5 and (c) the date on
which any of the Obligations become due and payable pursuant to Section 9.2.
“Revolving Loan” has the meaning specified in Section 2.1.
“Revolving Loan Maturity Date” means the fifth anniversary of the Closing Date.
“Sale and Leaseback Transaction” means, with respect to any Person, any direct or indirect
arrangement pursuant to which assets of such Person are sold or transferred by such Person or a
Subsidiary of such Person and are thereafter leased back from the purchaser thereof by such Person
or one of its Subsidiaries; provided, however, any sale and leaseback of assets that were purchased
in connection with a proposed lease financing transaction by such Person within 45 days of such
sale and leaseback transaction shall not constitute a “Sale and Leaseback Transaction”.
“Sales Contract” means, with respect to any Receivable, any and all sales contracts, purchase
orders, instruments, agreements, leases, invoices, notes or other writings pursuant to which such
Receivable arises or that evidence such Receivable or under which an Account Debtor becomes or is
obligated to make payment in respect of such Receivable.
“Secured Obligations” means, (a) in the case of the Borrower, the Obligations, (b) in the case
of each Guarantor, the obligations of such Loan Party under the Guaranty and the other Loan
Documents to which it is a party, and (c) in the case of each Loan Party, (i) the obligations of
such Loan Party under any Hedging Contract entered into with any Agent, Lender or any Affiliate of
any thereof, (ii) any Cash Management Obligations owing by such Loan Party to any Agent, Lender or
any Affiliate of any thereof and (iii) the obligations of such Loan Party under the Loan Party
Canadian Facility Guaranty.
“Secured Parties” means the Lenders (including the Swing Loan Lender), the Issuers, the
Administrative Agent, the Collateral Agent, each of their respective successors and assigns, and
any other holder of any Secured Obligation or of any other obligations under the Loan Documents,
including the beneficiaries of each indemnification obligation undertaken by any of the Loan
Parties and the Facility Agents.
“Securities Account” has the meaning given to such term in the UCC.
“Security” means any Stock, Stock Equivalent, voting trust certificate, bond, debenture, note
or other evidence of Indebtedness, whether secured, unsecured, convertible or subordinated, or any
certificate of interest, share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing, but shall not include any evidence of the Obligations.
“Senior Note Documents” means, collectively, the Senior Note Indenture, the Senior Notes and
each certificate, agreement or document executed by a Warnaco Entity and delivered to the Senior
Note Indenture Trustee or any Senior Noteholder in connection with or pursuant to any of the
foregoing.
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“Senior Note Indenture” means the indenture, dated as of June 12, 2003, among the Borrower, as
issuer, Group and each Domestic Subsidiary thereof (other than the Borrower), as guarantors, and
the Senior Note Indenture Trustee.
“Senior Note Indenture Trustee” means Wells Fargo Bank Minnesota, National Association, in its
capacity as indenture trustee for the Senior Noteholders and each successor thereto.
“Senior Noteholders” means each holder of a Senior Note.
“Senior Notes” means the 8-7/8% senior notes due 2013 issued by the Borrower pursuant to the
Senior Note Indenture.
“Solvent” means, with respect to any Person as of any date of determination, that, as of such
date, (a) the value of the assets of such Person (both at fair value and present fair saleable
value) is greater than the total amount of liabilities (including contingent and unliquidated
liabilities) of such Person, (b) such Person is able to pay all liabilities of such Person as such
liabilities mature and (c) such Person does not have unreasonably small capital. In computing the
amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at
the amount that, in light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
“Special Cash Collateral Account” means an account maintained with BofA or an affiliate
thereof for the purpose of providing cash collateral as part of the Borrowing Base, which account
shall be subject to a control agreement in form and substance reasonably satisfactory to the
Facility Agents and shall be a segregated account holding only cash of the Borrower deposited into
such account in accordance with Section 2.19, investments of such cash in Permitted Cash
Equivalents and investment income derived from such investments.
“Special Purpose Vehicle” means any special purpose funding vehicle identified in writing as
such by any Lender to the Administrative Agent.
“Standby Letter of Credit” means any letter of credit Issued pursuant to Section 2.4 which is
not a Documentary Letter of Credit.
“Stock” means shares of capital stock (whether denominated as common stock or preferred
stock), beneficial, partnership or membership interests, participations or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited liability company or
equivalent entity, whether voting or non-voting.
“Stock Equivalents” means all securities convertible into or exchangeable for Stock and all
warrants, options or other rights to purchase or subscribe for any Stock, whether or not presently
convertible, exchangeable or exercisable.
“Subordinated Indebtedness” means Indebtedness of a Loan Party that satisfies all of the
following requirements: (i) interest on such Indebtedness is not payable in cash prior to the date
that is six months after the Revolving Loan Maturity Date, (ii) such Indebtedness does not mature
and does not require any scheduled or mandatory prepayments prior to the date that is six months
after the Revolving Loan Maturity Date, (iii) such Indebtedness is not secured and is not
guaranteed by any Warnaco Entity that is not guaranteeing the Obligations and (iv) such
Indebtedness (and any guarantee thereof) is subordinated to the Secured Obligations on terms
reasonably satisfactory to the Administrative Agent.
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“Subsidiary” means, with respect to any Person, any corporation, partnership, limited
liability company, trust or estate or other business entity of which an aggregate of more than 50%
of (a) the outstanding Voting Stock, (b) the interest in the capital or profits of such
partnership, joint venture or limited liability company or (c) the beneficial interest in such
trust or estate, is in any case, at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s
other Subsidiaries.
“Subsidiary Guarantor” means each Domestic Subsidiary of Group party to or that becomes party
to the Guaranty.
“Super-Majority Lenders” means, collectively, the Lenders having more than sixty-six and
two-thirds percent (66 2/3%) of the aggregate outstanding amount of the Revolving Credit
Commitments. A Non-Funding Lender that is a Lender shall not be included in the calculation of
“Super-Majority Lenders.”
“Swing Loan” has the meaning specified in Section 2.3.
“Swing Loan Availability” means an aggregate principal amount at any time outstanding of Swing
Loans not to exceed $25,000,000.
“Swing Loan Lender” means BofA or any other Person who becomes the Administrative Agent or who
agrees with the approval of the Administrative Agent and the Borrower to act as the Swing Loan
Lender hereunder.
“Swing Loan Request” has the meaning specified in Section 2.3(b).
“Syndication Agent” has the meaning specified in the preamble to this Agreement.
“Tax Affiliate” means, with respect to any Person, (a) any Subsidiary of such Person, and (b)
any Affiliate of such Person with which such Person files or is eligible to file consolidated,
combined or unitary United States tax returns.
“Tax Return” has the meaning specified in Section 4.8(a).
“Taxes” has the meaning specified in Section 2.16(a).
“Test Period” means, if a Trigger Event shall occur, each period of four consecutive Fiscal
Quarters (taken as one accounting period) ending on each of (x) the last day of the Fiscal Quarter
most recently ended prior to the occurrence of such Trigger Event for which Financial Statements
for Group and its Subsidiaries have been delivered to the Administrative Agent pursuant to Section
6.1(b) or Section 6.1(c) and (y) the last day of each Fiscal Quarter after the Fiscal Quarter
referred to in clause (x) ending prior to or during the Trigger Event Compliance Period for such
Trigger Event.
“Title IV Plan” means a pension plan, other than a Multiemployer Plan, which is covered by
Title IV of ERISA to which Group, any of its Subsidiaries or any ERISA Affiliate has any obligation
or liability (contingent or otherwise).
“Trigger Amount” means, at any time, (i) prior to the first Anniversary Date, the greater of
(x) 10% of the Aggregate Borrowing Base at such time and (y) $30,000,000, (ii) on or after the
first Anniversary Date and prior to the second Anniversary Date, the greater of (x) 12.5% of the
Aggregate Borrowing Base at such time and (y) $35,000,000 and (iii) on or after the second
Anniversary Date, the greater of (x) 15% of the Aggregate Borrowing Base at such time and (y)
$40,000,000.
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“Trigger Event” means for any reason Available Credit is less than the Trigger Amount at any
time.
“Trigger Event Compliance Period” means the period commencing on the occurrence of a Trigger
Event and continuing until such time as Available Credit is greater than the Trigger Amount for
forty-five (45) consecutive calendar days.
“UCC” has the meaning specified in the Pledge and Security Agreement.
“Unfunded Pension Liability” means, with respect to Group at any time, the sum of (a) the
amount, if any, by which the present value of all accrued benefits under each Title IV Plan (other
than any Title IV Plan subject to Section 4063 of ERISA) exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title IV of ERISA, as
determined as of the most recent valuation date for such Title IV Plan using the actuarial
assumptions in effect under such Title IV Plan, and (b) the aggregate amount of withdrawal
liability that could be assessed under Section 4063 with respect to each Title IV Plan subject to
such Section, separately calculated for each such Title IV Plan as of its most recent valuation
date, (c) for a period of five years following a transaction reasonably likely to be covered by
Section 4069 of ERISA, the liabilities (whether or not accrued) that could be avoided by Group, any
of its Subsidiaries or any ERISA Affiliate as a result of such transaction and (d) with respect to
each Foreign Plan, the amount, if any, by which the present value of all benefit obligations under
such plan exceed the fair market value of assets attributable to such plan (determined for the most
recent valuation date for such plan using the actuarial assumptions in effect for such plan set
forth in the actuarial valuation report).
“Unused Commitment Fee” has the meaning specified in Section 2.12(a).
“U.S. Lender” means each Lender, each Issuer and each Agent that is a United States person as
defined in Section 7701(a)(30) of the Code.
“Voting Stock” means Stock of any Person having ordinary power to vote in the election of
members of the board of directors, managers, trustees or other controlling Persons of such Person
(irrespective of whether, at the time, Stock of any other class or classes of such entity shall
have or might have voting power by reason of the happening of any contingency).
“Warnaco Entity” means Group or any Subsidiary thereof.
“Wholly Owned Subsidiary” means any Subsidiary of Group, all of the Stock of which (other than
director’s qualifying shares or such other de minimus portion thereof to the extent required by
law) is owned by Group, either directly or indirectly through one or more Wholly Owned
Subsidiaries.
“Withdrawal Liability” means, with respect to the Borrower at any time, the aggregate
liability incurred (whether or not assessed) with respect to all Multiemployer Plans pursuant to
Section 4201 of ERISA or for increases in contributions required to be made pursuant to Section
4243 of ERISA.
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Section 1.2 Computation of Time Periods. In this Agreement, in the computation of periods of time
from a specified date to a later specified date, the word “from” means “from and including” and the
words “to” and “until” each mean “to but excluding” and the word “through” means “to and
including.”
Section 1.3 Accounting Terms and Principles.
(a) Except as set forth below, all accounting terms not specifically defined herein shall be
construed in conformity with Agreement Accounting Principles and all accounting determinations
required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in
conformity with Agreement Accounting Principles.
(b) If any change in the accounting principles used in the preparation of the most recent
Financial Statements referred to in Section 6.1 is hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or the International Accounting Standards
Board, in the case of the IFRS) (or any successors thereto) and such change is adopted by the
Borrower or Group with the agreement of its independent public accountants and results in a change
in any of the calculations required by Article V, Article VI or Article VIII or in the definition
of “Applicable Margin” or “Permitted Acquisition”, the parties hereto agree to enter into
negotiations in order to amend such provisions so as to equitably reflect such change with the
desired result that the criteria for evaluating compliance with such covenants by Group and the
Borrower or the determination of the “Applicable Margin” or the calculation of the Fixed Charge
Coverage Ratio in the definition of “Permitted Acquisition” shall be the same after such change as
if such change had not been made; provided, however, that no change in Agreement Accounting
Principles that would affect a calculation that measures compliance with any covenant contained in
Article V, Article VI or Article VIII or in the definition of “Applicable Margin” or “Permitted
Acquisition” shall be given effect until such provisions are amended to reflect such changes in
Agreement Accounting Principles.
(c) For purposes of making all financial calculations to determine compliance with Article V,
all components of such calculations shall be adjusted to include or exclude, as the case may be,
without duplication, such components of such calculations attributable to any business or assets
that have been acquired or disposed of by any Warnaco Entity after the first day of the applicable
period of determination and prior to the end of such period, as determined in good faith by Group
on a Pro Forma Basis.
Section 1.4 Conversion of Foreign Currencies.
(a) Financial Covenant Debt. Financial Covenant Debt denominated in any currency other than
Dollars shall be calculated using the Dollar Equivalent thereof as of the date of the Financial
Statements on which such Financial Covenant Debt is reflected.
(b) Dollar Equivalents. The Administrative Agent shall determine the Dollar Equivalent of any
amount as required hereby, and a determination thereof by the Administrative Agent shall be
conclusive absent manifest error. The Administrative Agent may, but shall not be obligated to,
rely on any determination made by any Loan Party in any document delivered to the Administrative
Agent. The Administrative Agent may determine or redetermine the Dollar Equivalent of any amount
on any date either in its own discretion or upon the request of any applicable Lender or Issuer.
(c) Rounding-Off. The Administrative Agent may set up appropriate rounding off mechanisms or
otherwise round-off amounts hereunder to the nearest higher or lower amount in whole Dollar or cent
to ensure amounts owing by any party hereunder or that otherwise need to be calculated or converted
hereunder are expressed in whole Dollars or in whole cents, as may be necessary or appropriate.
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Section 1.5 Certain Terms.
(a) The words “herein,” “hereof” and “hereunder” and similar words refer to this Agreement as
a whole, and not to any particular Article, Section, subsection or clause in this Agreement.
(b) References in this Agreement to an Exhibit, Schedule, Article, Section, subsection or
clause refer to the appropriate Exhibit or Schedule to, or Article, Section, subsection or clause
in this Agreement.
(c) Each agreement defined in this Article I shall include all appendices, exhibits and
schedules thereto. If the prior written consent of the Requisite Lenders is required hereunder for
an amendment, restatement, supplement or other modification to any such agreement and such consent
is obtained, references in this Agreement to such agreement shall be to such agreement as so
amended, restated, supplemented or modified.
(d) References in this Agreement to any statute shall be to such statute as amended or
modified and in effect at the time any such reference is operative.
(e) The term “including” when used in any Loan Document means “including without limitation”,
except when used in the computation of time periods.
(f) The terms “Lender,” “Issuer” and “Agent” include their respective successors.
(g) Upon the appointment of any successor Facility Agent pursuant to Section 10.6, references
to BofA in Section 10.3 to the extent applicable to such Facility Agent and to BofA in the
definitions of Base Rate, Eurodollar Rate, Federal Funds Rate, Dollar Equivalent, Permitted Cash
Equivalents and Special Cash Collateral Account to the extent applicable to such Facility Agent
shall be deemed to refer to the financial institution then acting as such Facility Agent or one of
its Affiliates if it so designates.
(h) Terms not otherwise defined herein and defined in the UCC are used herein with the
meanings specified in the UCC.
ARTICLE II
THE REVOLVING CREDIT FACILITY
Section 2.1 The Commitments. On the terms and subject to the conditions contained in this
Agreement, each Lender severally agrees to make loans in Dollars (each a “Revolving Loan”) to the
Borrower from time to time on any Business Day during the period from the Closing Date until the
Revolving Credit Termination Date in an aggregate principal amount not to exceed at any time
outstanding for all such loans by such Lender such Lender’s Commitment; provided, however, that at
no time shall any Lender be obligated to make a Revolving Loan (i) in excess of such Lender’s
Ratable Portion of the Available U.S. Credit or (ii) to the extent that the
aggregate Revolving Credit Outstandings, after giving effect to such Revolving Loan, would exceed
the Maximum Credit in effect at such time. Within the limits of the Revolving Credit Commitment of
each Lender, amounts of Revolving Loans repaid may be reborrowed under this Section 2.1.
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Section 2.2 Borrowing Procedures.
(a) Each Borrowing shall be made on notice given by the Borrower to the Administrative Agent
not later than 11:00 a.m. (New York City time) (i) one Business Day, in the case of a Borrowing of
Base Rate Loans and (ii) three (3) Business Days, in the case of a Borrowing of Eurodollar Rate
Loans, prior to the date of the proposed Borrowing. Each such notice shall be in writing in
substantially the form of Exhibit B (a “Notice of Borrowing”), specifying (A) the date of such
proposed Borrowing, (B) the aggregate amount of such proposed Borrowing, (C) whether any portion of
such Borrowing will be of Base Rate Loans or Eurodollar Rate Loans, (D) the initial Interest Period
or Periods for any such Eurodollar Rate Loans, and (E) the Available U.S. Credit (after giving
effect to the proposed Borrowing). Revolving Loans shall be made as Base Rate Loans unless
(subject to Section 2.14) the Notice of Borrowing specifies that all or a portion thereof shall be
Eurodollar Rate Loans. Each Revolving Credit Borrowing shall be in an aggregate amount of not less
than $1,000,000 or an integral multiple of $250,000 in excess thereof.
(b) The Administrative Agent shall give to each Lender prompt notice of the Administrative
Agent’s receipt of a Notice of Borrowing and, if Eurodollar Rate Loans are properly requested in
such Notice of Borrowing, the applicable interest rate determined pursuant to Section 2.14(a).
Each Lender shall, before 11:00 a.m. (New York City time) on the date of the proposed Borrowing,
make available to the Administrative Agent at its address referred to in Section 11.8 in
immediately available funds, such Lender’s Ratable Portion of such proposed Borrowing. After the
Administrative Agent’s receipt of such funds and (i) on the Closing Date, upon fulfillment of the
applicable conditions set forth in Section 3.1 and (ii) at any time (including the Closing Date),
upon fulfillment of the applicable conditions set forth Section 3.2, the Administrative Agent will
make such funds available to the Borrower.
(c) Unless the Administrative Agent shall have received notice from any Lender prior to the
date of any proposed Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s Ratable Portion of such Borrowing, the Administrative Agent may assume that such
Lender has made such Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.2 and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such Ratable Portion available to the Administrative
Agent, such Lender and the Borrower severally agree to repay to the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for each day from the date such
amount is made available to the Borrower until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to the Loans
comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate for the first
Business Day and thereafter at the interest rate applicable at the time to the Loans comprising
such Borrowing. If such Lender shall repay to the Administrative Agent such corresponding amount,
such corresponding amount so repaid shall constitute such Lender’s Loan as part of such Borrowing
for purposes of this Agreement. If the Borrower shall repay to the Administrative Agent such
corresponding amount, such payment shall not relieve such Lender of any obligation it may have
hereunder to the Borrower.
(d) The failure of any Lender to make the Loans or any payment required by it on the date
specified (a “Non-Funding Lender”), including any payment in respect of its participation in
Swing Loans and Letter of Credit Obligations, shall not relieve any other Lender of its
obligations to make such Loan or payment on such date but no such other Lender shall be responsible
for the failure of any Non-Funding Lender to make a Loan or payment required under this Agreement.
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Section 2.3 Swing Loans.
(a) On the terms and subject to the conditions contained in this Agreement, the Swing Loan
Lender may in its sole discretion make loans in Dollars (each a “Swing Loan”) otherwise available
to the Borrower under the Revolving Credit Facility from time to time on any Business Day during
the period from the Closing Date until the Revolving Credit Termination Date in an aggregate amount
at any time outstanding at any time not to exceed the Swing Loan Availability; provided, however,
that the Swing Loan Lender shall not make any Swing Loan to the extent that, after giving effect to
such Swing Loan, the aggregate Revolving Credit Outstandings would exceed the Maximum Credit. The
Swing Loan Lender shall be entitled to rely on the most recent Borrowing Base Certificate delivered
to the Administrative Agent. Each Swing Loan shall be a Base Rate Loan and must be repaid in full
within one Business Day of any demand by the Swing Loan Lender therefor and shall in any event
mature and become due and payable on the Revolving Credit Termination Date. Within the limits set
forth in the first sentence of this Section 2.3(a), amounts of Swing Loans prepaid or repaid may be
reborrowed under this Section 2.3(a).
(b) In order to request a Swing Loan, the Borrower shall telecopy (or forward by electronic
mail or similar means) to the Administrative Agent a duly completed request, in substantially the
form of Exhibit C, setting forth the date, the requested amount and date of the Swing Loan (a
“Swing Loan Request”), to be received by the Administrative Agent not later than 1:00 p.m. (New
York City time) on the day of the proposed borrowing. The Administrative Agent shall promptly
notify the Swing Loan Lender of the details of the requested Swing Loan. Subject to the terms of
this Agreement, the Swing Loan Lender shall make a Swing Loan available to the Administrative Agent
which will make such amounts available to the Borrower on the date of the relevant Swing Loan
Request. The Swing Loan Lender shall not make any Swing Loan in the period commencing on the first
Business Day after it receives written notice from the Administrative Agent or any Lender that one
or more of the conditions precedent contained in Section 3.2 shall not on such date be satisfied,
and ending when such conditions are satisfied. The Swing Loan Lender shall not otherwise be
required to determine that, or take notice whether, the conditions precedent set forth in Section
3.2 hereof have been satisfied in connection with the making of any Swing Loan.
(c) The Swing Loan Lender shall notify the Administrative Agent in writing (which may be by
telecopy or electronic mail) weekly, by no later than 10:00 a.m. (New York City time) on the first
Business Day of each week, of the aggregate principal amount of its Swing Loans then outstanding.
(d) The Swing Loan Lender may demand at any time that each Lender pay to the Administrative
Agent, for the account of the Swing Loan Lender, in the manner provided in clause (e) below, such
Lender’s Ratable Portion of all or a portion of the outstanding Swing Loans, which demand shall be
made through the Administrative Agent, shall be in writing and shall specify the outstanding
principal amount of Swing Loans demanded to be paid.
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(e) The Administrative Agent shall forward each notice referred to in clause (c) above and
each demand referred to in clause (d) above to each Lender on the day such notice or such demand is
received by the Administrative Agent (except that any such notice or demand received by the
Administrative Agent after 2:00 p.m. (New York City time) on any Business Day or any such demand
received on a day that is not a Business Day shall not be required to be forwarded to the
Lenders by the Administrative Agent until the next succeeding Business Day), together with a
statement prepared by the Administrative Agent specifying the amount of each Lender’s Ratable
Portion of the aggregate principal amount of the Swing Loans stated to be outstanding in such
notice or demanded to be paid pursuant to such demand, and, notwithstanding whether or not the
conditions precedent set forth in Section 3.2 shall have been satisfied (which conditions precedent
the Lenders hereby irrevocably waive), each Lender shall, before 11:00 a.m. (New York City time) on
the Business Day next succeeding the date of such Lender’s receipt of such written statement, make
available to the Administrative Agent, in immediately available funds, for the account of the Swing
Loan Lender, the amount specified in such statement. Upon such payment by a Lender, such Lender
shall, except as provided in clause (g) below, be deemed to have made a Revolving Loan to the
Borrower. The Administrative Agent shall use such funds to repay the Swing Loans to the Swing Loan
Lender. To the extent that any Lender fails to make such payment available to the Administrative
Agent for the account of the Swing Loan Lender, the Borrower shall repay such Swing Loan on demand.
(f) Upon the occurrence of a Default under Section 9.1(e), each Lender shall acquire, without
recourse or warranty, an undivided participation in each Swing Loan otherwise required to be repaid
by such Lender pursuant to clause (e) above, which participation shall be in a principal amount
equal to such Lender’s Ratable Portion of such Swing Loan, by paying to the Swing Loan Lender on
the date on which such Lender would otherwise have been required to make a payment in respect of
such Swing Loan pursuant to clause (e) above, in immediately available funds, an amount equal to
such Lender’s Ratable Portion of such Swing Loan. If all or part of such amount is not in fact
made available by such Lender to the Swing Loan Lender on such date, the Swing Loan Lender shall be
entitled to recover any such unpaid amount on demand from such Lender together with interest
accrued from such date at the Federal Funds Rate for the first Business Day after such payment was
due and thereafter at the rate of interest then applicable to Base Rate Loans.
(g) From and after the date on which any Lender (i) is deemed to have made a Revolving Loan
pursuant to clause (e) above with respect to any Swing Loan or (ii) purchases an undivided
participation interest in a Swing Loan pursuant to clause (f) above, the Swing Loan Lender shall
promptly distribute to such Lender such Lender’s Ratable Portion of all payments of principal of
and interest received by the Swing Loan Lender on account of such Swing Loan other than those
received from a Lender pursuant to clause (e) or (f) above.
Section 2.4 Letters of Credit.
(a) On the terms and subject to the conditions contained in this Agreement, each Issuer agrees
to Issue one or more Letters of Credit at the request of the Borrower for the account of the
Borrower from time to time during the period commencing on the Closing Date and ending on the
earlier of the Revolving Credit Termination Date and 30 days prior to the Revolving Loan Maturity
Date; provided, however, that no Issuer shall be under any obligation to Issue any Letter of Credit
if:
(i) any order, judgment or decree of any Governmental Authority or arbitrator shall
purport by its terms to enjoin or restrain such Issuer from issuing such Letter of Credit or
any Requirement of Law applicable to such Issuer or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over such Issuer
shall prohibit, or request that such Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon such Issuer with
respect to such Letter of Credit any restriction or reserve or capital requirement (for
which such Issuer is not otherwise compensated) not in effect on the date of this Agreement
or result in any unreimbursed loss, cost or expense which was not applicable, in effect or
known to
such Issuer as of the date of this Agreement and which such Issuer in good faith deems
material to it;
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(ii) such Issuer shall have received written notice from the Administrative Agent, any
Lender or the Borrower, on or prior to the requested date of issuance of such Letter of
Credit, that one or more of the applicable conditions contained in Section 3.1 and Section
3.2 is not then satisfied;
(iii) after giving effect to the issuance of such Letter of Credit, the aggregate
Revolving Credit Outstandings would exceed the Maximum Credit at such time;
(iv) after giving effect to the issuance of such Letter of Credit, the aggregate amount
of Letter of Credit Obligations then outstanding would exceed the Letter of Credit Sublimit;
(v) any fees due and payable in connection with a requested issuance have not been
paid; or
(vi) such Letter of Credit is not denominated in Dollars or in an Alternative Currency.
None of the Lenders (other than the Issuers in their capacity as such) shall have any obligation to
Issue any Letter of Credit. It is acknowledged and agreed by each party to this Agreement that
each of the letters of credit issued by BofA or The Bank of Nova Scotia under the Existing Credit
Agreement prior to the Closing Date and which remain outstanding on the Closing Date and are set
forth on Schedule 2.4 (each such letter of credit, an “Existing Rollover Letter of Credit”) shall,
from and after the Closing Date, constitute a Letter of Credit for all purposes of this Agreement
and shall, for purposes of this Agreement (including, without limitation, Sections 2.4(g) and
2.12(b)), be deemed issued on the Closing Date. The stated amount of each Existing Rollover Letter
of Credit and the expiry date therefor as of the Closing Date is set forth on Schedule 2.4.
(b) In no event shall the expiration date of any Letter of Credit (i) be more than one year
after the date of issuance thereof, or (ii) be less than five days prior to the Revolving Loan
Maturity Date.
(c) In connection with the issuance of each Letter of Credit, the Borrower shall give the
relevant Issuer and the Administrative Agent at least two Business Days’ (or such shorter period as
may be agreed by such Issuer) prior written notice, in substantially the form of Exhibit D (or in
such other written or electronic form as is acceptable to the Issuer), of the requested issuance of
such Letter of Credit (a “Letter of Credit Request”). Such notice shall be irrevocable and shall
(i) specify (A) the Issuer of such Letter of Credit, the stated amount of the Letter of Credit
requested, which stated amount (or, if such Letter of Credit is to be denominated in an Alternative
Currency, the Dollar Equivalent of such stated amount) shall not be less than $5,000 (or such
lesser amount as may be agreed to by such Issuer), (B) the date of issuance of such requested
Letter of Credit (which day shall be a Business Day), (C) the date on which such Letter of Credit
is to expire (which date shall be a Business Day), and (D) the Person for whose benefit the
requested Letter of Credit is to be Issued and (ii) certify that, after issuance of the requested
Letter of Credit, (A) the aggregate amount of the Letter of Credit Obligations then outstanding
will not exceed the Letter of Credit Sub-Limit and (B) the sum of the aggregate principal or
undrawn amount of the then-outstanding (I) Letter of Credit Obligations, (II) Revolving Loans and
(III) Swing Loans, will not exceed the Maximum Credit then in effect. Such notice, to be
effective, must be received by the relevant Issuer and the Administrative Agent not later
than 11:00 a.m. (New York City time) on the second (2nd) Business Day (or such
shorter period as agreed by the relevant Issuer) prior to the requested issuance of such Letter of
Credit.
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(d) Subject to the satisfaction of the conditions set forth in this Section 2.4, the relevant
Issuer shall, on the requested date, Issue a Letter of Credit on behalf of the Borrower in
accordance with such Issuer’s usual and customary business practices. No Issuer shall Issue any
Letter of Credit in the period commencing on the first Business Day after it receives written
notice from the Administrative Agent or any Lender that one or more of the conditions precedent
contained in Section 3.2 shall not on such date be satisfied, and ending when such conditions are
satisfied. The relevant Issuer shall not otherwise be required to determine that, or take notice
whether, the conditions precedent set forth in Section 3.2 have been satisfied in connection with
the issuance of any Letter of Credit.
(e) If requested by the relevant Issuer, prior to the issuance of each Letter of Credit by
such Issuer, and as a condition of such issuance, the Borrower shall have delivered to such Issuer
a letter of credit reimbursement agreement, in such form as the Issuer may employ in its ordinary
course of business for its own account (a “Letter of Credit Reimbursement Agreement”), signed by
the Borrower, and such other documents or items as may be required pursuant to the terms thereof.
In the event of any conflict between the terms of any Letter of Credit Reimbursement Agreement and
this Agreement, the terms of this Agreement shall govern.
(f) Each Issuer shall:
(i) give the Administrative Agent written notice (or telephonic notice confirmed
promptly thereafter in writing, which may be by telecopier) of the issuance or renewal of a
Letter of Credit Issued by it, of all drawings under a Letter of Credit Issued by it and the
payment (or the failure to pay when due) by the Borrower of any Reimbursement Obligation
when due (which notice the Administrative Agent shall promptly transmit by telecopy,
electronic mail or similar transmission to each Lender);
(ii) upon the request of any Lender, furnish to such Lender copies of any Letter of
Credit Reimbursement Agreement to which such Issuer is a party and such other documentation
as may reasonably be requested by such Lender; and
(iii) no later than 10 Business Days following the last day of each calendar month,
provide to the Administrative Agent (and the Administrative Agent shall provide a copy to
each Lender requesting the same) and the Borrower separate schedules for Documentary and
Standby Letters of Credit Issued by it, in form reasonably satisfactory to the
Administrative Agent, setting forth the aggregate Letter of Credit Obligations outstanding
at the end of each month and any information requested by the Borrower or the Administrative
Agent relating thereto.
(g) Immediately upon the issuance by an Issuer of a Letter of Credit in accordance with the
terms and conditions of this Agreement, such Issuer shall be deemed to have sold and transferred to
each Lender, and each Lender shall be deemed irrevocably and unconditionally to have purchased and
received from such Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender’s Ratable Portion of the Revolving Credit Commitments, in such Letter
of Credit and the obligations of the Borrower with respect thereto (including all Letter of Credit
Obligations with respect thereto) and any security therefor and guaranty pertaining thereto.
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(h) The Borrower agrees to pay to the Issuer of a Letter of Credit the amount of all
Reimbursement Obligations owing to such Issuer under a Letter of Credit when such amounts are due
and payable, irrespective of any claim, set-off, defense or other right that the Borrower may have
at any time against such Issuer or any other Person. In the event that any Issuer makes any
payment under any Letter of Credit and the Borrower shall not have repaid such amount to such
Issuer pursuant to this clause (h) or such payment is rescinded or set aside for any reason, such
Reimbursement Obligation shall bear interest computed from the date on which such Reimbursement
Obligation arose to the date of repayment in full at the rate of interest applicable to Revolving
Loans bearing interest at a rate based on the Base Rate during such period, and such Issuer shall
promptly notify the Administrative Agent, which shall promptly notify each Lender of the failure to
repay such Reimbursement Obligation, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Issuer the amount of such Lender’s Ratable Portion of
such payment in Dollars (or, if such payment was made in an Alternative Currency, an amount in
Dollars equal to the Dollar Equivalent thereof) and in immediately available funds. If the
Administrative Agent so notifies such Lender prior to 11:00 a.m. (New York City time) on any
Business Day, such Lender shall make available to the Administrative Agent for the account of such
Issuer its Ratable Portion of the amount of such payment on such Business Day in immediately
available funds. Upon such payment by a Lender, such Lender shall notwithstanding whether or not
the conditions precedent set forth in Section 3.2 shall have been satisfied (which conditions
precedent the Lenders hereby irrevocably waive) be deemed to have made a Revolving Loan to the
Borrower in the principal amount of such payment. Whenever any Issuer receives from the Borrower a
payment of a Reimbursement Obligation as to which the Administrative Agent has received for the
account of such Issuer any payment from a Lender pursuant to this clause (h), such Issuer shall pay
to the Administrative Agent and the Administrative Agent shall promptly pay to each Lender, in
immediately available funds, an amount equal to such Lender’s Ratable Portion of the amount of such
payment adjusted, if necessary, to reflect the respective amounts the Lenders have paid in respect
of such Reimbursement Obligation.
(i) If and to the extent such Lender shall not have so made its Ratable Portion of the amount
of the payment required by clause (h) above available to the Administrative Agent for the account
of such Issuer, such Lender agrees to pay to the Administrative Agent for the account of such
Issuer forthwith on demand any such unpaid amount together with interest thereon, for the first
Business Day after payment was first due at the Federal Funds Rate and, thereafter, until such
amount is repaid to the Administrative Agent for the account of such Issuer, at a rate per annum
equal to the rate applicable to Base Rate Loans under the Revolving Credit Facility. The failure
of any Lender to make available to the Administrative Agent for the account of such Issuer its
Ratable Portion of any such payment shall not relieve any other Lender of its obligation hereunder
to make available to the Administrative Agent for the account of such Issuer its Ratable Portion of
any payment on the date such payment is to be made, but no Lender shall be responsible for the
failure of any other Lender to make available to the Administrative Agent for the account of the
Issuer such other Lender’s Ratable Portion of any such payment.
(j) The Borrower’s obligation to pay each Reimbursement Obligation and the obligations of the
Lenders to make payments to the Administrative Agent for the account of the Issuers with respect to
Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly
in accordance with the terms of this Agreement, under any and all circumstances whatsoever,
including the occurrence of any Default or Event of Default, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or any Loan
Document, or any term or provision therein;
45
(ii) any amendment or waiver of or any consent to departure from all or any of the
provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, set off, defense or other right that the Borrower,
any other party guaranteeing, or otherwise obligated with, the Borrower, any Subsidiary or
other Affiliate thereof or any other Person may at any time have against the beneficiary
under any Letter of Credit, the Issuer, the Administrative Agent or any Lender or any other
Person, whether in connection with this Agreement, any other Loan Document or any other
related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(v) payment by the Issuer under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the Issuer, the Lenders,
the Administrative Agent or any other Person or any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of the Borrower’s obligations hereunder.
Any action taken or omitted to be taken by the relevant Issuer under or in connection with any
Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct,
shall not put such Issuer under any resulting liability to the Borrower or any Lender. In
determining whether drafts and other documents presented under a Letter of Credit comply with the
terms thereof, the Issuer may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or information to the contrary
and, in making any payment under any Letter of Credit (x) the Issuer may rely exclusively on the
documents presented to it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of Credit, whether or not
the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient in any respect, if
such document on its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged or invalid or any
statement therein proves to be inaccurate or untrue in any respect whatsoever and (y) any
noncompliance in any immaterial respect of the documents presented under such Letter of Credit with
the terms thereof shall, in each case, be deemed not to constitute willful misconduct or gross
negligence of the Issuer.
(k) Letters of Credit may be Issued in favor of a beneficiary that is a creditor of a
Subsidiary of Group provided that the account party with respect to such Letter of Credit is the
Borrower.
(l) The amount of Revolving Credit Commitments utilized by Letters of Credit denominated in an
Alternative Currency shall be measured by a determination by the applicable Issuer of the Dollar
Equivalent of such Letters of Credit on each day on which a Borrowing Base Certificate is
delivered. The applicable Issuers shall notify the Administrative Agent and the Borrower of the
aggregate Dollar Equivalent of such utilization in respect of the Letters of Credit Issued by it.
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Section 2.5 Reduction and Termination of the Commitments. The Borrower may, upon at least five
Business Days’ prior notice to the Administrative Agent, terminate in whole or reduce in part
ratably the unused portions of the respective Revolving Credit Commitments of the Lenders;
provided, however, that each partial reduction shall be in the aggregate amount of not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and, in the case of any
reduction of the Revolving Credit Commitments, the requirements of Section 2.9(e) shall have been
satisfied. The Borrower may not terminate the Revolving Credit Commitments in their entirety
pursuant to this Section 2.5 unless, concurrently with such termination, the Revolving Credit
Commitments under and as defined in the Canadian Facility are terminated.
Section 2.6 Repayment of Loans. The Borrower promises to repay the entire unpaid principal amount
of the Revolving Loans and the Swing Loans and all accrued but unpaid interest thereon on the
Revolving Credit Termination Date or earlier, if otherwise required by the terms hereof.
Section 2.7 Evidence of Debt.
(a) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing Indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from
time to time, including the amounts of principal and interest payable and paid to such Lender from
time to time under this Agreement.
(b) The Administrative Agent shall establish and maintain a Register pursuant to Section
11.2(c) and accounts therein in accordance with its usual practice in which it will record (i) the
amount of each applicable Loan made and, if a Eurodollar Rate Loan, the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable by the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder
from the Borrower and each Lender’s share thereof, if applicable.
(c) The entries made in the accounts maintained pursuant to clauses (a) and (b) of this
Section 2.7 shall, to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided, however, that the failure of
any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligations of the Borrower to repay the Loans in accordance with their
terms.
Section 2.8 Optional Prepayments. The Borrower may prepay the outstanding principal amount of the
Revolving Loans and Swing Loans in whole or in part at any time; provided, however, that if any
prepayment of any Eurodollar Rate Loan is made by the Borrower other than on the last day of an
Interest Period for such Loan, the Borrower shall also pay any amount owing pursuant to Section
2.14(e).
Section 2.9 Mandatory Prepayments.
(a) [Intentionally Omitted].
(b) Subject to clause (c) below, upon receipt by any Loan Party of Net Cash Proceeds (but only
if at the time of such receipt the Available Credit is less than 25% of the Aggregate Borrowing
Limit at such time), the Borrower shall within one Business Day after such receipt prepay the Loans
(or provide cash collateral in respect of Letters of Credit as set forth in clause (d) below) in an
amount equal to 100% of such Net Cash Proceeds as set forth in clause (d) below.
47
(c) Notwithstanding clause (b) above, as long as no Event of Default shall have occurred or be
continuing on the date Net Cash Proceeds are received by any Loan Party, the Borrower shall not be
required to so apply an amount equal to Net Cash Proceeds arising from a Reinvestment Event to the
extent that all Net Cash Proceeds from all Reinvestment Events do not exceed $50,000,000 (in the
aggregate since the Closing Date) and are actually used (or have been contractually committed to be
used) to consummate a Permitted Acquisition or to purchase replacement or fixed assets (in the case
of an Asset Sale) or repair or replace (in the case of a Property Loss Event) the sold, damaged or
taken property within 180 days of the receipt of such Net Cash Proceeds by a Loan Party and,
pending application of such proceeds, the Borrower has either (i) paid an amount equal to such Net
Cash Proceeds to the Administrative Agent to be held by the Administrative Agent in a Cash
Collateral Account designated by the Administrative Agent or (ii) applied an amount equal to such
Net Cash Proceeds in repayment of the Revolving Loans and the Administrative Agent shall have
established an Availability Reserve in the amount of such repayment, which reserve shall abate on
the Reinvestment Prepayment Date applicable to such Net Cash Proceeds or earlier to the extent that
Revolving Loans up to the amount of such Net Cash Proceeds are used as set forth in the
Reinvestment Notice with respect thereto; provided, however, that to the extent any asset subject
to such Asset Sale or Property Loss Event constituted Collateral, any replacement, fixed or
alternative assets acquired with Net Cash Proceeds shall, upon acquisition thereof by a Warnaco
Entity, be subject to a perfected Lien in favor of the Collateral Agent, for the benefit of the
Secured Parties, in each case, having the priority described in Section 4.20 of this Agreement and
the Collateral Documents (but, in the case of a Permitted Acquisition, only to the extent required
by clause (v) of the definition thereof); provided further, however, in the event an Event of
Default has occurred and is continuing after the provisions in this clause (c) become operative,
the Administrative Agent may, or shall at the direction of the Requisite Lenders, apply all amounts
in the Cash Collateral Account referred to above to the Obligations.
(d) Subject to the provisions of clause (c) above and Section 2.13(h) (Payments and
Computations), any prepayments made by the Borrower required to be applied in accordance with this
clause (d) shall be applied, first, to repay the outstanding principal balance of the Swing Loans
until the Swing Loans shall have been repaid in full; second, to repay the outstanding principal
balance of the Revolving Loans until the Revolving Loans shall have been repaid in full; and third,
to provide cash collateral for any Letter of Credit Obligations in the manner set forth in Section
9.3 until all the Letter of Credit Obligations have been fully cash collateralized in the manner
set forth therein.
(e) If at any time the aggregate principal amount of Revolving Credit Outstandings exceed the
Maximum Credit at such time, the Borrower shall, as soon as possible, but in any event within one
Business Day, prepay first the Swing Loans and then the Revolving Loans then outstanding in an
amount equal to such excess. If any such excess remains after repayment in full of the aggregate
outstanding Swing Loans and the Revolving Loans, the Borrower shall provide cash collateral for the
Letter of Credit Obligations in the manner set forth in Section 9.3 to the extent required to
eliminate such excess.
(f) Except in the case where Section 2.13(h) shall be applicable, all available funds in each
Cash Collateral Account (other than an amount equal to any proceeds arising from a Reinvestment
Event that are held in the Cash Collateral Account pending application of such proceeds as
specified in a Reinvestment Notice) shall be applied on a daily basis: first, to repay the
outstanding principal amount of the Swing Loans until the Swing Loans have been repaid in full;
second, to repay the outstanding principal amount of the Revolving Loans until the Revolving Loans
have been repaid in full; third, to any other Obligation in respect of the Revolving Credit
Facility then due and payable and then, to cash collateralize all outstanding Letter of Credit
Obligations in the manner set forth in Section 9.3. The Facility Agents agree so to apply such
funds and the Borrower consents to such
application. Notwithstanding the first sentence in this clause (f), at any time there is no
Event of Default that is continuing, there are no Loans outstanding and no other Obligations in
respect of the Revolving Credit Facility are then due and payable each Facility Agent shall cause
any funds in any Cash Collateral Account maintained by it to be paid at the written direction of
the Borrower for any other purpose.
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Section 2.10 Interest.
(a) Rate of Interest. All Loans and the outstanding amount of all other Obligations shall
bear interest, in the case of Loans, on the unpaid principal amount thereof from the date such
Loans are made and, in the case of such other Obligations, from the date such other Obligations are
due and payable until, in all cases, paid in full, except as otherwise provided in Section 2.10(c),
as follows:
(i) if a Base Rate Loan or such other Obligation, at a rate per annum equal to the sum
of (A) the Base Rate as in effect from time to time and (B) the Applicable Margin for such
Loans; and
(ii) if a Eurodollar Rate Loan, at a rate per annum equal to the sum of (A) the
Eurodollar Rate determined for the applicable Interest Period and (B) the Applicable Margin
in effect from time to time during such Interest Period.
(b) Interest Payments. Interest accrued:
(i) on each Base Rate Loan shall be payable in arrears (A) on the first Business Day of
each calendar quarter, commencing on the first such day following the making of such Base
Rate Loan and (B) if not previously paid in full, at maturity (whether by acceleration or
otherwise) of such Base Rate Loan;
(ii) on each Swing Loan shall be payable in arrears (A) on the first Business Day of
each calendar quarter, commencing on the first such day following the making of such Swing
Loan and (B) if not previously paid in full, at maturity (whether by acceleration or
otherwise) of such Swing Loan;
(iii) on each Eurodollar Rate Loan shall be payable in arrears (A) on the last day of
each Interest Period applicable to such Loan and if such Interest Period has a duration of
more than three months, on each day during such Interest Period which occurs every three
months from the first day of such Interest Period, (B) upon the payment or prepayment
thereof in full or in part, and (C) if not previously paid in full, at maturity (whether by
acceleration or otherwise) of such Eurodollar Rate Loan; and
(iv) on the amount of all other Obligations shall be payable on demand after the time
such Obligation becomes due and payable (whether by acceleration or otherwise).
(c) Default Interest. Notwithstanding the rates of interest specified in Section 2.10(a) or
elsewhere herein, effective immediately upon the occurrence of an Event of Default, and for as long
thereafter as such Event of Default shall be continuing, the principal balance of all Loans and the
amount of all other Obligations shall bear interest at a rate which is two percent per annum in
excess of the rate of interest applicable to such Loans or such other Obligations from time to
time. Default interest under this clause (c) shall be payable on demand by the Administrative Agent
or the Requisite Lenders.
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Section 2.11 Conversion/Continuation Option.
(a) The Borrower may elect (i) on any Business Day to convert Base Rate Loans (other than
Swing Loans) or any portion thereof to Eurodollar Rate Loans, or (ii) at the end of any applicable
Interest Period, to convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans or to
continue such Eurodollar Rate Loans or any portion thereof for an additional Interest Period;
provided, however, that the aggregate amount of the Eurodollar Loans for each Interest Period must
be in the amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof. Each
conversion or continuation shall be allocated among the Loans of each Lender in accordance with
such Lender’s Ratable Portion.
(b) Each such election shall be in substantially the form of Exhibit F hereto (a “Notice of
Conversion or Continuation”) and shall be made by giving the Administrative Agent at least three
(3) Business Days’ prior written notice specifying (i) the amount and type of Loan being converted
or continued, (ii) in the case of a conversion to or a continuation of Eurodollar Rate Loans, the
applicable Interest Period, and (iii) in the case of a conversion, the date of conversion (which
date shall be a Business Day and, if a conversion from Eurodollar Rate Loans, shall also be the
last day of the applicable Interest Period). The Administrative Agent shall promptly notify each
Lender of its receipt of a Notice of Conversion or Continuation and of the options selected
therein.
(c) Notwithstanding the foregoing, no conversion in whole or in part of Base Rate Loans to
Eurodollar Rate Loans, and no continuation in whole or in part of Eurodollar Rate Loans upon the
expiration of any applicable Interest Period, shall be permitted at any time at which (A) a Default
or an Event of Default shall have occurred and be continuing or (B) the continuation of, or
conversion into, would violate any of the provisions of Section 2.14.
(d) If, within the time period required under the terms of this Section 2.11, the
Administrative Agent does not receive a Notice of Conversion or Continuation from the Borrower
containing a permitted election to continue any Loan that is a Eurodollar Rate Loan for an
additional Interest Period or to convert any such Loan, then, upon the expiration of the applicable
Interest Period, such Loan will be automatically converted to a Base Rate Loan.
(e) Each Notice of Conversion or Continuation shall be irrevocable.
Section 2.12 Fees.
(a) Unused Commitment Fee. The Borrower agrees to pay to each Lender a commitment fee (the
“Unused Commitment Fee”) on the average amount by which the Revolving Credit Commitment of such
Lender exceeds such Lender’s Ratable Portion of the Revolving Credit Outstandings (excluding the
amount of any outstanding Swing Loans) from the Closing Date until the Revolving Credit Termination
Date at the Applicable Unused Commitment Fee Rate, payable in arrears on the first Business Day of
each calendar quarter, commencing on the first such day following the Closing Date, and on the
Revolving Credit Termination Date.
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(b) Letter of Credit Fees. The Borrower agrees to pay the following amounts with respect to
Letters of Credit Issued by any Issuer:
(i) to each Issuer of a Letter of Credit, with respect to each Letter of Credit Issued
by such Issuer, an issuance fee (the “Issuing Fee”) equal to 0.125% per annum of the maximum
amount available from time to time to be drawn under such Letter of Credit, payable in
arrears (A) on the first Business Day of each calendar quarter, commencing on the first such
day following the issuance of such Letter of Credit, and (B) on the Revolving Credit
Termination Date;
(ii) to the Administrative Agent for the ratable benefit of the Lenders, with respect
to each Letter of Credit, a fee accruing at a rate per annum equal to the Applicable Margin
for Revolving Loans that are Eurodollar Rate Loans of the maximum amount available from time
to time to be drawn under such Letter of Credit, payable in arrears (A) on the first
Business Day of each calendar quarter, commencing on the first such day following the
issuance of such Letter of Credit, and (B) on the Revolving Credit Termination Date;
provided, however, that during the continuance of an Event of Default, such fee shall be
increased by two percent per annum and shall be payable on demand; and
(iii) to the Issuer of any Letter of Credit, with respect to the issuance, extension,
amendment, transfer or other action of or with respect to each Letter of Credit and each
drawing made thereunder, documentary and processing charges in accordance with such Issuer’s
standard schedule for such charges in effect at the time of issuance, extension, amendment,
transfer, other action or drawing, as the case may be.
(c) Additional Fees. The Borrower has agreed to pay additional fees under the Fee Letters,
the amount, payees and dates of payment of which are embodied in the Fee Letters.
Section 2.13 Payments and Computations.
(a) The Borrower shall make each payment hereunder (including fees and expenses) not later
than 11:00 a.m. (New York City time) on the day when due, in Dollars, to the Administrative Agent
at its address referred to in Section 11.8 in immediately available funds without set-off or
counterclaim. The Administrative Agent will promptly thereafter cause to be distributed
immediately available funds relating to the payment of principal or interest or fees (to the extent
payable to the Lenders) to the Lenders, in accordance with the application of payments set forth in
clauses (g) and (h) of this Section 2.13, as applicable, for the account of their respective
Applicable Lending Offices; provided, however, that amounts payable pursuant to Section 2.14(c),
Section 2.14(e), Section 2.15 or Section 2.16 shall be paid only to the affected Lender or Lenders
and amounts payable with respect to Swing Loans shall be paid only to the Swing Loan Lender.
Payments received by the Administrative Agent after 11:00 a.m. (New York City time) shall be deemed
to be received on the next succeeding Business Day.
(b) All computations of interest and of fees shall be made by the Administrative Agent on the
basis of a year of 360 days (365/366 days in the case of interest on Base Rate Loans to the extent
that such interest is determined based upon BofA’s “prime rate” and not the Federal Funds Rate), in
each case for the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest and fees are payable. Each determination by the
Administrative Agent of an interest rate hereunder shall be conclusive and binding for all
purposes, absent manifest error.
(c) [Intentionally Omitted].
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(d) Each payment by the Borrower of any Loan, Reimbursement Obligation (including interest or
fees in respect thereof) and each reimbursement of various costs, expenses or other Obligation
shall be made in the currency in which such Loan was made, such Letter of Credit Issued or such
cost, expense or other Obligation was incurred; provided, however, that (i) the Letter of Credit
Reimbursement Agreement for a Letter of Credit may specify another currency for the Reimbursement
Obligation in respect of such Letter of Credit and (ii) other than for payments in respect of a
Loan or Reimbursement Obligation, Loan Documents duly executed by the Administrative Agent or any
Hedging Contract may specify other currencies of payment for Obligations created by or directly
related to such Loan Document or Hedging Contract.
(e) Whenever any payment hereunder shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest or fees, as the case may
be; provided, however, that if such extension would cause payment of interest on or principal of
any Eurodollar Rate Loan to be made in the next calendar month, such payment shall be made on the
immediately preceding Business Day. All repayments of any Revolving Loans shall be applied first
to repay such Loans outstanding as Base Rate Loans and then to repay such Loans outstanding as
Eurodollar Rate Loans with those Eurodollar Rate Loans which have earlier expiring Interest Periods
being repaid prior to those which have later expiring Interest Periods.
(f) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due hereunder that the Borrower will not make such payment in full,
the Administrative Agent may assume that the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each relevant Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower shall not have made such payment in
full to the Administrative Agent, each relevant Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with interest thereon at the
Federal Funds Rate, for the first Business Day, and, thereafter, at the rate applicable to Base
Rate Loans, for each day from the date such amount is distributed to such Lender until the date
such Lender repays such amount to the Administrative Agent.
(g) Subject to the provisions of clause (h) of this Section 2.13 (and except as otherwise
provided in Section 2.9 or elsewhere in this Agreement), all payments and any other amounts
received by the Administrative Agent from or for the benefit of the Borrower or any other Loan
Party shall be applied first, to pay principal of and interest on any portion of the Loans which
the Administrative Agent may have advanced pursuant to the express provisions of this Agreement on
behalf of any Lender, for which the Administrative Agent has not then been reimbursed by such
Lender or the Borrower; second, to pay all other Obligations then due and payable; and then, as the
Borrower so designates. Payments in respect of Swing Loans received by the Administrative Agent
shall be distributed to the Swing Loan Lender; payments in respect of Revolving Loans received by
the Administrative Agent shall be distributed to each Lender in accordance with such Lender’s
Ratable Portion; and, unless provided otherwise herein, all payments of fees and all other payments
in respect of any other Obligation shall be allocated among such of the Lenders and the Issuers as
are entitled thereto, and, if to the Lenders, in proportion to their respective Ratable Portions.
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(h) The Borrower hereby irrevocably waives the right to direct the application of any and all
payments in respect of the Secured Obligations and any proceeds of Collateral after the occurrence
and during the continuance of an Event of Default, and agrees that upon the termination of the
Commitments or the acceleration of any of the Obligations pursuant to Section 9.2, the Facility
Agents shall apply all payments made to or received by any Facility Agent, any Lender or any Issuer
constituting proceeds of Collateral (including all funds on deposit in the Special Cash
Collateral Account or any Cash Collateral Account (including all proceeds arising from a
Reinvestment Event that are held in the Cash Collateral Account pending application of such
proceeds as specified in a Reinvestment Notice)) and all other payments made to or received by any
Facility Agent, any Lender or any Issuer with respect to any Secured Obligations in the following
order:
first, to pay interest on and then principal of any portion of the Revolving Loans
which the Administrative Agent may have advanced on behalf of any Lender for which the
Administrative Agent has not then been reimbursed by such Lender or the Borrower;
second, to pay interest on and then principal of any Swing Loan;
third, to pay Secured Obligations in respect of any expense reimbursements (including
indemnities) or Cash Management Obligations then due to the Facility Agents;
fourth, to pay Secured Obligations in respect of any expense reimbursements (including
indemnities) then due to the Lenders and the Issuers;
fifth, to pay Secured Obligations in respect of any fees then due to the Facility
Agents, the Lenders and the Issuers;
sixth, to pay interest then due and payable in respect of the Loans and Reimbursement
Obligations;
seventh, to pay or prepay principal payments on the Loans and Reimbursement
Obligations and to provide cash collateral for outstanding Letter of Credit Undrawn Amounts
in the manner described in Section 9.3;
eighth, to pay or prepay principal amounts on Secured Obligations in respect of
Hedging Contracts and Cash Management Obligations, ratably (based on the proportional
amounts thereof) to the aggregate principal amount of such Hedging Contracts and Cash
Management Obligations;
ninth, to the ratable (based on the proportional amounts thereof) payment of all other
Secured Obligations (other than Secured Obligations under the Loan Party Canadian Facility
Guaranty);
tenth, to the payment of all Secured Obligations under the Loan Party Canadian
Facility Guaranty; and
eleventh; as directed by the Borrower;
provided, however, that if sufficient funds are not available to fund all payments to be made in
respect of any of the Obligations described in any of the foregoing clauses first through ninth,
the available funds being applied with respect to any such Obligation (unless otherwise specified
in such clause) shall be allocated to the payment of such Obligations ratably, based on the
proportion of the applicable Agent’s and each applicable Lender’s or Issuer’s interest in the
aggregate outstanding Obligations described in such clause; and provided, however, that payments
that would otherwise be allocated to the Lenders shall be allocated first to repay Protective
Advances and Swing Loans pro rata and then to the Lenders. The order of priority set forth in
clauses first through ninth of this Section 2.13(h) may at any time and from time to time be
changed by the agreement of the Requisite Lenders and each
adversely affected Lender without necessity of notice to or consent of or approval by the Borrower,
any Secured Party that is not a Lender or an Issuer, or any other Person. The order of priority
set forth in clauses first through fifth of this Section 2.13(h) may be changed only with the prior
written consent of the Administrative Agent in addition to the Requisite Lenders. The order of
priority set forth in clause tenth of this Section 2.13(h) may be changed only with the prior
written consent of the Requisite Lenders and the administrative agent under the Canadian Facility.
53
(i) At the option of the Administrative Agent, principal on the Swing Loans, Reimbursement
Obligations, interest, fees, expenses and other sums due and payable in respect of the Revolving
Loans and Protective Advances may be paid from the proceeds of Swing Loans or Revolving Loans. The
Borrower hereby authorizes the Swing Loan Lender to make such Swing Loans pursuant to Section
2.3(a) and the Lenders to make Revolving Loans pursuant to Section 2.2(a) from time to time in the
amounts of any and all principal payable with respect to the Swing Loans, Reimbursement
Obligations, interest, fees, expenses and other sums payable in respect of the Revolving Loans and
Protective Advances, and further authorizes the Administrative Agent to give the Lenders notice of
any Borrowing with respect to such Swing Loans and Revolving Loans and to distribute the proceeds
of such Swing Loans and Revolving Loans to pay such amounts. The Borrower agrees that all such
Swing Loans and Revolving Loans so made shall be deemed to have been requested by it (irrespective
of the satisfaction of the conditions in Section 3.2 which conditions the Lenders irrevocably
waive) and directs that all proceeds thereof shall be used to pay such amounts.
Section 2.14 Special Provisions Governing Eurodollar Rate Loans.
(a) Determination of Interest Rate. The Eurodollar Rate for each Interest Period for
Eurodollar Rate Loans shall be determined by the Administrative Agent pursuant to the procedures
set forth in the definition of “Eurodollar Rate.” The Administrative Agent’s determination shall
be presumed to be correct, absent manifest error, and shall be binding on the Borrower.
(b) Interest Rate Unascertainable, Inadequate or Unfair. In the event that: (i) the
Administrative Agent determines that adequate and fair means do not exist for ascertaining the
applicable interest rates by reference to which the Eurodollar Rate then being determined is to be
fixed; or (ii) the Requisite Lenders notify the Administrative Agent that the Eurodollar Rate for
any Loans for any Interest Period will not adequately reflect the cost to the Lenders of making or
maintaining such Loans for such Interest Period, the Administrative Agent shall forthwith so notify
the Borrower and the Lenders, whereupon each Eurodollar Loan will automatically, on the last day of
the current Interest Period for such Loan, convert into a Base Rate Loan and the obligations of the
Lenders to make Eurodollar Rate Loans or to convert Base Rate Loans into Eurodollar Rate Loans
shall be suspended until the Administrative Agent shall notify the Borrower that the Administrative
Agent (in the case of clause (i) above) or the Requisite Lenders (in the case of clause (ii) above)
has or have determined that the circumstances causing such suspension no longer exist.
(c) Increased Costs. If at any time any Lender shall determine that due to the introduction
of or any change in or in the interpretation of any law, treaty or governmental rule, regulation or
order (other than any change by way of imposition or increase of reserve requirements included in
determining the Eurodollar Rate or with respect to taxes (payment with respect to which shall be
governed by Section 2.16)) or the compliance by such Lender with any guideline, request or
directive from any central bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any Eurodollar Rate Loans, then the Borrower shall from time to time, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender additional amounts sufficient to compensate such Lender for
such increased cost. A certificate as to the amount of such increased cost, submitted to the
Borrower and the Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
54
(d) Illegality. Notwithstanding any other provision of this Agreement, if any Lender
determines that the introduction of or any change in or in the interpretation of any law, treaty or
governmental rule, regulation or order after the date of this Agreement shall make it unlawful, or
any central bank or other Governmental Authority shall assert that it is unlawful, for any Lender
or its Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to fund or maintain
Eurodollar Rate Loans, then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) the obligation of such Lender to make or to continue
Eurodollar Rate Loans and to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended,
and each such Lender shall make a Base Rate Loan as part of any requested Borrowing of Eurodollar
Rate Loans and (ii) if the affected Eurodollar Rate Loans are then outstanding, the Borrower shall
immediately convert each such Loan into a Base Rate Loan. If at any time after a Lender gives
notice under this Section 2.14(d) such Lender determines that it may lawfully make Eurodollar Rate
Loans, such Lender shall promptly give notice of that determination to the Borrower and the
Administrative Agent, and the Administrative Agent shall promptly transmit the notice to each other
Lender. The Borrower’s right to request, and such Lender’s obligation, if any, to make Eurodollar
Rate Loans shall thereupon be restored.
(e) Breakage Costs. In addition to all amounts required to be paid by the Borrower pursuant
to Section 2.10, the Borrower shall compensate each Lender, upon demand (with a copy of such demand
to the Administrative Agent), for all losses, expenses and liabilities (including any loss or
expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund or maintain such Lender’s Eurodollar Rate Loans to the Borrower but
excluding any loss of the Applicable Margin on the relevant Loans) which such Lender may sustain
(i) if for any reason a proposed Borrowing, conversion into or continuation of Eurodollar Rate
Loans does not occur on a date specified therefor in a Notice of Borrowing or a Notice of
Conversion or Continuation given by the Borrower or in a telephonic request by it for borrowing or
conversion or continuation or a successive Interest Period does not commence after notice therefor
is given pursuant to Section 2.11, (ii) if for any reason any Eurodollar Rate Loan is prepaid
(including mandatorily pursuant to Section 2.9) on a date which is not the last day of the
applicable Interest Period, (iii) as a consequence of a required conversion of a Eurodollar Rate
Loan to a Base Rate Loan as a result of any of the events indicated in Section 2.14(d), or (iv) as
a consequence of any failure by the Borrower to repay Eurodollar Rate Loans when required by the
terms hereof. The Lender making demand for such compensation shall deliver to the Borrower and the
Administrative Agent concurrently with such demand a written statement as to such losses, expenses
and liabilities, and this statement shall be conclusive as to the amount of compensation due to
that Lender, absent manifest error.
Section 2.15 Capital Adequacy. If at any time any Lender determines that (a) the adoption of or
any change in or in the interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement regarding capital adequacy, (b) compliance with any such law,
treaty, rule, regulation, or order, or (c) compliance with any guideline or request or directive
from any central bank or other Governmental Authority regarding capital adequacy (whether or not
having the force of law) shall have the effect of reducing the rate of return on such Lender’s (or
any corporation or other Person controlling such Lender’s) capital as a consequence of its
obligations hereunder or under or in respect of any Letter of Credit to a level below that which
such Lender or such corporation or other Person could have achieved but for such adoption, change,
compliance or interpretation, then, upon demand from time to time by such Lender (with a copy of
such demand to the Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such
Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate
such Lender for such reduction. A certificate as to such amounts submitted to the Borrower and the
Administrative Agent by such Lender shall be conclusive and binding for all purposes, absent
manifest error.
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Section 2.16 Taxes.
(a) Except as otherwise provided in this Section 2.16, any and all payments by any Loan Party
under each Loan Document shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding (i) in the case of each Lender, each Issuer and each Agent (A)
taxes imposed on or measured by its net income or net profits and franchise taxes imposed on such
Person by the United States of America, and similar taxes imposed by the jurisdiction (or any
political subdivision thereof) under the laws of which such Lender, such Issuer or such Agent (as
the case may be) is organized, in which its principal office is located, or in which it is
otherwise doing business, or, in the case of any Lender, in which its Applicable Lending Office is
located, (B) any branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which any Loan Party is located, (C) any United States
withholding taxes payable with respect to payments under the Loan Documents under laws (including
any statute, treaty or regulation) in effect on the Closing Date (or, in the case of (w) an
Eligible Assignee which became a party to this Agreement after the Closing Date, the date of the
Assignment and Acceptance or Assumption Agreement pursuant to which such Eligible Assignee became a
party to this Agreement, (x) a successor Agent, the date of the appointment of such Agent, (y) a
successor Issuer, the date such Issuer becomes an Issuer and (z) the designation of a new
Applicable Lending Office) applicable to such Lender, such Issuer or such Agent, as the case may
be, but not excluding any United States withholding taxes payable as a result of any change in such
laws occurring after the Closing Date (or the date of such Assignment and Acceptance or Assumption
Agreement or the date of such appointment of such Agent or the date such Issuer becomes an Issuer,
as appropriate) and (D) all liabilities, penalties and interest with respect to any of the
foregoing, (ii) in the case of each Agent, each Lender and each Issuer, taxes imposed on or
measured by its net income or net profits, franchise and similar taxes imposed on it as a result of
a present or former connection between such Agent, such Lender or such Issuer (as the case may be)
and the jurisdiction of the Governmental Authority imposing such tax or taxing authority thereof or
therein and (iii) in the case of each Agent, each Lender and each Issuer, taxes imposed as a result
of the gross negligence or willful misconduct of such Agent, such Lender or such Issuer (as the
case may be) (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as “Taxes”). Except as otherwise provided in this
Section 2.16, if any Taxes shall be required by law to be deducted from or in respect of any sum
payable under any Loan Document to any Lender, any Issuer or any Agent (i) the sum payable shall be
increased as may be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.16) such Lender, such Issuer or such
Agent (as the case may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the applicable Loan Party shall make such deductions, (iii) the Loan
Parties shall pay the full amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (iv) within 30 days after payment, the Loan Parties shall
deliver to the Administrative Agent evidence of such payment.
(b) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies imposed by any state, county, city
or other political subdivision within the United States (but not United States federal taxes,
payment with respect to which shall be governed by clause (a) above) or by any applicable foreign
jurisdiction, and all liabilities with respect thereto, which arise from any payment made under
any Loan Document or from the execution, delivery or registration of, or otherwise with
respect to, any Loan Document (collectively, “Other Taxes”).
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(c) Each Loan Party will, jointly and severally, indemnify each Lender, each Issuer and each
Agent for the full amount of Taxes and Other Taxes (including any Taxes and Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.16) paid by such Lender, such Issuer or
such Agent (as the case may be) and any liability (including for penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. This indemnification shall be made within 30 days from the date such Lender,
such Issuer or such Agent (as the case may be) makes written demand therefor setting forth in
reasonable detail the basis and calculations of such amounts.
(d) Within 30 days after the date of any payment of Taxes or Other Taxes, the Borrower will
furnish to the Administrative Agent, at its address referred to in Section 11.8, the original or a
certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of any Loan Party hereunder or
under the Guaranty, the agreements and obligations of the Loan Parties contained in this Section
2.16 shall survive the payment in full of the Secured Obligations.
(f) (i) Each Non-U.S. Lender or Non-U.S. Agent that is entitled to an exemption from U.S.
withholding tax, or that is subject to such tax at a reduced rate under an applicable tax treaty,
shall (v) on or prior to the Closing Date in the case of each Non-U.S. Lender or Non-U.S. Agent
that is a signatory hereto, (w) on or prior to the date of the Assignment and Acceptance or
Assumption Agreement pursuant to which such Non-U.S. Lender becomes a Lender, the date a successor
Issuer becomes an Issuer or the date a successor Agent becomes an Agent hereunder, (x) on or prior
to the date on which any such form or certification expires or becomes obsolete, (y) after the
occurrence of any event requiring a change in the most recent form or certification previously
delivered by it to the Borrower and the Administrative Agent, and (z) from time to time if
requested by the Borrower or the Administrative Agent, provide the Administrative Agent and the
Borrower with two completed originals of each of the following, as applicable:
(A) Form W-8ECI (claiming exemption from U.S. withholding tax because the income is
effectively connected with a U.S. trade or business) or any successor form;
(B) Form W-8BEN (claiming exemption from, or a reduction of, U.S. withholding tax under an
income tax treaty) or any successor form;
(C) Form W-8IMY (claiming exemption from, or a reduction of, U.S. withholding tax for foreign
intermediaries, foreign flow-through entities or U.S. branches of certain foreign banks or foreign
insurance companies) or any successor form;
(D) in the case of a Non-U.S. Lender or Non-U.S. Agent claiming exemption under Sections
871(h) or 881(c) of the Code, a Form W-8BEN (claiming exemption from U.S. withholding tax under the
portfolio interest exemption) or any successor form and a certificate establishing such Non-U.S.
Lender or Non-U.S. Agent’s entitlement to such exemption including, without limitation,
certification that the Non-U.S. Lender or Non-U.S. Agent is not a bank receiving payments under
this Agreement on an extension of credit made pursuant to a loan agreement entered into in the
ordinary course of its trade or business; and/or
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(E) any other applicable form, certificate or document prescribed by the IRS certifying as to
such Non-U.S. Lender’s or Non-U.S. Agent’s entitlement to such exemption from U.S. withholding tax
or reduced rate with respect to all payments to be made to such Non-U.S. Lender or Non-U.S. Agent
under the Loan Documents.
(ii) Each U.S. Lender shall (v) on or prior to the Closing Date in the case of each
U.S. Lender that is a signatory hereto, (w) on or prior to the date of the Assignment and
Acceptance or Assumption Agreement pursuant to which such U.S. Lender becomes a Lender, on
or prior to the date a successor Issuer becomes an Issuer or on or prior to the date a
successor Agent becomes a Agent hereunder, (x) on or prior to the date on which any such
form or certification expires or becomes obsolete, (y) after the occurrence of any event
requiring a change in the most recent form or certification previously delivered by it to
the Borrower and the Administrative Agent, and (z) from time to time if requested by the
Borrower or the Administrative Agent, provide the Administrative Agent and the Borrower with
two completed originals of Form W-9 (certifying that such U.S. Lender is entitled to an
exemption from U.S. backup withholding tax) or any successor form. Solely for purposes of
this Section 2.16(f), a U.S. Lender shall not include a Lender, an Issuer or an Agent that
may be treated as an exempt recipient based on the indicators described in Treasury
Regulation section 1.6049-4(c)(1)(ii) except to the extent that such Person is required to
deliver a withholding form under Treasury Regulation section 1.1441-1 to establish its
withholding status.
(g) Unless the Borrower and the Administrative Agent have received forms, documents and/or
other evidence satisfactory to them indicating that payments under any Loan Document to or for a
U.S. Lender, Non-U.S. Lender or Non-U.S. Agent are not subject to U.S. withholding tax or are
subject to such tax at a rate reduced by an applicable tax treaty, the Loan Parties and the
Administrative Agent shall withhold amounts required to be withheld by Requirements of Law from
such payments at the applicable statutory rate. For any period with respect to which an Agent,
Lender or Issuer has failed to provide the Borrower with the appropriate forms required under
Section 2.16(f), such Agent, such Lender or such Issuer shall not be entitled to indemnification or
increased amounts under Section 2.16(a) or (c) with respect to Taxes imposed by the United States
by reason of such failure except to the extent withholding is required as a result of a change in
law occurring after the applicable time described in paragraph (f), in which case the Borrower
shall be required to gross-up or indemnify for such amounts resulting solely from such change in
law.
(h) Any Lender or Issuer claiming any additional amounts payable pursuant to this Section 2.16
shall use its reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable Lending Office if the making of such a
change would avoid the need for, or reduce the amount of, any such additional amounts which would
be payable or may thereafter accrue and would not, in the sole determination of such Lender or
Issuer, be otherwise disadvantageous to such Lender or Issuer.
(i) If any Lender or any Issuer changes its residence, place of business or Applicable Lending
Office or takes any other similar action, and the effect of such change or action, as of the date
thereof, would be to increase the additional amounts that the Loan Parties are obligated to pay
under this Section 2.16, the Loan Parties shall not be obligated to pay the amount of such
increase.
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(j) If any Agent or Lender determines in its sole discretion that it has actually received any
refund of tax in connection with any deduction or withholding or payment of any additional amount
by the Loan Parties pursuant to this Section 2.16, such Person shall reimburse the Borrower in an
amount equal to such refund, after tax, and net of all expenses incurred by such Person
in connection with such refund. The Borrower shall return such amount to the applicable
Person in the event that such Person is required to repay such refund of tax. Nothing contained in
this paragraph shall interfere with the right of each of the Agents and the Lenders to arrange its
tax affairs in whatever manner it thinks fit, nor to disclose any information or any computations
relating to its tax affairs or to do anything that would prejudice its ability to benefit from
other credits, relief, remissions or repayments to which it may be entitled.
Section 2.17 Substitution of Lenders. In the event that (a) (i) any Lender makes a claim under
Section 2.14(c) or Section 2.15, or (ii) it becomes illegal for any Lender to continue to fund or
make any Eurodollar Rate Loan and such Lender notifies the Borrower pursuant to Section 2.14(d), or
(iii) the Borrower is required to make any payment pursuant to Section 2.16 that is attributable to
any Lender, or (iv) any Lender is a Non-Funding Lender, (b) in the case of clause (a)(i) above, as
a consequence of increased costs in respect of which such claim is made, the effective rate of
interest payable to such Lender under this Agreement with respect to its Loans materially exceeds
the effective average annual rate of interest payable to the Requisite Lenders under this Agreement
and (c) except with respect to clause (a)(iii) above, Lenders holding at least 75% of the sum of
the Revolving Credit Commitments are not subject to such increased costs or illegality, payment or
proceedings (any such Lender, an “Affected Lender”), the Borrower may, at its sole cost and
expense, substitute another financial institution for such Affected Lender hereunder, upon
reasonable prior written notice (which written notice must be given within 90 days following the
occurrence of any of the events described in clauses (a)(i), (ii), (iii) or (iv)) by the Borrower
to the Administrative Agent and the Affected Lender that the Borrower intends to make such
substitution, which substitute financial institution must be an Eligible Assignee and, if not a
Lender, reasonably acceptable to the Administrative Agent; provided, however, that if more than one
Lender claims increased costs, illegality or right to payment arising from the same act or
condition and such claims are received by the Borrower within 30 days of each other then the
Borrower may substitute all, but not (except to the extent the Borrower has already substituted one
of such Affected Lenders before the Borrower’s receipt of the other Affected Lenders’ claims) less
than all, Lenders making such claims. In the event that the proposed substitute financial
institution or other entity is reasonably acceptable to the Administrative Agent, each Issuer and
the written notice was properly issued under this Section 2.17, the Affected Lender shall sell and
the substitute financial institution or other entity shall purchase, pursuant to an Assignment and
Acceptance, all rights and claims of such Affected Lender under the Loan Documents (for a purchase
price equal to the principal balance of all Loans held by such Affected Lender and all accrued and
unpaid interest with respect thereto through the date of sale) and the substitute financial
institution or other entity shall assume and the Affected Lender shall be relieved of its
Commitments and all other prior unperformed obligations of the Affected Lender under the Loan
Documents (other than in respect of any damages (other than exemplary or punitive damages, to the
extent permitted by applicable law) in respect of any such unperformed obligations) and such sale
and purchase shall be recorded in the Register maintained by the Administrative Agent. Upon the
effectiveness of such sale, purchase and assumption (which, in any event shall be conditioned upon
the payment in full by the Borrower to the Affected Lender in cash of all fees, unreimbursed costs
and expenses and indemnities accrued and unpaid through such effective date), the substitute
financial institution or other entity shall become a “Lender” hereunder for all purposes of this
Agreement having a Commitment in the amount of such Affected Lender’s Commitment assumed by it and
such Commitments of the Affected Lender shall be terminated, provided that all indemnities under
the Loan Documents shall continue in favor of such Affected Lender. Notwithstanding the above, the
Borrower may not exercise the substitution right under this Section 2.17 during the continuance of
an Event of Default.
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Section 2.18 Facility Increase.
(a) The Borrower may (no more frequently than three times after the Closing Date (in minimum
increments of $50,000,000) during the term of the Revolving Credit Facility) request the Lenders or
other Eligible Assignees acceptable to the Administrative Agent in its reasonable discretion to
provide additional Commitments (a “Facility Increase”) up to an aggregate amount during the term of
the Revolving Credit Facility not in excess of $200,000,000; provided, however, that (i) the
Borrower shall have given the Administrative Agent at least 60 days’ written notice of its
intention to effect the Facility Increase and the desired amount of such Facility Increase, (ii)
there shall exist no Default or Event of Default as of the Facility Increase Effective Date (as
defined below) or after giving effect to the Facility Increase to occur on that date and the other
conditions precedent to a Borrowing set forth in Section 3.2 are satisfied as of the Facility
Increase Effective Date, (iii) an opinion of counsel to the Loan Parties in form and substance and
from counsel reasonably satisfactory to the Administrative Agent and addressed to the Facility
Agents, the Issuers and the Lenders dated the Facility Increase Effective Date and addressing such
matters as the Administrative Agent may reasonably request shall be delivered to the Administrative
Agent, (iv) the Administrative Agent shall have received such other documents, agreements,
certificates and writings with respect to the Facility Increase as the Administrative Agent shall
reasonably request (including, without limitation, resolutions of the Borrower authorizing the
borrowings under the Facility Increase and such amendments, modifications and/or supplements to the
Collateral Documents as are necessary or, in the reasonable opinion of the Administrative Agent,
desirable to ensure that the borrowings under the Facility Increase are secured by, and entitled to
the benefits of, the Collateral Documents), (v) the Borrower shall have paid to the Administrative
Agent a fee to be determined (but in any event reasonably acceptable to Group) and (vi) the
Borrower shall have paid to the Lenders providing the Facility Increase a fee required in order to
clear the market in an amount to be determined.
(b) The Borrower shall have the right to offer such increase to (x) the Lenders, and each
Lender will have the right, but not the obligation, to commit to all or a portion of the proposed
Facility Increase or (y) any institution that would be an Eligible Assignee and is acceptable to
the Administrative Agent in its reasonable discretion; provided, however, that (i) the additional
Revolving Credit Commitment of each Lender or Eligible Assignee is $5,000,000 or an incremental
multiple of $1,000,000 in excess thereof, (ii) such Lender or Eligible Assignee executes an
Assumption Agreement pursuant to which such Lender or Eligible Assignee agrees to commit to all or
a portion of such Facility Increase and, in the case of an Eligible Assignee, to be bound by the
terms of this Agreement as a Lender, (iii) the Borrower shall offer the proposed Facility Increase
to each Lender (other than a Non-Funding Lender) prior to offering any portion of such Facility
Increase to an Eligible Assignee and if the Borrower has not received commitments from the Lenders
in an aggregate amount at least equal to the amount of the proposed Facility Increase, then the
Borrower may request commitments for such Facility Increase from Eligible Assignees in an aggregate
amount equal to such deficiency, (iv) the fees to be paid to any Eligible Assignee shall be no
greater than those paid (or which were offered) to the then existing Lenders providing (or which
were requested to provide) any portion of the proposed Facility Increase, (v) the Loans made
pursuant to such Facility Increase shall have the same terms (including, without limitation,
maturity date, Applicable Margin and Collateral) as the other Loans (including, without limitation,
terms for the other Loans that are amended to reflect any otherwise better terms for the Loans made
pursuant to such Facility Increase) and (vi) such Facility Increase shall be subject to the
successful syndication of the entire amount of such proposed Facility Increase.
(c) On the effective date provided for in the Assumption Agreements providing for a Facility
Increase (each a “Facility Increase Effective Date”), the Revolving Credit Commitments
will be increased by the additional amount committed to by each Lender or Eligible Assignee on
the Facility Increase Effective Date.
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(d) In the event there are Lenders or Eligible Assignees that have committed to a Facility
Increase in excess of the maximum amount requested (or permitted), then the Arrangers (with the
consent of the Borrower which shall not be unreasonably withheld) shall have the right to allocate
such commitments as among the committing Lenders or committing Eligible Assignees, as the case may
be.
(e) On each Facility Increase Effective Date, the Administrative Agent will effect a
settlement of all outstanding Loans among the Lenders (including, without limitation, those
Eligible Assignees that become Lenders on such Facility Increase Effective Date) that will reflect
the adjustments to the Commitments of such Lenders. Any interest, fees and other payments accrued
to the Facility Increase Effective Date with respect to any Loans of a Lender transferred by such
Lender in accordance with such settlement shall be for the account of the transferring Lender. Any
interest, fees and other payments accrued on and after the Facility Increase Effective Date with
respect to the interests and obligations acquired by a Lender hereunder as a result of such
settlement shall be for the account of the acquiring Lender. On each Facility Increase Effective
Date, the Administrative Agent shall notify the Lenders (including, without limitation, those
Eligible Assignees that become Lenders on such Facility Increase Effective Date) and the Borrower
of the occurrence of the Facility Increase to be effected on such Facility Increase Effective Date,
the amount of Loans held by each Lender as a result thereof and the amount of the Commitment of
each Lender as a result thereof.
Section 2.19 Special Cash Collateral Account. The Borrower may from time to time deposit into the
Special Cash Collateral Account cash of the Borrower to be included in the calculation of the
Borrowing Base; provided that (i) such deposit shall be made upon not less than 2 Business Days’
prior written notice to the Facility Agents and (ii) such deposit shall be made on the same day (or
within one Business Day thereafter) as the day of the delivery of the Borrowing Base Certificate
required by Section 6.12(a) (Borrowing Base Determination) (but in any event no more frequently
than once per week). The Borrower may not make any such deposit if a Default or an Event of
Default shall have occurred and is continuing unless the making of such deposit shall cure such
Default or Event of Default. Funds on deposit in the Special Cash Collateral Account may be
invested in Permitted Cash Equivalents at the direction of the Collateral Agent and, except during
the continuance of an Event of Default (unless otherwise agreed to by the Administrative Agent in
its sole discretion), the Collateral Agent agrees with the Borrower to make or cause to be made
such investments in Permitted Cash Equivalents as requested by the Borrower; provided, however,
that the Collateral Agent shall not have any responsibility for, or bear any risk of loss of, any
such requested investment or income thereon and the Collateral Agent shall have no obligation to
make or cause to be made any such investment absent a request by the Borrower for a specific
investment in Permitted Cash Equivalents. The Borrower may request the Collateral Agent to
withdraw monies from the Special Cash Collateral Account and deliver such withdrawn amounts to the
Borrower by written notice to the Facility Agents delivered together with (but no more frequently
than once per week) the delivery of the Borrowing Base Certificate required by Section 6.12(a)
(Borrowing Base Determination); provided, that no withdrawal shall be permitted at the request of
the Borrower if a Default or an Event of Default shall have occurred and is continuing (other than
a withdrawal of monies by the Collateral Agent, at the request of the Borrower, to be applied
directly to the immediate payment of the Loans and if paid in full then to the cash
collateralization of Letter of Credit Obligations, and not to be delivered to the Borrower) or,
after giving effect to such withdrawal, the aggregate principal amount of the Revolving Credit
Outstandings will exceed the Maximum Credit. The parties hereto acknowledge and agree that the
Special Cash Collateral Account is not a Cash Collateral Account and that all funds and Permitted
Cash Equivalents in the Special Cash Collateral
Account are collateral security for the payment of the Secured Obligations. The Administrative
Agent may, in its sole discretion, from time to time apply funds and Permitted Cash Equivalents
then held in the Special Cash Collateral Account to the payment of Secured Obligations which are
past due.
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ARTICLE III
CONDITIONS TO LOANS AND LETTERS OF CREDIT
Section 3.1 Conditions Precedent to Initial Loans and Letters of Credit. The obligation of each
Lender to make the initial Loans requested to be made by it on or after the Closing Date and the
obligation of each Issuer to Issue the initial Letters of Credit on or after the Closing Date is
subject to the satisfaction of all of the following conditions precedent:
(a) Certain Documents. The Administrative Agent shall have received on the Closing Date each
of the following, each dated the Closing Date unless otherwise indicated or agreed to by the
Administrative Agent, in form and substance satisfactory to the Administrative Agent and each
Lender and each of their respective counsel, in sufficient copies for each Lender:
(i) this Agreement, duly executed and delivered by the Borrower and Group;
(ii) the Fee Letters, duly executed and delivered by the Borrower;
(iii) [Intentionally Omitted];
(iv) the Guaranty, duly executed by each Guarantor;
(v) the Pledge and Security Agreement, duly executed by the Borrower and each
Guarantor, together with each of the following:
(A) evidence satisfactory to the Administrative Agent that, upon the filing and
recording of instruments delivered on the Closing Date, the Collateral Agent (for
the benefit of the Secured Parties) shall have a valid and perfected security
interest in the Collateral having the priority described in Section 4.20 of this
Agreement and the Collateral Documents, including (x) such documents duly executed
by each Loan Party as the Administrative Agent may request with respect to the
perfection of the Collateral Agent’s security interests in the Collateral (including
financing statements under the UCC, patent, trademark and copyright security
agreements suitable for filing with the United States Patent and Trademark Office or
the United States Copyright Office, as the case may be, and other applicable
documents under the laws of any jurisdiction with respect to the perfection of Liens
created by the Pledge and Security Agreement), (y) copies of UCC search reports as
of a recent date listing all effective financing statements that name any Loan Party
as debtor, together with copies of such financing statements, none of which shall
cover the Collateral, except for those that shall be terminated on the Closing Date
or are otherwise permitted hereunder, and (z) copies of United States Patent and
Trademark Office and United States Copyright Office searches as of a recent date
with respect to any intellectual property of any Loan Party registered with either
such office or for which an application for registration has been submitted to
either such office, which searches shall not indicate any Liens on any such
intellectual property, except for
those that shall be terminated on the Closing Date or are otherwise permitted
hereunder;
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(B) all certificates, instruments and other documents representing all Pledged
Stock being pledged pursuant to the Pledge and Security Agreement and undated stock
powers for such certificates, instruments and other documents executed in blank;
(C) all instruments representing Pledged Debt Instruments being pledged
pursuant to the Pledge and Security Agreement duly endorsed in favor of the
Collateral Agent or in blank; and
(D) evidence reasonably satisfactory to the Administrative Agent of payment or
arrangements for payment by the Borrower of all applicable recording taxes, fees,
charges, costs and expenses required for the recording of the Collateral Documents
necessary to perfect the Liens created by the Pledge and Security Agreement;
(vi) [Intentionally Omitted];
(vii) a Borrowing Base Certificate dated on or about the Closing Date;
(viii) a favorable opinion of Skadden, Arps, Slate, Meagher & Flom, LLP, counsel to the
Loan Parties, in substantially the form of Exhibit G (Form of Opinion of Counsel for the
Loan Parties), and addressing such other related matters as any Lender through the
Administrative Agent may reasonably request, including opinions as to the enforceability of
the Loan Documents, compliance with all laws and regulations (including Regulation U of the
Board of Governors of the Federal Reserve System), the perfection of all security interests
purported to be granted pursuant to the Collateral Documents and no conflicts with material
agreements;
(ix) (i) (A) a copy of the articles or certificate of incorporation (or equivalent
Constituent Document) of each Loan Party, certified as of a recent date by the Secretary of
State (or local equivalent, if applicable) of its jurisdiction of organization and (B) a
certificate of the Secretary or an Assistant Secretary of each Loan Party certifying (1) the
by-laws (or equivalent Constituent Document) of such Loan Party as in effect on the date of
such certification, (2) the resolutions of such Loan Party’s Board of Directors (or
equivalent governing body) approving and authorizing the execution, delivery and performance
of this Agreement and the other Loan Documents to which such Loan Party is a party and (3)
that there have been no changes in the articles or certificate of incorporation (or
equivalent Constituent Document) of such Loan Party from the articles or certificate of
incorporation (or equivalent Constituent Document) of such Loan Party delivered pursuant to
clause (A) above;
(ii) a certificate of the Secretary or an Assistant Secretary of each Loan Party
certifying the names and true signatures of each officer of such Loan Party who has been
authorized to execute and deliver this Agreement and any Loan Document or other document
required hereunder to be executed and delivered by or on behalf of such Loan Party; and
(iii) a good standing certificate from the applicable Governmental Authority of (A)
each Loan Party’s jurisdiction of incorporation, organization or formation
and (B) each jurisdiction in which it is qualified as a foreign corporation or other
entity to do business and which, if it were not so qualified in such jurisdiction, could
reasonably be expected to have a Material Adverse Effect, each dated a recent date prior to
the Closing Date;
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(x) a certificate of the chief financial officer of Group stating that the Borrower is
Solvent and that the Borrower and the Subsidiary Guarantors (taken as a whole), are Solvent,
in each case, after giving effect to the initial Loans and Letters of Credit, the
application of the proceeds thereof in accordance with Section 7.9, the payment of all
estimated legal, accounting and other fees related hereto and thereto and the consummation
of the other transactions contemplated hereby;
(xi) a certificate of a Responsible Officer of Group to the effect that the conditions
set forth in Section 3.1(g) and Section 3.2 have been satisfied;
(xii) evidence satisfactory to the Administrative Agent that the insurance policies
required by Section 7.5 and any Collateral Document are in full force and effect, together
with, unless otherwise agreed by the Administrative Agent, endorsements naming the
Collateral Agent, on behalf of the Secured Parties, as an additional insured or loss payee
under all insurance policies to be maintained with respect to the properties of each Loan
Party;
(xiii) all other Collateral Documents and other Loan Documents and related
certificates, instruments, documents and agreements required, pursuant to the Pledge and
Security Agreement or this Agreement, to be delivered on the Closing Date (including,
without limitation, Blocked Account Letters, Restricted Account Letters, Control Account
Agreements, Landlord Waivers and Bailee Letters), duly executed by the parties thereto; and
(xiv) such other certificates, documents, agreements and information respecting any
Loan Party or the Collateral as the Administrative Agent or any Lender, through the
Administrative Agent, may reasonably request.
(b) Termination of Existing Credit Agreement. Group and its Subsidiaries shall have (i)
repaid in full all Indebtedness and other obligations under or with respect to the Existing Credit
Agreement and any related documents (or in the case of any such Indebtedness that is a guaranty,
terminated such guaranty), (ii) terminated any commitments to lend or make other extensions of
credit thereunder, (iii) delivered to the Administrative Agent a payoff letter with respect to the
Existing Credit Agreement and all documents or instruments necessary to release all Liens securing
the Indebtedness and other obligations of Group and its Subsidiaries under or with respect to the
Existing Credit Agreement or any related documents (such payoff letter, documents and instruments
to be in form and substance satisfactory to the Administrative Agent), and (iv) made arrangements
reasonably satisfactory to the Administrative Agent with respect to the cancellation of any letters
of credit outstanding under the Existing Credit Agreement (other than the Existing Rollover Letters
of Credit) or the issuance of Letters of Credit to support the obligations of the Borrower with
respect thereto.
(c) Financial Statements. The Lenders shall have received and be satisfied with (i) unaudited
consolidated and consolidating (by business unit) income statement and balance sheet and audited
consolidated financial statements of Group and its Subsidiaries for each fiscal quarter ending on
or after January 1, 2008 for which such financial statements are available in final form (but in
any event the financial statements of Group and its Subsidiaries for each such fiscal quarter
through and including the fiscal quarter ending July 5, 2008) and (ii) Group’s projections which
shall include a
financial forecast on a monthly basis for the first twelve months after the Closing Date and
on an quarterly basis thereafter through the year of the Revolving Loan Maturity Date prepared by
Group’s management.
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(d) Availability. As of the Closing Date, Available Credit shall be not less than $50,000,000
(after giving effect to the Borrowings, issuances of Letters of Credit and financial accommodations
under the Canadian Facility, in each instance, requested or deemed requested to be made on the
Closing Date).
(e) Consents, Etc. Each Warnaco Entity shall have received all material consents and
authorizations required pursuant to any material Contractual Obligation with any other Person and
shall have obtained all Permits of, and effected all notices to and filings with, any Governmental
Authority, in each case, as may be necessary to allow each of the Warnaco Entities lawfully (i) to
execute, deliver and perform, in all material respects, their respective obligations hereunder and
under the other Loan Documents to which each of them, respectively, is, or shall be, a party and
each other agreement or instrument to be executed and delivered by each of them, respectively,
pursuant thereto or in connection therewith and (ii) to create and perfect the Liens on the
Collateral owned by each of them in the manner and for the purpose contemplated by the Loan
Documents or the transactions contemplated thereby (other than certain non-discretionary consents,
authorizations, filings, registrations and other similar actions or approvals which by their nature
may only be made after the Closing Date and which will be made as soon as practical after the
Closing Date).
(f) Fees and Expenses Paid. There shall have been paid all fees and expenses (including
reasonable fees and expenses of counsel) due and payable on or before the Closing Date (including
all such fees described in the Fee Letters).
(g) No Material Adverse Effect. There shall have been no event, circumstance or change since
December 29, 2007 that has had, either individually or in the aggregate, a Material Adverse Effect.
There shall be no actions, suits, investigations, litigation or proceedings pending or threatened
in any court or before any arbitrator or Governmental Authority and no judgments, orders,
injunctions or other restraints that (i) could reasonably be expected to have a Material Adverse
Effect or (ii) can reasonably be expected to materially and adversely affect the Revolving Credit
Facility or the transactions contemplated thereby.
(h) Audit and Other Due Diligence. The Administrative Agent shall have conducted a field
examination and ordered an appraisal of each Loan Party’s Inventory and the Administrative Agent
and the Lenders shall have had an opportunity, if they so choose, to examine the books of account
and other records and files of the Loan Parties and to make copies thereof, and to conduct a
pre-closing audit, which shall include, without limitation, verification of Receivables and the
Borrowing Base of the Borrower and each other Loan Party, and to conduct such other due diligence
with respect to the Loan Parties and the Collateral as the Administrative Agent and the Lenders
require, and the results of such field examination, appraisal, examination, audit and other due
diligence shall have been reasonably satisfactory to the Administrative Agent and the Lenders in
all respects.
(i) Canadian Facility. The Canadian Facility shall have been executed by all the parties
thereto.
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Section 3.2 Conditions Precedent to Each Loan and Letter of Credit. The obligation of each Lender
on any date (including the Closing Date) to make any Loan and of each
Issuer on any date (including the Closing Date) to Issue any Letter of Credit is subject to the
satisfaction of all of the following conditions precedent:
(a) Request for Borrowing or Issuance of Letter of Credit. With respect to (i) any Revolving
Loan, the Administrative Agent shall have received a duly executed Notice of Borrowing, (ii) any
Swing Loan, the Administrative Agent shall have received a duly executed Swing Loan Request and
(iii) any Letter of Credit, the Administrative Agent and the Issuer shall have received a duly
executed Letter of Credit Request, in each case, dated on or before such date.
(b) Representations and Warranties; No Defaults. The following statements shall be true on
the date of such Loan or issuance of such Letter of Credit, both before and after giving effect
thereto and, in the case of any Loan, to the application of the proceeds therefrom:
(i) the representations and warranties set forth in Article IV and in the other Loan
Documents shall be true and correct on and as of the Closing Date and shall be true and
correct in all material respects on and as of any such date after the Closing Date with the
same effect as though made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects as of such earlier
date; and
(ii) no Default or Event of Default has occurred and is continuing.
(c) Borrowing Base. The Borrower shall have delivered the Borrowing Base Certificate required
to be delivered by Section 6.12. After giving effect to the Loans or the Letters of Credit
requested to be made or Issued on any such date and the use of proceeds thereof, the Revolving
Credit Outstandings shall not exceed the Maximum Credit at such time.
(d) No Legal Impediments. The making of the Loans or the issuance of such Letter of Credit on
such date does not violate any Requirement of Law on the date of or immediately following such Loan
or issuance of such Letter of Credit and is not enjoined, temporarily, preliminarily or
permanently.
Each submission by the Borrower to the Administrative Agent of a Notice of Borrowing or a Swing
Loan Request and the acceptance by the Borrower of the proceeds of each Loan requested therein, and
each submission by the Borrower to an Issuer of a Letter of Credit Request and the issuance of each
Letter of Credit requested therein, shall be deemed to constitute a representation and warranty by
the Borrower as to the matters specified in Section 3.2(b) on the date of the making of such Loan
or the issuance of such Letter of Credit.
Section 3.3 Determinations of Initial Borrowing Conditions. For purposes of determining compliance
with the conditions specified in Section 3.1, each Lender shall be deemed to have consented to,
approved, accepted or be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of the
Administrative Agent responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Lender prior to the initial Borrowing, borrowing of Swing Loans or
Issuance or deemed Issuance hereunder specifying its objection thereto and such Lender shall not
have made available to the Administrative Agent such Lender’s Ratable Portion of such Borrowing or
Swing Loans.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers, the Administrative Agent and the Collateral Agent to enter
into this Agreement, Group represents and warrants as to each Warnaco Entity, and the Borrower
represents and warrants as to itself and as to each of its Subsidiaries, to the Lenders, the
Issuers, the Administrative Agent and the Collateral Agent that, on and as of the Closing Date,
after giving effect to the making of the Loans and other financial accommodations on the Closing
Date and on and as of each date as required by Section 3.2(b)(i):
Section 4.1 Corporate Existence; Compliance with Law. Each Warnaco Entity (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization; (b)
is duly qualified as a foreign entity and in good standing under the laws of each jurisdiction
where such qualification is necessary, except where the failure to be so qualified or in good
standing would not, in the aggregate, have a Material Adverse Effect; (c) has all requisite power
and authority and the legal right to own, pledge, mortgage and operate its properties, to lease the
property it operates under lease and to conduct its business as now or currently proposed to be
conducted; (d) is in compliance with its Constituent Documents; (e) is in compliance with all
applicable Requirements of Law, except where the failure to be in compliance would not, in the
aggregate, have a Material Adverse Effect; and (f) has all necessary licenses, permits, consents or
approvals from or by, has made all necessary filings with, and has given all necessary notices to,
each Governmental Authority having jurisdiction, to the extent required for such ownership,
operation and conduct, except for licenses, permits, consents, approvals or filings which can be
obtained or made by the taking of ministerial action to secure the grant or transfer thereof or the
failure to obtain or make would not, in the aggregate, have a Material Adverse Effect.
Section 4.2 Corporate Power; Authorization; Enforceable Obligations.
(a) The execution, delivery and performance by each Warnaco Entity of the Loan Documents to
which it is a party and the consummation of the transactions contemplated thereby, including the
obtaining of the Loans and the creation and perfection of the Liens on the Collateral as security
therefor:
(i) are within such Warnaco Entity’s corporate, limited liability company, partnership
or other powers;
(ii) have been or, at the time of delivery thereof pursuant to Article III will have
been, duly authorized by all necessary corporate, limited liability company or partnership,
as the case may be, action, including the consent of shareholders, partners and members
where required;
(iii) do not and will not (A) contravene such Warnaco Entity’s or any of its
Subsidiaries’ respective Constituent Documents, (B) violate any other Requirement of Law
applicable to such Warnaco Entity (including Regulations T, U and X of the Federal Reserve
Board), or any order or decree of any Governmental Authority or arbitrator applicable to
such Warnaco Entity, (C) conflict with or result in the breach of, or constitute a default
under, or result in or permit the termination or acceleration of, any Contractual Obligation
of such Warnaco Entity or any of its Subsidiaries, or (D) result in the creation or
imposition of any Lien upon any of the property of such Warnaco Entity or any of its
Subsidiaries, other than those in favor of the Secured Parties pursuant to the Loan
Documents; and
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(iv) do not require the consent of, authorization by, approval of, notice to, or filing
or registration with, any Governmental Authority or any other Person, other than those
listed on Schedule 4.2 (Consents) and which have been or will be, prior to the Closing Date,
obtained or made (without the imposition of any conditions that are not reasonably
acceptable to the Agents), copies of which have been or will be delivered to the
Administrative Agent pursuant to Section 3.1, and each of which on the Closing Date will be
in full force and effect and, with respect to the Collateral, filings required to perfect
the Liens created by the Collateral Documents.
(b) This Agreement has been, and each of the other Loan Documents will have been upon delivery
thereof hereunder, duly executed and delivered by each Warnaco Entity party thereto.
(c) This Agreement is, and the other Loan Documents will be, when delivered hereunder, the
legal, valid and binding obligation of each Warnaco Entity party thereto, enforceable against such
Warnaco Entity in accordance with its terms.
(d) For so long as the Senior Note Indenture is in effect or any Senior Notes are outstanding,
each Borrowing, Issuance of a Letter of Credit and financial accommodation made under the Canadian
Facility and each delivery by the Borrower of a Borrowing Base Certificate constitutes a
representation and warranty by each of Group and the Borrower that, as of the date of such
Borrowing, Issuance, financial accommodation or delivery, as the case maybe (both before and after
giving effect to such Borrowing, Issuance or financial accommodation, if applicable), the financial
accommodations provided to the Borrower hereunder, both by themselves and together with the
financial accommodations provided to the Canadian Borrower under the Canadian Facility and the
guaranty by the Loan Parties under the Loan Party Canadian Facility Guaranty, do not violate the
debt incurrence restrictions set forth in the Senior Note Indenture or any other Senior Note
Document. Without limitation of the foregoing, each of Group and the Borrower represents and
warrants that (i) each Borrowing (including each Borrowing under a Facility Increase), the
Obligations with respect to each Letter of Credit and the guaranty by the Loan Parties of the
Canadian Secured Obligations pursuant to the Loan Party Canadian Facility Guaranty is Permitted
Debt (as defined in the Senior Note Indenture) and is permitted under Section 4.09 of the Senior
Note Indenture, (ii) as of the Closing Date there are in existence no Credit Facilities (as defined
in the Senior Note Indenture) other than this Agreement, the Canadian Facility and the Italian Debt
Facility and (iii) as of the Closing Date each Credit Facility (as defined in the Senior Note
Indenture) other than this Agreement and the Canadian Facility is permitted under Section 4.09 of
the Senior Note Indenture (other than under clause (b) thereof).
Section 4.3 Ownership of Group, Borrower; Subsidiaries.
(a) The authorized capital stock of the Borrower consists of 100,000 shares of common stock,
$1.00 par value per share, of which 100,000 shares are issued and outstanding. All of the
outstanding capital stock of the Borrower has been validly issued, is fully paid and non-assessable
and is owned beneficially and of record by Group, free and clear of all Liens other than the Lien
in favor of the Collateral Agent for the benefit of the Secured Parties created under the Loan
Documents. No Stock of the Borrower is subject to any option, warrant, right of conversion or
purchase or any similar right. There are no agreements or understandings to which the Borrower is
a party with respect to the voting, sale or transfer of any shares of Stock of the Borrower or any
agreement restricting the transfer or hypothecation of any such shares.
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(b) Set forth on Schedule 4.3 (Ownership of Warnaco Entities) is a complete and accurate list
of all Subsidiaries of Group on the Closing Date, showing (as to each such Subsidiary) the
jurisdiction of its incorporation or organization, the number of shares of each class of its
Stock or Stock Equivalents authorized, and the number outstanding, on the Closing Date and the
percentage of each such class of its Stock or Stock Equivalents owned (directly or indirectly) by
such Loan Party and the number of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the Closing Date. All of the outstanding Stock or
Stock Equivalents in each Subsidiary of Group has been validly issued, is fully paid and
non-assessable and is owned by a Warnaco Entity (except as described on Schedule 4.3 (Ownership of
Warnaco Entities)) free and clear of all Liens, except those created under the Loan Documents or
the Loan Documents (as defined in the Canadian Facility). No Stock of any Warnaco Entity is
subject to any outstanding option, warrant, right of conversion or purchase or any similar right.
No Warnaco Entity is a party to, or has knowledge of, any agreement restricting the transfer or
hypothecation of any Stock of any such Subsidiary, other than the Loan Documents. Group does not
own or hold, directly or indirectly, any Stock of any Person other than the Subsidiaries set forth
on Schedule 4.3 (Ownership of Warnaco Entities) and the Investments permitted by Section 8.3.
Section 4.4 Financial Statements.
(a) (x) The consolidated balance sheet of Group and its Subsidiaries as at December 29, 2007,
and the related consolidated statements of income, retained earnings and cash flows of Group and
its Subsidiaries for the fiscal year then ended, certified by Deloitte & Touche LLP, (y) the
unaudited consolidating balance sheets of Group and its Subsidiaries as at December 29, 2007, and
the related consolidated statements of income, retained earnings and cash flows of Group and its
Subsidiaries for the Fiscal Year then ended, and (z) the unaudited consolidated and consolidating
balance sheets of Group and its Subsidiaries as at July 5, 2008, and the related consolidated
statements of income, retained earnings and cash flows of Group and its Subsidiaries for the Fiscal
Quarter then ended and for the period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter, copies of all of which have been furnished to each Lender,
fairly present, subject, in the case of said interim financial statements under clause (z), to the
absence of footnote disclosure and normal recurring year-end audit adjustments, the consolidated
and consolidating, as the case may be, financial condition of Group and its Subsidiaries as at such
dates and the consolidated and consolidating, as the case may be, results of the operations of
Group and its Subsidiaries for the period ended on such dates, all in conformity with Agreement
Accounting Principles.
(b) Neither Group nor any of its Subsidiaries has any material obligation, contingent
liability or liability for taxes, long-term leases or unusual forward or long-term commitment which
is not reflected in the Financial Statements referred to in clause(a) above, in the notes thereto
or permitted by this Agreement.
(c) The Projections have been prepared by Group in light of the past operations of its
business, and reflect projections for the fiscal periods covered thereby. The Projections are
based upon estimates and assumptions stated therein, all of which Group believes to be reasonable
and fair in light of current conditions and current facts known to Group and, as of the Closing
Date, reflect Group’s good faith and reasonable estimates of the future financial performance of
Group and its Subsidiaries and of the other information projected therein for the periods set forth
therein.
Section 4.5 Material Adverse Change. Since December 29, 2007, there has been no Material Adverse
Change and there have been no events or developments that in the aggregate have had a Material
Adverse Effect.
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Section 4.6 Solvency. Both before and after giving effect to (a) the Loans and Letter of Credit
Obligations to be made or extended on the Closing Date or such other date as Loans
and Letter of Credit Obligations requested hereunder are made or extended, (b) the disbursement of
the proceeds of such Loans pursuant to the instructions of the Borrower, and (c) the payment and
accrual of all transaction costs in connection with the foregoing, the Borrower is Solvent and the
Borrower and the Subsidiary Guarantors, taken as a whole, are Solvent.
Section 4.7 Litigation. There are no pending or, to the knowledge of Group or the Borrower,
threatened actions, suits, investigations, litigation or proceedings pending or threatened in any
court or before any arbitrator or Governmental Authority that in the aggregate could reasonably be
expected to have a Material Adverse Effect. The performance of any action by any Loan Party
required or contemplated by any of the Loan Documents is not and could not reasonably be expected
to be restrained or enjoined (either temporarily, preliminarily or permanently).
Section 4.8 Taxes.
(a) All federal and material state, local and foreign income, franchise and other tax returns,
reports and statements (collectively, the “Tax Returns”) required to be filed by Group or any of
its Tax Affiliates have been filed with the appropriate Governmental Authorities in all
jurisdictions in which such Tax Returns are required to be filed, all such Tax Returns are true and
correct in all material respects, and all taxes, charges and other impositions reflected therein or
which are material and otherwise due and payable have been paid prior to the date on which any
fine, penalty, interest, late charge or loss may be added thereto for non-payment thereof except
where contested in good faith and by appropriate proceedings if adequate reserves therefor have
been established on the books of Group or such Tax Affiliate in conformity with Agreement
Accounting Principles. Proper and accurate amounts have been withheld by Group and each of its Tax
Affiliates from their respective employees for all periods in full and complete compliance with the
tax, social security and unemployment withholding provisions of applicable Requirements of Law and
such withholdings have been timely paid to the respective Governmental Authorities.
(b) None of Group or any of its Tax Affiliates has (i) executed or filed with the IRS or any
other Governmental Authority any agreement or other document extending, or having the effect of
extending, the period for the filing of any Tax Return or the assessment or collection of any
material taxes or other charges relating thereto; (ii) any obligation under any tax sharing
agreement or arrangement other than that to which the Administrative Agent has a copy prior to the
date hereof; or (iii) been a member of an affiliated, combined or unitary group other than the
group of which Group (or its Tax Affiliate) is the common parent other than, prior to the
acquisition by Group thereof, Warnaco Swimwear, Inc. and its Subsidiaries and Designer Holdings
Limited and its Subsidiaries.
(c) Each Foreign Subsidiary owned directly or indirectly by Group is either a “controlled
foreign corporation”, as defined under Section 957 of the Code, or owned, directly or indirectly,
by one or more “controlled foreign corporations”.
Section 4.9 Full Disclosure. The written information prepared or furnished by or on behalf of any
Warnaco Entity in connection with this Agreement or the consummation of the financing, taken as a
whole, does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein or herein not misleading. All facts known to
Group or the Borrower which are material to an understanding of the financial condition, business,
properties or prospects of Group and its Subsidiaries taken as one enterprise have been disclosed
to the Lenders.
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Section 4.10 Margin Regulations. No Warnaco Entity is engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Federal Reserve Board), and no proceeds of any Borrowing will be used to
purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock in contravention of Regulation T, U or X of the Federal Reserve Board.
Section 4.11 No Burdensome Restrictions; No Defaults.
(a) No Warnaco Entity (i) is a party to any Contractual Obligation the compliance with which
would have a Material Adverse Effect or the performance of which by any thereof, either
unconditionally or upon the happening of an event, would result in the creation of a Lien (other
than a Lien permitted under Section 8.2) on the property or assets of any thereof or (ii) is
subject to any charter or corporate or other similar restriction that would have a Material Adverse
Effect.
(b) No Warnaco Entity is in default under or with respect to any Contractual Obligation owed
by it and, to the knowledge of Group and the Borrower, no other party is in default under or with
respect to any Contractual Obligation owed to any Warnaco Entity, other than, in either case, those
defaults which in the aggregate would not have a Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
(d) To the best knowledge of Group and the Borrower, there is no Requirement of Law applicable
to any Warnaco Entity the compliance with which by such Warnaco Entity would have a Material
Adverse Effect.
Section 4.12 Investment Company Act. No Warnaco Entity is an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as amended.
Section 4.13 Use of Proceeds. The proceeds of the Revolving Loans and the Letters of Credit are
being used by the Borrower (and, to the extent distributed by the Borrower, each other Warnaco
Entity) solely as follows: (i) to refinance all amounts owing under the Existing Credit Agreement
and to pay fees and expenses in connection with entering into the Loan Documents, (ii) to provide
working capital from time to time for the Warnaco Entities and (iii) for other general and
corporate purposes of the Warnaco Entities permitted hereunder.
Section 4.14 Insurance. All policies of insurance of any kind or nature of any Warnaco Entity,
including policies of life, fire, theft, product liability, public liability, property damage,
other casualty, employee fidelity, workers’ compensation and employee health and welfare insurance,
are in full force and effect and are of a nature and provide such coverage as is sufficient and as
is customarily carried by businesses of the size and character of such Person. No Warnaco Entity
has been refused insurance for any material coverage which it had applied or, prior to the date
hereof, had any policy of insurance terminated (other than at its request). Each insurance policy
maintained by each Loan Party includes endorsements naming the Collateral Agent, on behalf of the
Secured Parties, as an additional insured or loss payee thereunder.
Section 4.15 Labor Matters.
(a) There are no strikes, work stoppages, slowdowns or lockouts pending or threatened against
or involving any Warnaco Entity, other than those which in the aggregate would not have a Material
Adverse Effect.
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(b) There are no unfair labor practices, grievances or complaints pending, or, to Group’s
knowledge, threatened against or involving any Warnaco Entity, nor are there any arbitrations or
grievances threatened involving any Warnaco Entity, other than those which, in the aggregate, if
resolved adversely to such Warnaco Entity, would not have a Material Adverse Effect.
(c) Except as set forth on Schedule 4.15 (Labor Matters), as of the Closing Date, there is no
collective bargaining agreement covering any employee of any Warnaco Entity.
(d) Schedule 4.15 (Labor Matters) sets forth, as of the Closing Date, all material consulting
agreements, executive employment agreements, executive compensation plans, deferred compensation
agreements, employee stock purchase and stock option plans and severance plans of any Warnaco
Entity.
Section 4.16 ERISA.
(a) Schedule 4.16 (ERISA Matters) separately identifies as of the date hereof all Title IV
Plans, all Multiemployer Plans and all of the employee benefit plans within the meaning of Section
3(3) of ERISA to which any Warnaco Entity has any obligation or liability, contingent or otherwise.
(b) Each employee benefit plan of each Warnaco Entity which is intended to qualify under
Section 401 of the Code does so qualify, and any trust created thereunder is exempt from tax under
the provisions of Section 501 of the Code, except where such failures in the aggregate would not
have a Material Adverse Effect.
(c) Each Title IV Plan is in compliance with applicable provisions of ERISA, the Code and
other Requirements of Law except for non-compliances that in the aggregate would not have a
Material Adverse Effect.
(d) There has not been, nor is there reasonably expected to occur, any ERISA Event which would
have a Material Adverse Effect
(e) Other than as set forth on Schedule 4.16 (ERISA Matters), there are no Unfunded Pension
Liabilities.
(f) Other than as set forth on Schedule 4.16 (ERISA Matters), no Warnaco Entity or any ERISA
Affiliate thereof would have any Withdrawal Liability as a result of a complete withdrawal as of
the date hereof from any Multiemployer Plan.
Section 4.17 Environmental Matters.
(a) The operations and properties of each Warnaco Entity comply, except to the extent
non-compliance would not have a Material Adverse Effect, with all applicable Environmental Laws and
Environmental Permits, all material past non-compliance with such Environmental Laws and
Environmental Permits has been resolved without ongoing material obligations or costs, and no
circumstances exist that would be reasonably likely to (A) form the basis of an Environmental
Action against any Warnaco Entity or any of their properties that could be reasonably expected to
have a Material Adverse Effect or (B) cause any such property to be subject to any material
restrictions on ownership, occupancy, use or transferability under any Environmental Law.
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(b) None of the properties currently or formerly owned or operated by any Warnaco Entity is,
to the knowledge of Group or the Borrower with respect to formerly owned or operated properties,
listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or
local list or is adjacent to any such property, except where such listing would not reasonably be
expected to have a Material Adverse Effect; there are no and never have been any underground or
aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in
which Contaminants are being or have been treated, stored or disposed on any property currently
owned or operated by any Warnaco Entity or, to the best of its knowledge, on any property formerly
owned or operated by any Warnaco Entity that in any case could reasonably be expected to have a
Material Adverse Effect; there is no asbestos or asbestos-containing material on any property
currently owned or operated by any Warnaco Entity that in any case could reasonably be expected to
have a Material Adverse Effect; and Contaminants have not been released, discharged or disposed of
on any property currently or, to the best knowledge of Group and the Borrower, formerly owned or
operated by any Warnaco Entity that in any case could reasonably be expected to have a Material
Adverse Effect.
(c) No Warnaco Entity is undertaking, and has not completed, either individually or together
with other potentially responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge or disposal of Contaminants at any
site, location or operation, either voluntarily or pursuant to the order of any governmental or
regulatory authority or the requirements of any Environmental Law that in any case could reasonably
be expected to have a Material Adverse Effect; and all Contaminants generated, used, treated,
handled or stored at, or transported to or from, any property currently or formerly owned or
operated by any Warnaco Entity have been disposed of in a manner not reasonably expected to result
in material liability to any Warnaco Entity.
Section 4.18 Intellectual Property; Material License.
(a) The Warnaco Entities own or license or otherwise have the right to use all Intellectual
Property and other intellectual property rights that are necessary for the operations of their
respective businesses, without, to the best of Group’s knowledge, infringing upon or conflict with
the rights of any other Person with respect thereto, including all trade names associated with any
private label brands of any Warnaco Entity. To Group’s knowledge, no Intellectual Property now
employed by any Warnaco Entity infringes upon or conflicts with any rights owned by any other
Person, and no claims or litigation regarding any of the foregoing are pending or threatened, where
such infringements, conflicts, claims or litigation would have, in the aggregate, a Material
Adverse Effect.
(b) Each Material License is in full force and effect as of the Closing Date.
Section 4.19 Title; Real Property.
(a) Each Warnaco Entity has good and marketable title to all Material Owned Real Property and
good title to all personal property purported to be owned by it, including those reflected on the
most recent Financial Statements delivered by Group, and none of such properties and assets is
subject to any Lien, except Liens permitted under Section 8.2. Each Warnaco Entity has received
all deeds, assignments, waivers, consents, non-disturbance and recognition or similar agreements,
bills of sale and other documents, and have duly effected all recordings, filings and other actions
necessary to establish, protect and perfect such Warnaco Entity’s right, title and interest in and
to all such Material Owned Real Property.
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(b) Set forth on Schedule 4.19 (Real Property) hereto is a complete and accurate list of all
Material Owned Real Property and all Material Leased Property, showing as of the Closing Date, the
street address, county or other relevant jurisdiction, state or province, and record owner.
(c) As of the Closing Date, no portion of any Material Owned Real Property or any Material
Leased Property has suffered any material damage by fire or other casualty loss which has not
heretofore been completely repaired and restored. No portion of any Real Property owned or leased
by any Warnaco Entity is located in a special flood hazard area as designated by any federal
Governmental Authority (unless flood insurance has been obtained).
(d) All Permits required to have been issued or appropriate to enable all real property owned
or leased by any Warnaco Entity to be lawfully occupied and used for all of the purposes for which
they are currently occupied and used have been lawfully issued and are in full force and effect,
other than those which, in the aggregate, would not have a Material Adverse Effect.
(e) No Warnaco Entity has received any notice, or has any knowledge, of any pending,
threatened or contemplated condemnation proceeding affecting any Real Property owned or leased by
any Warnaco Entity or any part thereof, except those which, in the aggregate, would not have a
Material Adverse Effect.
Section 4.20 Perfection of Security Interests in the Collateral. The Collateral Documents create
valid Liens on the Collateral purported to be covered thereby, which Liens are perfected Liens and
prior to all other Liens (other than Customary Permitted Liens having priority over such Liens).
ARTICLE V
FINANCIAL COVENANTS
As long as any of the Obligations or the Commitments remain outstanding, unless the Requisite
Lenders otherwise consent in writing, Group and the Borrower agree with the Lenders and the
Facility Agents that:
Section 5.1 Minimum Fixed Charge Coverage Ratio. If a Trigger Event shall occur, Group shall
maintain a Fixed Charge Coverage Ratio, for each Test Period with respect thereto, of at least 1.1
to 1.0.
ARTICLE VI
REPORTING COVENANTS
As long as any of the Obligations or Commitments remain outstanding, unless the Requisite
Lenders otherwise consent in writing, Group and the Borrower agree with the Lenders and the
Facility Agents that:
Section 6.1 Financial Statements. Group shall furnish to the Administrative Agent (with a copy for
each Lender requesting same) the following:
(a) Monthly Reports. As soon as available and in any event within 40 days after the end of
each of the first two months in each Fiscal Quarter, consolidated balance sheets of Group and its
Subsidiaries as of the end of such month and consolidated statements of income and cash flow
statements of Group and its Subsidiaries for the period commencing at the end of the previous
month and ending with the end of such month, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding Fiscal Year and the
corresponding figures for the corresponding period set forth in the Projections and duly certified
(subject to year-end audit adjustments) by a Responsible Officer of Group as having been prepared
in accordance with Agreement Accounting Principles;
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(b) Quarterly Reports. As soon as available and in any event within 50 days after the end of
each of the first three Fiscal Quarters of each Fiscal Year, consolidated and consolidating balance
sheets of Group and its Subsidiaries as of the end of such Fiscal Quarter and consolidated and
consolidating statements of income and consolidated statements of cash flows of Group and its
Subsidiaries for the period commencing at the end of the previous Fiscal Year and ending with the
end of such Fiscal Quarter, and also setting forth a variance analysis of monthly results during
such Fiscal Quarter as compared to monthly budgeted amounts specified in the forecast for such
Fiscal Quarter previously delivered pursuant to clause (e) below, duly certified (subject to
year-end audit adjustments) by a Responsible Officer of Group as having been prepared in accordance
with Agreement Accounting Principles and certifying compliance with the terms of this Agreement and
setting forth in reasonable detail the calculations necessary to demonstrate compliance with
Article V (it being understood and agreed that if such certification is delivered with respect to a
Fiscal Quarter for which Section 5.1 is not being tested for a fiscal period ending on the last day
of such Fiscal Quarter due to no Trigger Event having occurred, such certification shall still
provide the calculations for such Section 5.1 as if a Trigger Event had occurred and such Fiscal
Quarter were the last Fiscal Quarter of a Test Period, but the certification shall not then be
required to indicate whether or not Group was in compliance with such Section 5.1 as at the end of
such Fiscal Quarter);
(c) Annual Consolidated Reports. As soon as available and in any event within 95 days after
the end of each Fiscal Year of Group, (i) a copy of the annual audit report for such year for Group
and its Subsidiaries, containing the 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, in each case accompanied by an opinion (without qualification as
to the scope of the audit) of Deloitte & Touche LLP or by other independent public accountants
reasonably acceptable to the Administrative Agent stating that (x) such financial statements fairly
present the consolidated financial position of Group and its Subsidiaries as at the dates indicated
and the results of their operations and cash flows for the periods indicated in conformity with
Agreement Accounting Principles applied on a basis consistent with prior years (except for changes
with which such independent certified public accountants shall concur and which shall have been
disclosed in the notes to the financial statements) and (y) to the extent permitted by accounting
rules and guidelines, the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted auditing standards, and a
certificate of a Responsible Officer of Group as to compliance with the terms of this Agreement and
setting forth in reasonable detail the calculations necessary to demonstrate compliance with
Article V (it being understood and agreed that if such certificate is delivered with respect to a
Fiscal Year for which Section 5.1 is not being tested for a fiscal period ending on the last day of
such Fiscal Year due to no Trigger Event having occurred, such certificate shall still provide the
calculations for such Section 5.1 as if a Trigger Event had occurred and such Fiscal Year were a
Test Period, but the certificate shall not then be required to indicate whether or not Group was in
compliance with such Section 5.1 as at the end of such Fiscal Year) and (ii) financial information
regarding Group and its Subsidiaries consisting of consolidating balance sheets of Group and its
Subsidiaries as of the end of such Fiscal Year and related consolidating statements of income and
consolidated cash flows of Group and its Subsidiaries for such Fiscal Year, all prepared in
conformity with Agreement Accounting Principles and certified by a Responsible Officer of Group as
fairly presenting the financial position of Group and its
Subsidiaries as at the end of such Fiscal Year and the results of their operations and cash
flows for such Fiscal Year;
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(d) Compliance Certificate. Together with each delivery of any financial statement pursuant
to clauses (b) and (c) of this Section 6.1, a certificate of a Responsible Officer of Group
substantially in the form of Exhibit H hereto (each, a “Compliance Certificate”) (i) showing in
reasonable detail the calculations used in demonstrating compliance with each of the financial
covenants contained in Article V which is tested on a quarterly basis (it being understood and
agreed that if such certificate is delivered with respect to a Fiscal Quarter or Fiscal Year for
which Section 5.1 is not being tested for a fiscal period ending on the last day of such Fiscal
Quarter or Fiscal Year due to no Trigger Event having occurred, such certificate shall still
provide the calculations for such Section 5.1 as if a Trigger Event had occurred and such Fiscal
Quarter were the last Fiscal Quarter of a Test Period or such Fiscal Year were a Test Period, as
the case may be, but the certificate shall not then be required to indicate whether or not Group
was in compliance with such Section 5.1 as at the end of such Fiscal Quarter or Fiscal Year), (ii)
showing in reasonable detail the calculations necessary to determine the Applicable Margin, (iii)
stating that no Default or Event of Default has occurred and is continuing and no Default or Event
of Default (as defined in the Canadian Facility) has occurred and is continuing or, if a Default or
an Event of Default has occurred and is continuing, stating the nature thereof and the action which
Group proposes to take with respect thereto and (iv) stating that the amount of the Available
Credit at any time during the period covered by such certificate did not fall to an amount which
would give rise to an Accelerated Borrowing Base Certificate Delivery Date and that the amount of
the Available Credit at any time during the period covered by such certificate did not fall to an
amount which would give rise to a Trigger Event, or, if the Available Credit fell to any such
amount, the first date on which each such event occurred;
(e) Business Plan. Not later than 45 days after the end of each Fiscal Year (beginning with
the end of Fiscal Year 2008), and containing substantially the types of financial information
contained in the Projections, (i) the annual business plan of Group for the next succeeding Fiscal
Year approved by the Board of Directors of Group with updates thereof provided to the Lenders prior
to each July 31, (ii) schedules of all letters of credit, (iii) forecasts (including availability
forecasts) prepared by management of Group for each fiscal month in each of the succeeding Fiscal
Years through the Fiscal Year in which the Revolving Loan Maturity Date is scheduled to occur, and
(iv) forecasts prepared by management of Group for each of the succeeding Fiscal Years through the
Fiscal Year in which the Revolving Loan Maturity Date is scheduled to occur, including, in each
instance described in clause (ii) and clause (iii) above, (A) a projected year-end consolidated
balance sheet, income statement and statement of cash flows and (B) a statement of all of the
material assumptions on which such forecasts are based and in each case prepared by management of
Group and satisfactory in form to the Administrative Agent;
(f) Intercompany Loan Balances. Together with each delivery of any financial statement
pursuant to clause (b) and clause (c) of this Section 6.1, a summary of the outstanding balance of
all intercompany Indebtedness of any Subsidiary to any Loan Party as of the last day of the Fiscal
Quarter or Fiscal Year covered by such financial statement, certified by a Responsible Officer of
Group; provided that such balances between Loan Parties shall only be required to be delivered
annually, as early as practicable;
(g) Corporate Chart. Together with each delivery of any Financial Statement pursuant to
clause (c) above, a certificate of a Responsible Officer of Group certifying that the Corporate
Chart attached thereto or the last Corporate Chart delivered pursuant to this clause (g) is true,
correct, complete and current as of the date of such Financial Statement; and
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(h) Trigger Event and Accelerated Borrowing Base Certificate Delivery Date. Promptly after
the occurrence of a Trigger Event and/or Accelerated Borrowing Base Certificate Delivery Date, a
written notice of a Responsible Officer of Group stating that a Trigger Event and/or Accelerated
Borrowing Base Certificate Delivery Date has occurred and describing in reasonable detail such
occurrence, including the date of such occurrence.
Section 6.2 Default Notices. As soon as practicable, and in any event within two Business Days
after a Responsible Officer of any Loan Party has actual knowledge of the existence of any Default,
Event of Default or any other event which has had a Material Adverse Effect or of the existence of
any Default or Event of Default under and as defined in the Canadian Facility, Group shall give the
Administrative Agent notice specifying the nature of such Default or Event of Default or other
event, including the anticipated effect thereof, which notice, if given by telephone, shall be
promptly confirmed in writing on the next Business Day.
Section 6.3 Litigation. Promptly after the commencement thereof, Group shall give the
Administrative Agent written notice of the commencement of all actions, suits and proceedings
before any domestic or foreign Governmental Authority or arbitrator, affecting any Warnaco Entity,
which in the reasonable judgment of Group, if adversely determined, would be reasonable likely to
have a Material Adverse Effect.
Section 6.4 Asset Sales. No later than 10 days prior to any Asset Sale anticipated to generate in
excess of $15,000,000 (or its Dollar Equivalent) in net cash proceeds to the Loan Parties, Group
shall send the Administrative Agent a notice (a) describing such Asset Sale or the nature and
material terms and conditions of such transaction and (b) stating the estimated net cash proceeds
anticipated to be received by Group or any of its Subsidiaries.
Section 6.5 Notices under Senior Note Documents. Promptly after the sending or filing thereof, the
Borrower shall send the Administrative Agent copies of all material notices, certificates or
reports delivered pursuant to, or in connection with, any Senior Note Document.
Section 6.6 SEC Filings; Press Releases. Promptly after the sending or filing thereof, Group shall
send the Administrative Agent copies of (a) all reports which any Warnaco Entity sends to its
security holders generally, (b) all reports and registration statements which any Warnaco Entity
files with the Securities and Exchange Commission or any national securities exchange, (c) all
press releases, (d) all other statements concerning material changes or developments in the
business of any Warnaco Entity made available by any Warnaco Entity to the public and (e) all
notices of investigation or proceedings received from the Securities and Exchange Commission or any
national securities exchange.
Section 6.7 Labor Relations. Promptly after becoming aware of the same, Group shall give the
Administrative Agent written notice of (a) any material labor dispute to which any Warnaco Entity
is or may become a party, including any strikes, lockouts or other disputes relating to any of such
Person’s plants and other facilities, and (b) any Worker Adjustment and Retraining Notification Act
or related liability incurred with respect to the closing of any plant or other facility of any
such Person.
Section 6.8 Tax Returns. Upon the request of the Administrative Agent or any Lender, through the
Administrative Agent, Group will provide copies of all federal, state and local tax returns and
reports (other than foreign tax returns and reports) filed by any Warnaco Entity in respect of
taxes measured by income (excluding sales, use and like taxes).
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Section 6.9 Insurance. As soon as is practicable and in any event within 90 days after the end of
each Fiscal Year, Group will furnish the Administrative Agent (in sufficient copies for each of the
Lenders and the Collateral Agent) with (a) a report in form and substance satisfactory to the
Administrative Agent and the Lenders outlining all material insurance coverage maintained as of the
date of such report by the Warnaco Entities and the duration of such coverage and (b) an insurance
broker’s statement that all premiums then due and payable with respect to such coverage have been
paid and that all such insurance names the Collateral Agent on behalf of the Secured Parties as
additional insured or loss payee, as appropriate, and provides that no cancellation, material
addition in amount or material change in coverage shall be effective until after 30 days’ written
notice thereof to the Facility Agents.
Section 6.10 ERISA Matters. Group shall furnish the Administrative Agent (with a copy for each
Lender requesting same):
(a) promptly and in any event within 30 days after any Warnaco Entity or any ERISA Affiliate
knows or has reason to know that any ERISA Event has occurred, written notice describing such
event;
(b) promptly and in any event within 10 days after any Warnaco Entity or any ERISA Affiliate
knows or has reason to know that a request for a minimum funding waiver under Section 412 of the
Code has been filed with respect to any Title IV Plan or Multiemployer Plan, a written statement of
a Responsible Officer of Group describing such ERISA Event or waiver request and the action, if
any, which such Warnaco Entity and the ERISA Affiliates propose to take with respect thereto and a
copy of any notice filed with the PBGC or the IRS pertaining thereto; and
(c) simultaneously with the date that any Warnaco Entity or any ERISA Affiliate files a notice
of intent to terminate any Title IV Plan, if such termination would require material additional
contributions in order to be considered a standard termination within the meaning of Section
4041(b) of ERISA, a copy of each notice.
Section 6.11 Environmental Matters. Group shall provide promptly after the assertion or occurrence
thereof, notice of any Environmental Action against or of any noncompliance by any Warnaco Entity
with any Environmental Law or Environmental Permit that would reasonably be expected to (i) have a
Material Adverse Effect or (ii) cause any Material Real Property or Material Leased Property to be
subject to any material restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
Section 6.12 Borrowing Base Determination. Until the Revolving Credit Termination Date:
(a) The Borrower shall deliver to the Administrative Agent as soon as available, but in any
event within 15 days after the end of each calendar month, as of the end of such calendar month,
and at such other times as may be reasonably requested by the Administrative Agent (but not more
than one per week), a Borrowing Base Certificate executed by a Responsible Officer of Group;
provided, that during each Accelerated Borrowing Base Certificate Delivery Period or during the
existence of an Event of Default, the Borrower shall deliver to the Administrative Agent a
Borrowing Base Certificate not less than once each week, as of the Business Day immediately prior
to the day of delivery and executed by a Responsible Officer of Group. Concurrently with the
delivery of any Borrowing Base Certificate to the Administrative Agent, the Borrower shall deliver
to the Administrative Agent a certification in reasonable detail setting forth the Available Credit
as of the date of such Borrowing Base Certificate.
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(b) Group and the Borrower agree (i) that the Administrative Agent, on behalf of the Lenders,
may appoint an independent or an internal third party appraiser to conduct and conclude two field
audits in each calendar year (and additional field audits (not to exceed, in the case of clause (B)
below, two additional field audits in such calendar year) if (A) an Event of Default has occurred
and is continuing at the time of the appointment of the appraiser or (B) Available Credit has been
less than 15% of the aggregate of the Revolving Credit Commitments and Revolving Credit Commitments
(as defined in the Canadian Facility) for 5 or more consecutive Business Days at the time of the
appointment of the appraiser) with respect to Inventory owned by any Loan Party and (ii) Group
shall conduct, or shall cause to be conducted, and upon request of the Administrative Agent, and
present to the Administrative Agent for approval, such appraisals and reviews as the Administrative
Agent shall reasonably request, all upon notice and at such times during normal business hours and
as often as may be reasonably requested, in each case at the expense of Group and for the purpose
of determining the Borrowing Base. Group and the Borrower shall furnish to the Administrative
Agent any information which the Administrative Agent may reasonably request regarding the
determination and calculation of the Borrowing Base including correct and complete copies of any
invoices, underlying agreements, instruments or other documents and the identity of all Account
Debtors in respect of Accounts referred to therein. Group and the Borrower further agree to use
their reasonable best efforts to assist each appraiser appointed by the Administrative Agent to
conduct and conclude such field audits.
(c) The Administrative Agent may, at the sole cost and expense of Group and the Borrower, make
test verifications of the Accounts in any manner and through any medium that the Administrative
Agent considers advisable, and Group and the Borrower shall furnish all such assistance and
information as the Administrative Agent may reasonably require in connection therewith.
(d) Each of Group and the Borrower shall, and shall cause each of its respective Subsidiaries
to, use its reasonable best efforts to assist an independent third party appraiser appointed by the
Administrative Agent to conduct and conclude (i) field audits with respect to Inventory owned by
any Loan Party not more frequently than two times in any calendar year (and such additional times
in any calendar year (not to exceed, in the case of clause (B) below, two additional field audits
in such calendar year) if (A) an Event of Default has occurred and is continuing at the time of the
appointment of the appraiser or (B) Available Credit has been less than 15% of the aggregate of the
Revolving Credit Commitments and Revolving Credit Commitments (as defined in the Canadian Facility)
for 5 or more consecutive Business Days at the time of the appointment of the appraiser) and (ii)
Appraisals, as reasonably requested by the Administrative Agent (which, in the case of Inventory
and Receivables, shall be conducted not less frequently than twice during each calendar year and
may in any event be conducted if an Event of Default has occurred and is continuing at the time of
the appointment of the appraiser or if Available Credit is less than 15% of the aggregate of the
Revolving Credit Commitments and Revolving Credit Commitments (as defined in the Canadian Facility)
in effect at the time of the appointment of the appraiser), in each case at the sole expense of the
Group and the Borrower.
(e) Not less than once each month, the Borrower shall deliver to the Administrative Agent a
certificate, as of the day immediately prior to the day of delivery and executed by a Responsible
Officer of Group, that sets forth the aggregate amount of Cash Management Obligations owing to the
Agents or Lenders or any Affiliates of any Agent or Lender (or such other Persons as the
Administrative Agent may reasonably consent to) that constitute Secured Obligations as of such
date;
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(f) In connection with the consummation of a Permitted Acquisition, no Eligible Receivables or
Eligible Inventory of any Proposed Acquisition Target acquired in connection with such Permitted
Acquisition may be included in the Borrowing Base to the extent provided for in this Agreement
unless and until the Administrative Agent shall have received the results of the appraisals, field
audits, test verifications and other evaluations of such Collateral as it may reasonably request of
the type specified in clauses (b), (c) and (d) above, at the sole cost and expense of Group and the
Borrower.
Section 6.13 Material Licenses. Promptly after any Loan Party becoming aware of the same, the
Borrower shall give the Administrative Agent written notice of any cancellation, termination or
loss of any Material License.
Section 6.14 Communications and Amendments with respect to Canadian Facility. Group and the
Borrower shall cause the Canadian Borrower to provide the Administrative Agent with copies of (i)
all certificates (including, without limitation, borrowing base certificates), statements, notices
and other communications provided by it or any of its Affiliates under or with respect to the
Canadian Facility concurrently with the sending thereof to any other Person party to the Canadian
Facility and (ii) all amendments, waivers and consents to or with respect to the Canadian Facility
or any related documents promptly upon the Canadian Borrower’s receipt thereof.
Section 6.15 Other Information. Group and the Borrower shall provide the Administrative Agent or
any Lender with such other information respecting the business, properties, condition, financial or
otherwise, or operations of any Warnaco Entity as the Administrative Agent or any Lender, through
the Administrative Agent, may from time to time reasonably request.
ARTICLE VII
AFFIRMATIVE COVENANTS
As long as any of the Obligations or Commitments remain outstanding, unless the Requisite
Lenders otherwise consent in writing, each of Group and the Borrower agree with the Lenders and the
Facility Agents that:
Section 7.1 Preservation of Corporate Existence, Etc. Each of Group and the Borrower shall, and
shall cause each of its respective Subsidiaries to, preserve and maintain its legal existence,
rights (charter and statutory) and franchises, except as permitted by Section 8.3, Section 8.4 and
Section 8.7; provided, however, no Warnaco Entity shall be required to preserve any right, permit,
license, approval, privilege or franchise if the Board of Directors (or equivalent governing body)
of such Warnaco Entity shall determine that the preservation thereof is no longer desirable in the
conduct of the business of such Warnaco Entity and that the loss thereof is not disadvantageous in
any material respect to the Warnaco Entities (taken as whole) or the Secured Parties.
Section 7.2 Compliance with Laws, Etc. Each of Group and the Borrower shall, and shall cause each
of its respective Subsidiaries to, comply with all applicable Requirements of Law, Contractual
Obligations and Permits, except where the failure so to comply would not, in the aggregate, have a
Material Adverse Effect.
Section 7.3 Conduct of Business. Each of Group and the Borrower shall, and shall cause each of its
respective Subsidiaries to, (a) conduct its business in the ordinary course and (b) use its
reasonable efforts, in the ordinary course and consistent with past practice, to preserve its
business and the goodwill and business of the customers, advertisers, suppliers and others having
business relations with any Warnaco Entity, except in each case where the failure to comply with
the covenants in each of clauses (a) and (b) above would not, in the aggregate, have a Material
Adverse Effect.
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Section 7.4 Payment of Taxes, Etc. Each of Group and the Borrower shall, and shall cause each of
its respective Subsidiaries to, pay and discharge before the same shall become delinquent, all
lawful governmental claims, federal and material state, local and non-U.S. taxes, assessments,
charges and levies, except where contested in good faith, by proper proceedings and adequate
reserves therefor have been established on the books of the appropriate Warnaco Entity in
conformity with Agreement Accounting Principles, unless and until any Liens resulting from such
contested items attach to its property and become enforceable against its other creditors.
Section 7.5 Maintenance of Insurance. Each of Group and the Borrower shall (i) maintain, and cause
to be maintained for each of its respective Subsidiaries, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as is usually carried
by companies engaged in similar businesses and owning similar properties in the same general areas
in which such Warnaco Entity operates, and such other insurance as may be reasonably requested by
the Requisite Lenders, and, in any event, all insurance required by any Loan Document, and (ii)
cause all such insurance to name the Collateral Agent on behalf of the Secured Parties as
additional insured or loss payee, as appropriate, and to provide that no cancellation, material
addition in amount or material change in coverage shall be effective until after 30 days’ written
notice thereof to the Facility Agents.
Section 7.6 Access. Each of Group and the Borrower shall, and shall cause each of its respective
Subsidiaries to, from time to time permit each Facility Agent and the Lenders, or any agents or
representatives thereof, within two Business Days after written notification of the same to the
Borrower (except that during the continuance of an Event of Default, no such notice shall be
required) to (a) examine and make copies of and abstracts from the records and books of account of
any Warnaco Entity, (b) visit the properties of any Warnaco Entity, (c) discuss the affairs,
finances and accounts of any Warnaco Entity with any of their respective officers or directors, and
(d) communicate directly with any Warnaco Entity’s independent certified public accountants (or its
equivalent in foreign jurisdictions) (with Group having the right to have a representative present
at all such communications). Each of Group and the Borrower shall, and shall cause each of its
respective Subsidiaries to, authorize its independent certified public accountants (or its
equivalent in foreign jurisdictions) to disclose to any Facility Agent or any Lender any and all
financial statements and other information of any kind, as such Facility Agent or Lender reasonably
requests from any Warnaco Entity and which such accountants may have with respect to the business,
financial condition, results of operations or other affairs of such Warnaco Entity or any of its
Subsidiaries.
Section 7.7 Keeping of Books. Each of Group and the Borrower shall, and shall cause each of its
respective Subsidiaries to, keep proper books of record and account, in which full and correct
entries shall be made in conformity with Agreement Accounting Principles of all financial
transactions and the assets and business of such Warnaco Entity.
Section 7.8 Maintenance of Properties, Etc. Each of Group and the Borrower shall, and shall cause
each of its respective Subsidiaries to, maintain and preserve (a) all of its properties which are
necessary in the conduct of its business in good working order and condition, (b) all rights,
permits, licenses, approvals and privileges (including all Permits) which are used or useful or
necessary in the conduct of its business, and (c) all Intellectual Property with respect to the
business of the Warnaco Entities; except where the failure to so maintain and preserve would not in
the aggregate have a Material Adverse Effect.
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Section 7.9 Application of Proceeds. The Borrower (and, to the extent distributed by the Borrower,
each other Warnaco Entity) shall use the proceeds of the Loans as provided in Section 4.13.
Section 7.10 Environmental.
(a) Each of Group and Borrower shall comply, and shall cause each of its respective
Subsidiaries and all lessees and other Persons operating or occupying its properties to comply, in
all material respects, with all applicable Environmental Laws and Environmental Permits; obtain and
renew and cause each of its Subsidiaries to obtain and renew all material Environmental Permits
necessary for its operations and properties; and conduct, and cause each of its Subsidiaries to
conduct, any investigation, study, sampling and testing, and undertake any cleanup, removal,
remedial or other action necessary to remove and clean up all Contaminants from any of its
properties, in accordance with and to the extent required by all applicable Environmental Laws, to
the extent the failure to do any of the foregoing would have a Material Adverse Effect; provided,
however, that no Warnaco Entity shall be required to undertake any such cleanup, removal, remedial
or other action to the extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect to such
circumstances.
(b) At the request of the Administrative Agent after receipt of a notice of the type specified
in Section 6.11, Group will provide to the Administrative Agent and each Lender within 60 days
after such request, at the expense of Group and the Borrower, an environmental assessment report
for the applicable property described in such notice, prepared by an environmental consulting firm
reasonably acceptable to the Administrative Agent, indicating the presence of Contaminants that
could reasonably be expected to give rise to a material liability and the estimated cost of any
compliance, removal or remedial action in connection with any Contaminants that could reasonably be
expected to give rise to a material liability on such properties; without limiting the generality
of the foregoing, if the Administrative Agent determines at any time that a material risk exists
that any such report will not be provided within the time referred to above, the Administrative
Agent may retain an environmental consulting firm to prepare such report at the expense of Group
and the Borrower, and Group and the Borrower each hereby grants and agrees to cause any other
Warnaco Entity that owns any property described in such request to grant at the time of such
request to the Administrative Agent, such firm and any agents or representatives thereof an
irrevocable non-exclusive license, subject to the rights of tenants, to enter onto their respective
properties to undertake such an assessment, and to, or to cause its respective Subsidiaries to,
cooperate in all reasonable respects with the preparation of such assessment.
Section 7.11 Additional Personal Property Collateral and Guaranties. To the extent not delivered
to the applicable Facility Agents on or before the Closing Date (including in respect of
after-acquired property and Persons that become Subsidiaries of any Loan Party after the Closing
Date), each of Group and the Borrower agrees promptly to do, or cause each of its respective
Subsidiaries to do, each of the following, unless otherwise agreed by the Administrative Agent:
(a) deliver to the Facility Agents such duly-executed supplements and amendments to the
Guaranty, in each case in form and substance reasonably satisfactory to the Administrative Agent
and as the Administrative Agent deems necessary or advisable, in order to ensure that each Domestic
Subsidiary of Group (other than the Borrower) guaranties, as primary obligor and not as surety, the
full and punctual payment when due of the Obligations;
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(b) deliver to the Facility Agents such duly-executed joinder and amendments to the Pledge and
Security Agreement and, if applicable, other Collateral Documents, in each case in
form and substance reasonably satisfactory to the Administrative Agent and as the
Administrative Agent deems necessary or advisable, in order to effectively grant to the Collateral
Agent, for the benefit of the Secured Parties, a valid, perfected and enforceable security interest
having the priority described in Section 4.20 of this Agreement and the Collateral Documents in all
personal property interests and other assets (including the Stock and Stock Equivalents and other
debt Securities, but, in the case of Real Property, limited to Material Owned Real Property) of
each Loan Party; provided, however, that in no event shall any Warnaco Entity be required to pledge
in excess of 65% of the outstanding Voting Stock of any Foreign Subsidiary that is a direct
Subsidiary of a Loan Party, unless (x) the Borrower and the Administrative Agent otherwise agree;
(y) such Voting Stock has been granted as security in respect of other Indebtedness of a Warnaco
Entity having substantially similar tax consequences to the Loan Parties under Section 956 of the
Code or (z) such pledge or grant can be made without resulting in any material adverse tax
consequences for the Warnaco Entities, taken as a whole (including any Person that becomes a Loan
Party as a result of such pledge or grant);
(c) to take such other actions necessary or advisable to ensure the validity or continuing
validity of the guaranties required to be given pursuant to clause (a) above or to create, maintain
or perfect the security interest required to be granted pursuant to clause (b) above, including the
filing of UCC or equivalent financing statements in such jurisdictions as may be required by the
Collateral Documents or by law or as may be reasonably requested by the Administrative Agent; and
(d) if requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in form and substance,
and from counsel, reasonably satisfactory to the Administrative Agent.
Section 7.12 [Intentionally Omitted].
Section 7.13 Real Property.
(a) Each of Group and the Borrower shall, and shall cause each of its respective Subsidiaries
to, (i) provide the Administrative Agent with a copy of each notice of default under any Lease
with respect to any Material Leased Property received by any Warnaco Entity immediately upon
receipt thereof and deliver to the Administrative Agent a copy of each notice of default sent by
any Warnaco Entity under any Lease with respect to any Material Leased Property simultaneously with
its delivery of such notice under such Lease and (ii) notify the Administrative Agent at least 14
days prior to the date any Warnaco Entity takes possession of, or becomes liable under, any new
Lease with respect to any Material Leased Property, whichever is earlier.
(b) At least 15 Business Days prior to acquiring any Material Owned Real Property, each of
Group and the Borrower shall, and shall cause each of its respective Subsidiaries to, provide the
Administrative Agent written notice thereof and, upon written request of the Administrative Agent,
each of Group and the Borrower shall, and shall cause each of its respective Subsidiaries to,
provide Phase I environmental reports on such Material Owned Real Property showing no condition
that could give rise to material Environmental Liabilities and Costs.
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(c) To the extent not previously delivered to the Collateral Agent or the Administrative
Agent, upon written request of the Administrative Agent, each of Group and the Borrower shall, and
shall cause each other Loan Party to, execute and deliver to the Collateral Agent and the
Administrative Agent, promptly and in any event not later than 45 days after receipt of such
request (or such later date agreed to by the Administrative Agent in its sole discretion), a
Mortgage in favor of the Collateral Agent, for the benefit of the Secured Parties, on the Material
Owned Real Property of such Loan Party, together with (i) if requested by the Administrative Agent
and such
Material Owned Real Property is located in the United States, all Mortgage Supporting
Documents relating thereto or (ii) otherwise, documents similar to Mortgage Supporting Documents
deemed by the Administrative Agent to be appropriate in the applicable jurisdiction to obtain the
equivalent in such jurisdiction of a first-priority mortgage on such Material Owned Real Property;
provided, however, that in no event shall any Warnaco Entity that is not a Loan Party be required
to enter into a Mortgage in respect of Material Owned Real Property, unless (x) the Borrower and
the Administrative Agent otherwise agree, (y) such Mortgage has been provided as security in
respect of other Indebtedness of a Warnaco Entity having substantially similar tax consequences
under Section 956 of the Code or (z) such pledge or grant can be made without resulting in any
material adverse tax consequences for the Warnaco Entities, taken as a whole (including any Person
that becomes a Loan Party as a result of providing such Mortgage).
Section 7.14 Senior Notes. The Borrower shall, on or before the date 45 days prior to the
scheduled maturity of the Senior Notes, repurchase (in accordance with Section 8.6(b)) or refinance
(in accordance with Section 8.1(f)) all of the Senior Notes or cause the Legal Defeasance (as
defined in the Senior Note Indenture) of all of the Senior Notes (in accordance with Article 8 of
the Senior Note Indenture, including satisfaction of the conditions therefor under Section 8.04
thereof).
Section 7.15 Post Closing Matters. Each of Group and the Borrower shall, and shall cause each of
their respective Subsidiaries to, satisfy the requirements set forth on Schedule 7.15 on or before
the date set forth opposite such requirement or such later date as consented to by the
Administrative Agent.
ARTICLE VIII
NEGATIVE COVENANTS
As long as any of the Obligations or Commitments remain outstanding, without the written
consent of the Requisite Lenders, each of Group and the Borrower agrees with the Lenders and the
Facility Agents that:
Section 8.1 Indebtedness. Each of Group and the Borrower will not, and will not permit any of its
respective Subsidiaries to, directly or indirectly create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to any Indebtedness, except:
(a) the Secured Obligations (other than in respect of Hedging Contracts);
(b) the Senior Notes in an aggregate outstanding principal amount not to exceed $160,890,000;
(c) Indebtedness existing on the Closing Date and disclosed on Schedule 8.1 (Existing
Indebtedness);
(d) (i) Guaranty Obligations incurred by a Loan Party in respect of Indebtedness of another
Loan Party otherwise permitted by this Section 8.1, (ii) Guaranty Obligations incurred by any
Foreign Subsidiary in respect of the Indebtedness of a Foreign Subsidiary otherwise permitted by
this Section 8.1 and (iii) unsecured Guaranty Obligations incurred by a Loan Party in respect of
the Indebtedness of a Foreign Subsidiary permitted by clause (g) of this Section 8.1;
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(e) Capital Lease Obligations and purchase money Indebtedness incurred by a Warnaco Entity to
finance the acquisition or construction of fixed assets in an aggregate outstanding principal
amount not to exceed the Dollar Equivalent of $40,000,000 at any time;
(f) Renewals, extensions, refinancings and refundings of Indebtedness permitted by clauses
(b), (c) and (e) of this Section 8.1 and of Indebtedness under the Canadian Facility; provided,
however, that (A) any such renewal, extension, refinancing or refunding is in an aggregate
principal amount not greater than the principal amount of, and is on terms not materially less
favorable to the Warnaco Entity obligated thereunder (subject to market rates), including as to
weighted average maturity and final maturity, than, the Indebtedness being renewed, extended,
refinanced or refunded, (B) additionally with respect to any renewal, extension, refinancing or
refunding of the Senior Notes, such renewal, extension, refinancing or refunding (i) is unsecured
and not guaranteed by any Warnaco Entity that is not guaranteeing the Obligations, and (ii) has no
payments of principal scheduled to be due and payable prior to three years after the Revolving Loan
Maturity Date and (C) additionally with respect to any renewal, extension, refinancing or refunding
of Indebtedness under the Canadian Facility, such renewal, extension, refinancing or refunding is
not directly or indirectly guaranteed by, or secured by any assets of, any Loan Party;
(g) Indebtedness of the Foreign Subsidiaries of Group not otherwise permitted under this
Section 8.1; provided, however, that the Dollar Equivalent of the aggregate outstanding principal
amount of all such Indebtedness (other than under the Canadian Facility) shall not exceed
$100,000,000 at any time (with such dollar limitation not to be applicable with respect to the
incurrence of such Indebtedness if (x) at the time of incurrence of such Indebtedness the Leverage
Ratio for Group is less than 3.5 to 1.0 for the most recent four Fiscal Quarter period for which
Financial Statements have been delivered pursuant to Section 6.1 on a pro forma basis after giving
effect to such incurrence and the application of the proceeds thereof and (y) prior to the
incurrence of such Indebtedness, Group has delivered to the Administrative Agent a certificate
executed by a Responsible Officer of Group certifying the satisfaction of the requirements under
this parenthetical with respect to such incurrence and setting forth in reasonable detail the
calculation of such Leverage Ratio);
(h) a Sale and Leaseback Transaction permitted pursuant to Section 8.16, to the extent such
transaction would constitute Indebtedness;
(i) Indebtedness arising from intercompany loans from any Warnaco Entity to any other Warnaco
Entity, provided, that such Investment is permitted to be made by such Warnaco Entity under Section
8.3(a);
(j) Indebtedness incurred for the sole purpose of financing the payment of insurance premiums
in the ordinary course of business, in an aggregate amount not to exceed $15,000,000 at any one
time outstanding;
(k) Indebtedness arising under any performance or surety bond entered into in the ordinary
course of business;
(l) Obligations under Hedging Contracts permitted under Section 8.17;
(m) unsecured Earnout Obligations and Subordinated Indebtedness; and
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(n) other Indebtedness the aggregate Dollar Equivalent of the principal amount of which shall
not exceed $50,000,000 at any time (of which not greater than the aggregate Dollar Equivalent of
$20,000,000 may be secured by Liens at any time).
Section 8.2 Liens, Etc. Each of Group and the Borrower will not, and will not permit any of its
respective Subsidiaries to, create or suffer to exist, any Lien upon or with respect to any of its
properties or assets, whether now owned or hereafter acquired, or assign any right to receive
income, except for:
(a) Liens created pursuant to the Loan Documents;
(b) Liens granted by a Foreign Subsidiary of Group securing the Indebtedness permitted under
Section 8.1(g), which Liens for the avoidance of doubt shall not secure any Indebtedness under this
Agreement;
(c) Liens existing on the Closing Date and disclosed on Schedule 8.2 (Existing Liens);
(d) Customary Permitted Liens;
(e) purchase money Liens granted by a Warnaco Entity (including the interest of a lessor under
a Capital Lease and purchase money Liens to which any property is subject at the time of such
Warnaco Entity’s acquisition thereof or promptly thereafter) securing Indebtedness permitted under
Section 8.1(e) and limited in each case to the property purchased with the proceeds of such
purchase money Indebtedness or subject to such Capital Lease;
(f) any Lien securing the renewal, extension, refinancing or refunding of any Indebtedness
secured by any Lien permitted by clause (c) or (e) of this Section 8.2 as long as such Lien does
not cover any assets not subject to the Lien securing the Indebtedness being renewed, extended,
refinanced or refunded;
(g) Liens in favor of lessors securing operating leases or, to the extent such transactions
create a Lien thereunder, sale and leaseback transactions, in each case to the extent such
operating leases or sale and leaseback transactions are permitted hereunder;
(h) Liens not otherwise permitted under this Section 8.2, other than in favor of the PBGC,
arising out of judgments or awards in respect of which the applicable Warnaco Entity shall in good
faith be prosecuting an appeal or proceedings for review and in respect of which it shall have
secured a subsisting stay of execution pending such appeal or proceedings for review; provided it
shall have set aside on its books adequate reserves, in accordance with Agreement Accounting
Principles, with respect to such judgment or award and; provided, further, that any such judgment
shall not give rise to an Event of Default;
(i) Liens on any bills of lading, airway bills, receipts and other applicable documents of
title (and inventory and goods covered thereby) delivered with respect to letters of credit issued
for the benefit of suppliers of inventory pursuant to facilities provided to a Foreign Subsidiary
and in respect of which all inventory and goods are located outside the United States;
(j) Liens securing Indebtedness incurred under Section 8.1(j); provided that such Liens shall
only encumber Insurance Assets that relate directly to the Indebtedness such assets secure and that
have an aggregate value not in excess of $15,000,000; and
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(k) other Liens (not covering any Inventory, Accounts or other Receivables of any Loan Party
or proceeds of any of the foregoing) not otherwise permitted under this Section 8.2, securing
obligations in an amount not to exceed $20,000,000 in an aggregate amount outstanding at any time.
Section 8.3 Investments. Each of Group and the Borrower will not, and will not permit any of its
respective Subsidiaries to, directly or indirectly make or maintain any Investment except:
(a) (i) Investments by any Warnaco Entity in any Warnaco Entity in an amount not exceeding the
amount outstanding on the Closing Date and as set forth on Schedule 8.3, and (ii) additional
Investments by (A) any Warnaco Entity in a Loan Party, (B) any Warnaco Entity that is not a Loan
Party in any other Warnaco Entity, and (C) any Loan Party in a Warnaco Entity that is not a Loan
Party (1) to the extent required by applicable law to fulfill statutory capital requirements in a
maximum aggregate amount up to $10,000,000, and (2) solely for the purposes of funding (x) the
operations of such Foreign Subsidiary (including Standby Letters of Credit Issued for the benefit
of such Foreign Subsidiaries), not to exceed in the aggregate $25,000,000 at any time outstanding
under this subclause (a)(ii)(C)(2)(x), and (y) the repayment of Indebtedness owed by such Warnaco
Entity to any Loan Party and (3) to the extent necessary for such entity to pay taxes that are due
and payable; provided, that in each case (other than investments made as capital contributions
pursuant to subclause (ii)(C)(1)) such Investment shall be evidenced by a promissory note in form
and substance satisfactory to the Administrative Agent, the Collateral Agent shall have a perfected
security interest in such promissory note and no Event of Default shall have occurred and be
continuing at the time such Investment is made or would result therefrom; provided, further, that
in the case of investments made as capital contributions pursuant to subclause (ii)(C)(1) such
Investment shall be permitted only to the extent that substantially concurrently with such
Investment the Borrower shall have complied with the requirements of Section 7.11(b) (Additional
Personal Property Collateral and Guaranties);
(b) Investments in (i) cash and Cash Equivalents; provided that such cash and Cash Equivalents
held by a Loan Party are held in a Blocked Account, a Restricted Account, a Control Account or
otherwise in compliance with Section 4.7 of the Pledge and Security Agreement, and (ii) Investment
Grade Debt Securities; provided that Investment Grade Debt Securities held by a Loan Party are held
in a Securities Account or otherwise in compliance with Section 4.4 of the Pledge and Security
Agreement;
(c) Investments existing on the Closing Date and described on Schedule 8.3 (Existing
Investments);
(d) Investments in payment intangibles, chattel paper (each as defined in the UCC) and
Accounts, notes receivable (including but not limited to those notes receivable held by the
Borrower or its Subsidiaries pursuant to clause (b) of Section 8.4) and similar items arising or
acquired in the ordinary course of business consistent with the past practice of the Borrower and
its Subsidiaries;
(e) Investments consisting of Stock or Stock Equivalents, obligations, securities or other
property received in a bankruptcy proceeding or in settlement of claims arising in the ordinary
course of business;
(f) (i) advances or loans to directors or employees of the Warnaco Entities that do not exceed
$2,000,000 in the aggregate at any one time outstanding (other than any loans or advances to any
director or executive officer (or equivalent thereof) that would be in violation of Section 402 of
the United States Sarbanes-Oxley Act of 2002), and (ii) advances for employee travel,
relocation and other similar and customary expenses incurred in the ordinary course of business
that do not exceed $3,000,000 in the aggregate at any one time outstanding;
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(g) Investments consisting of promissory notes received in connection with an Asset Sale
permitted pursuant to Section 8.4(b); provided that such promissory notes are pledged to the
Collateral Agent within three (3) Business Days’ of the receipt thereof by any Loan Party as
additional Collateral pursuant to the Pledge and Security Agreement;
(h) Guaranty Obligations permitted by Section 8.1;
(i) Investments by the Borrower or any Subsidiary in Permitted Acquisitions;
(j) [Intentionally Omitted];
(k) other Investments in an aggregate amount invested not to exceed the Dollar Equivalent of
$5,000,000 at any time; and
(l) other Investments so long as (i) no Default or Event of Default shall have occurred and be
continuing at the time such Investment is made or after giving effect thereto, (ii) the Fixed
Charge Coverage Ratio for Group shall be at least 1.1 to 1.0 for the most recent four Fiscal
Quarter period for which Financial Statements have been delivered pursuant to Section 6.1 on a pro
forma basis after giving effect to the making of such Investment (as if such Investment had been
made on the first day of such period), (iii) after giving pro forma effect to such Investment
Available Credit is at least 25% of the Aggregate Borrowing Limit at such time and (iv) prior to
the making of such Investment, Group has delivered to the Administrative Agent a certificate
executed by a Responsible Officer of Group certifying the satisfaction of the requirements under
this clause (l) with respect to such Investment and setting forth in reasonable detail the
calculation of such Fixed Charge Coverage Ratio and Available Credit.
Section 8.4 Sale of Assets. Each of Group and the Borrower will not, and will not permit any of
its respective Subsidiaries to, sell, convey, transfer, lease or otherwise dispose of, any of its
assets or any interest therein (including the sale or factoring at maturity or collection of any
Accounts) to any Person, or permit or suffer any other Person to acquire any interest in any of its
assets or, in the case of any Subsidiary of Group, issue or sell any shares of such Subsidiary’s
Stock or Stock Equivalent (any such disposition being an “Asset Sale”), except:
(a) the sale or disposition of inventory in the ordinary course of business;
(b) the sale of any asset or assets (including, without limitation, a Subsidiary’s Stock) by a
Warnaco Entity as long as (i) the purchase price paid to such Warnaco Entity for such asset shall
be no less than the Fair Market Value of such asset at the time of such sale, (ii) no less than 75%
of the purchase price for such asset shall be paid in cash and the remaining amount paid in notes
receivable (provided that in the case of an Asset Sale consummated when no Loan or Loans or
unreimbursed amounts in respect of drawn Letters of Credit are outstanding (Loan, Loans and Letters
of Credit being used in this proviso as defined in each of this Agreement and the Canadian
Facility), 50% of the purchase price for such asset may be paid in cash and the remaining amount
paid in notes receivable) (which notes receivable shall be in form and substance reasonably
satisfactory to the Administrative Agent), (iii) neither the seller of such assets nor any of its
Affiliates shall have any subsequent payment obligations in respect of such sale, other than
customary and
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standard indemnity obligations and as set forth in subclause (ii) above, (iv) no
Default or Event of Default has occurred
and is continuing at the time of such sale or would result from such sale, and (v) if the net
cash proceeds received for all assets sold by the Loan Parties during any calendar year pursuant to
this clause (b) shall exceed $10,000,000 in the aggregate, then (1) the Borrower shall prepay the
Loans (first the Swing Loans until paid in full and then the Revolving Loans) promptly upon receipt
of such net cash proceeds in the amount of all net cash proceeds received from time to time
(including in respect of any note receivable) with respect to the sale that resulted in such excess
occurring and all subsequent sales of assets by any Loan Party pursuant to this clause (b) during
such calendar year and (2) with respect to the sale that resulted in such excess occurring and each
subsequent sale of assets by any Loan Party pursuant to this clause (b) during such calendar year
which results in net cash proceeds in excess of $500,000, the Borrower shall deliver to the
Administrative Agent, no later than the date of such sale, a Borrowing Base Certificate as of the
Business Day immediately preceding the date of such sale executed by a Responsible Officer of Group
giving pro forma effect to such sale, which Borrowing Base Certificate shall show that the
aggregate principal amount of Revolving Credit Outstandings does not exceed the Maximum Credit at
such time(for purposes of this clause (v), net cash proceeds of an asset sale means proceeds of
such asset sale received from time to time (including a payment on a note receivable) in cash or
Cash Equivalents net of (x) the reasonable cash costs of sale, (y) taxes paid or payable as a
result thereof and (z) any amount required to be paid or prepaid on Indebtedness (other than the
Obligations) secured by a perfected Lien on the assets subject to such asset sale);
(c) transfers of assets from (i) any Loan Party to any other Loan Party, (ii) any Loan Party
to any Warnaco Entity that is not a Loan Party, provided that the aggregate Fair Market Value of
assets sold, leased, transferred or otherwise disposed of pursuant to this subclause (ii) (other
than pursuant to the next proviso of this subclause (ii)) shall not exceed $20,000,000 in the
aggregate plus the Fair Market Value of any equipment and inventory owned on the Closing Date by a
Loan Party in connection with its domestic manufacturing operations that are subsequently
transferred to a Foreign Subsidiary, and provided further that the Loan Parties may transfer the
Calvin Klein Underwear trademark and/or rights to use such trademark to one or more Warnaco
Entities that are not Loan Parties so long as (A) each such transfer shall be on arm’s-length terms
and the price paid to the transferring Loan Parties shall be no less than the Fair Market Value of
such trademark at the time of such transfer, (B) each such transfer is for cash, Cash Equivalents
and/or a note (such note to be on arm’s-length terms at a market interest rate and otherwise
reasonably acceptable to the Administrative Agent and pledged to the Collateral Agent for the
benefit of the Secured Parties), (C) no Default or Event of Default has occurred and is continuing
at the time of such transfer or would result from such transfer and (D) the transferee of such
trademark shall have entered into an agreement on terms reasonably satisfactory to the
Administrative Agent pursuant to which such transferee agrees that the Collateral Agent may dispose
of Inventory utilizing such trademark without restriction or royalty payment to the transferee, and
(iii) any Warnaco Entity that is not a Loan Party to any other Warnaco Entity;
(d) the licensing or sublicensing of trademarks and trade names by any Warnaco Entity;
provided that (i) if the licensing or sublicensing is by a Loan Party, if the applicable trademark
or trade name has generated sales in excess of $20,000,000 in the prior fiscal year, such license
or sublicense (x) shall not have an initial term in excess of 7 years and (y) shall not have
aggregate up-front payments and minimum guaranteed royalties in excess of $7,500,000 or, together
with the aggregate up-front payments and minimum guaranteed royalties for all other such licenses
and sublicenses, in an aggregate amount in excess of $25,000,000 and (ii) any such licensing or
sublicensing to a Person other than a Loan Party shall take place on an arm’s-length basis;
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(e) the rental by the Warnaco Entities, as lessors or sub-lessors, in the ordinary course of
their respective businesses, on an arm’s-length basis, of real property and personal property, in
each case under leases (other than Capital Leases);
(f) the sale or disposition of machinery and equipment no longer used or useful in the
business of the Warnaco Entities;
(g) any sale of fixed assets not in connection with a Sale and Leaseback Transaction that were
purchased in connection with a proposed lease financing transaction within 45 days of such Asset
Sale, which assets are subsequently leased back by the Borrower or one of its Subsidiaries;
(h) any Asset Sale permitted by Section 8.7;
(i) any Asset Sale in connection with a Sale and Leaseback Transaction permitted pursuant to
Section 8.16(b); and
(j) the sale of any asset listed on Schedule 8.4.
Section 8.5 Restricted Payments. Each of Group and the Borrower will not, and will not permit any
of its respective Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Payment except for the following:
(a) Restricted Payments by any Subsidiary of the Borrower to the Borrower or any Subsidiary of
the Borrower that owns Stock of such Subsidiary;
(b) dividends and distributions declared and paid on the common Stock of Group and payable
only in common Stock of Group;
(c) cash dividends on the Stock of the Borrower to Group paid and declared in any Fiscal Year
solely for the purpose of funding the following:
(i) ordinary operating expenses of Group to cover, inter alia, fees and expenses of
directors, directors’ and officers’ insurance, and costs associated with regulatory
compliance, not in excess of $5,500,000 in the aggregate in any Fiscal Year; and
(ii) payments by Group in respect of foreign, federal, state or local taxes owing by
Group in respect of the Warnaco Entities, but not greater than the amount that would be
payable by the Borrower, on a consolidated basis, if the Borrower were the taxpayer; and
(d) other dividends and distributions on the Stock of Group and the Borrower and other
redemptions, repurchases or other acquisitions of the Stock of Group and the Borrower, in each
instance under this clause (d), so long as (i) the Fixed Charge Coverage Ratio for Group shall be
at least 1.1 to 1.0 for the most recent four Fiscal Quarter period for which Financial Statements
have been delivered pursuant to Section 6.1 on a pro forma basis after giving effect to the making
of such Restricted Payment (as if such Restricted Payment had been made on the first day of such
period), (ii) at the time such Restricted Payment is made and after giving effect thereto Available
Credit is at least 25% of the Aggregate Borrowing Limit at such time and (iii) prior to the making
of such Restricted Payment, Group has delivered to the Administrative Agent a certificate executed
by a Responsible Officer of Group certifying the satisfaction of the requirements under this clause
(d) with respect to
such Restricted Payment and setting forth in reasonable detail the calculation of such Fixed
Charge Coverage Ratio and Available Credit;
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provided, however, that the Restricted Payments described in subclause (c)(i) and clause (d) shall
not be permitted if either (A) an Event of Default or Default shall have occurred and be continuing
at the date of declaration or payment thereof or would result therefrom or (B) such Restricted
Payment is prohibited under the terms of any Indebtedness (other than the Obligations) of any
Warnaco Entity (as in effect on the Closing Date).
Section 8.6 Prepayment and Cancellation of Indebtedness.
(a) Neither Group nor the Borrower shall, nor shall they permit any of their respective
Subsidiaries to, cancel any claim or Indebtedness owed to any of them except in the ordinary course
of business consistent with past practice; provided that this Section 8.6(a) shall not apply to
intercompany Indebtedness disclosed on Schedule 8.1 (Existing Indebtedness).
(b) Neither Group nor the Borrower shall, nor shall they permit any of their respective
Subsidiaries to, prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled
maturity thereof in any manner, or make any payment in violation of any subordination terms of, any
Indebtedness; provided, however, that any Warnaco Entity may: (i) prepay the Obligations in
accordance with the terms of this Agreement and prepay the Canadian Secured Obligations in
accordance with the terms of the Canadian Facility, (ii) make regularly scheduled or otherwise
required repayments or redemptions of Indebtedness, (iii) make permitted repayments of any
Indebtedness permitted by Section 8.1 hereof solely to the extent that such Indebtedness is
“revolving”, (iv) prepay any intercompany Indebtedness payable to the Borrower or any of its
Subsidiaries by the Borrower or any of its Subsidiaries, (v) repurchase the Senior Notes in the
open market using then available Cash On Hand in an aggregate amount not to exceed $10,000,000,
(vi) renew, extend, refinance and refund Indebtedness, as long as such renewal, extension,
refinancing or refunding is permitted under Section 8.1(f), and defease all of the Senior Notes on
the terms set forth in Section 7.14 and (vii) prepay, redeem, purchase, defease or otherwise
satisfy prior to the scheduled maturity thereof any Indebtedness of any Warnaco Entity so long as
(A) no Default or Event of Default shall have occurred and be continuing at the time of any such
prepayment, redemption, purchase, defeasance or satisfaction or after giving effect thereto, (B)
the Fixed Charge Coverage Ratio for Group shall be at least 1.1 to 1.0 for the most recent four
Fiscal Quarter period for which Financial Statements have been delivered pursuant to Section 6.1 on
a pro forma basis after giving effect to such prepayment, redemption, purchase, defeasance or
satisfaction (as if such prepayment, redemption, purchase, defeasance or satisfaction had been
made on the first day of such period), (C) at the time of such prepayment, redemption, purchase,
defeasance or satisfaction and after giving effect thereto Available Credit is at least 25% of the
Aggregate Borrowing Limit at such time and (D) prior to such prepayment, redemption, purchase,
defeasance or satisfaction, Group has delivered to the Administrative Agent a certificate executed
by a Responsible Officer of Group certifying the satisfaction of the requirements under this clause
(vii) with respect to such prepayment, redemption, purchase, defeasance or satisfaction and setting
forth in reasonable detail the calculation of such Fixed Charge Coverage Ratio and Available
Credit.
Section 8.7 Restriction on Fundamental Changes. Each of Group and the Borrower will not, and will
not permit any of its respective Subsidiaries to, merge with any Person, consolidate with any
Person, dissolve, acquire all or substantially all of the Stock or Stock Equivalents of any Person,
acquire all or substantially all of the assets constituting a business, division, branch or other
unit of operation or trademark of any Person, enter into any joint venture or partnership with any
Person, or acquire or create any Subsidiary, except that:
(a) any Warnaco Entity may merge into or consolidate with any Loan Party; provided, however,
that, in the case of any such merger or consolidation, the Person formed by such merger or
consolidation shall be a Loan Party and, if the Borrower is a party to any such merger or
consolidation, the Borrower is the surviving entity of such merger or consolidation;
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(b) any Warnaco Entity that is not a Loan Party may merge into or consolidate with any other
Warnaco Entity that is not a Loan Party; provided, however, that, in the case of any such merger or
consolidation, the Person formed by such merger or consolidation shall be a Wholly Owned Subsidiary
of Group;
(c) any Warnaco Entity may form a new Wholly Owned Subsidiary; provided, however, that if a
Domestic Subsidiary is formed, such Domestic Subsidiary shall become a Loan Party;
(d) any Warnaco Entity which is inactive or dormant (meaning that on the date of determination
and on a consolidated basis with its Subsidiaries, it has assets with an aggregate Fair Market
Value of less than $100,000) may be dissolved, provided that if such Warnaco Entity is a Loan
Party, all assets distributed upon dissolution shall be distributed to another Loan Party; and
(e) any Warnaco Entity may consummate any Investment permitted under Section 8.3, including
any Permitted Acquisition;
provided, however, that in each case under this Section 8.7 both before and immediately after
giving effect thereto, no Default or Event of Default shall have occurred and be continuing or
would result therefrom.
Section 8.8 Change in Nature of Business.
(a) Each of Group and the Borrower will not, and will not permit any of its respective
Subsidiaries to, engage as its primary business in any material line of business substantially
different from those lines of business conducted by Group and its Subsidiaries on the date hereof
or any business reasonably related or ancillary thereto.
(b) Group shall not engage in any business or activity other than (i) holding shares in the
Stock of the Borrower, (ii) paying taxes, (iii) preparing reports to Governmental Authorities,
national securities exchanges and its shareholders and debt holders, (iv) maintaining its legal
existence, holding directors and shareholders meetings, preparing corporate records and other
corporate activities required to maintain its separate corporate structure, including the ability
to incur fees, costs and expenses relating to such maintenance, (v) issuing Stock, (vi) performing
its obligations and activities incidental thereto under the Loan Documents and under the Loan
Documents (as defined in the Canadian Facility), (vii) making Restricted Payments and Investments
to the extent permitted by this Agreement, (viii) entering into unsecured guaranties of
Indebtedness and other obligations of its Subsidiaries to the extent permitted by Section 8.1(d)
and (ix) activities incidental to the foregoing.
Section 8.9 Transactions with Affiliates. Each of Group and the Borrower will not, and will not
permit any of its respective Subsidiaries to, except as otherwise expressly permitted herein, do
any of the following: (a) make any Investment in an Affiliate of Group which is not a Warnaco
Entity; (b) transfer, sell, lease, assign or otherwise dispose of any asset to any Affiliate of
Group which is not a Warnaco Entity; (c) merge into or consolidate with or purchase or acquire
assets from any Affiliate of Group which is not a Warnaco Entity; (d) repay any Indebtedness to any
Affiliate
of Group which is not a Warnaco Entity; or (e) enter into any other transaction directly or
indirectly with or for the benefit of any Affiliate of Group which is not a Warnaco Entity
(including guaranties and assumptions of obligations of any such Affiliate), except for (i)
transactions in the ordinary course of business on a basis no less favorable to such Warnaco Entity
as would be obtained in a comparable arm’s length transaction with a Person not an Affiliate and
(ii) salaries and other employee compensation to officers or directors of any Warnaco Entity.
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Section 8.10 Restrictions on Subsidiary Distributions; No New Negative Pledge. Other than (x)
pursuant to the Loan Documents, the Senior Note Documents, the Canadian Facility, the documents
governing any Indebtedness permitted under Section 8.1(g), any agreements governing any purchase
money Indebtedness or Capital Lease Obligations permitted by Section 8.1(e) or any renewal,
extension, refinancing or refunding of any such Indebtedness or Capital Lease Obligations permitted
under Section 8.1(f) (in which case, any prohibition or limitation shall only be effective against
the assets financed thereby) or any agreement governing any renewal, extension, refinancing or
refunding of the Senior Notes or the Canadian Facility permitted under Section 8.1(f) (in which
case, any prohibition or limitation shall not be materially more restrictive than the corresponding
prohibition or limitation in the Senior Note Indenture or the Canadian Facility, as applicable, as
in effect on the date hereof), (y) any restrictions consisting of customary non-assignment
provisions that are entered into in the ordinary course of business consistent with prior practice
to the extent that such provisions restrict the transfer or assignment of such contract or (z) with
respect to any asset that is subject to a contract of sale permitted by Section 8.4 or which
contract acknowledges that a waiver under Section 8.4 is necessary, each of Group and the Borrower
will not, and will not permit any of its respective Subsidiaries to:
(a) agree to enter into or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of such Subsidiary to pay dividends or make any other
distribution or transfer of funds or assets or make loans or advances to or other Investments in,
or pay any Indebtedness owed to, any other Warnaco Entity, or
(b) enter into or suffer to exist or become effective any agreement which prohibits or limits
the ability of any Warnaco Entity to create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, to secure the Secured
Obligations, including any agreement which requires other Indebtedness or Contractual Obligation to
be equally and ratably secured with the Secured Obligations.
Section 8.11 Modification of Constituent Documents. Each of Group and the Borrower will not, and
will not permit any of its respective Subsidiaries to, change its capital structure (including in
the terms of its outstanding Stock) or otherwise amend its Constituent Documents, except for
changes and amendments which do not materially and adversely affect the rights and privileges of
any Warnaco Entity, or the interests of the Facility Agents or the Secured Parties under the Loan
Documents or in the Collateral.
Section 8.12 Modification of Certain Documents and Certain Debt. Neither Group nor the Borrower
shall, nor shall they permit any of their respective Subsidiaries to, alter, rescind, terminate,
amend, supplement, waive or otherwise modify any provision of any document governing Indebtedness
permitted pursuant to Section 8.1(b) or Section 8.1(g), except for modifications to the terms of
such Indebtedness (or any indenture or agreement in connection therewith) permitted under Section
8.13 (Modification of Debt Agreements) and modifications that do not materially adversely affect
the interests of the Secured Parties under the Loan Documents or in the Collateral. Neither Group
nor the Borrower shall permit the Canadian Borrower to amend, supplement, waive or otherwise modify
(or to consent to any amendment, supplement, waiver or
modification of) the Canadian Facility so as to (i) increase the aggregate Commitments under and as
defined in the Canadian Facility to an amount greater than $50,000,000 or (ii) increase any
borrowing base advance rate percentage thereunder above the maximum borrowing base advance rate
percentage therefor as in effect on the date of execution of the Canadian Facility.
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Section 8.13 Modification of Debt Agreements. Neither Group nor the Borrower shall, nor shall they
permit any of their respective Subsidiaries to, change or amend the terms of the Senior Note
Documents (or any indenture, agreement or other material document entered into in connection
therewith) if the effect of such amendment is to (a) increase the interest rate payable in cash on
such Indebtedness, (b) change the dates upon which payments of principal or interest are due on
such Indebtedness other than to extend such dates, (c) change any default or event of default other
than to delete or make less restrictive any default provision therein, or add any covenant with
respect to such Indebtedness unless a corresponding covenant is added hereunder, (d) change the
subordination provisions, if any, of such Indebtedness, (e) change the redemption or prepayment
provisions of such Indebtedness other than to extend the dates therefor or to reduce the premiums
payable in connection therewith or (f) change or amend any term (including any covenant) if such
change or amendment would increase the obligations of the obligor or confer additional rights to
the holder of such Indebtedness or Security in a manner materially adverse to any Warnaco Entity,
the Facility Agents or any Lender.
Section 8.14 Accounting Changes; Fiscal Year. Each of Group and the Borrower will not, and will
not permit any of its respective Subsidiaries to, change its (a) accounting treatment and reporting
practices, except as required by Agreement Accounting Principles, the Financial Accounting
Standards Board or any Requirement of Law and disclosed to the Lenders and the Administrative Agent
or (b) Fiscal Year.
Section 8.15 Margin Regulations. Neither Group nor the Borrower shall, nor shall they permit any
of their respective Subsidiaries to, use all or any portion of the proceeds of any credit extended
hereunder to purchase or carry margin stock (within the meaning of Regulation U of the Federal
Reserve Board) in contravention of Regulation U of the Federal Reserve Board.
Section 8.16 Sale and Leasebacks Transactions.
(a) [Intentionally Omitted].
(b) Each of Group and the Borrower will not, and will not permit any of its respective
Subsidiaries to, enter into any Sale and Leaseback Transaction if, after giving effect to such Sale
and Leaseback Transaction, the Dollar Equivalent of the aggregate Fair Market Value of all
properties covered by Sale and Leaseback Transactions would exceed $10,000,000.
Section 8.17 No Speculative Transactions. Each of Group and the Borrower will not, and will not
permit any of its respective Subsidiaries to, engage in any speculative transaction or in any
transaction involving Hedging Contracts except for the sole purpose of hedging in the normal course
of business and consistent with industry practices.
Section 8.18 Compliance with ERISA. Each of Group and the Borrower will not, and will not permit
any of its respective Subsidiaries to, or cause or permit any ERISA Affiliate to, cause or permit
to occur (a) an event which could result in the imposition of a Lien under Section 412 of the IRC
or Section 302 or 4068 of ERISA or (b) an ERISA Event that would have a Material Adverse Effect.
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Section 8.19 Environmental. Each of Group and the Borrower will not, and will not permit any of
its respective Subsidiaries to, allow a Release of any Contaminant in violation of any
Environmental Law; provided, however, that no Warnaco Entity shall be deemed in violation of this
Section 8.19 if, as the consequence of all such Releases, the Warnaco Entities would not incur
Environmental Liabilities and Costs in excess of $5,000,000 in the aggregate.
ARTICLE IX
EVENTS OF DEFAULT
Section 9.1 Events of Default. Each of the following events shall be an Event of Default:
(a) The Borrower shall (i) fail to pay any principal of any Loan or any Reimbursement
Obligation under any Loan Document when the same becomes due and payable or (ii) fail to pay
interest or fees under any Loan Document when due and such payment default shall continue for three
(3) Business Days; or
(b) any representation or warranty made or deemed made by any Loan Party in any Loan Document
or by any Loan Party (or any of its officers) in connection with any Loan Document shall prove to
have been incorrect in any material respect when made or deemed made; or
(c) any Loan Party shall fail to perform or observe (i) any term, covenant or agreement
contained in Article V, Section 6.1, Section 6.2, Section 6.12, Section 7.1, Section 7.6, Section
7.9, Section 7.11, Section 7.14, or Article VIII, or Section 4.7 of the Pledge and Security
Agreement, or (ii) any other term, covenant or agreement contained in this Agreement or in any
other Loan Document if such failure under this clause (ii) shall remain unremedied for 30 days
after the earlier of the date on which (A) a Responsible Officer of Group or the Borrower becomes
aware of such failure and (B) written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender; or
(d) (i) any Warnaco Entity shall fail to make any payment on any Indebtedness (other than the
Obligations) of any Warnaco Entity (or any Guaranty Obligation in respect of Indebtedness of any
other Person) having a principal amount of $25,000,000 or more, when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise); or
(ii) any other event shall occur or condition shall exist under any agreement or instrument
relating to any such Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness (or, in the case of the Canadian
Facility under this clause (ii), if the effect of such event or condition is (x) to accelerate the
maturity of the Indebtedness owing thereunder or (y) the declaration of an “Event of Default” under
and as defined therein); or (iii) any such Indebtedness shall become or be declared to be due and
payable, or required to be prepaid or repurchased (other than by a regularly scheduled required
prepayment or, in connection with the Senior Notes, a provision requiring a prepayment or
repurchase in the event of the receipt by a Warnaco Entity of proceeds of a debt issuance, equity
issuance or an Asset Sale), prior to the stated maturity thereof; or
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(e) (i) any Warnaco Entity shall generally not pay its debts as such debts become due, shall
admit in writing its inability to pay its debts generally or shall make a general assignment for
the benefit of creditors, (ii) any proceeding shall be instituted by or against any Warnaco Entity
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it or its debts,
under any Requirement of
Law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a custodian, receiver, trustee or other similar
official for it or for any substantial part of its property; provided, however, that, in the case
of any such proceedings instituted against a Warnaco Entity (but not instituted by a Warnaco
Entity), either such proceedings shall remain undismissed or unstayed for a period of 30 days or
more or any action sought in such proceedings shall occur or (iii) any Warnaco Entity shall take
any corporate action to authorize any action set forth in clauses (i) and (ii) above; or
(f) any provision of any Loan Document after delivery thereof shall for any reason fail or
cease to be valid and binding on, or enforceable against, any Loan Party thereto, or any Loan Party
shall so state in writing; or
(g) any Collateral Document shall for any reason fail or cease to create a valid and
enforceable Lien on any Collateral purported to be covered thereby or, except as permitted by the
Loan Documents, such Lien shall fail or cease to be a perfected Lien having the priority described
in Section 4.20 of this Agreement and the Collateral Documents, or any Loan Party shall so state in
writing; or
(h) one or more judgments or orders (or other similar process) involving, in any single case
or in the aggregate, an amount in excess of $20,000,000 in the case of a money judgment, to the
extent not covered by insurance, shall be rendered against one or more Warnaco Entity and shall
remain unpaid and either (i) enforcement proceedings shall have been commenced by any creditor upon
such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(i) an ERISA Event shall occur and the amount of all liabilities and deficiencies resulting
therefrom, whether or not assessed, exceeds $20,000,000 in the aggregate; or
(j) there shall occur a Change of Control; or
(k) a Warnaco Entity shall have entered into one or more consent or settlement decrees or
agreements or similar arrangements with a Governmental Authority or one or more judgments, orders,
decrees or similar actions shall have been entered against a Warnaco Entity based on or arising
from the violation of or pursuant to any Environmental Law, or the generation, storage,
transportation, treatment, disposal or Release of any Contaminant and, in connection with all the
foregoing, the Warnaco Entities are likely to incur Environmental Liabilities and Costs in excess
of $15,000,000 in the aggregate; or
(l) the declaration of an “Event of Default” under and as defined in the Canadian Facility.
Section 9.2 Remedies. During the continuance of any Event of Default,
(i) the Administrative Agent may, and at the request of the Requisite Lenders, shall,
by notice to the Borrower, declare that all or any portion of the Commitments be terminated,
whereupon the obligation of each Lender to make any Revolving Loan and each Issuer to Issue
any Letter of Credit shall immediately terminate; and
(ii) the Administrative Agent shall at the request, or may with the consent, of the
Requisite Lenders, by notice to the Borrower, declare the Revolving Loans, all
interest thereon and all other amounts and Obligations payable under this Agreement to
be forthwith due and payable, whereupon all such Loans, all such interest and all such
amounts and Obligations shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly waived by
the Borrower;
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provided, however, that upon the occurrence of any of the Events of Default specified in Section
9.1(e) with respect to any Loan Party, (x) the Commitments of each Lender to make Loans and the
commitments of each Issuer to Issue Letters of Credit shall each automatically be terminated and
(y) the Loans, all such interest and all such amounts and Obligations shall automatically become
and be due and payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower; and provided, further, that in addition to the
remedies set forth above, the Facility Agents and the Lenders shall be entitled to exercise all of
their respective rights and remedies under the Loan Documents, including, without limitation, in
the case of the Collateral Agent, all rights and remedies with respect to the Collateral provided
under the Collateral Documents and in the case of all Agents, any other remedies provided by
applicable law.
Section 9.3 Actions in Respect of Letters of Credit. Upon the Revolving Credit Termination Date,
or as required by Section 2.9, the Borrower shall pay to the Administrative Agent in immediately
available funds at the Administrative Agent’s office referred to in Section 11.8, for deposit in a
Cash Collateral Account, the amount required to ensure that, after such payment, the aggregate
funds on deposit in the Cash Collateral Accounts equals or exceeds 105% of the sum of all
outstanding Letter of Credit Obligations. The Administrative Agent may, from time to time after
funds are deposited in any Cash Collateral Account, apply funds then held in such Cash Collateral
Account to the payment of any amounts, in accordance with Section 2.13(h), as shall have become or
shall become due and payable by the Borrower to the Issuers or the Lenders in respect of the
Obligations. The Administrative Agent shall promptly give written notice of any such application;
provided, however, that the failure to give such written notice shall not invalidate any such
application.
ARTICLE X
THE FACILITY AGENTS
Section 10.1 Authorization and Action.
(a) (i) Each Lender and each Issuer hereby appoints BofA as the Administrative Agent
hereunder and under the other Loan Documents and each Lender and each Issuer authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise such powers under
this Agreement and the other Loan Documents as are delegated to the Administrative Agent under such
agreements and to exercise such powers as are reasonably incidental thereto. Without limiting the
foregoing, each Lender and each Issuer hereby authorizes the Administrative Agent to execute and
deliver, and to perform its obligations under, each of the Loan Documents to which the
Administrative Agent is a party and to exercise all rights, powers and remedies that the
Administrative Agent may have under such Loan Documents.
(ii) The Administrative Agent, each Lender and each Issuer hereby appoints BofA as the
Collateral Agent hereunder and under the other Loan Documents and the Administrative Agent,
each Lender and each Issuer authorizes the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the other Loan Documents as
are delegated to the Collateral Agent under such agreements and to exercise such powers as
are reasonably incidental thereto. Without limiting the foregoing, the
Administrative Agent, each Lender and each Issuer hereby authorizes the Collateral
Agent to execute and deliver, and to perform its obligations under, each of the Loan
Documents to which the Collateral Agent is a party, to exercise all rights, powers and
remedies that the Collateral Agent may have under such Loan Documents and, in the case of
the Collateral Documents, to act as agent for the Administrative Agent, the Lenders, each
Issuer and the other Secured Parties under such Collateral Documents.
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(b) As to any matters not expressly provided for by this Agreement and the other Loan
Documents (including enforcement or collection), no Facility Agent shall be required to exercise
any discretion or take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the instructions of the
Requisite Lenders, and such instructions shall be binding upon all Lenders and each Issuer;
provided, however, that no Facility Agent shall be required to take any action which (i) such
Facility Agent in good faith believes exposes it to personal liability unless such Facility Agent
receives an indemnification satisfactory to it from the Lenders and the Issuers with respect to
such action or (ii) is contrary to this Agreement, any other Loan Document or applicable
Requirements of Law. Each Facility Agent agrees to give to each other Facility Agent, each Lender
and each Issuer, to the extent required hereunder, prompt notice of each notice given to it by any
Loan Party pursuant to the terms of this Agreement or the other Loan Documents.
(c) In performing its functions and duties hereunder and under the other Loan Documents, (i)
the Administrative Agent is acting solely on behalf of the Lenders and the Issuers and (ii) the
Collateral Agent is acting solely on behalf of the Administrative Agent, the Lenders and the
Issuers, except, in the case of the Administrative Agent, to the limited extent provided in Section
2.7(b) and Section 11.2(c), and each of their respective duties are entirely administrative in
nature. No Facility Agent assumes, and shall not be deemed to have assumed, any obligation other
than as expressly set forth herein and in the other Loan Documents or any other relationship as
agent, fiduciary or trustee of or for any other Agent, Lender, Issuer or holder of any other
Obligation. Any Facility Agent may perform any of its duties under any of the Loan Documents by or
through its agents or employees.
Section 10.2 Agent’s Reliance, Etc. None of the Facility Agents, any of their respective
Affiliates, or any of their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it, him, her or them under or in connection with this
Agreement or any of the other Loan Documents, except for its, his, her or their own gross
negligence or willful misconduct. Without limiting the foregoing, the Administrative Agent and the
Collateral Agent: (a) may rely on the Register to the extent set forth in Section 11.2(c); (b) may
consult with legal counsel (including counsel to the Borrower or any other Loan Party), independent
public accountants and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants
or experts; (c) makes no warranty or representation to any other Agent, any Lender or any Issuer
and shall not be responsible to any other Agent, any Lender or any Issuer for any statements,
warranties or representations made by or on behalf of Group or any of its Subsidiaries in or in
connection with this Agreement or any of the other Loan Documents; (d) shall not have any duty to
ascertain or to inquire either as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or any of the other Loan Documents or the financial condition of
any Loan Party, or the existence or possible existence of any Default or Event of Default; (e)
shall not be responsible to any other Agent, any Lender or any Issuer for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the attachment,
perfection or priority of any Lien created or purported to be created under or in connection with,
this Agreement, any of the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto; and (f) shall incur no
liability under or in respect of this Agreement or any of the other Loan Documents by acting upon
any notice, consent, certificate or other instrument or writing (which may be by telecopy or
electronic mail) or any telephone message believed by it to be genuine and signed or sent by the
proper party or parties.
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Section 10.3 The Agents Individually. With respect to its Ratable Portion, BofA shall have and may
exercise the same rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender. The terms “Lenders” or
“Requisite Lenders” or any similar terms shall, unless the context clearly otherwise indicates,
include each Facility Agent in its individual capacity as a Lender or as one of the Requisite
Lenders, as the case may be. BofA and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with any Loan Party as if it were
not acting as a Facility Agent hereunder or under the other Loan Documents.
Section 10.4 Lender Credit Decision. Each Lender and each Issuer acknowledges that it shall,
independently and without reliance upon any Facility Agent or any other Lender or Issuer, conduct
its own independent investigation of the financial condition and affairs of the Borrower and each
other Loan Party in connection with the making and continuance of the Loans and with the issuance
of the Letters of Credit. Each Lender and each Issuer also acknowledges that it will,
independently and without reliance upon any Facility Agent or any other Lender or Issuer and based
on such documents and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and other Loan Documents.
Section 10.5 Indemnification. Each Lender agrees to indemnify each of the Facility Agents and each
of its respective Affiliates and each of their respective directors, officers, employees, agents
and advisors (to the extent not reimbursed by a Loan Party and without limiting its obligation to
do so) from and against such Lender’s aggregate Ratable Portion of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements (including reasonable fees and disbursements of legal counsel) of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against, any Facility Agent or any of
its Affiliates, directors, officers, employees, agents or advisors in any way relating to or
arising out of this Agreement, any of the other Loan Documents or any action taken or omitted by
any Facility Agent under this Agreement or any of the other Loan Documents; provided, however, that
no Lender shall be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Facility
Agent’s or such Affiliate’s gross negligence or willful misconduct. Without limiting the
foregoing, each Lender agrees to reimburse each Facility Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including reasonable fees and disbursements of legal counsel)
incurred by such Facility Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of its rights or responsibilities under,
this Agreement or any of the other Loan Documents, to the extent that such Facility Agent is not
reimbursed for such expenses by a Loan Party.
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Section 10.6 Successor Agents.
(a) Administrative Agent. The Administrative Agent may resign at any time by giving written
notice thereof to the other Facility Agents, the Lenders, the Issuers and the Borrower and shall,
immediately upon giving such notice, be discharged from its duties and obligations under this
Agreement and the other Loan Documents. Upon any such resignation by the Administrative Agent, the
Requisite Lenders shall have the right to appoint a successor Administrative Agent,
provided that such successor shall be a United States person as defined in Section 7701(a)(30)
of the Code. If no successor Administrative Agent shall have been so appointed by the Requisite
Lenders and shall have accepted such appointment, within 30 days after the retiring Administrative
Agent’s giving of notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders and the Issuers, appoint a successor Administrative Agent, selected from among the
Lenders. Such appointment shall be subject to the prior written approval of the Borrower (which
approval may not be unreasonably withheld or delayed and shall not be required upon the occurrence
and during the continuance of an Event of Default). Upon the acceptance of any appointment as
Administrative Agent by a successor Administrative Agent, such successor Administrative Agent shall
succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. Prior to any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the retiring Administrative
Agent shall take such action as may be reasonably necessary to assign to the successor
Administrative Agent its rights as Administrative Agent under the Loan Documents. At any time
after the discharge of a retiring Administrative Agent from its duties and obligations under this
Agreement and prior to any Person accepting its appointment as a successor Administrative Agent,
the Requisite Lenders shall assume and perform all of the duties of such retiring Administrative
Agent hereunder until such time, if any, as a successor Administrative Agent shall become the
Administrative Agent hereunder. After its resignation, the retiring Administrative Agent shall
continue to have the benefit of this Article X as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement or any of the other Loan Documents.
(b) Collateral Agent. The Collateral Agent may resign at any time by giving written notice
thereof to the Administrative Agent, the Lenders, the Issuers and the Borrower. Upon any such
resignation, the Administrative Agent shall have the right to appoint a successor Collateral Agent.
If no successor Collateral Agent shall have been so appointed by the Administrative Agent and
shall have accepted such appointment, within 30 days after the retiring Collateral Agent’s giving
of notice of resignation, then the retiring Collateral Agent may, on behalf of the Secured Parties,
appoint a successor Collateral Agent. Such appointment shall be subject to the prior written
approval of the Borrower (which approval may not be unreasonably withheld or delayed and shall not
be required upon the occurrence and during the continuance of an Event of Default). Upon the
acceptance of any appointment as the Collateral Agent by a successor Collateral Agent, such
successor Collateral Agent shall succeed to, and become vested with, all the rights, powers,
privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall be
discharged from its duties and obligations under this Agreement and the other Loan Documents.
Promptly after any retiring Collateral Agent’s resignation hereunder as Collateral Agent, the
retiring Collateral Agent shall take such action as may be reasonably necessary to assign to the
successor Collateral Agent its rights as Collateral Agent under the Loan Documents and to protect
and maintain the Liens held by the Collateral Agent for the benefit of the Secured Parties
(including delivery of any Collateral in its possession to the successor Collateral Agent). If no
Person has accepted appointment as a successor Collateral Agent within 30 days after the retiring
Collateral Agent’s giving of notice of resignation, the retiring Collateral Agent’s resignation
shall nevertheless thereupon become effective, and the Administrative Agent shall assume and
perform all of the duties of the retiring Collateral Agent hereunder until such time, if any, as
the Administrative Agent shall appoint a successor Collateral Agent as provided for above. After
its resignation, the retiring Collateral Agent shall continue to have the benefit of this Article X
as to any actions taken or omitted to be taken by it while it was Collateral Agent under this
Agreement or any of the other Loan Documents.
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Section 10.7 Concerning the Collateral and the Collateral Documents.
(a) (i) Each Lender and each Issuer agrees that any action taken by the Administrative Agent
or the Requisite Lenders (or, where required by the express terms of this Agreement, a greater
proportion of the Lenders) in accordance with the provisions of this Agreement or of the other Loan
Documents, and the exercise by the Administrative Agent or the Requisite Lenders (or, where so
required, such greater proportion) of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the
Lenders, the Issuers and the other applicable Secured Parties. Without limiting the generality of
the foregoing, the Administrative Agent shall have the sole and exclusive right and authority to
act as the disbursing and collecting agent for the Lenders and the Issuers with respect to all
payments and collections arising in connection with the Revolving Credit Facility; provided,
however, that notwithstanding anything to the contrary herein, the Administrative Agent shall have
the right to manage, supervise and otherwise deal with the Collateral included in the Borrowing
Base, including the right to make Protective Advances in an aggregate amount not to exceed the
lesser of $25,000,000 and 10% of the Available U.S. Credit.
(ii) The Administrative Agent, each Lender and each Issuer agrees that any action taken
by the Collateral Agent or the Requisite Lenders (or, where required by the express terms of
this Agreement, a greater proportion of the Lenders) in accordance with the provisions of
this Agreement or of the other Loan Documents, and the exercise by the Collateral Agent or
the Requisite Lenders (or, where so required, such greater proportion) of the powers set
forth herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Administrative Agent, the Lenders,
the Issuers and the other Secured Parties. Without limiting the generality of the
foregoing, the Collateral Agent shall have the sole and exclusive right and authority to (i)
act as the disbursing and collecting agent for the Lenders and the Issuers with respect to
all payments and collections arising in connection with the Collateral Documents; provided,
that the Collateral Agent shall pay such amounts to the Administrative Agent for application
in accordance with the provisions of this Agreement and the other Loan Documents, (ii)
execute and deliver each Collateral Document and accept delivery of each such agreement
delivered by Group or any of its Subsidiaries, (iii) act as collateral agent for the
Administrative Agent, the Lenders, the Issuers and the other Secured Parties for purposes of
the perfection of all security interests and Liens created by such agreements and all other
purposes stated therein; provided, however, that the Collateral Agent hereby appoints,
authorizes and directs the Administrative Agent and each Lender and Issuer to act as
collateral sub-agent for the Collateral Agent, the Administrative Agent, the Lenders and the
Issuers for purposes of the perfection of all security interests and Liens with respect to
the Collateral, including any Deposit Account maintained by a Loan Party with, and cash and
Cash Equivalents held by, the Administrative Agent, such Lender or such Issuer, (iv) manage,
supervise and otherwise deal with the Collateral, (v) take such action as is necessary or
desirable to maintain the perfection and priority of the security interests and Liens
created or purported to be created by the Collateral Documents and (vi) except as may be
otherwise specifically restricted by the terms hereof or of any other Loan Document,
exercise all remedies given to the Collateral Agent, the Lenders, the Issuers and the other
Secured Parties with respect to the Collateral under the Loan Documents relating thereto,
applicable Requirements of Law or otherwise.
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(b) At the request of the Borrower, the Collateral Agent shall, and each of the Administrative
Agent, the Lenders and the Issuers hereby authorizes and directs the Collateral Agent (without any
further notice to or consent of any such Person) to, promptly release (or, in the case of clause
(ii) below, release or subordinate as required by the holders of any Lien specified thereunder)
any Lien held by the Collateral Agent for the benefit of the Secured Parties against any of
the following:
(i) all of the Collateral and all Loan Parties, upon receipt of a written notice from
the Administrative Agent that the Commitments and the Commitments (as defined in the
Canadian Facility) have been terminated and all Loans, all Reimbursement Obligations and all
other Secured Obligations and Canadian Secured Obligations that the Administrative Agent has
been notified in writing are then due and payable have been paid in full (and, in respect of
contingent Letter of Credit Obligations (as defined in each of this Agreement and the
Canadian Facility), with respect to which cash collateral has been deposited or a back-up
letter of credit has been issued, in either case in the appropriate currency and on terms
satisfactory to the Administrative Agent and the applicable Issuers(or, in the case of
Letter of Credit Obligations (as defined in the Canadian Facility), satisfactory to the
administrative agent and applicable letter of credit issuers under the Canadian Facility));
(ii) any part of the Collateral that is subject to a Lien permitted by Sections 8.2(c),
(e) or (f); and
(iii) any part of the Collateral (A) sold or disposed of by a Loan Party if such sale
or disposition is permitted by this Agreement (or permitted pursuant to a waiver or consent
of a transaction otherwise prohibited by this Agreement) (other than an Asset Sale to a Loan
Party) or (B) that constitutes Stock of a Subsidiary Guarantor if such Subsidiary Guarantor
has been dissolved pursuant to Section 8.7(d).
(c) Each of the Administrative Agent, the Lenders and the Issuers hereby authorizes and
directs the Collateral Agent to execute and deliver or file such termination and partial release
statements and do such other things as are necessary to release (or subordinate) Liens to be
released (or subordinated) pursuant to this Section 10.7 promptly upon the effectiveness of any
such release (or subordination). Unless expressly permitted by a Loan Document (or permitted
pursuant to a waiver of or consent to a transaction otherwise prohibited by this Agreement), the
Collateral Agent shall not release any Lien or any Subsidiary Guarantor from its obligations under
the Guaranty.
Section 10.8 Collateral Matters Relating to Related Obligations. The provisions of this Agreement
and the other Loan Documents relating to the Collateral shall extend to and be available in respect
of any Secured Obligation arising under any Hedging Contract or Cash Management Obligation or that
is otherwise owed to Persons other than the Facility Agents, the Lenders and the Issuers
(collectively, “Related Obligations”) solely on the condition and understanding, as among the
Facility Agents and all Secured Parties, that (a) the Related Obligations shall be entitled to the
benefit of the Collateral to the extent expressly set forth in this Agreement and the other Loan
Documents and to such extent the Facility Agents shall hold, and have the right and power to act
with respect to, the Guaranty and the Collateral on behalf of and as agent for the holders of the
Related Obligations, but each Facility Agent is otherwise acting solely as agent for the Lenders
and the Issuers and shall have no fiduciary duty, duty of loyalty, duty of care, duty of disclosure
or other obligation whatsoever to any holder of Related Obligations, (b) all matters, acts and
omissions relating in any manner to the Guaranty, the Collateral, or the omission, creation,
perfection, priority, abandonment or release of any Lien, shall be governed solely by the
provisions of this Agreement and the other Loan Documents and no separate Lien, right, power or
remedy shall arise or exist in favor of any Secured Party under any separate instrument or
agreement or in respect of any Related Obligation, (c) each Secured Party shall be bound by all
actions taken or omitted, in accordance with the provisions of this Agreement and the other Loan
Documents, by any of the Facility Agents and the Requisite Lenders, each of whom shall be entitled
to act at its sole
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discretion and exclusively in its
own interest given its own Commitments and its own interest in the Loans, Letter of Credit
Obligations and other Obligations to it arising under this Agreement or the other Loan Documents,
without any duty or liability to any other Secured Party or as to any Related Obligation and
without regard to whether any Related Obligation remains outstanding or is deprived of the benefit
of the Collateral or becomes unsecured or is otherwise affected or put in jeopardy thereby, (d) no
holder of Related Obligations and no other Secured Party (except the Facility Agents, the Lenders
and the Issuers, to the extent set forth in this Agreement) shall have any right to be notified of,
or to direct, require or be heard with respect to, any action taken or omitted in respect of the
Collateral or under this Agreement or the other Loan Documents and (e) no holder of any Related
Obligation shall exercise any right of setoff, banker’s lien or similar right except to the extent
provided in Section 11.6 and then only to the extent such right is provided for under the documents
governing such Related Obligation and exercised in compliance with Section 11.7.
Section 10.9 Posting of Approved Electronic Communications.
(a) Each of the Agents, the Lenders, the Issuers and Group and the Borrower agree, and Group
shall cause each other Loan Party to agree, that the Administrative Agent and the Collateral Agent
may, but shall not be obligated to, make the Approved Electronic Communications available to the
Lenders and Issuers by posting such Approved Electronic Communications on IntraLinks™ or a
substantially similar electronic platform chosen by the Facility Agents to be their electronic
transmission system (the “Approved Electronic Platform”).
(b) Although the Approved Electronic Platform and its primary web portal are secured with
generally-applicable security procedures and policies implemented or modified by the Facility
Agents from time to time (including, as of the Closing Date, a dual firewall and a User ID/Password
Authorization System) and the Approved Electronic Platform is secured through a
single-user-per-deal authorization method whereby each user may access the Approved Electronic
Platform only on a deal-by-deal basis, each of the Lenders, the Issuers, Group and the Borrower
acknowledges and agrees, and Group shall cause each other Loan Party to acknowledge and agree, that
the distribution of material through an electronic medium is not necessarily secure and that there
are confidentiality and other risks associated with such distribution. In consideration for the
convenience and other benefits afforded by such distribution and for the other consideration
provided hereunder, the receipt and sufficiency of which is hereby acknowledged, each of the
Facility Agents, the Lenders, the Issuers, Group and the Borrower hereby approves, and Group shall
cause each other Loan Party to approve, distribution of the Approved Electronic Communications
through the Approved Electronic Platform and understands and assumes, and Group shall cause each
other Loan Party to understand and assume, the risks of such distribution.
(c) THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC COMMUNICATIONS ARE PROVIDED
“AS IS” AND “AS AVAILABLE”. NONE OF THE FACILITY AGENTS OR ANY OF THEIR AFFILIATES OR ANY OF THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (THE “AGENT
AFFILIATES”) WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED ELECTRONIC
COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY DISCLAIMS LIABILITY FOR
ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC COMMUNICATIONS.
NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY
RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY OF THE AGENT AFFILIATES IN
CONNECTION WITH THE APPROVED ELECTRONIC PLATFORM OR THE APPROVED ELECTRONIC COMMUNICATIONS.
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(d) Each of the Lenders, the Issuers, Group and the Borrower agrees, and Group shall cause
each other Loan Party to agree, that each Facility Agent may, but (except as may be required by
applicable law) shall not be obligated to, store the Approved Electronic Communications on the
Approved Electronic Platform in accordance with such Agent’s generally-applicable document
retention procedures and policies.
Section 10.10 Syndication Agent; Co-Documentation Agents; Arrangers; Joint Bookrunners. Neither
the Syndication Agent, the Co-Documentation Agents, the Joint Bookrunners nor the Arrangers shall
have any obligations or duties whatsoever in such capacity under this Agreement or any other Loan
Document and shall incur no liability hereunder or thereunder in such capacity. Without limiting
the foregoing, none of the Syndication Agent, the Co-Documentation Agents, the Joint Bookrunners
nor the Arrangers shall have or be deemed to have any fiduciary relationship with any Lender or
Issuer. Each Lender and Issuer acknowledges and agrees that it has not relied, and will not rely,
on any of the Arrangers, the Joint Bookrunners, the Syndication Agent, the Co-Documentation Agents
or any of the other Lenders or Issuers in deciding whether to enter into this Agreement or in
taking or not taking action hereunder.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Amendments, Waivers, Etc.
(a) No amendment or waiver of any provision of this Agreement or any other Loan Document nor
consent to any departure by any Loan Party therefrom shall in any event be effective unless the
same shall be in writing and (x) in the case of any such waiver or consent, signed by the Requisite
Lenders (or by the Administrative Agent with the consent of the Requisite Lenders) and (y) in the
case of any other amendment, by the Requisite Lenders (or by the Administrative Agent with the
consent of the Requisite Lenders) and the Borrower, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given; provided,
however, that:
(i) no amendment, waiver or consent with respect to the provisions contained in Section
2.13(h) shall be effective, unless in writing and signed by each Agent or Lender (and, in
the case of clause tenth of such Section, the administrative agent under the Canadian
Facility) required under the terms of such section to have consented thereto;
(ii) no amendment, waiver or consent under this Agreement shall be effective to add any
category of Collateral to the Borrowing Base unless in writing and signed by the
Administrative Agent and the Super-Majority Lenders;
(iii) no amendment, waiver or consent shall be effective to increase any Advance Rate
above the applicable maximum set forth in the definition thereof, unless in writing and
signed by each Lender;
(iv) no amendment, waiver or consent with respect to the terms and conditions of the
Collateral Documents shall be effective, unless in writing and signed by the Collateral
Agent;
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(v) except to the extent any such amendment, waiver or consent would result in an
increase of the aggregate Revolving Credit Commitments (it being understood that any
Facility Increase does not constitute such an increase in Revolving Credit Commitments), no
amendment, waiver or consent shall be effective with respect to the terms and provisions
under Article II and any other provisions related solely to Revolving Credit Borrowings
(including any conditions to such Borrowings or the Facility Increase and increases to
interest rates and fees) and payment procedures under the Revolving Credit Facility, unless
in writing and signed by the Administrative Agent and the Requisite Lenders;
(vi) [Intentionally Omitted]; and
(vii) no amendment, waiver or consent shall, unless in writing and signed by each
Lender affected thereby, in addition to the Requisite Lenders, do any of the following:
(A) waive any of the conditions specified in Section 3.1 (subject to Section 3.3) or Section
3.2 except with respect to a condition based upon another provision hereof, the waiver of which
requires only the concurrence of the Requisite Lenders;
(B) increase the Commitment of such Lender or subject such Lender to any additional
obligation;
(C) extend the scheduled final maturity of any Loan owing to such Lender, or waive, reduce, or
postpone any scheduled date fixed for, the payment of principal, interest or fees owing to such
Lender (it being understood that Section 2.9 does not provide for scheduled dates fixed for
payment) or for the reduction of such Lender’s Commitment;
(D) reduce the principal amount of any Loan or Reimbursement Obligation (other than by the
payment or prepayment thereof) owing to such Lender;
(E) reduce the rate of interest on any Loan or Reimbursement Obligations owing to such Lender
or any fee payable hereunder to such Lender or waive any such obligation (other than with respect
to default interest);
(F) change the aggregate Ratable Portions of the Lenders which shall be required for the
Lenders or any of them to take any action hereunder;
(G) release all or substantially all of the Collateral or release any Guarantor from its
obligations under the Guaranty except as provided in Section 10.7 or as expressly provided under
the Guaranty; or
(H) amend Section 11.7 or this Section 11.1 or the definition of the terms “Requisite
Lenders,” “Ratable Portion” or “Super-Majority Lenders”; provided, that in connection with any
Facility Increase, this Section 11.1 and the definition of “Ratable Portion,” “Requisite Lenders”
and “Super-Majority Lenders” shall be deemed to be amended in order to provide the Lenders of such
additional loans with voting rights proportionate to the Commitments of such new Lenders; and
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provided, further, that:
(i) any modification of the application of payments to the Loans pursuant to Section
2.9 or the reduction of the Revolving Credit Commitments pursuant to Section 2.5 shall
require the consent of the Requisite Lenders;
(ii) no amendment, waiver or consent shall, unless in writing and signed by any Special
Purpose Vehicle that has been granted an option pursuant to Section 11.2(f), affect the
grant or nature of such option or the right or duties of such Special Purpose Vehicle
hereunder;
(iii) no amendment, waiver or consent shall, unless in writing and signed by the
applicable Facility Agent in addition to the Lenders required above to take such action,
affect the rights or duties of such Facility Agent under this Agreement or any of the other
Loan Documents; and
(iv) no amendment, waiver or consent shall, unless in writing and signed by the Swing
Loan Lender in addition to the Lenders required above to take such action, affect the rights
or duties of the Swing Loan Lender under this Agreement or any of the other Loan Documents;
and
provided, further, that (i) the Administrative Agent may, with the consent of the Borrower, amend,
modify or supplement this Agreement or any other Loan Document to cure any ambiguity, omission,
defect or inconsistency, so long as such amendment, modification or supplement does not adversely
affect the rights of any Lender or any Issuer, (ii) Schedule I (Commitments) may be amended from
time to time by the Administrative Agent alone to reflect assignments of Commitments in accordance
herewith and any increase in the Commitment of any Lender or any new Commitment of any Lender made
in accordance herewith (including, without limitation, in accordance with clause (B) above or with
respect to a Facility Increase) (with the Administrative Agent agreeing to remit to the Borrower a
copy of any such amended Schedule I; provided, however, that the failure of the Administrative
Agent to so remit such copy shall not affect any such assignment or any such increase in or new
Commitment and shall not create any liability against the Administrative Agent), (iii) any Loan
Documents may be amended from time to time by the Administrative Agent, the Collateral Agent and
the relevant Loan Party alone (i.e. without any Lender consent or approval) to add a Subsidiary of
Group as a Subsidiary Guarantor or as a grantor under a Collateral Document or to subject to the
Lien of any applicable Loan Document assets or property not then subject to the Lien of such Loan
Document and (iv) no amendment, waiver or consent shall, unless in writing and signed by the
administrative agent under the Canadian Facility (so long as the Canadian Facility is in effect) in
addition to the other Persons required above to take such action, (x) release, remove or eliminate
any of the obligations of the Loan Parties under the Loan Party Canadian Facility Guaranty from the
definition of Secured Obligations or otherwise from the obligations secured by the Collateral
Documents, (y) change or delete the definition of Loan Party Canadian Facility Guaranty or (z)
amend this Section 11.1 in a manner such that any such amendment, waiver or consent or any
amendment, waiver or consent under clause (a)(i) above (as to clause tenth of Section 2.13(h))
would no longer require the written approval of the administrative agent under the Canadian
Facility.
(b) The Administrative Agent may, but shall have no obligation to, with the written
concurrence of any applicable Lender, execute amendments, modifications, waivers or consents on
behalf of such Lender. Any waiver or consent shall be effective only in the specific instance and
for the specific purpose for which it was given. No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in similar or other
circumstances.
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(c) In connection with any proposed amendment, modification, waiver or termination (a
“Proposed Change”) requiring the consent of all affected Lenders or of the Super-Majority 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 11.1 being referred to as a “Non-Consenting Lender”), then, as long as the Lender that
is acting as the Administrative Agent is not a Non-Consenting Lender and there is no continuing
Event of Default, at the Borrower’s request (and at the Borrower’s sole cost and expense), 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 Revolving Credit Commitments and Revolving Credit 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 and unpaid interest and fees with respect thereto through the date of sale; provided,
however, that such purchase and sale shall be recorded in the Register maintained by the
Administrative Agent and not be effective until (x) the Administrative Agent shall have received
from such Eligible Assignee an agreement in form and substance satisfactory to the Administrative
Agent and the Borrower whereby such Eligible Assignee shall agree to be bound by the terms hereof
and (y) such Non-Consenting Lender shall have received payments of all Loans held by it and all
accrued and unpaid interest and fees with respect thereto through the date of the sale. Each
Lender agrees that, if it becomes a Non-Consenting Lender, it shall execute and deliver to the
Administrative Agent an Assignment and Acceptance to evidence such sale and purchase; provided,
however, that the failure of any Non-Consenting Lender to execute an Assignment and Acceptance
shall not render such sale and purchase (and the corresponding assignment) invalid and such
assignment shall be recorded in the Register.
Section 11.2 Assignments and Participations.
(a) Each Lender may sell, transfer, negotiate or assign to one or more Eligible Assignees all
or a portion of its rights and obligations hereunder (including all of its rights and obligations
with respect to the Revolving Loans, the Swing Loans and the Letters of Credit); provided, however,
that:
(i) if any such assignment shall be of the assigning Lender’s Revolving Credit
Outstandings and Revolving Credit Commitment, such assignment shall cover the same
percentage of such Lender’s Revolving Credit Outstandings and Revolving Credit Commitment;
(ii) the aggregate amount being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment) shall in no
event (if less than the Assignor’s entire interest) be less than $5,000,000 or an integral
multiple of $1,000,000 in excess thereof, except (I) with the consent of the Borrower and
the Administrative Agent or (II) if such assignment is being made to a Lender or an
Affiliate or Approved Fund of such Lender; and
(iii) if such Eligible Assignee is not, prior to the date of such assignment, a Lender
or an Affiliate or Approved Fund of a Lender, such assignment shall be subject to the prior
consent of the Administrative Agent, each Issuer and the Borrower (which consents shall not
be unreasonably withheld or delayed);
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and provided, further, that, notwithstanding any other provision of this Section 11.2, the consent
of the Borrower shall not be required for any assignment occurring when any Event of Default shall
have occurred and be continuing.
(b) The parties to each assignment shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Register (as defined in clause (c) below), an Assignment and
Acceptance. Upon such execution, delivery, acceptance and recording in the Register and the
receipt by the Administrative Agent from the assignee of an assignment fee in the amount of $3,500
(other than in the case of an assignment by a Lender to an Affiliate of such Lender or by any Agent
or their respective Affiliates) from and after the effective date specified in such Assignment and
Acceptance, (i) the assignee thereunder shall become a party hereto and, to the extent that rights
and obligations under the Loan Documents have been assigned to such assignee pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender, and if such Lender were an
Issuer, of such Issuer hereunder and thereunder, and (ii) the assignor thereunder shall, to the
extent that rights and obligations under this Agreement have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (except those which survive the payment in full of
the Obligations) and be released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and
obligations under the Loan Documents, such Lender shall cease to be a party hereto).
(c) The Administrative Agent shall maintain at its address referred to in Section 11.8 a copy
of each Assignment and Acceptance delivered to and accepted by it and a register for the recording
of the names and addresses of the Lenders and the Issuers, the Revolving Credit Commitments of and
principal amount of the Revolving Loans, Swing Loans and Letter of Credit Obligations (specifying
the Reimbursement Obligations) owing to each Lender and each Issuer from time to time (the
“Revolving Credit Facility Register” or the “Register”). The entries in the Revolving Credit
Facility Register shall be conclusive and binding for all purposes, absent manifest error, and the
Loan Parties, the Administrative Agent, the Lenders and the Issuers shall treat each Person whose
name is recorded in the Revolving Credit Facility Register as a Lender or as an Issuer, as the case
may be, for all purposes of this Agreement. The Revolving Credit Facility Register shall be
available for inspection by the Borrower and the Facility Agents at any reasonable time and from
time to time upon reasonable prior notice. No Revolving Loan, Swing Loan, Letter of Credit
Obligation, Reimbursement Obligation, nor any Assignment and Acceptance or Assumption Agreement,
shall be effective unless it is entered in the Register in due course.
(d) Notwithstanding anything to the contrary contained in clause (b) above, the Loans and
drawn Letters of Credit are registered obligations and the right, title, and interest of the
Lenders and Issuers, as the case may be, and their assignees in and to such Loans or drawn Letters
of Credit, as the case may be, shall be transferable only upon notation of such transfer in the
Register. This Section 11.2 shall be construed so that the Loans and drawn Letters of Credit are
at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and
881(c)(2) of the Code and any related regulations (or any other relevant or successor provisions of
the Code or such regulations). Solely for purposes of this Section 11.2 and for tax purposes only,
the Administrative Agent shall act as the Borrower’s agent for purposes of maintaining the Register
and such notations of transfer in the Register.
(e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an
assignee, the Administrative Agent shall, if such Assignment and Acceptance has been completed, (i)
accept such Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.
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(f) In addition to the other assignment rights provided in this Section 11.2, each Lender may
do each of the following:
(i) grant to a Special Purpose Vehicle the option to make all or any part of any Loan
that such Lender would otherwise be required to make hereunder and the exercise of such
option by any such Special Purpose Vehicle and the making of Loans pursuant thereto shall
satisfy (once and to the extent that such Loans are made) the obligation of such Lender to
make such Loans thereunder, provided, however, that (x) nothing herein shall constitute a
commitment or an offer to commit by such a Special Purpose Vehicle to make Loans hereunder
and no such Special Purpose Vehicle shall be liable for any indemnity or other Obligation
(other than the making of Loans for which such Special Purpose Vehicle shall have exercised
an option, and then only in accordance with the relevant option agreement) and (y) such
Lender’s obligations under the Loan Documents shall remain unchanged, such Lender shall
remain responsible to the other parties for the performance of its obligations under the
terms of this Agreement and shall remain the holder of the Obligations for all purposes
hereunder; and
(ii) assign, as collateral or otherwise, any of its rights under this Agreement,
whether now owned or hereafter acquired (including rights to payments of principal or
interest on the Loans), to (A) without notice to or consent of the Administrative Agent, any
Issuer or the Borrower, any Federal Reserve Bank (pursuant to Regulation A of the Federal
Reserve Board) and (B) without consent of the Administrative Agent, any Issuer or the
Borrower, (1) any holder of, or trustee for the benefit of, the holders of such Lender’s
Securities and (2) any Special Purpose Vehicle to which such Lender has granted an option
pursuant to clause (i) above;
provided, however, that no such assignment or grant shall release such Lender from any of its
obligations hereunder except as expressly provided in clause (i) above and except, in the case of a
subsequent foreclosure pursuant to an assignment as collateral, if such foreclosure is made in
compliance with the other provisions of this Section 11.2 other than this clause (f) or clause (g)
below. Each party hereto acknowledges and agrees that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other senior debt of any such
Special Purpose Vehicle, such party shall not institute against, or join any other Person in
instituting against, any Special Purpose Vehicle that has been granted an option pursuant to this
clause (f) any bankruptcy, reorganization, insolvency or liquidation proceeding (such agreement
shall survive the payment in full of the Obligations). The terms of the designation of, or
assignment to, such Special Purpose Vehicle shall not restrict such Lender’s ability to, or grant
such Special Purpose Vehicle the right to, consent to any amendment or waiver to this Agreement or
any other Loan Document or to the departure by the Borrower from any provision of this Agreement or
any other Loan Document without the consent of such Special Purpose Vehicle except, as long as the
Administrative Agent and the Lenders, Issuers and other Secured Parties shall continue to, and
shall be entitled to continue to, deal solely and directly with such Lender in connection with such
Lender’s obligations under this Agreement, to the extent any such consent would reduce the
principal amount of, or the rate of interest on, any Obligations, amend this clause (f) or postpone
any scheduled date of payment of such principal or interest. Each Special Purpose Vehicle shall be
entitled to the benefits of Section 2.14(d), Section 2.15, and Section 2.16 as if it were such
Lender; provided, however, that anything herein to the contrary notwithstanding, the Borrower shall
not, at any time, be obligated to make under Section 2.14(d), Section 2.15, or Section 2.16 to any
such Special Purpose Vehicle and any such Lender any payment in excess of the amount the Borrower
would have been obligated to pay to such Lender in respect of such interest if such Special Purpose
Vehicle had not been assigned the rights of such Lender hereunder. In addition, each Lender
granting a Special Purpose Vehicle the option to make all or
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any
part of any Loan that such Lender would otherwise be required to make pursuant to clause (i) above,
(x) shall keep a register, meeting the requirements of Treasury Regulation Section 5f.103-1(c), of
each Special Purpose Vehicle which has funded all or any part of any Loans that such Lender would
otherwise be obligated to make pursuant to this Agreement, specifying such Special Purpose
Vehicle’s entitlement to payments of principal and interest with respect to such Loans and (y)
shall collect (and deliver copies thereof to each of the Administrative Agent and the Borrower),
prior to the time such Special Purpose Vehicle receives payments with respect to such funded Loans,
from each Special Purpose Vehicle the appropriate forms, certificates and statements described in
Section 2.16(f) (and updated as required by Section 2.16(f)) as if such Special Purpose Vehicle
were a Lender under Section 2.16(f).
(g) Each Lender may sell participations to one or more Persons in or to all or a portion of
its rights and obligations under the Loan Documents (including all its rights and obligations with
respect to the Revolving Loans and Letters of Credit). The terms of such participation shall not,
in any event, require the participant’s consent to any amendments, waivers or other modifications
of any provision of any Loan Documents, the consent to any departure by any Loan Party therefrom,
or to the exercising or refraining from exercising any powers or rights such Lender may have under
or in respect of the Loan Documents (including the right to enforce the obligations of the Loan
Parties), except if any such amendment, waiver or other modification or consent would (i) reduce
the amount, or postpone any date fixed for, any amount (whether of principal, interest or fees)
payable to such participant under the Loan Documents, to which such participant would otherwise be
entitled under such participation or (ii) result in the release of all or substantially all of the
Collateral other than in accordance with Section 10.7(b). In the event of the sale of any
participation by any Lender, (w) such Lender’s obligations under the Loan Documents shall remain
unchanged, (x) such Lender shall remain solely responsible to the other parties for the performance
of such obligations, (y) such Lender shall remain the holder of such Obligations for all purposes
of this Agreement and (z) the Borrower, the Agents, the Issuers and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Each participant shall be entitled to the benefits of Sections
2.14(d), Section 2.15 and Section 2.16 as if it were a Lender; provided, however, that anything
herein to the contrary notwithstanding, the Borrower shall not, at any time, be obligated to make
any payment under Sections 2.14(d), Section 2.15 and Section 2.16 to the participants in the
rights and obligations of any Lender (together with such Lender) in excess of the amount the
Borrower would have been obligated to pay to such Lender in respect of such interest had such
participation not been sold; and provided, further, that such participant in the rights and
obligations of such Lender shall have no direct right to enforce any of the terms of this Agreement
against the Borrower, any Agent or the other Lenders.
(h) Any Issuer may at any time assign its rights and obligations hereunder to any other Lender
by an instrument in form and substance satisfactory to the Borrower, the Administrative Agent, such
Issuer and such Lender, subject to the provisions under this Section 11.2 relating to notations of
transfer in the Register.
(i) For purposes of this Section 11.2, with respect to each Letter of Credit, if an Issuer
transfers its rights with respect to the Borrower’s Reimbursement Obligation with respect to a
Letter of Credit such Issuer shall give notice of such transfer to the Administrative Agent for
notation in the Revolving Credit Facility Register. If any Issuer ceases to be a Lender hereunder
by virtue of any assignment made pursuant to this Section 11.2, then, as of the effective date of
such cessation, such Issuer’s obligations to Issue Letters of Credit pursuant to Section 2.4 shall
terminate and such Issuer shall be an Issuer hereunder only with respect to outstanding Letters of
Credit Issued prior to such date.
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Section 11.3 Costs and Expenses.
(a) Group and the Borrower agree, jointly and severally, upon demand to pay, or reimburse each
Facility Agent and BAS for, all of such Facility Agent’s and BAS’s reasonable internal and external
audit, legal, appraisal, valuation, filing, document duplication and reproduction and investigation
expenses and for all other reasonable out-of-pocket costs and expenses of every type and nature
(including the reasonable fees, expenses and disbursements of the Facility Agents’ counsel, Kaye
Scholer LLP, local legal counsel, auditors, accountants, appraisers, printers, insurance advisers,
and other consultants and agents) incurred by such Facility Agent or BAS in connection with (i)
such Facility Agent’s or BAS’s audit and investigation of any of the Warnaco Entities in connection
with the preparation, negotiation and execution of the Loan Documents and the Administrative
Agent’s periodic audits of any of the Warnaco Entities, as the case may be; (ii) the preparation,
negotiation, execution and interpretation of this Agreement (including, without limitation, the
satisfaction or attempted satisfaction of any of the conditions set forth in Article III), the
other Loan Documents and any proposal letter or commitment letter issued in connection therewith
and the making of the Loans hereunder; (iii) the creation, perfection or protection of the Liens
under the Loan Documents (including, without limitation, any reasonable fees and expenses for local
counsel in various jurisdictions); (iv) the ongoing administration of this Agreement and the Loans,
including consultation with attorneys in connection therewith and with respect to the rights and
responsibilities of each Facility Agent hereunder and under the other Loan Documents; (v) the
protection, collection or enforcement of any of the Secured Obligations or the enforcement of any
of the Loan Documents; (vi) the commencement, defense or intervention in any court proceeding
relating in any way to any of the Secured Obligations, any Warnaco Entity, this Agreement or any of
the other Loan Documents; (vii) the response to, and preparation for, any subpoena or request for
document production with which any Facility Agent or BAS is served or deposition or other
proceeding in which any Facility Agent or BAS is called to testify, in each case, relating in any
way to any of the Obligations, any Warnaco Entity, this Agreement or any of the other Loan
Documents; and (viii) any amendments, consents, waivers, assignments, restatements, or supplements
to any of the Loan Documents and the preparation, negotiation, and execution of the same.
(b) Group and the Borrower further agree, jointly and severally, to pay or reimburse each
Arranger, each Agent and each of the Lenders and Issuers upon demand for all out-of-pocket costs
and expenses, including, without limitation, reasonable attorneys’ fees (including allocated costs
of internal counsel and costs of settlement), incurred by such Arranger, such Agent, such Lender or
such Issuer (i) in enforcing any Loan Document, any Secured Obligation or any security therefor or
exercising or enforcing any other right or remedy available by reason of an Event of Default; (ii)
in connection with any refinancing or restructuring of the credit arrangements provided hereunder
in the nature of a “work-out” or in any insolvency or bankruptcy proceeding; (iii) in commencing,
defending or intervening in any litigation or in filing a petition, complaint, answer, motion or
other pleadings in any legal proceeding relating to any of the Secured Obligations, any Warnaco
Entity and related to or arising out of any of the transactions contemplated hereby or by any of
the other Loan Documents; and (iv) in taking any other action in or with respect to any suit or
proceeding (bankruptcy or otherwise) described in any of clauses (i) through (iii) above.
111
Section 11.4 Indemnities.
(a) Group and the Borrower agree, jointly and severally, to indemnify and hold harmless each
Arranger, each Agent, each Lender and each Issuer and each of their respective Affiliates, and each
of the directors, officers, employees, agents, representative, attorneys, consultants and advisors
of or to any of the foregoing (including those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in Article III) (each such Person being
an “Indemnitee”) from and against any and all claims, damages, liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, disbursements and expenses of any kind or nature
(including reasonable fees and disbursements of counsel to any such Indemnitee) which may be
imposed on, incurred by or asserted against any such Indemnitee in connection with or arising out
of any investigation, litigation or proceeding, whether or not any such Indemnitee is a party
thereto, whether direct, indirect, or consequential and whether based on any federal, state or
local law or other statutory regulation, securities or commercial law or regulation, or under
common law or in equity, or on contract, tort or otherwise, in any manner relating to or arising
out of this Agreement, any other Loan Document, any Secured Obligation, any Letter of Credit or any
act, event or transaction related or attendant to any thereof, or the use or intended use of the
proceeds of any of the Loans or Letters of Credit or in connection with any investigation of any
potential matter covered hereby (collectively, the “Indemnified Matters”); provided, however, that
neither Group nor the Borrower shall not have any obligation under this Section 11.4 (i) to an
Indemnitee with respect to any Indemnified Matter caused by or resulting from the gross negligence
or willful misconduct of that Indemnitee, as determined by a court of competent jurisdiction in a
final non-appealable judgment or order, (ii) with respect to taxes (and amounts relating thereto),
the indemnification for which shall be governed solely and exclusively by Section 2.16, and (iii)
to an Indemnitee with respect to any Indemnified Matter that does not involve an act or omission of
any Warnaco Entity or affiliate thereof and is brought by one Indemnitee against another
Indemnitee. Without limiting the foregoing, Indemnified Matters include (i) all Environmental
Liabilities and Costs arising from or connected with the past, present or future operations of any
Warnaco Entity involving any property subject to a Collateral Document, or damage to real or
personal property or natural resources or harm or injury alleged to have resulted from any Release
of Contaminants on, upon or into such property or any contiguous real estate; (ii) any costs or
liabilities incurred in connection with any Remedial Action concerning any Warnaco Entity; (iii)
any costs or liabilities incurred in connection with any Environmental Lien; (iv) any costs or
liabilities incurred in connection with any other matter under any Environmental Law, including
CERCLA and applicable state property transfer laws, whether, with respect to any of such matters,
such Indemnitee is a mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the
successor in interest to any Warnaco Entity, or the owner, lessee or operator of any property of
any Warnaco Entity by virtue of foreclosure, except, with respect to those matters referred to in
clauses (i), (ii), (iii) and (iv) above, to the extent incurred following (A) foreclosure by any
Facility Agent, any Lender or any Issuer, or any Facility Agent, any Lender or any Issuer having
become the successor in interest to any Warnaco Entity, and (B) attributable solely to acts of the
Arrangers, the Facility Agents, such Lender or such Issuer or any agent on behalf of the Facility
Agents or such Lender.
(b) Group and the Borrower shall, jointly and severally, indemnify each Agent, each Arranger,
each Lender and each Issuer for, and hold each Agent, each Arranger, each Lender and each Issuer
harmless from and against, any and all claims for brokerage commissions, fees and other
compensation made against any Agent, Arranger, Lender or any Issuer for any broker, finder or
consultant with respect to any agreement, arrangement or understanding made by or on behalf of any
Warnaco Entity in connection with the transactions contemplated by this Agreement.
(c) Group and the Borrower agree, jointly and severally, that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including pursuant to this
Section 11.4) or any other Loan Document shall (i) survive payment in full of the Secured
Obligations and (ii) inure to the benefit of any Person who was at any time an Indemnitee under
this Agreement or any other Loan Document.
112
Section 11.5 Limitation of Liability.
(a) Group and the Borrower agree, jointly and severally, that no Indemnitee shall have any
liability (whether direct or indirect, in contract, tort or otherwise) to any Warnaco Entity or any
equity holders or creditors of any Warnaco Entity for or in connection with the transactions
contemplated hereby and in the other Loan Documents, except to the extent such liability is found
in a final judgment by a court of competent jurisdiction to have resulted from such Indemnitee’s
gross negligence or willful misconduct. In no event, however, shall any Indemnitee be liable on
any theory of liability for any special, indirect, consequential or punitive damages and each of
Group and the Borrower hereby waives, releases and agrees (for itself and on behalf of its
Subsidiaries) not to sue upon any such claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
(b) IN NO EVENT SHALL ANY AGENT AFFILIATE HAVE ANY LIABILITY TO ANY LOAN PARTY, LENDER, ISSUER
OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT OR CONTRACT OR OTHERWISE) ARISING OUT OF
ANY LOAN PARTY OR ANY AGENT AFFILIATE’S TRANSMISSION OF APPROVED ELECTRONIC COMMUNICATIONS THROUGH
THE INTERNET OR ANY USE OF THE APPROVED ELECTRONIC PLATFORM, EXCEPT TO THE EXTENT SUCH LIABILITY OF
ANY AGENT AFFILIATE IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED PRIMARILY FORM SUCH AGENT AFFILIATE’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
Section 11.6 Right of Set-off. Upon the occurrence and during the continuance of any Event of
Default, each Lender and each Affiliate of a Lender is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other Indebtedness at any
time owing by such Lender or its Affiliates to or for the credit or the account of a Loan Party
against any and all of the Secured Obligations now or hereafter existing whether or not such Lender
shall have made any demand under this Agreement or any other Loan Document and although such
Secured Obligations may be unmatured. Each Lender agrees promptly to notify the Borrower after any
such set-off and application made by such Lender or its Affiliates; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 11.6 are in addition to the other rights and remedies
(including other rights of set-off) which such Lender may have.
Section 11.7 Sharing of Payments, Etc.
(a) If any Lender (directly or through an Affiliate thereof) shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off or otherwise) on account of
the Loans owing to it (including any interest or fees in respect thereof or amounts due pursuant to
Section 11.3 or Section 11.4) or derived from Collateral (in each case, other than pursuant to
Section 2.14, Section 2.15 or Section 2.16) in excess of its Ratable Portion of payments obtained
by all the Lenders on account of such Obligations, such Lender (each, a “Purchasing Lender”) shall
forthwith purchase from the other Lenders (each, a “Selling Lender”) such participations in their
Loans or other Obligations as shall be necessary to cause such Purchasing Lender to share the
excess payment ratably with each of them.
113
(b) If any Lender shall, after the sharing of payments as set forth in clause (a) above, hold
payments in excess of its Loans, such Lender shall pay such amounts to the Administrative Agent for
application pursuant to Section 2.13(h).
(c) If all or any portion of any payment received by a Purchasing Lender is thereafter
recovered from such Lender, such purchase from each applicable Selling Lender shall be rescinded
and such Lender shall repay to such Purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Selling Lender’s ratable share (according to the
proportion of (i) the amount of such Selling Lender’s required repayment to (ii) the total amount
so recovered from such Purchasing Lender) of any interest or other amount paid or payable by such
Purchasing Lender in respect of the total amount so recovered.
(d) The Borrower agrees that any Purchasing Lender so purchasing a participation from a
Selling Lender pursuant to this Section 11.7 may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount of such
participation.
Section 11.8 Notices, Etc.
(a) Notices. All notices, demands, requests and other communications provided for in this
Agreement shall be given in writing, or by any telecommunication device capable of creating a
written record, and addressed to the party to be notified as follows:
| (i) | if to Group or the Borrower: |
||
c/o The Warnaco Group Inc. 501 7th Avenue New York, NY 10018 Attention: Chief Financial Officer Telecopy No: (212) 287-8546 |
|||
with a copy to the Assistant General Counsel of Group Email: ealford@warnaco.com |
(ii) if to any Lender, at its Domestic Lending Office specified opposite its name on
Schedule II (Applicable Lending Offices and Addresses for Notices) or on the signature page
of any applicable Assignment and Acceptance or Assumption Agreement;
(iii) if to any Issuer, at the address set forth under its name on Schedule II
(Applicable Lending Offices and Addresses for Notices);
| (iv) | if to the Administrative Agent: |
||
Bank of America, N.A. 335 Madison Avenue New York, New York 10017 Attention: Business Capital- Account Executive
Email: kevin.w.corcoran@bankofamerica.comTelecopy No.: (212) 503-7350 |
114
with a copy to:
Bank of America, N.A.
335 Madison Avenue
New York, New York 10017
Attention: Legal Department
Email: girolamo.m.saccone@bankofamerica.com
Telecopy No.: (212) 503-7350
335 Madison Avenue
New York, New York 10017
Attention: Legal Department
Email: girolamo.m.saccone@bankofamerica.com
Telecopy No.: (212) 503-7350
and
| (v) | if to the Collateral Agent: |
||
Bank of America, N.A. 335 Madison Avenue New York, New York 10017 Attention: Business Capital- Account Executive
Email: kevin.w.corcoran@bankofamerica.comTelecopy No.: (212) 503-7350 |
with a copy to:
Bank of America, N.A.
335 Madison Avenue
New York, New York 10017
Attention: Legal Department
Email: girolamo.m.saccone@bankofamerica.com
Telecopy No.: (212) 503-7350
335 Madison Avenue
New York, New York 10017
Attention: Legal Department
Email: girolamo.m.saccone@bankofamerica.com
Telecopy No.: (212) 503-7350
or at such other address as shall be notified in writing (i) in the case of Group, the Borrower and
the Facility Agents, to the other parties and (ii) in the case of all other parties, to the
Borrower and the Facility Agents. All such notices and communications shall be effective upon (1)
personal delivery (if delivered by hand, including any overnight courier service), (2) when
deposited in the mails (if sent by mail), (3) if delivered by posting to an Approved Electronic
Platform, an internet website or a similar telecommunication device requiring a user prior access
to such Approved Electronic Platform, website or other device, when such notice, demand, request,
consent and other communication shall have been made generally available on such Approved
Electronic Platform, Internet website or similar device to the class of Person being notified
(regardless of whether any such Person must accomplish, and whether or not any such Person shall
have accomplished, any action prior to obtaining access to such items, including registration,
disclosure of contact information, compliance with a standard user agreement or undertaking a duty
of confidentiality) and (4) if delivered by electronic mail or any other telecommunications device,
when transmitted to an electronic mail address (or by another means of electronic delivery) as
provided above; provided, however, that notices and communications to the Administrative Agent
pursuant to Article II or Article X shall not be effective until received by the Administrative
Agent.
115
(b) Use of Electronic Platform. Notwithstanding clause (a) above (unless the Administrative
Agent requests that the provisions of clause (a) above be followed) and any other provision in this
Agreement or any other Loan Document providing for the delivery of any Approved Electronic
Communication by any other means, the Loan Parties shall deliver all Approved Electronic
Communications to the Facility Agents by transmitting such Approved Electronic Communications
electronically (in a format acceptable to the applicable Facility Agent) to
kevin.w.corcoran@bankofamerica.com or such other electronic mail address (or similar means of
electronic delivery) as such Facility Agent may notify the Borrower. Nothing in this clause (b)
shall prejudice the right of any Facility Agent or any Lender or Issuer to deliver any Approved
Electronic Communication to any Loan Party in any manner prescribed in this Agreement.
Section 11.9 No Waiver; Remedies. No failure on the part of any Lender, Issuer or any Facility
Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
Section 11.10 Binding Effect. This Agreement shall become effective when it shall have been
executed by Group, the Borrower and the Facility Agents and when the Administrative Agent shall
have been notified by each Lender that such Lender has executed it and thereafter shall be binding
upon and inure to the benefit of Group, the Borrower, the Facility Agents and each Lender and their
respective successors and assigns, except that neither Group nor the Borrower shall have the right
to assign its rights hereunder or any interest herein without the prior written consent of the
Lenders.
Section 11.11 Governing Law. This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and interpreted in accordance with, the internal law of the
State of New York.
Section 11.12 Submission to Jurisdiction; Service of Process.
(a) Any legal action or proceeding with respect to this Agreement or any other Loan Document
may be brought in the courts of the State of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Agreement, Group and the
Borrower hereby each accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including any objection to the laying of venue or based on the grounds of
forum non conveniens, that any of them may now or hereafter have to the bringing of any such action
or proceeding in such respective jurisdictions.
(b) Each of Group and the Borrower hereby irrevocably consents to the service of any and all
legal process, summons, notices and documents in any suit, action or proceeding brought in the
United States of America arising out of or in connection with this Agreement or any of the other
Loan Documents by the mailing (by registered or certified mail, postage prepaid) or delivering of a
copy of such process to Group and the Borrower at its address specified in Section 11.8. Each of
Group and the Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
(c) Nothing contained in this Section 11.12 shall affect the right of any Facility Agent or
any Lender to serve process in any other manner permitted by law or commence legal proceedings or
otherwise proceed against the Borrower or any other Loan Party in any other jurisdiction.
116
(d) If for the purposes of obtaining judgment in any court it is necessary to convert a sum
due hereunder in Dollars into another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be that at which
in accordance with normal banking procedures the Administrative Agents could purchase Dollars with
such other currency at the spot rate of exchange quoted by the Administrative Agent at 11:00 a.m.
(New York time) on the Business Day preceding that on which final judgment is given, for the
purchase of Dollars, for delivery two Business Days thereafter.
Section 11.13 Waiver of Jury Trial. Each Facility Agent, each of the Lenders, the Issuers, Group
and the Borrower irrevocably waives trial by jury in any action or proceeding with respect to this
Agreement or any other Loan Document.
Section 11.14 Marshaling; Payments Set Aside. None of the Facility Agents, any Lender or any
Issuer shall be under any obligation to marshal any assets in favor of any Loan Party or any other
party or against or in payment of any or all of the Obligations. To the extent that any Loan Party
makes a payment or payments to any Facility Agent, the Lenders or the Issuers or any of such
Persons receives payment from the proceeds of the Collateral or exercise their rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be
repaid to a trustee, receiver or any other party, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens, right and remedies
therefore, shall be revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
Section 11.15 Section 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 11.16 [Intentionally Omitted].
Section 11.17 [Intentionally Omitted].
Section 11.18 Entire Agreement. This Agreement may be executed in any number of counterparts and
by different parties 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. Signature
pages may be detached from multiple separate counterparts and attached to a single counterpart so
that all signature pages are attached to the same document. Delivery of an executed signature page
of this Agreement by facsimile transmission, electronic mail or by posting on the Approved
Electronic Platform shall be as effective as delivery of a manually executed counterpart hereof. A
set of the copies of this Agreement signed by all parties shall be lodged with the Borrower and the
Administrative Agent. In the event of any conflict between the terms of this Agreement and any
other Loan Document, the terms of this Agreement shall govern.
117
Section 11.19 Confidentiality.
(a) No Agent or any Lender may disclose to any Person any confidential, proprietary or
non-public information of the Warnaco Entities furnished to the Agents or the Lenders by Group or
the Borrower (such information being referred to collectively herein as the “Borrower
Information”), except that each of the Agents and each of the Lenders may disclose Borrower
Information (i) to its and its Affiliates’ employees, officers, directors, agents and advisors (it
being understood that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Borrower Information and instructed to keep such Borrower Information
confidential on substantially the same terms as provided herein), (ii) to the extent requested by
any regulatory
authority, (iii) to the extent required by applicable laws or regulations or by any subpoena
or similar legal process, (iv) to any other party to this Agreement, (v) if reasonably necessary in
connection with the exercise of any remedies hereunder or under any other Loan Document or any
suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement
of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially
the same as those of this Section 11.19, to any assignee of or participant in, or any prospective
assignee of or participant in, any of its rights or obligations under this Agreement, (vii) to the
extent such Borrower Information (A) is or becomes generally available to the public on a
non-confidential basis other than as a result of a breach of this Section 11.19 by such Agent or
such Lender, or (B) is or becomes available to such Agent or such Lender on a nonconfidential basis
from a source other than a Warnaco Entity and (viii) with the prior written consent of Group or the
Borrower.
(b) Neither Group nor the Borrower may disclose to any Person the amount or terms of any fees
payable to any Agent, any Arranger or any Lender (such information being collectively referred to
herein as the “Facility Information”), except that Group or the Borrower may disclose the Facility
Information (i) to its and its respective Affiliates’ employees, officers, directors, agents and
advisors who have a need to know the Facility Information in connection with this Agreement and the
transactions contemplated hereby or (ii) to the extent required by applicable laws or regulations
or by any subpoena or similar legal process.
Section 11.20 Patriot Act Notice. The Agents, the Issuers and the Lenders hereby notify Group and
the Borrower that, pursuant to the requirements of the Patriot Act, the Agents, the Issuers and the
Lenders are required to obtain, verify and record information that identifies each of Group, the
Borrower and the other Loan Parties, including its legal name, address, tax ID number and other
information that will allow the Agents, the Issuers and the Lenders to identify it in accordance
with the Patriot Act. The Agents, the Issuers and the Lenders may require information regarding
Group’s, the Borrower’s and other Loan Parties’ management and owners, such as legal name, social
security number and date of birth.
118
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/ Lawrence R. Rutkowski | |||
| Name: | Lawrence R. Rutkowski | |||
| Title: | Executive Vice President and CFO | |||
| The Warnaco Group, Inc., as Group |
||||
| By: | /s/ Lawrence R. Rutkowski | |||
| Name: | Lawrence R. Rutkowski | |||
| Title: | Executive Vice President and CFO | |||
| Bank of America, N.A., as Administrative Agent and Collateral Agent |
||||
| By: | /s/ Kevin W. Corcoran | |||
| Name: | Kevin W. Corcoran | |||
| Title: | Vice President | |||
SIGNATURE PAGE TO CREDIT AGREEMENT
| Issuers Bank of America, N.A. |
||||
| By: | /s/ Kevin W. Corcoran | |||
| Name: | Kevin W. Corcoran | |||
| Title: | Vice President | |||
| The Bank of Nova Scotia |
||||
| By: | /s/ Brian S. Allen | |||
| Name: | Brian S. Allen | |||
| Title: | Managing Director | |||
SIGNATURE PAGE TO CREDIT AGREEMENT
| Lenders Bank of America, N.A. |
||||
| By: | /s/ Kevin W. Corcoran | |||
| Name: | Kevin W. Corcoran | |||
| Title: | Vice President | |||
| DEUTSCHE BANK TRUST COMPANY AMERICAS |
||||
| By: | /s/ Marguerite Sutton | |||
| Name: | Marguerite Sutton | |||
| Title: | Director | |||
| By: | /s/ Enrique Landaeta | |||
| Name: | Enrique Landaeta | |||
| Title: | Vice President | |||
SIGNATURE PAGE TO CREDIT AGREEMENT
| HSBC BUSINESS CREDIT (usa) INC. |
||||
| By: | /s/ Kysha Pierre-Louis | |||
| Name: | Kysha Pierre-Louis | |||
| Title: | Vice President | |||
| JP MORGAN CHASE BANK, N.A. |
||||
| By: | /s/ Tony Yung | |||
| Name: | Tony Yung | |||
| Title: | Vice President | |||
| RBS BUSINESS CAPITAL, A DIVISION OF RBS ASSET FINANCE INC. |
||||
| By: | /s/ Jennifer Mannila | |||
| Name: | Jennifer Mannila | |||
| Title: | Vice President | |||
| U.S. BANK NATIONAL ASSOCIATION |
||||
| By: | /s/ Jeffrey D. Patton | |||
| Name: | Jeffrey D. Patton | |||
| Title: | Asset-Based Loan Officer | |||
| TD BANK, N.A. |
||||
| By: | /s/ Matthew Leighton | |||
| Name: | Matthew Leighton | |||
| Title: | Vice President | |||
| BRANCH BANKING AND TRUST COMPANY |
||||
| By: | /s/ Roberts A. Bass | |||
| Name: | Roberts A. Bass | |||
| Title: | Senior Vice President | |||
SIGNATURE PAGE TO CREDIT AGREEMENT
| CAPITAL ONE LEVERAGE FINANCE CORP. |
||||
| By: | /s/ Michael S. Burns | |||
| Name: | Michael S. Burns | |||
| Title: | Senior Vice President | |||
| THE BANK OF NOVA SCOTIA |
||||
| By: | /s/ Brian S. Allen | |||
| Name: | Brian S. Allen | |||
| Title: | Managing Director | |||
| UBS LOAN FINANCE LLC |
||||
| By: | /s/ David B. Julie | |||
| Name: | David B. Julie | |||
| Title: | Associate Director Banking Products Services, US | |||
| By: | /s/ Irja R. Olsa | |||
| Name: | Irja R. Olsa | |||
| Title: | Associate Director Banking Products Services, US | |||
| UPS CAPITAL CORPORATION |
||||
| By: | /s/ John P. Holloway | |||
| Name: | John P. Holloway | |||
| Title: | Director of Portfolio Management | |||
| INTENSA SANPAOLO S.P.A. NEW YORK BRANCH |
||||
| By: | /s/ Frank Maffei | |||
| Name: | Frank Maffei | |||
| Title: | Vice President | |||
| By: | /s/ Francesco Di Mario | |||
| Name: | Francesco Di Mario | |||
| Title: | FVP, Credit Manager | |||
| ISRAEL DISCOUNT BANK OF NEW YORK |
||||
| By: | /s/ Virginia J. Pulverenti | |||
| Name: | Virginia J. Pulverenti | |||
| Title: | Senior Vice President | |||
SIGNATURE PAGE TO CREDIT AGREEMENT
| By: | /s/ Paul P. Neydavood | |||
| Name: | Paul P. Neydavood | |||
| Title: | Assistant Vice President | |||
SIGNATURE PAGE TO CREDIT AGREEMENT
TABLE OF CONTENTS
| Page | ||||
ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS |
1 | |||
Section 1.1 Defined Terms |
1 | |||
Section 1.2 Computation of Time Periods |
38 | |||
Section 1.3 Accounting Terms and Principles |
38 | |||
Section 1.4 Conversion of Foreign Currencies |
38 | |||
Section 1.5 Certain Terms |
39 | |||
ARTICLE II THE REVOLVING CREDIT FACILITY |
39 | |||
Section 2.1 The Commitments |
39 | |||
Section 2.2 Borrowing Procedures |
40 | |||
Section 2.3 Swing Loans |
41 | |||
Section 2.4 Letters of Credit |
42 | |||
Section 2.5 Reduction and Termination of the Commitments |
47 | |||
Section 2.6 Repayment of Loans |
47 | |||
Section 2.7 Evidence of Debt |
47 | |||
Section 2.8 Optional Prepayments |
47 | |||
Section 2.9 Mandatory Prepayments |
47 | |||
Section 2.10 Interest |
49 | |||
Section 2.11 Conversion/Continuation Option |
50 | |||
Section 2.12 Fees |
50 | |||
Section 2.13 Payments and Computations |
51 | |||
Section 2.14 Special Provisions Governing Eurodollar Rate Loans |
54 | |||
Section 2.15 Capital Adequacy |
55 | |||
Section 2.16 Taxes |
56 | |||
Section 2.17 Substitution of Lenders |
59 | |||
Section 2.18 Facility Increase |
60 | |||
Section 2.19 Special Cash Collateral Account |
61 | |||
ARTICLE III CONDITIONS TO LOANS AND LETTERS OF CREDIT |
62 | |||
Section 3.1 Conditions Precedent to Initial Loans and Letters of Credit |
62 | |||
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit |
66 | |||
Section 3.3 Determinations of Initial Borrowing Conditions |
66 | |||
i
TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES |
67 | |||
Section 4.1 Corporate Existence; Compliance with Law |
67 | |||
Section 4.2 Corporate Power; Authorization; Enforceable Obligations |
67 | |||
Section 4.3 Ownership of Group, Borrower; Subsidiaries |
68 | |||
Section 4.4 Financial Statements |
69 | |||
Section 4.5 Material Adverse Change |
69 | |||
Section 4.6 Solvency |
70 | |||
Section 4.7 Litigation |
70 | |||
Section 4.8 Taxes |
70 | |||
Section 4.9 Full Disclosure |
70 | |||
Section 4.10 Margin Regulations |
71 | |||
Section 4.11 No Burdensome Restrictions; No Defaults |
71 | |||
Section 4.12 Investment Company Act; Public Utility Holding Company Act |
71 | |||
Section 4.13 Use of Proceeds |
71 | |||
Section 4.14 Insurance |
71 | |||
Section 4.15 Labor Matters |
71 | |||
Section 4.16 ERISA |
72 | |||
Section 4.17 Environmental Matters |
72 | |||
Section 4.18 Intellectual Property; Material License |
73 | |||
Section 4.19 Title; Real Property |
73 | |||
Section 4.20 Perfection of Security Interests in the Collateral |
74 | |||
ARTICLE V FINANCIAL COVENANTS |
74 | |||
Section 5.1 Minimum Fixed Charge Coverage Ratio |
74 | |||
ARTICLE VI REPORTING COVENANTS |
74 | |||
Section 6.1 Financial Statements |
74 | |||
Section 6.2 Default Notices |
77 | |||
Section 6.3 Litigation |
77 | |||
Section 6.4 Asset Sales |
77 | |||
Section 6.5 Notices under Senior Note Documents |
77 | |||
Section 6.6 SEC Filings; Press Releases |
77 | |||
Section 6.7 Labor Relations |
77 | |||
ii
TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||
Section 6.8 Tax Returns |
77 | |||
Section 6.9 Insurance |
78 | |||
Section 6.10 ERISA Matters |
78 | |||
Section 6.11 Environmental Matters |
78 | |||
Section 6.12 Borrowing Base Determination |
78 | |||
Section 6.13 Material Licenses |
80 | |||
Section 6.14 Communications and Amendments with respect to Canadian Facility |
80 | |||
Section 6.15 Other Information |
80 | |||
ARTICLE VII AFFIRMATIVE COVENANTS |
80 | |||
Section 7.1 Preservation of Corporate Existence, Etc. |
80 | |||
Section 7.2 Compliance with Laws, Etc. |
80 | |||
Section 7.3 Conduct of Business |
80 | |||
Section 7.4 Payment of Taxes, Etc. |
81 | |||
Section 7.5 Maintenance of Insurance |
81 | |||
Section 7.6 Access |
81 | |||
Section 7.7 Keeping of Books |
81 | |||
Section 7.8 Maintenance of Properties, Etc. |
81 | |||
Section 7.9 Application of Proceeds |
82 | |||
Section 7.10 Environmental |
82 | |||
Section 7.11 Additional Personal Property Collateral and Guaranties |
82 | |||
Section 7.12 [Intentionally Omitted] |
83 | |||
Section 7.13 Real Property |
83 | |||
Section 7.14 Senior Notes |
84 | |||
Section 7.15 Post Closing Matters |
84 | |||
ARTICLE VIII NEGATIVE COVENANTS |
84 | |||
Section 8.1 Indebtedness |
84 | |||
Section 8.2 Liens, Etc. |
86 | |||
Section 8.3 Investments |
87 | |||
Section 8.4 Sale of Assets |
88 | |||
Section 8.5 Restricted Payments |
90 | |||
Section 8.6 Prepayment and Cancellation of Indebtedness |
91 | |||
iii
TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||
Section 8.7 Restriction on Fundamental Changes |
91 | |||
Section 8.8 Change in Nature of Business |
92 | |||
Section 8.9 Transactions with Affiliates |
92 | |||
Section 8.10 Restrictions on Subsidiary Distributions; No New Negative Pledge |
93 | |||
Section 8.11 Modification of Constituent Documents |
93 | |||
Section 8.12 Modification of Certain Documents and Certain Debt |
93 | |||
Section 8.13 Modification of Debt Agreements |
94 | |||
Section 8.14 Accounting Changes; Fiscal Year |
94 | |||
Section 8.15 Margin Regulations |
94 | |||
Section 8.16 Sale and Leasebacks Transactions |
94 | |||
Section 8.17 No Speculative Transactions |
94 | |||
Section 8.18 Compliance with ERISA |
94 | |||
Section 8.19 Environmental |
95 | |||
ARTICLE IX EVENTS OF DEFAULT |
95 | |||
Section 9.1 Events of Default |
95 | |||
Section 9.2 Remedies |
96 | |||
Section 9.3 Actions in Respect of Letters of Credit |
97 | |||
ARTICLE X THE FACILITY AGENTS |
97 | |||
Section 10.1 Authorization and Action |
97 | |||
Section 10.2 Agent’s Reliance, Etc. |
98 | |||
Section 10.3 The Agents Individually |
99 | |||
Section 10.4 Lender Credit Decision |
99 | |||
Section 10.5 Indemnification |
99 | |||
Section 10.6 Successor Agents |
100 | |||
Section 10.7 Concerning the Collateral and the Collateral Documents |
101 | |||
Section 10.8 Collateral Matters Relating to Related Obligations |
102 | |||
Section 10.9 Posting of Approved Electronic Communications |
103 | |||
Section 10.10 Syndication Agent; Co-Documentation Agents; Arrangers |
104 | |||
ARTICLE XI MISCELLANEOUS |
104 | |||
Section 11.1 Amendments, Waivers, Etc. |
104 | |||
Section 11.2 Assignments and Participations |
107 | |||
iv
TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||
Section 11.3 Costs and Expenses |
112 | |||
Section 11.4 Indemnities |
111 | |||
Section 11.5 Limitation of Liability |
113 | |||
Section 11.6 Right of Set-off |
113 | |||
Section 11.7 Sharing of Payments, Etc. |
113 | |||
Section 11.8 Notices, Etc. |
114 | |||
Section 11.9 No Waiver; Remedies |
116 | |||
Section 11.10 Binding Effect |
116 | |||
Section 11.11 Governing Law |
116 | |||
Section 11.12 Submission to Jurisdiction; Service of Process |
116 | |||
Section 11.13 Waiver of Jury Trial |
117 | |||
Section 11.14 Marshaling; Payments Set Aside |
117 | |||
Section 11.15 Section Titles |
117 | |||
Section 11.16 [Intentionally Omitted] |
117 | |||
Section 11.17 [Intentionally Omitted] |
117 | |||
Section 11.18 Entire Agreement |
117 | |||
Section 11.19 Confidentiality |
118 | |||
Section 11.20 Patriot Act Notice |
118 | |||
v
Schedules
Schedule I
|
— | Commitments | ||
Schedule II
|
— | Applicable Lending Offices and Addresses for Notices | ||
Schedule 2.4
|
— | Existing Rollover Letters of Credit | ||
Schedule 4.2
|
— | Consents | ||
Schedule 4.3
|
— | Ownership of Warnaco Entities | ||
Schedule 4.15
|
— | Labor Matters | ||
Schedule 4.16
|
— | ERISA Matters | ||
Schedule 4.19
|
— | Real Property | ||
Schedule 7.15
|
— | Post Closing Matters | ||
Schedule 8.1
|
— | Existing Indebtedness | ||
Schedule 8.2
|
— | Existing Liens | ||
Schedule 8.3
|
— | Existing Investments | ||
Schedule 8.4
|
— | Specified Asset Sales |
Exhibits
Exhibit A
|
— | Form of Assignment and Acceptance | ||
Exhibit B
|
— | Form of Notice of Borrowing | ||
Exhibit C
|
— | Form of Swing Loan Request | ||
Exhibit D
|
— | Form of Letter of Credit Request | ||
Exhibit E
|
— | Form of Borrowing Base Certificate | ||
Exhibit F
|
— | Form of Notice of Conversion or Continuation | ||
Exhibit G
|
— | Form of Opinion of Counsel for the Loan Parties | ||
Exhibit H
|
— | Form of Compliance Certificate | ||
Exhibit I
|
— | Form of Pledge and Security Agreement | ||
Exhibit J
|
— | Form of Guaranty |
vi
SCHEDULE I
COMMITMENTS
| REVOLVING CREDIT | ||||
| LENDER | COMMITMENT | |||
Bank of America, N.A. |
$ | 35,000,000.00 | ||
Deutsche Bank Trust Company Americas |
$ | 27,000,000.00 | ||
JPMorgan Chase Bank, N.A. |
$ | 30,000,000.00 | ||
HSBC Business Credit (USA) Inc. |
$ | 30,000,000.00 | ||
RBS Business Capital, a division of RBS Asset Finance Inc. |
$ | 30,000,000.00 | ||
U.S. Bank National Association |
$ | 20,000,000.00 | ||
TD Bank N.A. |
$ | 18,000,000.00 | ||
Branch Banking and Trust Company |
$ | 15,000,000.00 | ||
Capital One Leverage Finance Corp. |
$ | 15,000,000.00 | ||
The Bank of Nova Scotia |
$ | 10,000,000.00 | ||
UBS Loan Finance LLC |
$ | 15,000,000.00 | ||
UPS Capital Corporation |
$ | 12,000,000.00 | ||
Intesa Sanpaolo S.p.A. New York Branch |
$ | 8,000,000.00 | ||
Israel Discount Bank of New York |
$ | 5,000,000.00 | ||
TOTAL |
$ | 270,000,000.00 | ||
SCHEDULE II
APPLICABLE LENDING OFFICES AND ADDRESSES FOR NOTICES
On File with Administrative Agent.
SCHEDULE 2.4
EXISTING ROLLOVER LETTERS OF CREDIT
| Outstanding | ||||||||||
| Letter of Credit | Bank | Issue Date | Amount (USD) | Expiration Date | ||||||
10120725
|
The Bank of Nova Scotia | 16-Jul-08 | 51,603.43 | 13-Sep-08 | ||||||
10120730
|
The Bank of Nova Scotia | 29-Jul-08 | 19,923.91 | 30-Aug-08 | ||||||
10120736
|
The Bank of Nova Scotia | 13-Aug-08 | 18,959.01 | 11-Oct-08 | ||||||
10120737
|
The Bank of Nova Scotia | 13-Aug-08 | 99,486.79 | 18-Sep-08 | ||||||
10120738
|
The Bank of Nova Scotia | 13-Aug-08 | 293,540.63 | 16-Sep-08 | ||||||
10120739
|
The Bank of Nova Scotia | 13-Aug-08 | 24,645.60 | 14-Sep-08 | ||||||
10120658
|
The Bank of Nova Scotia | 02-Jun-08 | 31,481.32 | 05-Sep-08 | ||||||
10120702
|
The Bank of Nova Scotia | 25-Jun-08 | 22,952.79 | 02-Sep-08 | ||||||
10120719
|
The Bank of Nova Scotia | 16-Jul-08 | 24,136.77 | 14-Sep-08 | ||||||
10120720
|
The Bank of Nova Scotia | 16-Jul-08 | 15,618.96 | 29-Aug-08 | ||||||
10120721
|
The Bank of Nova Scotia | 16-Jul-08 | 13,687.44 | 12-Sep-08 | ||||||
10120722
|
The Bank of Nova Scotia | 16-Jul-08 | 14,110.11 | 14-Sep-08 | ||||||
10120723
|
The Bank of Nova Scotia | 16-Jul-08 | 3,447.44 | 14-Sep-08 | ||||||
10120724
|
The Bank of Nova Scotia | 16-Jul-08 | 53,343.68 | 14-Sep-08 | ||||||
10120727
|
The Bank of Nova Scotia | 29-Jul-08 | 30,866.12 | 06-Nov-08 | ||||||
10120728
|
The Bank of Nova Scotia | 29-Jul-08 | 12,592.36 | 07-Dec-08 | ||||||
10120731
|
The Bank of Nova Scotia | 13-Aug-08 | 3,628.80 | 15-Sep-08 | ||||||
10120732
|
The Bank of Nova Scotia | 13-Aug-08 | 16,128.00 | 25-Sep-08 | ||||||
10120733
|
The Bank of Nova Scotia | 13-Aug-08 | 12,472.95 | 06-Nov-08 | ||||||
10120734
|
The Bank of Nova Scotia | 13-Aug-08 | 314,487.60 | 21-Nov-08 | ||||||
10120735
|
The Bank of Nova Scotia | 13-Aug-08 | 146,160.00 | 21-Nov-08 | ||||||
10120740
|
The Bank of Nova Scotia | 13-Aug-08 | 48,039.71 | 06-Nov-08 | ||||||
10120758
|
The Bank of Nova Scotia | 13-Aug-08 | 8,799.23 | 01-Jan-09 | ||||||
10100164
|
The Bank of Nova Scotia | 06-Feb-08 | 4,277.23 | 08-Sep-08 | ||||||
10100184
|
The Bank of Nova Scotia | 02-Apr-08 | 98,469.80 | 28-Aug-08 | ||||||
10100200
|
The Bank of Nova Scotia | 20-May-08 | 19,319.98 | 08-Sep-08 | ||||||
10100206
|
The Bank of Nova Scotia | 13-Jun-08 | 4,627.48 | 12-Sep-08 | ||||||
10100208
|
The Bank of Nova Scotia | 10-Jul-08 | 23,880.66 | 28-Sep-08 | ||||||
10100209
|
The Bank of Nova Scotia | 15-Jul-08 | 24,768.64 | 02-Sep-08 | ||||||
10100211
|
The Bank of Nova Scotia | 16-Jul-08 | 15,469.50 | 17-Sep-08 | ||||||
10100212
|
The Bank of Nova Scotia | 24-Jul-08 | 2,288.00 | 28-Aug-08 | ||||||
10100215
|
The Bank of Nova Scotia | 24-Jul-08 | 38,801.52 | 15-Sep-08 | ||||||
10100217
|
The Bank of Nova Scotia | 24-Jul-08 | 3,586.92 | 10-Dec-08 | ||||||
10100218
|
The Bank of Nova Scotia | 28-Jul-08 | 22,519.40 | 16-Sep-08 | ||||||
10100213
|
The Bank of Nova Scotia | 29-Jul-08 | 5,962.98 | 12-Sep-08 | ||||||
10100216
|
The Bank of Nova Scotia | 29-Jul-08 | 72,182.50 | 05-Oct-08 | ||||||
10100219
|
The Bank of Nova Scotia | 01-Aug-08 | 23,320.75 | 13-Dec-08 | ||||||
10100220
|
The Bank of Nova Scotia | 05-Aug-08 | 41,400.00 | 01-Nov-08 | ||||||
10100221
|
The Bank of Nova Scotia | 08-Aug-08 | 20,421.18 | 09-Nov-08 | ||||||
10100222
|
The Bank of Nova Scotia | 08-Aug-08 | 36,440.21 | 09-Nov-08 | ||||||
10100223
|
The Bank of Nova Scotia | 08-Aug-08 | 15,180.00 | 09-Nov-08 | ||||||
10120710
|
The Bank of Nova Scotia | 16-Jul-08 | 96,293.61 | 11-Sep-08 | ||||||
10120711
|
The Bank of Nova Scotia | 16-Jul-08 | 477,834.00 | 13-Sep-08 | ||||||
10120712
|
The Bank of Nova Scotia | 16-Jul-08 | 16,315.43 | 11-Sep-08 | ||||||
10120713
|
The Bank of Nova Scotia | 16-Jul-08 | 14,925.96 | 11-Sep-08 | ||||||
10120714
|
The Bank of Nova Scotia | 16-Jul-08 | 11,259.36 | 11-Sep-08 | ||||||
10120741
|
The Bank of Nova Scotia | 13-Aug-08 | 7,508.90 | 08-Oct-08 | ||||||
| Outstanding | ||||||||||
| Letter of Credit | Bank | Issue Date | Amount (USD) | Expiration Date | ||||||
10120742
|
The Bank of Nova Scotia | 13-Aug-08 | 44,765.28 | 05-Oct-08 | ||||||
10120743
|
The Bank of Nova Scotia | 13-Aug-08 | 17,784.90 | 04-Oct-08 | ||||||
10120744
|
The Bank of Nova Scotia | 13-Aug-08 | 66,681.98 | 25-Sep-08 | ||||||
10120745
|
The Bank of Nova Scotia | 13-Aug-08 | 11,062.80 | 09-Oct-08 | ||||||
10120746
|
The Bank of Nova Scotia | 13-Aug-08 | 3,381.84 | 02-Oct-08 | ||||||
10120747
|
The Bank of Nova Scotia | 13-Aug-08 | 20,114.64 | 09-Oct-08 | ||||||
10120748
|
The Bank of Nova Scotia | 13-Aug-08 | 20,461.56 | 15-Oct-08 | ||||||
10120749
|
The Bank of Nova Scotia | 13-Aug-08 | 24,706.50 | 15-Oct-08 | ||||||
10120750
|
The Bank of Nova Scotia | 13-Aug-08 | 37,344.51 | 02-Oct-08 | ||||||
10120751
|
The Bank of Nova Scotia | 13-Aug-08 | 42,894.60 | 15-Oct-08 | ||||||
10120752
|
The Bank of Nova Scotia | 13-Aug-08 | 11,875.50 | 15-Oct-08 | ||||||
10120753
|
The Bank of Nova Scotia | 13-Aug-08 | 12,497.21 | 03-Oct-08 | ||||||
10120754
|
The Bank of Nova Scotia | 13-Aug-08 | 19,082.70 | 10-Oct-08 | ||||||
10120755
|
The Bank of Nova Scotia | 13-Aug-08 | 25,004.70 | 30-Sep-08 | ||||||
10120756
|
The Bank of Nova Scotia | 13-Aug-08 | 19,769.40 | 15-Oct-08 | ||||||
10120757
|
The Bank of Nova Scotia | 13-Aug-08 | 13,973.40 | 30-Sep-08 | ||||||
10120729
|
The Bank of Nova Scotia | 29-Jul-08 | 79,121.86 | 15-Sep-08 | ||||||
10120759
|
The Bank of Nova Scotia | 13-Aug-08 | 14,630.99 | 03-Oct-08 | ||||||
085-01-006831
|
The Bank of Nova Scotia | 07-Apr-08 | 465,415.44 | 29-Aug-08 | ||||||
085-01-001879
|
The Bank of Nova Scotia | 29-Jan-08 | 11,504.64 | 29-Aug-08 | ||||||
085-01-0019435
|
The Bank of Nova Scotia | 17-Mar-08 | 27,487.32 | 29-Aug-08 | ||||||
085-01-0019694
|
The Bank of Nova Scotia | 27-Mar-08 | 244,576.32 | 29-Aug-08 | ||||||
085-01-0019710
|
The Bank of Nova Scotia | 27-Mar-08 | 351,749.54 | 22-Sep-08 | ||||||
085-01-0019765
|
The Bank of Nova Scotia | 14-Jul-08 | 1,046,408.04 | 18-Sep-08 | ||||||
085-01-0019872
|
The Bank of Nova Scotia | 30-Apr-08 | 115,208.20 | 28-Aug-08 | ||||||
085-01-0019881
|
The Bank of Nova Scotia | 30-Apr-08 | 71,786.93 | 28-Aug-08 | ||||||
085-01-0019890
|
The Bank of Nova Scotia | 30-Apr-08 | 250,330.16 | 30-Aug-08 | ||||||
085-01-0020165
|
The Bank of Nova Scotia | 09-May-08 | 197,102.94 | 30-Aug-08 | ||||||
085-01-0020290
|
The Bank of Nova Scotia | 16-May-08 | 63,033.48 | 24-Aug-08 | ||||||
085-01-0020307
|
The Bank of Nova Scotia | 28-May-08 | 180,053.09 | 04-Sep-08 | ||||||
085-01-0020398
|
The Bank of Nova Scotia | 28-May-08 | 221,858.00 | 05-Sep-08 | ||||||
085-01-0020423
|
The Bank of Nova Scotia | 06-Jun-08 | 64,971.61 | 04-Sep-08 | ||||||
085-01-0020780
|
The Bank of Nova Scotia | 20-Jun-08 | 550,025.00 | 27-Oct-08 | ||||||
085-01-0020806
|
The Bank of Nova Scotia | 14-Jul-08 | 30,688.10 | 09-Sep-08 | ||||||
085-01-0020824
|
The Bank of Nova Scotia | 14-Jul-08 | 99,149.80 | 09-Sep-08 | ||||||
085-01-0020833
|
The Bank of Nova Scotia | 04-Jul-08 | 121,217.90 | 29-Aug-08 | ||||||
085-01-0020842
|
The Bank of Nova Scotia | 14-Jul-08 | 66,879.40 | 08-Sep-08 | ||||||
085-01-0020851
|
The Bank of Nova Scotia | 04-Jul-08 | 336,202.35 | 08-Sep-08 | ||||||
085-01-0020879
|
The Bank of Nova Scotia | 04-Jul-08 | 49,000.00 | 01-Sep-08 | ||||||
085-01-0020888
|
The Bank of Nova Scotia | 04-Jul-08 | 85,170.01 | 29-Aug-08 | ||||||
085-01-0020897
|
The Bank of Nova Scotia | 14-Jul-08 | 382,344.36 | 09-Sep-08 | ||||||
085-01-0020904
|
The Bank of Nova Scotia | 04-Jul-08 | 270,990.87 | 08-Sep-08 | ||||||
085-01-0020913
|
The Bank of Nova Scotia | 14-Jul-08 | 19,422.10 | 08-Sep-08 | ||||||
085-01-0020931
|
The Bank of Nova Scotia | 14-Jul-08 | 289,729.20 | 08-Sep-08 | ||||||
085-01-0020940
|
The Bank of Nova Scotia | 14-Jul-08 | 434,976.80 | 08-Sep-08 | ||||||
085-01-0020959
|
The Bank of Nova Scotia | 14-Jul-08 | 278,235.30 | 11-Sep-08 | ||||||
085-01-0020968
|
The Bank of Nova Scotia | 04-Jul-08 | 62,771.74 | 08-Sep-08 | ||||||
085-01-0020977
|
The Bank of Nova Scotia | 14-Jul-08 | 29,529.72 | 14-Sep-08 | ||||||
085-01-0020986
|
The Bank of Nova Scotia | 14-Jul-08 | 156,673.50 | 08-Sep-08 | ||||||
085-01-0021002
|
The Bank of Nova Scotia | 08-Jul-08 | 98,455.20 | 05-Sep-08 | ||||||
085-01-0021011
|
The Bank of Nova Scotia | 04-Jul-08 | 5,238.00 | 28-Aug-08 | ||||||
| Outstanding | ||||||||||
| Letter of Credit | Bank | Issue Date | Amount (USD) | Expiration Date | ||||||
085-01-0021020
|
The Bank of Nova Scotia | 14-Jul-08 | 13,248.00 | 03-Sep-08 | ||||||
085-01-0021039
|
The Bank of Nova Scotia | 14-Jul-08 | 5,280.00 | 01-Sep-08 | ||||||
085-01-0021048
|
The Bank of Nova Scotia | 04-Jul-08 | 44,896.80 | 01-Sep-08 | ||||||
085-01-0021057
|
The Bank of Nova Scotia | 14-Jul-08 | 22,180.80 | 26-Oct-08 | ||||||
085-01-0021066
|
The Bank of Nova Scotia | 14-Jul-08 | 54,072.96 | 26-Oct-08 | ||||||
085-01-0021075
|
The Bank of Nova Scotia | 14-Jul-08 | 12,208.12 | 01-Oct-08 | ||||||
085-01-0021084
|
The Bank of Nova Scotia | 14-Jul-08 | 43,780.50 | 26-Oct-08 | ||||||
085-01-0021093
|
The Bank of Nova Scotia | 17-Jul-08 | 118,884.15 | 27-Nov-08 | ||||||
085-01-0021119
|
The Bank of Nova Scotia | 17-Jul-08 | 363,390.84 | 27-Nov-08 | ||||||
085-01-0021137
|
The Bank of Nova Scotia | 25-Jul-08 | 282,836.14 | 25-Dec-08 | ||||||
085-01-0021146
|
The Bank of Nova Scotia | 25-Jul-08 | 103,212.08 | 27-Nov-08 | ||||||
085-01-0021155
|
The Bank of Nova Scotia | 25-Jul-08 | 210,498.02 | 25-Dec-08 | ||||||
085-01-0021164
|
The Bank of Nova Scotia | 25-Jul-08 | 559,426.64 | 25-Dec-08 | ||||||
085-01-0021173
|
The Bank of Nova Scotia | 25-Jul-08 | 83,923.84 | 27-Nov-08 | ||||||
085-01-0021182
|
The Bank of Nova Scotia | 25-Jul-08 | 232,189.52 | 27-Nov-08 | ||||||
085-01-0021191
|
The Bank of Nova Scotia | 25-Jul-08 | 18,414.00 | 01-Sep-08 | ||||||
085-01-0021208
|
The Bank of Nova Scotia | 25-Jul-08 | 1,292,169.36 | 31-Dec-08 | ||||||
085-01-0021226
|
The Bank of Nova Scotia | 25-Jul-08 | 84,755.68 | 30-Dec-08 | ||||||
085-01-0021235
|
The Bank of Nova Scotia | 30-Jul-08 | 51,195.90 | 29-Sep-08 | ||||||
085-01-0021244
|
The Bank of Nova Scotia | 30-Jul-08 | 86,801.09 | 14-Dec-08 | ||||||
085-01-0021253
|
The Bank of Nova Scotia | 30-Jul-08 | 433,059.60 | 14-Dec-08 | ||||||
085-01-0021262
|
The Bank of Nova Scotia | 05-Aug-08 | 112,934.48 | 13-Jan-09 | ||||||
085-01-0021306
|
The Bank of Nova Scotia | 05-Aug-08 | 31,650.80 | 08-Jan-09 | ||||||
085-01-0021315
|
The Bank of Nova Scotia | 05-Aug-08 | 21,707.40 | 19-Sep-08 | ||||||
085-01-0021324
|
The Bank of Nova Scotia | 05-Aug-08 | 69,785.95 | 06-Oct-08 | ||||||
085-01-0021333
|
The Bank of Nova Scotia | 05-Aug-08 | 25,000.00 | 19-Sep-08 | ||||||
085-01-0021342
|
The Bank of Nova Scotia | 05-Aug-08 | 117,051.20 | 18-Oct-08 | ||||||
085-01-0021351
|
The Bank of Nova Scotia | 05-Aug-08 | 141,197.44 | 04-Oct-08 | ||||||
085-01-0021360
|
The Bank of Nova Scotia | 05-Aug-08 | 45,105.22 | 08-Oct-08 | ||||||
085-01-0021379
|
The Bank of Nova Scotia | 05-Aug-08 | 113,275.00 | 29-Sep-08 | ||||||
085-01-0021388
|
The Bank of Nova Scotia | 05-Aug-08 | 34,046.50 | 18-Sep-08 | ||||||
085-01-0021397
|
The Bank of Nova Scotia | 05-Aug-08 | 351,587.10 | 08-Oct-08 | ||||||
085-01-0021404
|
The Bank of Nova Scotia | 11-Aug-08 | 166,894.00 | 18-Oct-08 | ||||||
085-01-0021440
|
The Bank of Nova Scotia | 11-Aug-08 | 69,837.12 | 09-Oct-08 | ||||||
085-01-0021447
|
The Bank of Nova Scotia | 11-Aug-08 | 88,698.24 | 09-Oct-08 | ||||||
085-01-0021486
|
The Bank of Nova Scotia | 11-Aug-08 | 226,044.00 | 08-Oct-08 | ||||||
085-01-0021495
|
The Bank of Nova Scotia | 11-Aug-08 | 531,456.00 | 08-Oct-08 | ||||||
085-01-0021501
|
The Bank of Nova Scotia | 05-Aug-08 | 207,795.60 | 11-Dec-08 | ||||||
085-01-0021510
|
The Bank of Nova Scotia | 05-Aug-08 | 33,120.00 | 30-Dec-08 | ||||||
085-01-0021538
|
The Bank of Nova Scotia | 15-Aug-08 | 114,224.24 | 11-Dec-08 | ||||||
085-01-0021547
|
The Bank of Nova Scotia | 15-Aug-08 | 128,164.00 | 11-Dec-08 | ||||||
90366/80085
|
The Bank of Nova Scotia | 6-Dec-01 | 2,794,854.00 | 31-Dec-08 | ||||||
90531/80085
|
The Bank of Nova Scotia | 25-Mar-03 | 3,829,885.26 | 28-Jan-09 | ||||||
92186/80085
|
The Bank of Nova Scotia | 2-Mar-07 | 300,499.93 | 2-Mar-09 | ||||||
TD605500138739-8
|
Bank of America | 10-Jul-08 | 33,376.32 | 17-Sep-08 | ||||||
TD605500138740-8
|
Bank of America | 10-Jul-08 | 110,840.00 | 23-Sep-08 | ||||||
TD605500138741-8
|
Bank of America | 10-Jul-08 | 18,360.00 | 12-Sep-08 | ||||||
TD605500138742-8
|
Bank of America | 10-Jul-08 | 47,462.82 | 10-Sep-08 | ||||||
TD605500138753-8
|
Bank of America | 25-Jul-08 | 18,559.20 | 11-Sep-08 | ||||||
TD605500138803-8
|
Bank of America | 14-Aug-08 | 20,866.56 | 11-Oct-08 | ||||||
TD605500138804-8
|
Bank of America | 14-Aug-08 | 278,925.45 | 24-Sep-08 | ||||||
| Outstanding | ||||||||||
| Letter of Credit | Bank | Issue Date | Amount (USD) | Expiration Date | ||||||
TD605500138805-8
|
Bank of America | 14-Aug-08 | 363,835.00 | 17-Oct-08 | ||||||
TD605500138806-8
|
Bank of America | 14-Aug-08 | 41,760.00 | 10-Oct-08 | ||||||
TD605500138666-8
|
Bank of America | 11-Apr-08 | 130,918.20 | 30-Aug-08 | ||||||
TD605500138738-8
|
Bank of America | 10-Jul-08 | 121,373.00 | 13-Sep-08 | ||||||
TD605500138809-8
|
Bank of America | 18-Aug-08 | 49,062.15 | 03-Oct-08 | ||||||
TD605500138810-8
|
Bank of America | 18-Aug-08 | 42,702.50 | 10-Oct-08 | ||||||
TD605500138811-8
|
Bank of America | 18-Aug-08 | 10,004.50 | 08-Oct-08 | ||||||
TD605500138812-8
|
Bank of America | 18-Aug-08 | 15,033.56 | 08-Oct-08 | ||||||
TD605500138813-8
|
Bank of America | 18-Aug-08 | 13,192.08 | 03-Oct-08 | ||||||
TD605500138814-8
|
Bank of America | 18-Aug-08 | 46,029.79 | 09-Oct-08 | ||||||
TD605500138815-8
|
Bank of America | 18-Aug-08 | 58,666.44 | 14-Oct-08 | ||||||
TD605500138816-8
|
Bank of America | 18-Aug-08 | 32,448.90 | 21-Oct-08 | ||||||
TD605500138817-8
|
Bank of America | 18-Aug-08 | 32,156.20 | 21-Oct-08 | ||||||
TD605500138818-8
|
Bank of America | 18-Aug-08 | 15,743.20 | 18-Oct-08 | ||||||
TD605500138724-8
|
Bank of America | 10-Jul-08 | 333,958.20 | 03-Sep-08 | ||||||
TD605500138725-8
|
Bank of America | 10-Jul-08 | 796,824.48 | 08-Sep-08 | ||||||
TD605500138726-8
|
Bank of America | 10-Jul-08 | 230,888.30 | 22-Aug-08 | ||||||
TD605500138727-8
|
Bank of America | 10-Jul-08 | 949,155.35 | 12-Sep-08 | ||||||
TD605500138730-8
|
Bank of America | 10-Jul-08 | 253,031.64 | 27-Aug-08 | ||||||
TD605500138731-8
|
Bank of America | 10-Jul-08 | 585,374.40 | 03-Sep-08 | ||||||
TD605500138732-8
|
Bank of America | 10-Jul-08 | 974,025.00 | 29-Aug-08 | ||||||
TD605500138733-8
|
Bank of America | 10-Jul-08 | 1,460,984.40 | 10-Sep-08 | ||||||
TD605500138728-8
|
Bank of America | 10-Jul-08 | 101,280.00 | 08-Sep-08 | ||||||
TD605500138734-8
|
Bank of America | 10-Jul-08 | 1,477,674.00 | 08-Sep-08 | ||||||
TD605500138735-8
|
Bank of America | 10-Jul-08 | 541,500.00 | 26-Aug-08 | ||||||
TD605500138736-8
|
Bank of America | 10-Jul-08 | 87,840.00 | 27-Aug-08 | ||||||
TD605500138737-8
|
Bank of America | 10-Jul-08 | 194,356.80 | 25-Aug-08 | ||||||
TD605500138761-8
|
Bank of America | 13-Aug-08 | 482,416.48 | 07-Nov-08 | ||||||
TD605500138772-8
|
Bank of America | 14-Aug-08 | 198,958.47 | 08-Oct-08 | ||||||
TD605500138773-8
|
Bank of America | 14-Aug-08 | 163,031.94 | 09-Oct-08 | ||||||
TD605500138774-8
|
Bank of America | 14-Aug-08 | 1,121,243.97 | 10-Oct-08 | ||||||
TD605500138775-8
|
Bank of America | 14-Aug-08 | 812,235.02 | 10-Oct-08 | ||||||
TD605500138776-8
|
Bank of America | 14-Aug-08 | 292,030.00 | 08-Oct-08 | ||||||
TD605500138777-8
|
Bank of America | 14-Aug-08 | 90,059.16 | 21-Oct-08 | ||||||
TD605500138778-8
|
Bank of America | 14-Aug-08 | 859,570.25 | 09-Oct-08 | ||||||
TD605500138779-8
|
Bank of America | 15-Aug-08 | 396,938.79 | 08-Oct-08 | ||||||
TD605500138780-8
|
Bank of America | 14-Aug-08 | 934,475.85 | 14-Oct-08 | ||||||
TD605500138781-8
|
Bank of America | 14-Aug-08 | 106,211.00 | 21-Oct-08 | ||||||
TD605500138782-8
|
Bank of America | 14-Aug-08 | 85,920.00 | 03-Oct-08 | ||||||
TD605500138783-8
|
Bank of America | 14-Aug-08 | 141,264.60 | 09-Oct-08 | ||||||
TD605500138784-8
|
Bank of America | 14-Aug-08 | 133,777.40 | 17-Oct-08 | ||||||
TD605500138785-8
|
Bank of America | 14-Aug-08 | 256,922.35 | 21-Oct-08 | ||||||
TD605500138786-8
|
Bank of America | 14-Aug-08 | 141,240.90 | 21-Oct-08 | ||||||
TD605500138787-8
|
Bank of America | 14-Aug-08 | 85,032.77 | 16-Oct-08 | ||||||
TD605500138788-8
|
Bank of America | 14-Aug-08 | 127,860.40 | 14-Oct-08 | ||||||
TD605500138789-8
|
Bank of America | 14-Aug-08 | 107,780.80 | 17-Sep-08 | ||||||
TD605500138790-8
|
Bank of America | 14-Aug-08 | 30,285.60 | 08-Oct-08 | ||||||
TD605500138791-8
|
Bank of America | 14-Aug-08 | 89,070.70 | 06-Oct-08 | ||||||
TD605500138792-8
|
Bank of America | 14-Aug-08 | 58,430.00 | 08-Oct-08 | ||||||
TD605500138793-8
|
Bank of America | 18-Aug-08 | 18,540.00 | 25-Sep-08 | ||||||
TD605500138794-8
|
Bank of America | 14-Aug-08 | 582,630.40 | 09-Oct-08 | ||||||
| Outstanding | ||||||||||
| Letter of Credit | Bank | Issue Date | Amount (USD) | Expiration Date | ||||||
TD605500138795-8
|
Bank of America | 14-Aug-08 | 399,451.75 | 09-Oct-08 | ||||||
TD605500138796-8
|
Bank of America | 14-Aug-08 | 19,296.00 | 10-Oct-08 | ||||||
TD605500138797-8
|
Bank of America | 14-Aug-08 | 119,523.60 | 16-Oct-08 | ||||||
TD605500138798-8
|
Bank of America | 14-Aug-08 | 85,696.92 | 24-Sep-08 | ||||||
TD605500138799-8
|
Bank of America | 14-Aug-08 | 1,090,380.15 | 08-Oct-08 | ||||||
TD605500138800-8
|
Bank of America | 14-Aug-08 | 6,132.00 | 09-Oct-08 | ||||||
TD605500138762-8
|
Bank of America | 05-Aug-08 | 62,551.00 | 20-Sep-08 | ||||||
TD605500138763-8
|
Bank of America | 05-Aug-08 | 135,694.95 | 11-Oct-08 | ||||||
TD605500138764-8
|
Bank of America | 07-Aug-08 | 358,737.70 | 11-Oct-08 | ||||||
TD605500138765-8
|
Bank of America | 07-Aug-08 | 11,102.30 | 23-Sep-08 | ||||||
TD605500138766-8
|
Bank of America | 07-Aug-08 | 553,334.94 | 14-Oct-08 | ||||||
TD605500138767-8
|
Bank of America | 07-Aug-08 | 90,288.00 | 18-Sep-08 | ||||||
TD605500138708-8
|
Bank of America | 12-Jun-08 | 62,854.40 | 08-Aug-08 | ||||||
TD605500138743-8
|
Bank of America | 10-Jul-08 | 559,360.00 | 12-Sep-08 | ||||||
TD605500138744-8
|
Bank of America | 10-Jul-08 | 32,921.40 | 13-Sep-08 | ||||||
TD605500138745-8
|
Bank of America | 10-Jul-08 | 16,092.00 | 27-Aug-08 | ||||||
TD605500138746-8
|
Bank of America | 10-Jul-08 | 200,319.84 | 29-Aug-08 | ||||||
TD605500138747-8
|
Bank of America | 10-Jul-08 | 204,504.00 | 10-Sep-08 | ||||||
TD605500138748-8
|
Bank of America | 10-Jul-08 | 561,546.99 | 14-Oct-08 | ||||||
TD605500138751-8
|
Bank of America | 17-Jul-08 | 251,233.00 | 12-Sep-08 | ||||||
TD605500138752-8
|
Bank of America | 17-Jul-08 | 430,334.50 | 03-Sep-08 | ||||||
TD605500138754-8
|
Bank of America | 05-Aug-08 | 938,902.30 | 09-Oct-08 | ||||||
TD605500138755-8
|
Bank of America | 05-Aug-08 | 88,315.00 | 09-Oct-08 | ||||||
TD605500138756-8
|
Bank of America | 07-Aug-08 | 591,779.20 | 14-Oct-08 | ||||||
TD605500138757-8
|
Bank of America | 05-Aug-08 | 148,177.95 | 08-Oct-08 | ||||||
TD605500138758-8
|
Bank of America | 07-Aug-08 | 155,784.28 | 07-Oct-08 | ||||||
TD605500138759-8
|
Bank of America | 05-Aug-08 | 200,319.84 | 29-Sep-08 | ||||||
TD605500138768-8
|
Bank of America | 14-Aug-08 | 349,061.00 | 08-Nov-08 | ||||||
TD605500138769-8
|
Bank of America | 14-Aug-08 | 5,654.40 | 09-Oct-08 | ||||||
TD605500138770-8
|
Bank of America | 14-Aug-08 | 42,982.40 | 09-Oct-08 | ||||||
TD605500138771-8
|
Bank of America | 14-Aug-08 | 22,963.20 | 24-Sep-08 | ||||||
TD605500138807-8
|
Bank of America | 21-Aug-08 | 25,898.25 | 15-Sep-08 | ||||||
TD605500138718-8
|
Bank of America | 13-Jun-08 | 1,065,721.47 | 14-Oct-08 | ||||||
TD605500138719-8
|
Bank of America | 13-Jun-08 | 1,778,276.95 | 08-Oct-08 | ||||||
TD605500138749-8
|
Bank of America | 17-Jul-08 | 21,155.54 | 11-Sep-08 | ||||||
TD605500138750-8
|
Bank of America | 17-Jul-08 | 168,391.89 | 11-Sep-08 | ||||||
TD605500138801-8
|
Bank of America | 14-Aug-08 | 356,915.97 | 09-Oct-08 | ||||||
TD605500138802-8
|
Bank of America | 14-Aug-08 | 149,149.13 | 09-Oct-08 | ||||||
SCHEDULE 4.2
CONSENTS
None.
SCHEDULE 4.3
OWNERSHIP OF WARNACO ENTITIES
| Jurisdiction of | Number of | Percentage of | ||||||||
| Incorporation/ | Number of Shares | Shares | each Class of | |||||||
| Parent | Subsidiary | Organization | Authorized | Outstanding | Shares Owned | |||||
4278941 Canada Inc. |
WBR Industria e Comercio de Vestuario S.A. | Brazil | 400,000 | 196,000 common, 4,000 preferred | 51% | |||||
Calvin Klein Jeanswear Company |
CKJ Holdings, Inc. | Delaware | 1,000 shares Common Stock, par value $0.01 | 1,000 | 100% | |||||
CKJ UK Limited |
Jeanswear Services, Ltd. | United Kingdom | N/A | 100 | 100% | |||||
CK Jeanswear Asia Ltd. |
CKJ Fashion (Shanghai) Ltd. | People’s Republic of China | 1,050,000 | 157,500 | 100% | |||||
| Gold Lightening Limited | Hong Kong | N/A | 65,000 | 100% | ||||||
Designer Holdings Ltd. |
Calvin Klein Jeanswear Company | Delaware | 1,000 shares Common Stock, par value $0.01 | 1,000 | 100% | |||||
The Warnaco Group, Inc. |
Warnaco Inc. | Delaware | 100,000 shares Common Stock, par value $1.00 | 100,000 | 100% | |||||
Warnaco B.V. |
A.E.S. Advanced Euro Service S.r.l | Italy | 90,000 | 90,000 | 100% | |||||
| CKJ UK Ltd. | United Kingdom | 1,098,000 shares, par value £1.00 | 980,000 | 100% | ||||||
| CK Jeanswear Australia Pty Limited | Australia | 4,467,737 | 4,467,737 | 100% | ||||||
| CK Jeanswear Europe S.r.l. | Italy | N/A | 3,500,000 | 100% | ||||||
| CK Jeanswear Korea Co. Limited | Korea | N/A | 381,045 | 100% | ||||||
| CK Jeanswear NZ Ltd. | New Zealand | 100 | 100 | 100% | ||||||
| Euro Retail S.r.l. | Italy | 100,000 | 100,000 | 100% |
| ** | Certain shares are held as Directors’ qualifying shares, but in each case, solely to the extent
required by local law. |
| Jurisdiction of | Number of | Percentage of | ||||||||
| Incorporation/ | Number of Shares | Shares | each Class of | |||||||
| Parent | Subsidiary | Organization | Authorized | Outstanding | Shares Owned | |||||
| Warnaco Argentina SRL | Argentina | 12,000 quotas | 1,080 | 95% | ||||||
| Warnaco Denmark A/S | Denmark | 5000 | 5000 | 100% | ||||||
| Warnaco France S.A.R.L. | France | 500, par value FF 100 | 500 | 100% | ||||||
| Warnaco Germany GmbH | Germany | €25,000 | 25,000 | 100% | ||||||
| Warnaco Netherlands B.V. | The Netherlands | 2,500 shares | 561 shares | 100% | ||||||
| Warnaco Poland Sp.zo.o. | Poland | 20,000 shares, par value 50 zlotys | 1,000 | 100% | ||||||
| Warnaco Portugal Vesutario e Acessorios Sociedade Unipessoal, Lda. | Portugal | €5,000 | 5,000 | 100% | ||||||
| Warner’s Company (Belgium) SPRL | Belgium | 25,000 shares, par value 1,000 FF | 25,000 | 100% | ||||||
| Warner’s (EIRE) Teoranta | Ireland | 1,000 shares, par value IR£1.00 | 101 | 100%** | ||||||
| WAS Logistics B.V. | The Netherlands | €18,200 | 18,200 | 100% | ||||||
Warnaco France S.A.R.L. |
FA France S.A.R.L. | France | 7,623 | 7,623 | 100% | |||||
| Warner’s Aiglon, S.A. | France | 215,000, par value FRF 100 | 215,000 | 100%** | ||||||
Warnaco (H.K.), Ltd. |
CK Jeanswear Asia Ltd. | Hong Kong | 100 | 100 | 100% | |||||
| Warnaco International Trading (Shanghai) Co. Ltd. | People’s Republic of China | 1,655,420 | 1,655,420 | 100% | ||||||
| Warnaco Shanghai Co. Ltd. | People’s Republic of China | 810,000 | 610,000 | 100% | ||||||
| Warnaco Singapore Private Ltd. | Singapore | 100,000 shares, par value $1.00 | 2 | 100% |
| ** | Certain shares are held as Directors’ qualifying shares, but in each case, solely to the extent
required by local law. |
| Jurisdiction of | Number of | Percentage of | ||||||||
| Incorporation/ | Number of Shares | Shares | each Class of | |||||||
| Parent | Subsidiary | Organization | Authorized | Outstanding | Shares Owned | |||||
Warnaco Inc. |
CKU.com Inc. | Delaware | 1,000 shares Common Stock, par value $0.01 | 1,000 | 100% | |||||
| Designer Holdings Ltd. | Delaware | 1,000 shares Common Stock, par value $0.01 | 1,000 | 100% | ||||||
| Ocean Pacific Apparel Corp. | Delaware | 5,589 | 5,589 | 100% | ||||||
| Linda Vista de Veracruz S.A. de C.V. | Mexico | 500 shares Serie B Subserie I; 225 shares Serie B Subserie II, par value 100 Mexican Pesos | 500 Serie B Subserie I | 69%** | ||||||
| Warnaco Intimo S.A. | Spain | 11,000, par value 1,000 pesetas each | 11,000 | 100% | ||||||
| Warnaco Puerto Rico, Inc. | Delaware | 1,000 shares of Common Stock, par value $0.01 | 1,000 | 100% | ||||||
| Warnaco Swimwear Inc. | Delaware | 1,000 shares of Common Stock, par value $0.01 | 1,000 | 100% | ||||||
| Warnaco U.S., Inc. | Delaware | 1,000 shares Common Stock, par value $0.01 | 1,000 | 100% | ||||||
| Warner’s de Mexico S.A. de C.V. | Mexico | 50,000 Series A shares, par value $0.10 Mexican Pesos; 60,545,220 Series B shares, par value $0.10 Mexican Pesos | 50,000 Series A shares; 60,545,220 Series B shares | Type A - 100%** Type B - 100% | ||||||
| WF Overseas Fashion C.V. | The Netherlands | 100% partnership interests | Warnaco Inc. holds 99% interest (as limited partner); Warnaco U.S., Inc. holds 1% interest (as general partner) | 99% |
| ** | Certain shares are held as Directors’ qualifying shares, but in each case, solely to the extent
required by local law. |
| Jurisdiction of | Number of | Percentage of | ||||||||
| Incorporation/ | Number of Shares | Shares | each Class of | |||||||
| Parent | Subsidiary | Organization | Authorized | Outstanding | Shares Owned | |||||
Warnaco Netherlands B.V. |
Eretex GmbH | Germany | DM 50,000 | DM 50,000 | 100% | |||||
| Lenitex-Warnaco Handelsgesellschaft m.b.H. | Austria | 500,000 Austrian schillings | 500,000 | 100% | ||||||
| Lintex-Warnaco S.a.r.l. | Switzerland | 50 shares | 50 | 100% | ||||||
| Warnaco Argentina SRL | Argentina | 12,000 quotas | 120 | 5% | ||||||
| Warnaco of Canada Company | Province of Nova Scotia | 1,000,000 Common Shares, without par value | 1,000,000 | 100% | ||||||
| Warner’s (United Kingdom) Limited | United Kingdom | 5,520,000 shares at £1 each | 5,520,000 | 100% | ||||||
Warnaco of Canada Company |
4278941 Canada Inc. | Canada | Unlimited number of Classes A-F | 2,000 Class A | 100% | |||||
| Linda Vista de Veracruz S.A. de C.V. | Mexico | 500 shares Serie B Subserie I; 225 shares Serie B Subserie II, par value 100 Mexican Pesos | 225 Serie B Subserie II | 31%** | ||||||
Warnaco Swimwear Inc. |
Warnaco Swimwear Products Inc. | Delaware | 10,000 shares of Common Stock, par value $0.01 | 100 | 100% | |||||
Warnaco Swimwear Products Inc. |
Authentic Fitness On-Line, Inc. | Nevada | 100 shares of Common Stock, par value $0.01 | 100 | 100% | |||||
| CCC Acquisition Corp. | Delaware | 1,000 shares Common Stock, par value $0.01 | 100 | 100% | ||||||
| Vista de Yucatan S.A. de C.V. | Mexico | 500 shares, par value 100 Mexican Pesos | 500 | 100%** | ||||||
| Warnaco Retail Inc. | Delaware | 100 shares of Common Stock, par value $0.01 | 100 | 100% |
| ** | Certain shares are held as Directors’ qualifying shares, but in each case, solely to the extent
required by local law. |
| Jurisdiction of | Number of | Percentage of | ||||||||
| Incorporation/ | Number of Shares | Shares | each Class of | |||||||
| Parent | Subsidiary | Organization | Authorized | Outstanding | Shares Owned | |||||
Warnaco U.S., Inc. |
Warnaco (Macao) Company Limited | Macao | Uncertificated | Uncertificated | 100%** | |||||
| WF Overseas Fashion C.V. | The Netherlands | 100% partnership interests | Warnaco Inc. holds 99% interest (as limited partner); Warnaco U.S., Inc. holds 1% interest (as general partner) | 1% | ||||||
Warner’s (United Kingdom) Ltd. |
Mullion International Limited | British Virgin Islands | 50,000 shares | 10 | 100% | |||||
WF Overseas Fashion C.V. |
Designer Holdings Overseas Limited | Hong Kong | 10,000 shares, par value HK$1.00 | 10,000 | 100%** | |||||
| Warnaco B.V. | The Netherlands | 200,000 NLG | 40,000 | 100% | ||||||
| Warnaco (H.K.) Limited | Barbados | 1,000 common shares, no par value | 1,000 | 100% | ||||||
| Warnaco Taiwan Co. Ltd. | Taiwan | 1,500,000 | 1,500,000 | 100% |
| ** | Certain shares are held as Directors’ qualifying shares, but in each case, solely to the extent
required by local law. |
Number of Shares Covered by All Outstanding Options, Warrants,
Rights of Conversion or Purchase and Similar Rights
Rights of Conversion or Purchase and Similar Rights
None.
SCHEDULE 4.15
LABOR MATTERS
Collective Bargaining Agreements
Local 1701 of the Union of Needle Trades Industrial and Textile Employees
AFL-CIO, CLC and Warnaco Inc.
Duncansville, PA
Expires March 1, 2009
Duncansville, PA
Expires March 1, 2009
Indigo Blue S.A. and Lintex-Warnaco S.a.r.l.
Collective Bargaining Agreement for employees of Foxtown Center,
Mendrisio, Switzerland
Expires December 31, 2011
Collective Bargaining Agreement for employees of Foxtown Center,
Mendrisio, Switzerland
Expires December 31, 2011
Consulting Agreements
None.
Executive Employment Agreements
| 1 | Joseph Gromek, President and Chief Executive Officer |
|
| 2 | Lawrence R. Rutkowski, Executive Vice President and Chief Financial Officer |
|
| 3 | Helen McCluskey, President Intimate Apparel Group |
|
| 4 | Frank Tworecke, President Sportswear Group |
|
| 5 | Dwight Meyer, President Global Sourcing |
|
| 6 | Stanley Silverstein, Executive Vice president — International Strategy and Business
Development |
|
| 7 | Elizabeth Wood, Senior Vice President, Human Resources |
Executive Compensation Plans
None.
Deferred Compensation Agreements
The Warnaco Group, Inc. Non-Employee Directors Deferred Compensation Plan
The Warnaco Group, Inc. Deferred Compensation Plan
The Warnaco Group, Inc. Deferred Compensation Plan
Employee Stock Purchase and Stock Option Plans
The Warnaco Group, Inc. 2003 Stock Incentive Plan, as amended
The Warnaco Group, Inc. 2005 Stock Incentive Plan, as amended
The Warnaco Group, Inc. 2005 Stock Incentive Plan, as amended
Severance Plans
None.
SCHEDULE 4.16
ERISA MATTERS
| PLAN NAME | EMPLOYER ID NO. | PLAN NO. | ||||||
| Retirement Plans |
||||||||
Employees Retirement Plan of Warnaco Inc. |
22-1897478 | 001 | ||||||
The Warnaco Group, Inc. Employee Savings Plan |
95-4032739 | 020 | ||||||
| Health and Welfare Plans |
||||||||
Warnaco Flexible Benefits Plan |
22-1897478 | 501 | ||||||
Unfunded Pension Liability
The Plan is under funded, however under the terms of Warnaco Inc.’s Amended and Restated Plan
of Reorganization provided that the Warnaco Inc. will continue its Employee Retirement Plan,
including meeting the minimum funding standards under ERISA and the Code. In connection with the
Employee Retirement Plan, on an actuarial basis the amount by which the present value of all
accrued benefits under the Employee Retirement Plan exceeds the fair market value of all assets of
such Plan allocable to such benefits in accordance with Title IV of ERISA is approximately $8.95
million, as reported in Group’s 10-K for fiscal year 2007.
Withdrawal Liability
None.
SCHEDULE 4.19
MATERIAL REAL PROPERTY
| Address of Property | Record Owner | |
Material Owned Real Property: |
||
None. |
||
Material Leased Real Property: |
||
The Warnaco Group, Inc.
|
501 Seventh Ave. Associates L.L.C | |
501 7th Avenue
|
c/o Insigna/ESG Inc. | |
New York, NY 10018
|
200 Park Ave. | |
New York County
|
New York, NY 10016 | |
| Leased by: The Warnaco Group, Inc. | ||
Distribution Facility
|
Huntingdon Storage & Distribution | |
(Former) Fleming Building
|
5506 Sixth Ave. Com Rear | |
RD # 4 Industrial Park
|
Altoona, PA 16602 | |
Huntingdon, PA 16652
|
Attention: John Radionoff/Lenorad Fiore | |
Huntingdon County
|
Leased by Warnaco Inc. | |
Distribution Facility
|
Realty Associated Fund VIP | |
5305 Rivergrade Road
|
Realty Associated Fund V Irwindale | |
Irwindale, CA 91076
|
Distribution Center | |
Los Angeles County
|
PO Box 51921 Unit 1 | |
| Los Angeles, CA 90051-6210 | ||
| Leased by Authentic Fitness Products
Inc. (N/K/A: Warnaco Swimwear Products Inc.) |
||
Office Facility
|
Corporate Campus/Joint Venture | |
470 Wheelers Farms Road
|
c/o Lend Lease Real Estate Investments Inc. | |
Milford, CT 06040
|
787 Seventh Ave. | |
Hartford County
|
New York, NY 10019 | |
| Leased by Warnaco Inc. |
SCHEDULE 7.15
POST CLOSING MATTERS
To the extent not delivered on or prior to the Closing Date, within the periods set forth below
(or such later date as may be agreed by the Administrative Agent), Group and the Borrower shall
deliver, or cause to be delivered, to the Administrative Agent the following documents, in each
case, in form and substance reasonably satisfactory to the Administrative Agent:
1. On or prior to the 30th day following the Closing Date, for each Loan Party set forth
below a good standing certificate from the applicable Governmental Authority of each jurisdiction
set forth below opposite the name of such Loan Party:
| Loan Party | Jurisdiction | |
Warnaco Swimwear Inc.
|
New York | |
Ocean Pacific Apparel Corp.
|
New York | |
Warnaco Inc.
|
Connecticut; New York | |
The Warnaco Group, Inc.
|
Connecticut; New York | |
Warnaco Retail Inc.
|
California; New York | |
Designer Holdings Ltd.
|
New York | |
CKU.com Inc.
|
Connecticut | |
Warnaco U.S., Inc.
|
Connecticut | |
Calvin Klein Jeanswear Company
|
Connecticut |
2. On or prior to the 30th day following the Closing Date, certificates to evidence the
following pledged interests (to the extent such pledged interest is evidenced by a certificate):
| Loan Party | Stock Issuer | Class of Stock | Number of Shares | |||||
Warnaco Inc.
|
CKU.com Inc. | Common Stock | 1,000 | |||||
Warnaco Inc.
|
Ocean Pacific Apparel Corp. | Common Stock | 5,589 | |||||
Warnaco Inc.
|
Warnaco Intimo S.A. | Common Stock | 7,260 | |||||
Warnaco Inc.
|
WF Overseas Fashion C.V. | Partnership Interests | 65% of interests | |||||
CONFIDENTIAL TREATMENT
SCHEDULE 8.1
EXISTING INDEBTEDNESS
| Debt Balance (as of | ||||||||
| Debtor | Creditor | August 19, 2008) | Maturity | Type of Debt | ||||
Warnaco of Canada
Company
|
SBI Holdings Ltd. & Anahar Holdings Ltd. | *** | 12/31/06 | Capital Lease | ||||
Calvin Klein Jeanswear Europe |
Banca Nazionale del Lavoro SpA |
*** | Continuous, as agreed by the parties |
Local Revolving Credit |
||||
Calvin Klein Jeanswear Europe |
Banca Populare di Verona |
*** | Continuous, as agreed by the parties |
Local Revolving Credit |
||||
Calvin Klein Jeanswear Europe |
Banca Toscana | *** | Continuous, as agreed by the parties |
Local Revolving Credit |
||||
Calvin Klein Jeanswear Europe |
Banca Cr Firenze | *** | Continuous, as agreed by the parties |
Local Revolving Credit |
||||
Calvin Klein Jeanswear Europe |
Fortis Bank | *** | Continuous, as agreed by the parties |
Local Revolving Credit |
||||
Calvin Klein Jeanswear Europe |
Intessa SanPaolo | *** | Continuous, as agreed by the parties |
Local Revolving Credit |
||||
Calvin Klein Jeanswear Europe |
Unicredit Banca d’Impresa | *** | Continuous, as agreed by the parties |
Local Revolving Credit |
||||
Calvin Klein Jeanswear Europe |
Monte Dei Paschi Di Siena |
*** | Continuous, as agreed by the parties |
Local Revolving Credit |
||||
WBR Industria e
Comercio de
Vestuano S.A.
Brazil
|
Banco do Brasil-Giro; Banco do Braso-Fat; Banco Real ABN-Giro; Banco HSBC-Garantida | *** | Continuous, as agreed by the parties |
Local Revolving Credit |
The above local revolving credit facilities under which Calvin Klein Jeanswear Europe is the debtor
are collectively referred to as the “Italian Debt Facility”.
INTERCOMPANY DEBT
See the Intercompany Notes referenced in Schedule 8.3 hereto.
SCHEDULE 8.2
EXISTING LIENS
Part I: U.S. Liens
| Tax Liens/ | UCC File | |||||||||||||||||||
| Entity | Jurisdiction | Judgments | Number | Secured Party | Type of Collateral | |||||||||||||||
Denim Holdings Inc., a subsidiary
of Calvin Klein
Jeanswear Inc. |
New York County, NY | Supreme Court Case: 603702/99 | G8612815 | Union Transport Corp. | $ | 77,810.11 | ||||||||||||||
Part II: Canadian Liens
See attached.
SUMMARY OF SEARCH RESULTS
Client Name:
|
Warnaco of Canada Company | |
Matter Name:
|
Refinancing of US and Canadian facilities | |
File Number:
|
084167 |
COMPAGNIE WARNACO DU CANADA
PERSONAL PROPERTY SECURITY ACT
Party Searched:
|
Compagnie Warnaco du Canada | |
Jurisdiction Searched:
|
Province of Ontario | |
Office Searched:
|
Ministry of Government Services, Companies and Personal Property Security Branch | |
Statute Searched:
|
Personal Property Security Act (Ontario) | |
File Currency:
|
August 10, 2008 |
A certified PPSA enquiry response was obtained from this Office in respect
of “Compagnie Warnaco du Canada” indicating the following registrations:
| INITIAL | AMENDMENT | REG’N | COLLATERAL | GENERAL COLLATERAL | ||||||||||||||||||||||||
| SECURED PARTY | REFERENCE | REGISTRATION | REGISTRATION | PERIOD | CLASSIFICATIONS | DESCRIPTION / | ||||||||||||||||||||||
| DEBTOR NAME | NAME | FILE NO. | NO. | NO. | (in years) | CG | I | E | A | O | MV | ADDITIONAL NOTES | ||||||||||||||||
WARNACO OF CANADA LIMITED
|
PHH CANADA INC. | 082454544 | 19920924 2118 1513 2585 |
19960731 1929 1529 2742 |
4 | X | X | X | ||||||||||||||||||||
| B-RENEWAL (3 YEARS) |
||||||||||||||||||||||||||||
| 19990806 1821 1531 7758 |
||||||||||||||||||||||||||||
| B-RENEWAL (5 YEARS) |
||||||||||||||||||||||||||||
| INITIAL | AMENDMENT | REG’N | COLLATERAL | GENERAL COLLATERAL | ||||||||||||||||||||
| SECURED PARTY | REFERENCE | REGISTRATION | REGISTRATION | PERIOD | CLASSIFICATIONS | DESCRIPTION / | ||||||||||||||||||
| DEBTOR NAME | NAME | FILE NO. | NO. | NO. | (in years) | CG | I | E | A | O | MV | ADDITIONAL NOTES | ||||||||||||
| 20010614 1814 1531 6865 |
1999 OLDSMOBILE INTRIGUE VIN: 1G3WX52K1XF301921 |
|||||||||||||||||||||||
| A-AMENDMENT (ADDING COLLATERAL DESCRIPTION TO REGISTRATION) |
ALL PRESENT AND FUTURE MOTOR VEHICLES AND AUTOMOTIVE EQUIPMENT AND MATERIALS-HANDLING EQUIPMENT LEASED FROM TIME TO TIME BY THE SECURED PARTY TO THE DEBTOR, TOGETHER WITH ALL PRESENT AND FUTURE ATTACHMENTS, ACCESSIONS, APPURTENANCES, ACCESSORIES AND REPLACEMENT PARTS, AND ALL PROCEEDS OF OR RELATING TO ANY OF THE FOREGOING. | |||||||||||||||||||||||
| 20010619 1800 1531 2624 A-AMENDMENT (TO INCLUDE ADDITIONAL DEBTORS) |
ADDITIONAL DEBTORS INCLUDE: WARNACO OF CANADA COMPANY; COMPAGNIE WARNACO DU CANADA/; WARNACO COMPANY OF CANADA, COMPANY/COMPAGNIE WARNACO DU CANADA,; AND COMPAGNIE WARNACO DU CANADA/WARNACO OF CANADA COMPANY |
|||||||||||||||||||||||
| 20030721 1055 1529 5434 A-AMENDMENT (AMEND SECURED PARTY) |
SECURED PARTY AMENDED TO PHH VEHICLE MANAGEMENT SERVICES INC. 2233 ARGENTIA RD., SUITE 400, MISSISSAUGA, ON L5N 2X7 | |||||||||||||||||||||||
2
| INITIAL | AMENDMENT | REG’N | COLLATERAL | GENERAL COLLATERAL | ||||||||||||||||||||
| SECURED PARTY | REFERENCE | REGISTRATION | REGISTRATION | PERIOD | CLASSIFICATIONS | DESCRIPTION / | ||||||||||||||||||
| DEBTOR NAME | NAME | FILE NO. | NO. | NO. | (in years) | CG | I | E | A | O | MV | ADDITIONAL NOTES | ||||||||||||
| 20030819 1537 1530 2225 F-PART DISCHARGE |
1999 OLDSMOBILE INTRIGUE VIN: 1G3WX53KIXF301921 |
|||||||||||||||||||||||
| 20040811 1934 1531 1642 |
||||||||||||||||||||||||
| B-RENEWAL (5 YEARS) |
||||||||||||||||||||||||
3
WARNACO OF CANADA COMPANY
PERSONAL PROPERTY SECURITY ACT
Party Searched:
|
Warnaco of Canada Company | |
Jurisdiction Searched:
|
Province of Ontario | |
Office Searched:
|
Ministry of Government Services, Companies and Personal Property Security Branch | |
Statute Searched:
|
Personal Property Security Act (Ontario) | |
File Currency:
|
August 10, 2008 |
A certified PPSA enquiry response was obtained from this Office in respect
of “Warnaco of Canada Company” indicating the following registrations:
| INITIAL | AMENDMENT | REG’N | COLLATERAL | GENERAL COLLATERAL | ||||||||||||||||||||||||
| SECURED PARTY | REFERENCE | REGISTRATION | REGISTRATION | PERIOD | CLASSIFICATIONS | DESCRIPTION / | ||||||||||||||||||||||
| DEBTOR NAME | NAME | FILE NO. | NO. | NO. | (in years) | CG | I | E | A | O | MV | ADDITIONAL NOTES | ||||||||||||||||
WARNACO OF CANADA COMPANY |
JAGUAR CREDIT CANADA LEASING, A | 642614445 | 20080208 1954 1531 7083 |
3 | X | X | X | 2008 JAGUAR VANDEN PLAS VIN: SAJXA82B78SH21378 |
||||||||||||||||||||
| DIV/CANADIAN ROAD LEASING CO |
||||||||||||||||||||||||||||
| CBSC CAPITAL | 632484171 | 20070130 1938 1531 0376 |
3 | X | X | |||||||||||||||||||||||
| BANK OF AMERICA, N.A. |
613611342 | 20050324 1214 1862 5725 |
10 | X | X | X | X | X | ||||||||||||||||||||
| BANK OF AMERICA, | 613611351 | 20050324 1214 1862 5726 |
10 | X | X | X | X | X | ||||||||||||||||||||
| NATIONAL ASSOCIATION | ||||||||||||||||||||||||||||
| STUART BUDD & SONS LTD | 610307172 | 20041103 1039 1616 0722 |
4 | X | X | X | 2005 JAGUAR VANDEN PLAS VIN: SAJXA82C25SG36310 |
|||||||||||||||||||||
| XEROX CANADA LTD |
602126694 | 20031230 1021 1715 3205 | 5 | X | X | |||||||||||||||||||||||
4
| INITIAL | AMENDMENT | REG’N | COLLATERAL | GENERAL COLLATERAL | ||||||||||||||||||||||||
| SECURED PARTY | REFERENCE | REGISTRATION | REGISTRATION | PERIOD | CLASSIFICATIONS | DESCRIPTION / | ||||||||||||||||||||||
| DEBTOR NAME | NAME | FILE NO. | NO. | NO. | (in years) | CG | I | E | A | O | MV | ADDITIONAL NOTES | ||||||||||||||||
| PHH CANADA INC. | 082454544 | 19920924 2118 1513 2585 |
19960731 1929 1529 2742 |
4 | X | X | X | |||||||||||||||||||||
| B-RENEWAL (3 YEARS) |
||||||||||||||||||||||||||||
| 19990806 1821 1531 7758 |
||||||||||||||||||||||||||||
| B-RENEWAL (5 YEARS) |
||||||||||||||||||||||||||||
| 20010614 1814 1531 6865 |
1999 OLDSMOBILE INTRIGUE VIN: 1G3WX52K1XF301921 | |||||||||||||||||||||||||||
| A-AMENDMENT (ADDING COLLATERAL DESCRIPTION TO REGISTRATION) |
ALL PRESENT AND FUTURE MOTOR VEHICLES AND AUTOMOTIVE EQUIPMENT AND MATERIALS-HANDLING EQUIPMENT LEASED FROM TIME TO TIME BY THE SECURED PARTY TO THE DEBTOR, TOGETHER WITH ALL PRESENT AND FUTURE ATTACHMENTS, ACCESSIONS, APPURTENANCES, ACCESSORIES AND REPLACEMENT PARTS, AND ALL PROCEEDS OF OR RELATING TO ANY OF THE FOREGOING. | |||||||||||||||||||||||||||
| 20010619 1800 1531 2624 A-AMENDMENT (TO INCLUDE ADDITIONAL DEBTORS) |
ADDITIONAL DEBTORS
INCLUDE: WARNACO OF CANADA COMPANY; COMPAGNIE WARNACO DU CANADA/; WARNACO COMPANY OF CANADA, COMPANY/COMPAGNIE WARNACO DU CANADA,; AND COMPAGNIE WARNACO DU CANADA/WARNACO OF CANADA COMPANY |
|||||||||||||||||||||||||||
5
| INITIAL | AMENDMENT | REG’N | COLLATERAL | GENERAL COLLATERAL | ||||||||||||||||||||||||
| SECURED PARTY | REFERENCE | REGISTRATION | REGISTRATION | PERIOD | CLASSIFICATIONS | DESCRIPTION / | ||||||||||||||||||||||
| DEBTOR NAME | NAME | FILE NO. | NO. | NO. | (in years) | CG | I | E | A | O | MV | ADDITIONAL NOTES | ||||||||||||||||
| 20030721 1055 1529 5434 A-AMENDMENT (AMEND SECURED PARTY) |
SECURED PARTY AMENDED TO PHH
VEHICLE MANAGEMENT SERVICES INC. 2233 ARGENTIA RD., SUITE 400, MISSISSAUGA, ON L5N 2X7 |
|||||||||||||||||||||||||||
| 20030819 1537 1530 2225 F-PART DISCHARGE |
1999 OLDSMOBILE INTRIGUE VIN: 1G3WX53K1XF301921 | |||||||||||||||||||||||||||
| 20040811 1934 1531 1642 B-RENEWAL (5 YEARS) |
||||||||||||||||||||||||||||
6
WARNACO DU CANADA LIMITED
PERSONAL PROPERTY SECURITY ACT
Party Searched:
|
Warnaco du Canada limited | |
Jurisdiction Searched:
|
Province of Ontario | |
Office Searched:
|
Ministry of Government Services, Companies and Personal Property Security Branch | |
Statute Searched:
|
Personal Property Security Act (Ontario) | |
File Currency:
|
August 10, 2008 |
A certified PPSA enquiry response was obtained from this Office in respect
of “Warnaco du Canada Limited” indicating the following registrations:
| INITIAL | AMENDMENT | REG’N | COLLATERAL | GENERAL COLLATERAL | ||||||||||||||||||||||||
| SECURED PARTY | REFERENCE | REGISTRATION | REGISTRATION | PERIOD | CLASSIFICATIONS | DESCRIPTION / | ||||||||||||||||||||||
| DEBTOR NAME | NAME | FILE NO. | NO. | NO. | (in years) | CG | I | E | A | O | MV | ADDITIONAL NOTES | ||||||||||||||||
WARNACO OF CANADA LIMITED |
PHH CANADA INC. | 082454544 | 19920924 2118 1513 2585 |
19960731 1929 1529 2742 |
4 | X | X | X | ||||||||||||||||||||
| B-RENEWAL (3 YEARS) | ||||||||||||||||||||||||||||
| 19990806 1821 1531 7758 |
||||||||||||||||||||||||||||
| B-RENEWAL (5 YEARS) | ||||||||||||||||||||||||||||
| 20010614 1814 1531 6865 |
1999 OLDSMOBILE INTRIGUE VIN: 1G3WX52K1XF301921 |
|||||||||||||||||||||||||||
| A-AMENDMENT (ADDING COLLATERAL DESCRIPTION TO REGISTRATION) |
ALL PRESENT AND FUTURE MOTOR VEHICLES AND AUTOMOTIVE EQUIPMENT AND MATERIALS-HANDLING EQUIPMENT LEASED FROM TIME TO TIME BY THE SECURED PARTY TO THE DEBTOR, TOGETHER WITH ALL PRESENT AND FUTURE ATTACHMENTS, ACCESSIONS, APPURTENANCES, ACCESSORIES AND REPLACEMENT PARTS, AND ALL PROCEEDS OF OR RELATING TO ANY OF THE FOREGOING. | |||||||||||||||||||||||||||
7
| INITIAL | AMENDMENT | REG’N | COLLATERAL | GENERAL COLLATERAL | ||||||||||||||||||||||||
| SECURED PARTY | REFERENCE | REGISTRATION | REGISTRATION | PERIOD | CLASSIFICATIONS | DESCRIPTION / | ||||||||||||||||||||||
| DEBTOR NAME | NAME | FILE NO. | NO. | NO. | (in years) | CG | I | E | A | O | MV | ADDITIONAL NOTES | ||||||||||||||||
| 20010619 1800 1531 2624 A-AMENDMENT (TO INCLUDE ADDITIONAL DEBTORS) |
ADDITIONAL DEBTORS INCLUDE: WARNACO OF CANADA COMPANY; COMPAGNIE WARNACO DU CANADA/; WARNACO COMPANY OF CANADA, COMPANY/COMPAGNIE WARNACO DU CANADA,; AND COMPAGNIE WARNACO DU CANADA/WARNACO OF CANADA COMPANY |
|||||||||||||||||||||||||||
| 20030721 1055 1529 5434 A-AMENDMENT (AMEND SECURED PARTY) |
SECURED PARTY AMENDED TO PHH VEHICLE MANAGEMENT SERVICES INC. 2233 ARGENTIA RD, SUITE 400, MISSISSAUGA, ON L5N 2X7 | |||||||||||||||||||||||||||
| 20030819 1537 1530 2225 | 1999 OLDSMOBILE INTRIGUE VIN: | |||||||||||||||||||||||||||
F-PART DISCHARGE |
1G3WX53K1XF301921 | |||||||||||||||||||||||||||
| 20040811 1934 1531 1642 | ||||||||||||||||||||||||||||
| B-RENEWAL (5 YEARS) | ||||||||||||||||||||||||||||
8
Robinson Sheppard Shapiro
S.E.N.C.R.L. • LLP.
Avocats • Barristers & Solicitors
S.E.N.C.R.L. • LLP.
Avocats • Barristers & Solicitors
SEARCH REPORT
Register of Personal and Movable Real Rights (Quebec) (“RPMRR”)
Register of Personal and Movable Real Rights (Quebec) (“RPMRR”)
Name(s) searched: |
||
Current name(s)
|
• Warnaco of Canada Company |
|
Previous name(s) (as per Sharon
|
• Compagnie Warnaco du Canada |
|
Druker’s request)
|
• Warnaco du Canada Limitee |
|
• 3024368 Nova Scotia Company |
||
• Authentic Fitness of Canada Inc. |
||
• Condition Physique Authentique du Canada Inc. |
||
Trade name(s)
|
• Nil. |
Date of search:
|
August 5, 2008 | |
Date and time of certification of the RPMRR:
|
August 5, 2008 at 1:10 p.m. |
| Amount | ||||||||
| Nature of Rights & | (Cdn $) & | Collateral Affected | ||||||
| Registration Details | Parties | Interest Rate | (summary only) | |||||
1.
|
Rights resulting from a lease # 06-0194340-0017 Date: April 12, 2006 at 2:52 p.m. Expiry: April 5, 2012 |
Lessor: Xerox Canada Ltd. Lessee: Warnaco of Canada Company Inc. (sic) |
n/a | Equipment, other All present and future office equipment and software supplied or financed from time to time by the secured party (whether by lease, conditional sale or otherwise), whether or not manufactured by the secured party or any affiliate thereof. |
IMPORTANT DISCLAIMERS:
A) The information set forth in this search results summary does not constitute (and should not
be construed as) a legal opinion of Robinson Sheppard Shapiro llp. For more
information in connection with each registration summarized herein, please refer to the
underlying computer printouts from the RPMRR corresponding to such registration.
B) We draw to your attention that the RPMRR is a computer data, base which may suffer from
sporadic glitches and manual transcription errors of the registrar which can give rise to
uncertainties. Although rare, there have been instances where a proper search of the RPMRR has
failed to disclose all entries.
Page 1 of 6
| Amount | ||||||||
| Nature of Rights & | (Cdn $) & | Collateral Affected | ||||||
| Registration Details | Parties | Interest Rate | (summary only) | |||||
| Ancillary Registrations & Comments: |
||||||||
• Nil. |
||||||||
2.
|
Rights resulting from a lease
# 06-0194340-0007 Date: April 12, 2006 at 2:52 p.m. Expiry: April 3, 2012 |
Lessor: Xerox Canada Ltd. Lessee: Warnaco of Canada Company Inc. (sic) |
n/a | Equipment, other All present and future office equipment and software supplied or financed from time to time by the secured party (whether by lease, conditional sale or otherwise), whether or not manufactured by the secured party or any affiliate thereof. |
||||
| Ancillary Registrations & Comments: |
||||||||
• Nil. |
||||||||
3.
|
Rights resulting from a lease and | Lessor: |
n/a | Dodge Grand Caravan SXT, 2006 | ||||
| assignment thereof # 06-0118596-0062 Date: March 9, 2006 at 2:57 p.m. Expiry: May 16, 2009 |
Des Sources Dodge Chrysler Ltee
Assignee: Services Financiers DaimlerChrysler Canada Inc., acting under its business name: Services Financiers Chrysler Lessee: Warnaco of Canada Company |
S.N.: 2D4GP44L76R653741 | ||||||
| Ancillary Registrations & Comments: | ||||||||
• The assignment grants all rights; |
||||||||
• By an assignment of rights in Leases registered on April 27, 2007 under number
07-0226452-0001, DaimlerChrysler Financial Services Canada Inc., Services Financiers
DaimlerChrysler Canada Inc. and DaimlerChrysler Canada Inc. assigned to Computershare
Trust Company of Canada (sic) acting as Trustee for King Street Funding Trust, all right,
title and interest of DCCI and DCFSC in the Designated Eligible Leases, as more fully
described in the registration (this registration was modified by a rectification of an
inscription dated June 21, 2007 under number 07-0357060-0001); |
||||||||
• By an assignment of the universality of claims and rights registered on May
12, 2008 under number 08-0269491-0001, King Street Funding Trust assigned to
Computershare Trust Company of Canada, acting as Trustee for DaimlerChrysler
Financial Services Canada Inc., Chrysler Canada Inc. and Services Financiers
DaimlerChrysler Canada Inc., all of the remaining rights of King Street Funding Trust
in and to a) the universality of claims and b) the rights resulting from the leases
registered at the RPMRR listed in the registration (as more fully described in the
registration); |
||||||||
• By an assignment of rights registered on May 12, 2008 under number 08-0269497-0001,
Chrysler Canada Inc. and DaimlerChrysler Financial Services Canada Inc. assigned to
Chrysler Lease Receivables Partnership, all of the right, title and interest of each
Assignor in and to all Québec Leases (other than Excluded Québec Leases) and all Related
Lease Rights and the rights of the Assignors under the rights resulting from the leases
registered at the RPMRR listed in the registration (this registration was modified by a
rectification of an inscription dated May 30, 2008 under number 08-0315817-0001); |
||||||||
Page 2 of 6
| Amount | ||||||||
| Nature of Rights & | (Cdn $) & | Collateral Affected | ||||||
| Registration Details | Parties | Interest Rate | (summary only) | |||||
• By an assignment of rights registered on May 12, 2008 under number 08-0269500-0001, Chrysler Lease Receivables
Partnership assigned to Computershare Trust Company of Canada, acting as Trustee for Chrysler Lease Trust, all
right, title and interest of the Partnership in an to all Designated Eligible Leases, including the Related lease
Rights and the rights of the Partnership under the rights resulting from the leases registered at the RPMRR
listed in the registration (this registration was modified by a rectification of an inscription dated May 30,
2008 under number 08-0315817-0004). |
||||||||
4.
|
Conventional
hypothec without delivery
# 05-0176608-0003 Date: April 1, 2005 at 9:00 a.m. Expiry: April 1, 2015 |
Holder: Bank of America, National Association Grantor: Warnaco of Canada Company Warnaco of Canada Company, acting under its business name: Warnaco du Canada |
$25,000,000 25% per annum |
The universality of all of the Grantor’s movable property, present and future, corporeal and incorporeal, of whatever nature and kind and wheresoever situated (hereinafter collectively called the “Collateral”), including, without limitation, all tools and equipment pertaining to the enterprises of the Grantor, all claims and customer accounts, all securities, all patents, trademarks and other intellectual property rights and all corporeal movables included in the assets of any of the Grantor’s enterprises kept for sale, lease or processing in the manufacture or transformation of property intended for sale, for lease or for use in providing a service. | ||||
| Ancillary Registrations & Comments: | ||||||||
• Nil. |
||||||||
5.
|
Conventional hypothec without delivery
# 05-0176608-0002 Date: April 1, 2005 at 9:00 a.m. Expiry: April 1, 2015 |
Holder: Bank of America, National Association Grantor: Warnaco of Canada Company Warnaco of Canada Company, acting under its business name: Warnaco du Canada |
$25,000,000 25% per annum |
The universality of all of the Grantor’s movable property, present and future, corporeal and incorporeal, of whatever nature and kind and wheresoever situated (hereinafter collectively called the “Collateral”), including, without limitation, all tools and equipment pertaining to the enterprises of the Grantor, all claims and customer accounts, all securities, all patents, trademarks and other intellectual property rights and all corporeal movables included in the assets of any of the Grantor’s enterprises kept for sale, lease or processing in the manufacture or transformation of | ||||
Page 3 of 6
| Amount | ||||||||
| Nature of Rights & | (Cdn $) & | Collateral Affected | ||||||
| Registration Details | Parties | Interest Rate | (summary only) | |||||
| property intended for sale, for lease or for use in providing a service. | ||||||||
| Ancillary Registrations & Comments: | ||||||||
| • Nil. | ||||||||
6.
|
Rights resulting from a lease # 04-0526417-0011 Date: September 9, 2004 at 2:58 p.m. Expiry: September 8, 2010 |
Lessor: Xerox Canada Ltd Lessee: Warnaco of Canada Company |
n/a | Equipment, other All present and future office equipment and software supplied or financed from time to time by the secured party (wheather (sic) by lease, conditional sale or otherwise), whether or not manufactured by the secured party or any affiliate thereof. |
||||
| Ancillary Registrations & Comments: | ||||||||
| • Nil. | ||||||||
7.
|
Rights of ownership of the Lessor under a leasing contract or crédit-bail # 03-0632560-0001 Date: November 26, 2003 at 10:18 a.m. Expiry: October 30, 2008 |
Lessor (crédit-bailleur): Équipements G.N. Johnston Ltée Lessee (crédit-preneur): Warnaco du Canada (sic) |
n/a | Chariots Raymond Model: EASI-OPC30TT S.N.: EASI-03-AL33171, EASI-03-AL33172, EASI-03-AL33173, EASI-03-AL33174 Batteries Oldham model: 12-125-13 S.N.: D28333, D28334, D28335, D28336 |
||||
| Ancillary Registrations & Comments: | ||||||||
| • Nil. | ||||||||
8.
|
Change of name # 01-0301961-0003 Date: August 21, 2001 at 1:49 p.m. Expiry: n/a |
Old name: Warnaco of Canada Limited Warnaco du Canada Limitée New name: |
n/a | n/a | ||||
| Warnaco of Canada Company / Compagnie Warnaco du Canada Warnaco of Canada Company Compagnie Warnaco du Canada |
Ancillary Registrations & Comments:
| • | This change of name affects a Rights
of ownership of the Lessor under a leasing contract or crédit-bail (refer to
#9 for references). |
Page 4 of 6
| Amount | ||||||||
| Nature of Rights & | (Cdn $) & | Collateral Affected | ||||||
| Registration Details | Parties | Interest Rate | (summary only) | |||||
9.
|
Rights of ownership of the Lessor under a leasing contract or crédit-bail
(Global registration (art. 2961.1 C.c.Q.)) # 00-0207115-0008 Date: July 25, 2000 at 9:00 a.m. Expiry: July 24, 2010 |
Lessor (crédit-bailleur): PHH Vehicle Management Services Inc. Lessee (crédit-preneur): Warnaco of Canada Limited Warnaco du Canada Limitee |
n/a | All present and future motor vehicles (including, without limitation, passenger automobiles, trucks, truck tractors, truck trailers, truck chassis, or truck bodies), automotive equipment (including, without limitation, trailers, boxes and refrigeration units), and materials-handling equipment leased from time to time by the Lessor to the Lessee, together with all present and future attachments, accessions, appurtenances, accessories and replacement parts, and all proceeds of or relating to any of the foregoing. |
Ancillary Registrations & Comments:
| • | By an assignment of rights registered on September 14, 2000 under number 00-0274576-0001, PHH Vehicle Management Services Inc. and PHH
Services de Gestion de Vehicules Inc. assigned to TD Trust Company, acting as Trustee for
Leaf Trust, all of the Assignor’s rights which have been
registered at the RPMRR and listed in the registration; |
||
| • | By an assignment of rights registered on September 14, 2000 under number 00-0274576-0002, PHH Vehicle Management Services Inc. and PHH
Services de Gestion de Vehicules Inc. assigned to TD Trust Company, acting as Trustee for
Leaf Trust, all of the Assignor’s rights which have been
registered at the RPMRR and listed in the registration; |
||
| • | By an assignment of rights registered on September 14, 2000 under number 00-0274576-0003, PHH Vehicle Management Services Inc. and PHH
Services de Gestion de Vehicules Inc. assigned to TD Trust Company, acting as Trustee for
Leaf Trust, all of the Assignor’s rights which have been
registered at the RPMRR and listed in the registration; |
||
| • | By an assignment of rights registered on September 14, 2000 under number 00-0274576-0004, PHH Vehicle Management Services Inc. and PHH
Services de Gestion de Vehicules Inc. assigned to TD Trust Company, acting as Trustee for
Leaf Trust, all of the Assignor’s rights which have been
registered at the RPMRR and listed in the registration; |
||
| • | Change of name (refer to #8 for references); |
||
| • | By a modification a of published right registered on September 5, 2003 under number 03-0465017-0009, the address of PHH Vehicle Management
Services Inc. was changed. |
Page 5 of 6
Name(s) searched: |
||
Current name(s)
|
• 4278941 Canada Inc. | |
Previous name(s) (as disclosed per corporate search)
|
• Nil. | |
Trade name(s)
|
• Nil. | |
Date of search:
|
August 5, 2008 | |
Date and time of certification of the RPMRR:
|
August 5, 2008 at 1:10 p.m. |
| Amount | ||||||||
| (Cdn $) & | ||||||||
| Nature of Rights & | Interest | Collateral Affected | ||||||
| Registration Details | Parties | Rate | (summary only) | |||||
1.
|
Clear | |||||||
| Ancillary Registrations & Comments: | ||||||||
| • Nil. |
Page 6 of 6
SCHEDULE “A”
Searches and Inquiries
Searches and Inquiries
We have conducted searches in the Province of Nova Scotia with respect to Warnaco of Canada
Company and the following predecessor names:
| • | Compagnie Warnaco du Canada |
|
| • | Warnaco of Canada Limited |
|
| • | Warnaco du Canada Limitée |
|
| • | 3024368 Nova Scotia Company |
|
| • | Authentic Fitness of Canada Inc. |
|
| • | Condition Physique Authentique du Canada Inc. |
|
| • | 171173 Canada Inc. |
|
| • | 4278941 Canada Inc. |
The results of our searches are as follows:
Corporate
Warnaco of Canada Company was formed by the amalgamation under the laws of Nova Scotia of
Authentic Fitness of Canada Inc. and Warnaco of Canada Company/Compagnie Warnaco du Canada effective
January 4, 2004. The company is up to date with respect to the filing of its annual returns.
Personal Property Security Act (includes any outstanding executions)
(current to August 22, 2008 for Warnaco of Canada Company and August 11, 2008 for all other names)
PPSA Registration No. 9369578
Debtor: Warnaco of Canada Company
Secured Party: Bank of America, N.A.
Registration Date (and Term): 2005-03-22 (10 years)
Collateral Description: A security interest is taken in all of the debtor’s present and after-acquired personal property.
Debtor: Warnaco of Canada Company
Secured Party: Bank of America, N.A.
Registration Date (and Term): 2005-03-22 (10 years)
Collateral Description: A security interest is taken in all of the debtor’s present and after-acquired personal property.
Note — This registration was discharged by discharge statement no. 14337869 entered 2008-08-25 but
remains searchable for a period of thirty days from the date of discharge.
PPSA Registration No. 9369630
Debtor: Warnaco of Canada Company
Secured Party: Bank of America, National Association
Registration Date (and Term): 2005-03-22 (10 years)
Collateral Description: A security interest is taken in all of the debtor’s present and after-acquired personal property.
Debtor: Warnaco of Canada Company
Secured Party: Bank of America, National Association
Registration Date (and Term): 2005-03-22 (10 years)
Collateral Description: A security interest is taken in all of the debtor’s present and after-acquired personal property.
Note — This registration was discharged by discharge statement no. 14338024 entered 2008-08-25 but
remains searchable for a period of thirty days from the date of discharge.
PPSA Registration No. 14333355
Debtor: Warnaco of Canada Company
Secured Party: Bank of America, N.A., as Collateral Agent
Registration Date (and Term): 2008-08-22 (7 years)
Collateral Description: A security interest is taken in all of the debtor’s present and after-acquired personal property.
Debtor: Warnaco of Canada Company
Secured Party: Bank of America, N.A., as Collateral Agent
Registration Date (and Term): 2008-08-22 (7 years)
Collateral Description: A security interest is taken in all of the debtor’s present and after-acquired personal property.
Bank Act (Canada)
We have received certificates from the Canadian Securities Registration Systems each dated August
11, 2008, confirming that there are no outstanding registrations under the Bank Act (Canada) at the
Halifax Office of the Bank of Canada with respect to Warnaco of Canada Company or any of the
predecessor names.
Bankruptcy and Insolvency Act (Canada)
We have obtained certificates from the Office of the Superintendent of Bankruptcy, Industry Canada
each dated August 14, 2008, indicating that a name search has been made of the public record kept
by the Superintendent for all of the Districts and divisions in Canada under the Bankruptcy and
Insolvency Act (Canada) and that the public record was found to contain no facts nor any reference
to Warnaco of Canada Company or any of the predecessor names from 1978 to 2008/08/11.
-2-
CONFIDENTIAL TREATMENT
SCHEDULE 8.3
EXISTING INVESTMENTS
STOCK
None.
NOTES RECEIVABLE
| Commencement | Remaining | Status (as of EOM | ||||||
| Customer | Original Amount | Date | Balance | 12/2007) | ||||
***
|
*** | May-03 | *** | In Collections | ||||
| *** | *** | Dec-03 | *** | In Collections | ||||
| *** | *** | Dec-03 | *** | Current |
INTERCOMPANY DEBT
| Creditor | Debtor | Amount (USD) | ||
Warnaco B.V.
|
Eratex GmbH | *** | ||
Eratex GmbH
|
Warnaco B.V. | *** | ||
Lintex-Warnaco S.a.r.l.
|
Warnaco B.V. | *** | ||
Lintex-Warnaco S.a.r.l.
|
Warnaco B.V. | *** | ||
Lenitex-Warnaco
Handelsgesellschaft
|
Warnaco B.V. | *** | ||
Warnaco B.V.
|
Aiglon | *** | ||
Warnaco Netherlands B.V.
|
Eratex GmbH | *** | ||
Mullion International Limited
|
Warnaco B.V. | *** | ||
WF Overseas Fashion C.V.
|
Warnaco B.V. | *** | ||
WF Overseas Fashion C.V.
|
(Warnaco B.V. | *** | ||
Warnaco B.V.
|
Warnaco Poland Sp.zo.o | *** | ||
Warnaco Inc.
|
CKJ UK Ltd. | *** | ||
Warnaco B.V.
|
Warnaco Germany GmbH | *** | ||
Warnaco Inc.
|
CK Jeanswear Asia Ltd. | *** | ||
Warnaco B.V.
|
Warner’s (United Kingdom) Limited | *** | ||
Warnaco (H.K.), Ltd.
|
Warnaco Taiwan Co. Ltd. | *** | ||
WF Overseas Fashion C.V.
|
Warnaco France S.A.R.L. | *** | ||
WF Overseas Fashion C.V.
|
CK Jeanswear Europe S.r.l. | *** | ||
WF Overseas Fashion C.V.
|
CKJ UK Ltd. | *** | ||
WF Overseas Fashion C.V.
|
CK Jeanswear Australia Pty Limited | *** | ||
Euro Retail S.r.l.
|
WF Overseas Fashion C.V. | *** | ||
Warnaco of Canada Company
|
WF Overseas Fashion C.V. | *** | ||
Mullion International Limited
|
WF Overseas Fashion C.V. | *** | ||
Designer Holdings Ltd.
|
Calvin Klein Jeanswear Company | *** | ||
Warnaco Inc.
|
Ocean Pacific Apparel Corp. | *** |
SCHEDULE 8.4
ASSET SALES
None.
EXHIBIT A
TO
CREDIT AGREEMENT
TO
CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE dated as of
_____, 20____
between [NAME OF ASSIGNOR] (the
“Assignor”) and [NAME OF ASSIGNEE] (the “Assignee”).
Reference is made to the Credit Agreement, dated as of August
_____, 2008 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Warnaco Inc., as borrower (the “Borrower”), The Warnaco Group, Inc., the Lenders and Issuers
party thereto, Bank of America, N.A., as administrative agent for the Revolving Credit Facility (in
such capacity, the “Administrative Agent”) and as Collateral Agent for the Lenders and the Issuers
(together with the Administrative Agent, the “Facility Agents”), and the other Persons party
thereto. Capitalized terms used herein and not otherwise defined herein are used herein as defined
in the Credit Agreement.
The Assignor and the Assignee hereby agree as follows:
| 1. | As of the Effective Date (as defined below), the Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, all of the
Assignor’s rights and obligations under the Credit Agreement to the extent related to the
amounts and percentages specified on Section 1 of Schedule I hereto. |
| 2. | The Assignor (a) represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear of any
adverse claim, (b) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document or any other instrument or document furnished
pursuant thereto or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other Loan Document or any other
instrument or document furnished pursuant thereto and (c) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any Warnaco Entity or
the performance or observance by any Loan Party of any of its obligations under the Credit
Agreement or any other Loan Document or any other instrument or document furnished pursuant
thereto. |
| 3. | The Assignee (a) agrees that it will, independently and without reliance upon the Facility
Agents, the Assignor or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in taking or not
taking action under the Credit Agreement, (b) appoints and authorizes each Facility Agent to
take such action as agent on its behalf and to exercise such powers under the Credit Agreement
and the other Loan Documents as are delegated to each such Facility Agent by the terms
thereof, together with such powers as are reasonably incidental thereto, (c) agrees that it
will perform in accordance with their terms all of the obligations that, by the terms of the
Credit Agreement, are required to be performed by it as a Lender, (d) represents and warrants
that it is an Eligible Assignee, (e) confirms it has received such documents and information
as it has deemed appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance, (f) specifies as its Domestic Lending Office (and address for
notices) and Eurodollar Lending Office the offices set forth beneath its name on the signature
pages hereof and (g) attaches the forms prescribed by the Internal Revenue Service of the
United States certifying as to the Assignee’s status for purposes of determining exemption
from, or a reduced rate of withholding of, United States withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement if required to establish such
exemption or reduction of withholding for such Assignee. |
| 4. | Following the execution of this Assignment and Acceptance by the Assignor and the Assignee,
it will be delivered to the Administrative Agent (together with an assignment fee in the
amount of $3,500 payable by the Assignee to the Administrative Agent pursuant to Section
11.2(b)(Assignments and Participations)) for acceptance and recording in the Register by the
Administrative Agent. The effective date of this Assignment and Acceptance shall be the
effective date specified in Section 2 of Schedule I hereto (the “Effective Date”). |
| 5. | Upon such acceptance and recording in the Register by the Administrative Agent, then, as of
the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and obligations under the
Credit Agreement of a Lender and, if such Lender were an Issuer, of such Issuer and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its
rights (except those surviving the payment in full of the Obligations) and be released from
its obligations under the Loan Documents other than those relating to events or circumstances
occurring prior to the Effective Date. |
| 6. | Upon such acceptance and recording in the Register by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments under the Loan
Documents in respect of the interest assigned hereby (a) to the Assignee, in the case of
amounts accrued with respect to any period on or after the Effective Date, and (b) to the
Assignor, in the case of amounts accrued with respect to any period prior to the Effective
Date. |
| 7. | This Assignment and Acceptance shall be governed by, and be construed and interpreted in
accordance with, the internal law of the State of New York. |
| 8. | This Assignment and Acceptance may be executed in any number of counterparts and by different
parties on separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart of this Assignment and Acceptance by telecopier or
electronic transmission (in pdf format) shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance. |
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be
executed by their respective officers thereunto duly authorized, as of the date first above
written.
| [NAME OF ASSIGNOR], as Assignor | ||||||
| By: | ||||||
| Title: | ||||||
| [NAME OF ASSIGNEE], as Assignee | ||||||
| By: | ||||||
| Title: | ||||||
Domestic Lending Office (and address for notices):
[Insert Address (including contact name, fax number and e-mail address)]
Eurodollar Lending Office:
[Insert Address (including contact name, fax number and e-mail address)]
ACCEPTED AND AGREED
this _____ day of _____ 20____:
this _____ day of _____ 20____:
BANK OF AMERICA, N.A.,
as Administrative Agent
as Administrative Agent
By: |
||||
| Title: | ||||
| 1[CONSENTED TO: | ||||
| WARNACO INC. | ||||
By: |
||||
| Title:] | ||||
| 1 | If consent is required under Credit Agreement |
SCHEDULE I
TO
ASSIGNMENT AND ACCEPTANCE
TO
ASSIGNMENT AND ACCEPTANCE
SECTION 1. |
||||
Ratable Portion assigned to Assignee: |
% | |||
Revolving Credit Commitment assigned to Assignee: |
$ | |||
Aggregate Outstanding Principal Amount of Revolving
Loans Assigned to Assignee: |
$ | |||
SECTION 2. |
||||
Effective Date: |
__, 20__ | |||
EXHIBIT B
TO
CREDIT AGREEMENT
TO
CREDIT AGREEMENT
FORM OF NOTICE OF BORROWING
BANK OF AMERICA, N.A.,
as Administrative Agent under the
Credit Agreement referred to below
Credit Agreement referred to below
335 Madison Avenue
New York, New York 10017
New York, New York 10017
___, 20__
Attention:
Re: Warnaco Inc. (the “Borrower”)
Reference is made to the Credit Agreement, dated as of August
_____, 2008 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, The Warnaco Group, Inc., the Lenders and Issuers party thereto, Bank of
America, N.A., as administrative agent for the Revolving Credit Facility (in such capacity, the
“Administrative Agent”) and as Collateral Agent for the Lenders and the Issuers, and certain other
Persons. Capitalized terms used herein and not otherwise defined herein are used herein as defined
in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section 2.2 (Borrowing
Procedures) of the Credit Agreement that the undersigned hereby requests a Borrowing of Revolving
Loans under the Credit Agreement and, in that connection, sets forth below the information relating
to such Borrowing (the “Proposed Borrowing”) as required by Section 2.2 (Borrowing Procedures) of
the Credit Agreement:
| (a) | The date of the Proposed Borrowing is
_____, 20_____ (the
“Funding Date”). |
| (b) | The aggregate amount of the Proposed Borrowing is $ ,
of which amount [$ consists of Base Rate Loans] [and $
consists of Eurodollar Rate Loans having an initial Interest Period of [one]
[two] [three] [six] month[s]]. |
| (c) | The Available U.S. Credit (after giving effect to the Proposed
Borrowing) is $ . |
The undersigned hereby certifies that the following statements are true on the date hereof and
shall be true on the Funding Date both before and after giving effect to the Proposed Borrowing and
to the application of the proceeds therefrom:
Section 1.01 the representations and warranties set forth in Article IV
(Representations and Warranties) of the Credit Agreement and in the other Loan
Documents are true and correct [in all material respects]2 on and as
of the Funding Date with the same effect as though made on and as of such date,
except to the extent any such representation or warranty expressly relates to
an earlier date, in which case such representation or warranty shall have been
true and correct as of such earlier date; and
| (d) | no Default or Event of Default has occurred and is continuing
on the Funding Date. |
[The undersigned hereby irrevocably authorizes and directs the Administrative Agent to
disburse the proceeds of the Proposed Borrowing in accordance with the instructions set forth on
Schedule 1 hereto.]3
| WARNACO INC. | ||||||
| By: | ||||||
| Title: | ||||||
| 2 | Insert for any Proposed Borrowing after the Closing Date. |
|
| 3 | Insert only for Proposed Borrowing on the Closing Date. |
[Schedule 1 to Notice of Borrowing]4
Disbursement Instructions
| 4 | Insert only for Proposed Borrowing on the Closing Date. |
EXHIBIT C
TO
CREDIT AGREEMENT
TO
CREDIT AGREEMENT
FORM OF SWING LOAN REQUEST
BANK OF AMERICA, N.A.,
as Administrative Agent under the
Credit Agreement referred to below
335 Madison Avenue
New York, New York 10017
as Administrative Agent under the
Credit Agreement referred to below
335 Madison Avenue
New York, New York 10017
___, 20__
Attention:
Re: Warnaco Inc. (the “Borrower”)
Reference is made to the Credit Agreement, dated as of August
_____, 2008 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, The Warnaco Group, Inc., the Lenders and Issuers party thereto, Bank of
America, N.A., as administrative agent for the Revolving Credit Facility (in such capacity, the
“Administrative Agent”) and as Collateral Agent for the Lenders and the Issuers, and certain other
Persons. Capitalized terms used herein and not otherwise defined herein are used herein as defined
in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section 2.3(b) (Swing Loans) of
the Credit Agreement that the undersigned hereby requests a Swing Loan under the Credit Agreement
and, in that connection, sets forth below the information relating to such Swing Loan (the
“Proposed Swing Loan”) as required by Section 2.3(b) (Swing Loans) of the Credit Agreement:
| (e) | The date of the Proposed Swing Loan is
_____, 20____
(the
“Funding Date”). |
(f) The amount of the Proposed Swing Loan is $ .
| (g) | The Available U.S. Credit (after giving effect to the Proposed
Swing Loan) is $ . |
The undersigned hereby certifies that the following statements are true on the date hereof and
shall be true on the Funding Date both before and after giving effect to the Proposed Swing Loan
and to the application of the proceeds therefrom:
Section 1.01 the representations and warranties set forth in Article IV
(Representations and Warranties) of the Credit Agreement and in the other Loan
Documents are true and correct [in all material respects]5 on and as
of the Funding Date with the same effect as though made on and as of such date,
except to the extent any such representation or warranty expressly relates to
an earlier date, in which case such representation or warranty shall have been
true and correct as of such earlier date; and
| (h) | no Default or Event of Default has occurred and is continuing
on the Funding Date. |
[The undersigned hereby irrevocably authorizes and directs the Administrative Agent to
disburse the proceeds of the Proposed Swing Loan in accordance with the instructions set forth on
Schedule 1 hereto.]6
| WARNACO INC. | ||||||
| By: | ||||||
| Title: | ||||||
| 5 | Insert for any Proposed Borrowing after the Closing Date. |
|
| 6 | Insert only for Proposed Borrowing on the Closing Date. |
[Schedule 1 to Swing Loan Request]7
Disbursement Instructions
| 7 | Insert only for Proposed Borrowing on the Closing Date. |
EXHIBIT D
TO
CREDIT AGREEMENT
TO
CREDIT AGREEMENT
FORM OF LETTER OF CREDIT REQUEST
BANK OF AMERICA, N.A.,
as Administrative Agent under the
Credit Agreement referred to below
335 Madison Avenue
New York, New York 10017
as Administrative Agent under the
Credit Agreement referred to below
335 Madison Avenue
New York, New York 10017
___, 20__
Attention:
Re: Warnaco Inc. (the “Borrower”)
Reference is made to the Credit Agreement, dated as of August
_____, 2008 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, The Warnaco Group, Inc., the Lenders and Issuers party thereto, Bank of
America, N.A., as administrative agent for the Revolving Credit Facility (in such capacity, the
“Administrative Agent”) and as Collateral Agent for the Lenders and the Issuers, and certain other
Persons. Capitalized terms used herein and not otherwise defined herein are used herein as defined
in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section 2.4(c) (Letters of
Credit) of the Credit Agreement that the undersigned requests the issuance of a Letter of Credit by
[Name of Issuer] in the form of a [standby] [documentary] letter of credit for the benefit of [Name
of Beneficiary], in the amount of [$_____] [Amount in Alternative Currency (the Dollar
Equivalent of which is
_____
as of the date hereof)], to be issued on
_____,
_____
(the “Issue Date”) and having an expiration date of
_____,
_____.
The form of the requested Letter of Credit is attached hereto.
The undersigned hereby certifies that the following statements are true on the date hereof
(with respect to clauses (d) and (e) only) and shall be true on the Issue Date both before and
after giving effect to the issuance of the Letter of Credit requested hereby:
(i) the aggregate amount of the Letter of Credit Obligations then outstanding will not
exceed the Letter of Credit Sub-Limit;
(j) the sum of the aggregate amount of the Letter of Credit Obligations then
outstanding and the aggregate amount of the Loans then outstanding will not exceed the
Maximum Credit in effect;
(k) the representations and warranties set forth in Article IV (Representations and
Warranties) of the Credit Agreement and in the other Loan Documents are true and correct [in
all material respects]8 with the same effect as though made on and as of the date
hereof, or the Issue Date, as the case may be, except to the extent any such representation
or warranty expressly relates to an earlier date, in which case such representation or
warranty shall have been true and correct as of such earlier date; and
(l) no Default or Event of Default has occurred and is continuing on the date hereof or
the Issue Date.
| WARNACO INC. | ||||||
| By: | ||||||
| Title: | ||||||
| 8 | Insert for any Proposed Issuance after the Closing Date. |
EXHIBIT E
TO
CREDIT AGREEMENT
TO
CREDIT AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
See attached.
WARNACO, GROUP
AVAILABILITY SCHEDULE (000’s)
AVAILABILITY SCHEDULE (000’s)
| Gordon | ||||||||
| Brothers Exam | Current | |||||||
| 7/5/2008 | 8/2/2008 | |||||||
Gross Accounts Receivable |
183,931 | 157,520 | ||||||
Ineligible A/R |
||||||||
Over 90 Days |
1,926 | 1,911 | ||||||
Aged Credits |
— | — | ||||||
Cross-Aged |
274 | 331 | ||||||
Dr Memo / Chargebacks |
4,557 | 4,423 | ||||||
Cr & Rebill Refreshed |
— | — | ||||||
Contra |
— | — | ||||||
Concentration |
— | — | ||||||
Bankruptcy/Credit Hold |
953 | 2,996 | ||||||
180 + TERMS |
2,626 | 1,753 | ||||||
Foreign |
554 | 473 | ||||||
Government |
483 | — | ||||||
90 - 180 TERMS 31 + OS |
560 | 1,738 | ||||||
| — | — | |||||||
Other |
— | — | ||||||
Total Ineligible A/R |
11,933 | 13,625 | ||||||
Net Eligible A/R |
171,998 | 143,895 | ||||||
Advance Rate |
85.00 | % | 85.00 | % | ||||
Eligible A/R @ Adv % |
146,198 | 122,311 | ||||||
Less: Dilution Reserve (15.2% - 5% = 10.2%) |
17,544 | 14,677 | ||||||
Less: Other Reserve |
— | — | ||||||
Eligible A/R @ Adv %, net of Reserves |
128,655 | 107,633 | ||||||
Sub Limit |
270,000 | 270,000 | ||||||
A/R Availability |
128,655 | 107,633 | ||||||
Gross Inventory |
135,568 | 153,929 | ||||||
Ineligible Inventory |
— | — | ||||||
In-transit Inventory |
36,460 | 41,366 | ||||||
Off Site & Foreign Locations |
2,373 | 3,353 | ||||||
Reserve for FG Markdowns |
6,381 | — | ||||||
Misc Inventory Adjustments |
20 | 20 | ||||||
Capitalized Variances Reserve |
176 | — | ||||||
Obsolete Inventory |
327 | — | ||||||
Royalties |
— | — | ||||||
Shrink Reserve |
989 | 1,060 | ||||||
Other |
— | — | ||||||
0 |
— | — | ||||||
0 |
— | — | ||||||
Total Ineligible Inventory |
46,726 | 45,799 | ||||||
Net Eligible Inventory |
88,842 | 108,130 | ||||||
90% of NOLV of 85.9% = 77.31% |
77.31 | % | 77.31 | % | ||||
| Gordon | ||||||||
| Brothers Exam | Current | |||||||
| 7/5/2008 | 8/2/2008 | |||||||
Eligible Inventory @ Adv % |
68,684 | 83,595 | ||||||
Less: Rents and Fees on Leased Inv. Locations |
276 | 183 | ||||||
Less: AP to Outside Processors |
— | — | ||||||
Less: Royalties (Future) |
— | — | ||||||
Less: Other2 |
— | — | ||||||
Eligible Inventory @ Adv %, net of Reserves |
68,408 | 83,412 | ||||||
Gross Inventory at __% of OLV % |
— | — | ||||||
Sub Limit |
— | — | ||||||
Inventory Availability |
68,408 | 83,412 | ||||||
L/C’S DOCUMENTARY 85% of NOLV of 61% = 51.85%/intransit |
(28,721 | ) | (29,188 | ) | ||||
ACCRUED DOMESTIC ROYALTIES |
10,478 | 4,683 | ||||||
Cash Collateral (reflects estimated cash on hand at closing) |
(3,918 | ) | (20,000 | ) | ||||
Total Other Availability/Credit Products Reserve |
(22,161 | ) | (44,505 | ) | ||||
Gross Availability |
219,223 | 235,551 | ||||||
Line Amount |
270,000 | 270,000 | ||||||
ADJUSTED GROSS AVAILABILITY |
219,223 | 235,551 | ||||||
Revolving Loan Balance including accrued fees & interest |
— | 110,000 | ||||||
Letters of Credit [reflects estimated CITI L/C] |
65,167 | 68,325 | ||||||
AP Amount to Vendors with Lien/Security Interests |
— | — | ||||||
Delinquent Payables (One time only at closing) |
— | — | ||||||
Minimum Excess Availability |
— | 40,000 | ||||||
Loan Exposures |
65,167 | 218,325 | ||||||
NET AVAILABILITY / (SHORTFALL) |
154,056 | 17,226 | ||||||
EXHIBIT F
TO
CREDIT AGREEMENT
TO
CREDIT AGREEMENT
FORM OF NOTICE OF CONVERSION OR CONTINUATION
BANK OF AMERICA, N.A.,
as Administrative Agent under the
Credit Agreement referred to below
Credit Agreement referred to below
335 Madison Avenue
New York, New York 10017
New York, New York 10017
___, 20__
Attention:
Re: Warnaco Inc. (the “Borrower”)
Reference is made to the Credit Agreement, dated as of August
_____, 2008 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, The Warnaco Group, Inc., the Lenders and Issuers party thereto, Bank of
America, N.A., as administrative agent for the Revolving Credit Facility (in such capacity, the
“Administrative Agent”) and as Collateral Agent for the Lenders and the Issuers, and certain other
Persons. Capitalized terms used herein and not otherwise defined herein are used herein as defined
in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section 2.11
(Conversion/Continuation Option) of the Credit Agreement that the undersigned hereby requests a
[conversion] [continuation] on
_____,
_____
of $_____
in principal amount of presently
outstanding Revolving Loans that are [Base Rate Loans] [Eurodollar Rate Loans having an Interest
Period ending on
_____,
_____
][to] [as] [Base Rate][Eurodollar Rate] Loans. [The Interest
Period for such amount requested to be converted to or continued as Eurodollar Rate Loans is [[one]
[two] [three] [six] month[s]].
In connection herewith, the undersigned hereby certifies that no Default or Event of Default
has occurred and is continuing on the date hereof.
| WARNACO INC. | ||||||
| By: | ||||||
| Title: | ||||||
EXHIBIT G
TO
CREDIT AGREEMENT
TO
CREDIT AGREEMENT
FORM OF OPINION OF COUNSEL FOR THE LOAN PARTIES
See attached.
Skadden, Arps, Slate, Meagher & Flom llp four times square new york 10036-6522 tel: (212) 735-3000 fax: (212) 735-2000 www.skadden.com |
FIRM/AFFILIATE OFFICES BOSTON CHICAGO HOUSTON LOS ANGELES PALO ALTO SAN FRANCISCO WASHINGTON, D.C. WILMINGTON BEIJING BRUSSELS FRANKFURT HONG KONG LONDON MOSCOW MUNICH PARIS SINGAPORE SYDNEY TOKYO TORONTO VIENNA |
August 26, 2008
Bank of America, N.A.,
in its capacities as Administrative Agent and Collateral Agent
335 Madison Avenue
New York, New York 10017
in its capacities as Administrative Agent and Collateral Agent
335 Madison Avenue
New York, New York 10017
the Lenders and Issuers listed on Schedule A hereto
Re: Warnaco Inc. Credit Agreement
Ladies and Gentlemen:
We have acted as special counsel to The Warnaco Group, Inc., a Delaware corporation
(“Group”), Warnaco Inc., a Delaware corporation (the “Borrower”), and each of the other
direct and indirect subsidiaries of Group listed on Schedule I hereto (each, a
“Subsidiary” and, together with the Borrower and Group, the “Loan Parties” and each a “Loan
Party”) in connection with the preparation, execution and delivery of: (i) the Credit
Agreement, dated as of August 26, 2008 (the “Credit Agreement”), among the Borrower, Group,
the Lenders parties thereto, the Issuers parties thereto, Bank of America, N.A. (“BOA”), as
administrative agent (in such capacity, the “Administrative Agent”) and as collateral
agent for the Lenders and the Issuers, Banc of America Securities LLC and Deutsche Bank
Securities Inc., as Joint Lead Arrangers, Banc of America Securities LLC, Deutsche Bank
Securities Inc. and J.P. Morgan Securities Inc., as Joint Bookrunners, Deutsche Bank
Securities Inc., as Sole Syndication Agent and HSBC Business Credit (USA) Inc., JPMorgan
Chase Bank, N.A., and RBS Business Capital, a division of RBS Asset Finance Inc., as
Co-Documentation Agents; (ii) the Pledge and Security Agreement, dated as of August 26, 2008
(the “Security Agreement”), by each Loan Party, collectively as grantors, in favor of BOA, in
its capacity as collateral agent for the benefit of the Secured Parties (as defined therein)
(in such capacity, the “Collateral Agent”); and
(iii) certain other agreements, instruments and documents related to the Credit Agreement. This
opinion is being delivered pursuant to Section 3.1(a)(viii) of the Credit Agreement.
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 2
Agent and Collateral Agent
August 26, 2008
Page 2
In our examination, we have assumed the genuineness of all signatures including endorsements,
the legal capacity and competency of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents submitted to us as
facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of
such copies. As to any facts relevant to this opinion which we did not independently establish or
verify, we have relied upon statements and representations of the Loan Parties and their officers
and other representatives, including the Loan Parties’ Certificate described below, and of public
officials, including the facts and conclusions set forth therein.
In rendering the opinions set forth herein, we have examined and relied on originals or
copies of the following:
(a) the Credit Agreement;
(b) the Security Agreement;
(c) the Guaranty, dated as of August 26, 2008 (the “Guaranty”), by Group and each of Group’s
subsidiaries which are parties thereto in favor of the Guarantied Parties (as defined therein);
(d) the Trademark Security Agreement, dated as of August 26, 2008, by Warnaco Inc., Warnaco
U.S., Inc., Warnaco Swimwear Inc., Warnaco Swimwear Products Inc. and CCC Acquisition Corp. in
favor of the Collateral Agent;
(e) the Copyright Security Agreement, dated as of August 26, 2008, by Warnaco Inc., Warnaco
U.S., Inc., Warnaco Swimwear Inc. and Warnaco Swimwear Products Inc. in favor of the Collateral
Agent;
(f) the Patent Security Agreement, dated as of August 26, 2008, by Warnaco Inc., Warnaco U.S.,
Inc., Warnaco Swimwear Inc., Warnaco Swimwear Products Inc. and CCC Acquisition Corp. in favor of
the Collateral Agent;
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 3
Agent and Collateral Agent
August 26, 2008
Page 3
(g) the fee letter, dated August 26, 2008, among the Borrower, BOA and Banc of America
Securities LLC;
(h) an unfiled copy of a separate financing statement for each of Group, Borrower and each of
the entities listed on Part I-A of Schedule I hereto (together with Group and Borrower,
each, a “Delaware Loan Party”), each identifying a different Delaware Loan Party, as debtor, and
all identifying “Bank of America, N.A., as Collateral Agent”, as secured party, each of which we
understand will be filed in the office of the Secretary of State of the State of Delaware (such
filing office, the “Delaware Filing Office” and such financing statements, the
“Delaware Financing Statements”);
(i) the Possessory Certificates (as defined herein);
(j) the certificate of the Vice President of each of Group and Borrower, dated the date
hereof, a copy of which is attached as Exhibit A hereto (the “Loan Parties’ Certificate”);
(k) copies of the certificate of incorporation (“Certificates of Incorporation”) of each
Delaware Loan Party, certified by the Secretary of State of the State of Delaware, on August 1,
2008, August 4, 2008, August 6, 2008 and August 19, 2008, as applicable, and certified by the
Assistant Secretary or Vice President of each Delaware Loan Party, as applicable, as of the date
hereof;
(l) copies of the bylaws (together with the Certificates of Incorporation, the
“Organizational Documents”), of each Delaware Loan Party, certified by the Secretary
of each Delaware Loan Party as of the date hereof;
(m) certified copies of certain resolutions of the board of directors of each Delaware Loan
Party certified by the Assistant Secretary or Vice President of each Delaware Loan Party, as
applicable, as of the date hereof;
(n) certificates, dated August 1, 2008, August 4, 2008, August 12, 2008 and August 19, 2008,
as applicable, and facsimile bringdowns thereof, dated the date hereof, from the Secretary of State
of the State of Delaware as to the existence and good standing in the State of Delaware of each
Delaware Loan Party (the “Delaware Good Standing Certificates”); and
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 4
Agent and Collateral Agent
August 26, 2008
Page 4
(o) such other documents as we have deemed necessary or appropriate as a basis
for the opinions set forth below.
We express no opinion as to the laws of any jurisdiction (including, without limitation, the
laws of the State of Nevada and laws of the foreign countries listed on Schedule III
hereto) other than (i) the Applicable Laws of the State of New York, (ii) the Applicable Laws of
the United States of America (including, without limitation, Regulations U and X of the Federal
Reserve Board), (iii) the General Corporation Law of the State of Delaware (the “DGCL”) and (iv)
solely the UCC (as defined below) for purposes of our opinions in paragraphs 8 through 12.
Capitalized terms used and not otherwise defined herein shall have the same meanings herein as
ascribed thereto in the Credit Agreement. The documents identified in clauses (a) through (g) above
shall hereinafter be referred to collectively as the “Transaction Agreements.” As used
herein:
“Applicable Contracts” means those agreements or instruments set forth on Schedule
I to the Loan Parties’ Certificate;
“Applicable Laws” means those laws, rules and regulations which, in our experience,
are normally applicable to transactions of the type contemplated by the Transaction Agreements,
without our having made any special investigation as to the applicability of any specific law, rule
or regulation, and which are not the subject of a specific opinion herein referring expressly to a
particular law or laws;
“Applicable Orders” means those orders or decrees of governmental authorities
identified on Schedule II to the Loan Parties’ Certificate;
“Delaware UCC” means the Uniform Commercial Code as in effect on the date hereof in
the State of Delaware (without regard to laws referenced in Section 9-201 thereof);
“Governmental Approval” means any consent, approval, license, authorization or
validation of, or filing, recording or registration with, any governmental authority pursuant to
the Applicable Laws of the State of New York or the Applicable Laws of the United States of
America;
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 5
Agent and Collateral Agent
August 26, 2008
Page 5
“New York UCC” means the Uniform Commercial Code as in effect on the date hereof in
the State of New York (without regard to laws referenced in Section 9-201 thereof);
“Possessory Certificates” means those certificates identified on Schedule II
hereto and delivered to the Collateral Agent on the date hereof;
“UCC” means (a) the New York UCC and (b) the Delaware UCC, as applicable; and
“UCC Collateral” means that portion of the Collateral (as such term is defined
in the Security Agreement), including the Possessory Certificates, to the extent the New York
UCC governs the creation of a security interest in such collateral.
Based upon the foregoing and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, we are of the opinion that:
1. Based solely on our review of the Delaware Good Standing Certificates, each Delaware Loan
Party is validly existing and in good standing under the DGCL.
2. Each Delaware Loan Party has the corporate power and authority to execute, deliver and
perform all of its obligations under each of the Transaction Agreements to which it is a party
under the DGCL. The execution and delivery by each Delaware Loan Party of each of the Transaction
Agreements to which it is a party and the consummation by each Delaware Loan Party of the
transactions contemplated thereby, and the filing of the Delaware Financing Statements, have been
duly authorized by all requisite corporate action on the part of each Delaware Loan Party under the
DGCL. Each of the Transaction Agreements has been duly executed and delivered by each Delaware Loan
Party which is a party thereto under the DGCL.
3. Each of the Transaction Agreements constitutes the valid and binding obligation of each
Loan Party which is a party thereto, enforceable against each such Loan Party in accordance with
its terms under the Applicable Laws of the State of New York.
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 6
Agent and Collateral Agent
August 26, 2008
Page 6
4. The execution and delivery by each Loan Party of each of the Transaction Agreements to
which it is a party and the performance by each Loan Party of its obligations under each such
Transaction Agreement, each in accordance with its terms, do not (i) conflict with such Loan
Party’s Organizational Documents, (ii) constitute a violation of, or a default under, any
Applicable Contract or (iii) cause the creation of any security interest or lien (other than the
liens granted under, or created by or pursuant to, the Transaction Agreements) upon any of the
property of such Loan Party pursuant to any Applicable Contract. We do not express any opinion,
however, as to whether the execution, delivery or performance by any Loan Party of the Transaction
Agreements will constitute a violation of, or a default under, any covenant, restriction or
provision with respect to financial ratios or tests or any aspect of the financial condition or
results of operations of the Loan Parties. We call to your attention that certain of the Applicable
Contracts are governed by laws other than those as to which we express our opinion. We express no
opinion as to the effect of such other laws on the opinions herein stated.
5. Neither the execution, delivery or performance by any Loan Party of any of the Transaction
Agreements to which it is a party nor the compliance by such Loan Party with the terms and
provisions thereof will contravene any provision of any Applicable Law of the State of New York or
any Applicable Law of the United States of America.
6. No Governmental Approval, which has not been obtained or taken and is not in full force and
effect, is required to authorize, or is required in connection with, the execution, delivery or
performance of any of the Transaction Agreements by any Loan Party which is a party thereto or the
enforceability of any of the Transaction Agreements against such Loan Party except those
Governmental Approvals set forth in Schedule III to the Loan Parties’ Certificate.
7. Neither the execution, delivery or performance by any Loan Party of its obligations under
any of the Transaction Agreements to which it is a party nor compliance by such Loan Party with the
terms thereof will contravene any Applicable Order to which such Loan Party is subject.
8. Under the New York UCC, the provisions of the Security Agreement are effective to create a
valid security interest in favor of the Collateral Agent in each Loan Party’s rights in the UCC
Collateral to secure the Secured Obligations (as defined in the Security Agreement) of such Loan
Party.
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 7
Agent and Collateral Agent
August 26, 2008
Page 7
9. Pursuant to the provisions of the Security
Agreement, each Delaware Loan Party has authorized the filing of the respective Delaware Financing
Statement naming such Delaware Loan Party as debtor for purposes of Section 9-509 of the Delaware
UCC.
10. Each Delaware Financing Statement includes not only all of the types of information
required by Section 9-502(a) of the Delaware UCC but also the types of information without which
the Delaware Filing Office may refuse to accept such Delaware Financing Statement pursuant to
Section 9-516 of the Delaware UCC.
11. To the extent the Delaware UCC is applicable, the security interest of the Collateral
Agent will be perfected in each Delaware Loan Party’s rights in all UCC Collateral upon the later
of the attachment of the security interest and the filing of the Delaware Financing Statement
naming such Delaware Loan Party as debtor in the Delaware Filing Office; provided, however,
we express no opinion under this paragraph 11 with respect to (i) money, (ii) deposit accounts,
(iii) letter of credit rights, (iv) goods covered by a certificate of title statute, (v) as-extracted collateral or (vi) any property subject to a statute, regulation or treaty of the United
States whose requirements for a security interest’s obtaining priority over the rights of a lien
creditor with respect to the property preempt Section 9-310(a) of the Delaware UCC.
12. Assuming neither the Collateral Agent nor any of the Secured Parties has notice of any
adverse claims with respect to the Possessory Certificates then, upon the later of the attachment
of the security interest and the delivery of such Possessory Certificates to the Collateral Agent
in the State of New York indorsed, by an effective indorsement, either in blank or to the
Collateral Agent, the Collateral Agent will acquire such Possessory Certificates (and the shares
represented thereby) free of any adverse claims under 8-303 of the New York UCC. As used herein,
“notice of adverse claim” has the meaning set forth in Section 8-105 of the New York UCC and
includes, without limitation, any adverse claim that the Collateral Agent or any of the Secured
Parties would discover upon any investigation which such person has a duty, imposed by statute or
regulation, to investigate.
13. No Loan Party is and, solely after giving effect to the loans made pursuant to the
Transaction Agreements and the application of the proceeds thereof, will not be an “investment
company” as such term is defined in the Investment Company Act of 1940, as amended.
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 8
Agent and Collateral Agent
August 26, 2008
Page 8
Our opinions are subject to the following assumptions and qualifications:
(a) enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally and by general principles of
equity (regardless of whether enforcement is sought in equity or at law);
(b) we have assumed that each of the Transaction Agreements constitutes the valid and
binding obligation of each party to such Transaction Agreement (other than the Loan Parties
to the extent expressly set forth herein) enforceable against such other party in accordance
with its terms;
(c) we express no opinion as to the effect on the opinions expressed herein of (i) the
compliance or non-compliance of any party (other than the Loan Parties to the extent expressly set
forth herein) to the Transaction Agreements with any state, federal or other laws or regulations
applicable to them or (ii) the legal or regulatory status or the nature of the business of any
party (other than the Loan Parties to the extent expressly set forth herein);
(d) we express no opinion as to the enforceability of any rights to contribution or
indemnification provided for in the Transaction Agreements which are violative of the public policy
underlying any law, rule or regulation (including any federal or state securities law, rule or
regulation);
(e) we express no opinion on the enforceability of any provision in a Transaction Agreement
purporting to prohibit, restrict or condition the assignment of rights under such Transaction
Agreement to the extent such restriction on assignability is governed by the Uniform Commercial
Code;
(f) in the case of the Guaranty certain of the provisions, including waivers, with respect to
the Guaranty are or may be unenforceable in whole or in part, but the inclusion of such provisions
does not affect the validity of the Guaranty, taken as a whole;
(g) certain of the remedial provisions with respect to the security contained in the Security
Agreement, including waivers, may be unenforceable in whole or in part, but the inclusion of such
provisions does not affect the validity of the Security Agreement, taken as a whole, and the
Security Agreement, taken as a
whole, together with applicable law, contains adequate provisions for the practical realization of
the benefits of the security;
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 9
Agent and Collateral Agent
August 26, 2008
Page 9
(h) we express no opinion as to the enforceability of any section of any Transaction Agreement
to the extent it purports to waive any objection a person may have that a suit, action or
proceeding has been brought in an inconvenient forum or a forum lacking subject-matter
jurisdiction;
(i) we express no opinion with respect to any section of the Security Agreement to the extent
it establishes a standard of care for collateral in the possession or control of the Collateral
Agent to the extent such standard of care is unenforceable under Sections 1-102 and 9-207 of the
UCC;
(j) we express no opinion with respect to any provision of the Credit Agreement to the extent
it authorizes or permits any purchaser of a participation interest or Affiliate of any Lender or
the Administrative Agent to set-off or apply any deposit, property or indebtedness or the effect
thereof on the opinions contained herein;
(k) we express no opinion with respect to Section 2.4(j) of the Credit Agreement to the
extent it excuses the issuer of a letter of credit from liability to the extent such provision is
unenforceable pursuant to Section 5-103 of the UCC;
(l) to the extent that any opinion relates to the enforceability of the choice of New York law
and choice of New York forum provisions of the Transaction Agreements, our opinion is rendered in
reliance upon N.Y. Gen. Oblig. Law §§ 5-1401, 5-1402 (McKinney 2001) and N.Y. CPLR
327(b) (McKinney 2001) and is subject to the qualifications that such enforceability may be
limited by public policy considerations of any jurisdiction, other than the courts of the State of
New York, in which enforcement of such provisions, or of a judgment upon an agreement containing
such provisions, is sought;
(m) we wish to point out that where reference is made in the Transaction Agreements to the
internal laws of the State of New York we have assumed that N.Y. Gen. Oblig. Law §§ 5-1401,
5-1402 (McKinney 2001) will be deemed to be internal laws;
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 10
Agent and Collateral Agent
August 26, 2008
Page 10
(n) we have assumed that all conditions precedent contained in Section 3.1 of the
Credit Agreement, which conditions require the delivery of
documents, evidence or other items satisfactory in form, scope and/or substance to the
Administrative Agent or the satisfaction of which is otherwise in the discretion or control of the
Administrative Agent have been, or contemporaneously with the delivery hereof will be, fully
satisfied or waived;
(o) we have assumed that each Loan Party has rights in, or with respect to after-acquired
property will have rights in, the UCC Collateral (within the meaning of Section 9-203(b)(2) of the
UCC), and we express no opinion as to the nature or extent of the rights of any Loan Party in any
of the UCC Collateral and we note that with respect to any after-acquired property, the security
interest will not attach until such Loan Party acquires rights (within the meaning of Section
9-203(b)(2) of the UCC) therein;
(p) our opinion with respect to proceeds is subject to the limitations set forth in Section
9-315 of the UCC and, in addition, we call to your attention that in the case of certain types of
proceeds, other parties such as holders in due course, protected purchasers of securities, persons
who obtain control over securities entitlements and buyers in the ordinary course of business may
acquire a superior interest or may take their interest free of the security interest of a secured
party;
(q) we express no opinion with respect to commercial tort claims, timber to be cut or
cooperative interests;
(r) we express no opinion with respect to any goods which are accessions to, or commingled or
processed with, other goods to the extent that the security interest is limited by Section 9-335 or
9-336 of the UCC;
(s) we express no opinion with respect to the choice of law governing (i) authorization to
file the Delaware Financing Statements, or (ii) perfection, the effect of perfection and
non-perfection or priority of the security interest;
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 11
Agent and Collateral Agent
August 26, 2008
Page 11
(t) we call to your attention that the issuers of certain of the Possessory Certificates and
other equity interests that may constitute UCC Collateral are organized under the laws of those
foreign countries listed on Schedule III hereto (each such country, a “Foreign Country”;
and such Possessory Certificates, the “Foreign Certificates”), and we express no opinion as to the
effect of the laws of any Foreign Countries on the opinions herein stated. In addition, we express
no opinion in paragraph 12 with respect to the Foreign Certificates except to the extent each of
the Foreign Certificates constitute a “certificated security” as defined in Section 8-102 of the
UCC. Our opinion is limited to the UCC, and the laws of the jurisdiction of the issuer of such
Foreign Certificates may affect, among other things, whether such Foreign Certificate is
characterized as a “certificated security” under the UCC, the exercise of remedies with respect to
such Foreign Certificate and the exercise of voting or other rights with respect to such Foreign
Certificate;
(u) we advise you that with respect to that portion of the UCC Collateral in which the
Collateral Agent has been granted a security interest by more than one agreement, a court may limit
the Collateral Agent’s right to choose among the rights and remedies to which it may be entitled;
(v) we express no opinion regarding any copyrights, patents, trademarks, service marks or
other intellectual property, the proceeds thereof or money due with respect to the lease, license
or use thereof except to the extent Article 9 of the UCC may be applicable to the foregoing and,
without limiting the generality of the foregoing, we express no opinion as to the effect of any
federal laws relating to copyrights, patents, trademarks, service marks or other intellectual
property on the opinions expressed herein;
(w) we express no opinion with respect to the security interest of the Collateral Agent for
the benefit of the Secured Parties to secure the Secured Obligations owing to the Secured Parties
except to the extent that the Collateral Agent has been duly appointed as agent for such Persons as
of the date hereof and for any Person who becomes a Lender by executing an Assignment and
Acceptance or an Assumption Agreement;
(x) we express no opinion whether the description “all other goods and personal property” set
forth in Section 2.1 (a) of the Security Agreement is an adequate description of property for
purposes of Sections 9-108 or 9-203 of the UCC; and
(y) we express no opinion with respect to (i) the descriptions “trade dress”, and “other
source or business identifiers” (as contained in the term “Trademark” in the Security Agreement)
and (ii) the descriptions in items (i) and (iii) of the term “Excluded Property” (as defined in the
Security Agreement) or the effect of (i) or (ii) on the adequacy of the description of any of the
“Collateral” (as defined
in the Security Agreement) for purposes of Sections 9-108 or 9-203 of the UCC and the opinions
stated herein.
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 12
Agent and Collateral Agent
August 26, 2008
Page 12
In rendering the foregoing opinions, we have assumed, with your consent, that:
(a) Authentic Fitness On-Line, Inc. (“AF On-Line”) is validly existing and in good
standing under the laws of the State of Nevada;
(b) AF On-Line has the power and authority to execute, deliver and perform all of its
obligations under each Transaction Agreement to which it is a party, and the execution and delivery
by AF On-Line of each such Transaction Agreement and the consummation by AF On-Line of the
transactions contemplated thereby have been duly authorized by all requisite action on the part of
AF On-Line and do not and will not conflict with, contravene, violate or constitute a default under
AF On-Line’s certificate of incorporation or by-laws. AF On-Line has duly executed and delivered
each Transaction Agreement to which it is a party;
(c) the execution, delivery and performance by the Loan Parties of any of their obligations
under the Transaction Agreements does not and will not conflict with, contravene, violate or
constitute a default under (i) any lease, indenture, instrument or other agreement to which the
Loan Parties or their property is subject (other than the Applicable Contracts as to which we
express our opinion in paragraph 4 herein), (ii) any rule, law or regulation to which the Loan
Parties are subject (other than Applicable Laws of the State of New York and Applicable Laws of the
United States of America as to which we express our opinion in paragraph 5 herein) or (iii) any
judicial or administrative order or decree of any governmental authority (other than Applicable
Orders as to which we express our opinion in paragraph 7 herein); and
(d) no authorization, consent or other approval of, notice to or filing with any court,
governmental authority or regulatory body (other than Governmental Approvals as to which we express
our opinion in paragraph 6 herein) is required to authorize or is required in connection with the
execution and delivery by or enforceability against each Loan Party of any Transaction Agreement to
which it is a party or the transactions contemplated thereby.
Bank of America, N.A., as Administrative
Agent and Collateral Agent
August 26, 2008
Page 13
Agent and Collateral Agent
August 26, 2008
Page 13
This opinion is being furnished only to you in connection with the Transaction Agreements and
is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to for
any other purpose or relied upon by any other person or entity for any purpose without our prior
written consent; provided that any Person that becomes a Lender or an Issuer under the Credit
Agreement may rely on this opinion as if addressed to and delivered to such Person on the date
hereof; and provided further that this opinion may be disclosed to bank regulatory
authorities and to the auditors of any Lender or Issuer and to any prospective assignees or
participants in the Revolving Credit Facility; provided that such Persons are not entitled to rely
on this opinion.
Very truly yours,
(SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP)
(SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP)
SCHEDULE A
(Lenders and Issuers)
(Lenders and Issuers)
Bank of America, N.A.
Deutsche Bank Trust Company Americas
JPMorgan Chase Bank, N.A.
HSBC Business Credit (USA) Inc.
RBS Business Capital, a division of RBS Asset Finance Inc.
U.S. Bank National Association
TD Bank N.A.
Branch Banking and Trust Company
Capital One Leverage Finance Corp.
The Bank of Nova Scotia
UBS Loan Finance LLC
UPS Capital Corporation
Intesa Sanpaolo S.p.A. New York Branch
Israel Discount Bank of New York
SCHEDULE I
(Subsidiaries)
(Subsidiaries)
PART
I-A
(Delaware Subsidiaries)
(Delaware Subsidiaries)
Calvin Klein Jeanswear Company
CCC Acquisition Corp.
CKJ Holdings, Inc.
CKU.com Inc.
Designer Holdings Ltd.
Ocean Pacific Apparel Corp.
Warnaco Puerto Rico, Inc.
Warnaco Retail Inc.
Warnaco Swimwear Inc.
Warnaco Swimwear Products Inc.
Warnaco U.S., Inc.
CCC Acquisition Corp.
CKJ Holdings, Inc.
CKU.com Inc.
Designer Holdings Ltd.
Ocean Pacific Apparel Corp.
Warnaco Puerto Rico, Inc.
Warnaco Retail Inc.
Warnaco Swimwear Inc.
Warnaco Swimwear Products Inc.
Warnaco U.S., Inc.
PART I-B
(Other Subsidiaries)
(Other Subsidiaries)
Authentic Fitness On-Line, Inc.
SCHEDULE II
(Possessory Certificates)
(Possessory Certificates)
Part I:
U.S. Subsidiaries
| Stock | Percentage of | |||||||||||||||
| Certificate | Number of | Outstanding | ||||||||||||||
| Loan Party | Stock Issuer | Class of Stock | No(s) | Shares | Shares | |||||||||||
Calvin Klein Jeanswear Company |
CKJ Holdings, Inc. | Common Stock | 2 | 1,000 | 100 | % | ||||||||||
Designer Holdings Ltd. (f/k/a Jeanswear Holdings, Inc.) |
Calvin Klein Jeanswear Company | Common Stock | 2 | 1,000 | 100 | % | ||||||||||
The Warnaco Group, Inc. |
Warnaco Inc. | Common Stock | 43 | 100,000 | 100 | % | ||||||||||
Warnaco Inc. |
CKU.com Inc. | Common Stock | 2 | 1,000 | 100 | % | ||||||||||
| Designer Holdings Ltd. | Common Stock | 2 | 1,000 | 100 | % | |||||||||||
| Ocean Pacific Apparel Corp. | Common Stock | 9 | 5,589 | 100 | % | |||||||||||
| Warnaco Puerto Rico, Inc. | Common Stock | 1 | 1,000 | 100 | % | |||||||||||
| Warnaco Swimwear Inc. (f/k/a Authentic Fitness Corporation) | Common Stock | 3 | 1,000 | 100 | % | |||||||||||
| Warnaco U.S., Inc. | Common Stock | 1 | 1,000 | 100 | % | |||||||||||
Warnaco Swimwear Inc. (f/k/a Authentic Fitness Corporation) |
Warnaco Swimwear Products Inc. (f/k/a Authentic Fitness Products Inc.) | Common Stock | 6 | 100 | 100 | % | ||||||||||
| Stock | Percentage of | |||||||||||||||
| Certificate | Number of | Outstanding | ||||||||||||||
| Loan Party | Stock Issuer | Class of Stock | No(s) | Shares | Shares | |||||||||||
Warnaco Swimwear Products Inc. (f/k/a Authentic Fitness Products Inc.) |
Authentic Fitness On-Line, Inc. | Common Stock | 1 | 100 | 100 | % | ||||||||||
| Warnaco Retail Inc. (f/k/a Authentic Fitness Retail Inc.) | Common Stock | 1 | 100 | 100 | % | |||||||||||
| CCC Acquisition Corp. | Common Stock | 3 | 100 | 100 | % | |||||||||||
Part II: First-Tier Foreign Subsidiaries
| Stock | Percentage of | |||||||||||||||
| Certificate | Number of | Outstanding | ||||||||||||||
| Loan Party | Stock Issuer | Class of Stock | No(s) | Shares | Shares | |||||||||||
Warnaco Inc. |
Linda Vista de Veracruz S. A. de C.V. | Series B | 1 | 329 | 66 | % | ||||||||||
| Warnaco Intimo S.A. | Common Stock | N/A | 7,260 | 66 | % | |||||||||||
| WF Overseas Fashion C.V. | Partnership Interests | Uncertificated | Uncertificated | 65 | % | |||||||||||
| Warner’s de Mexico S.A. de C.V. | Series A | 1 | 33,000 | 66 | % | |||||||||||
| Series B | 4 | 39,959,844 | 66 | % | ||||||||||||
Warnaco Swimwear Products Inc. (f/k/a Authentic Fitness Products Inc.) |
Vista de Yucatan S.A. de C.V. | Series B | 1 | 329 | 66 | % | ||||||||||
Warnaco U.S., Inc. |
Warnaco (Macao) Company Limited | Uncertificated | Uncertificated | Uncertificated | 66 | % | ||||||||||
SCHEDULE III
(Foreign Countries)
(Foreign Countries)
Macao
Mexico
Spain
The Netherlands
Mexico
Spain
The Netherlands
Exhibit A to Opinion of
Special Counsel to The Warnaco Group. Inc.
Special Counsel to The Warnaco Group. Inc.
Officer’s Certificate
August 26, 2008
I, Ericka Alford, am the duly elected, qualified and acting Associate General Counsel of each
of The Warnaco Group, Inc., a Delaware corporation (“Group”), and Warnaco Inc., a Delaware
corporation (the “Borrower”). I understand that pursuant to Section 3.1(a)(viii) of the Credit
Agreement, dated as of August 26, 2008 (the “Credit Agreement”), among the Borrower, Group, the
Lenders parties thereto, the Issuers parties thereto, Bank of America, N.A. (“BOA”) as
administrative agent (in such capacity, the “Administrative Agent”) and as collateral
agent for the Lenders and the Issuers, Banc of America Securities LLC and Deutsche Bank Securities
Inc., as Joint Lead Arrangers, Banc of America Securities LLC, Deutsche Bank Securities Inc., and
J.P. Morgan Securities Inc., as Joint Bookrunners, Deutsche Bank Securities Inc., as Sole
Syndication Agent, and HSBC Business Credit (USA) Inc., JPMorgan Chase Bank, N.A., and RBS
Business Capital, a division of RBS Asset Finance Inc., as Co-Documentation Agents, Skadden, Arps,
Slate, Meagher & Flom LLP (“SASM&F”) is rendering an opinion (the “Opinion”) to the Administrative
Agent, the Collateral Agent, the Lenders and the Issuers. Capitalized terms used herein but not
otherwise defined herein shall have the meanings assigned to such terms as set forth in the
Opinion. I further understand that SASM&F is relying on this officer’s certificate and the
statements made herein in rendering such Opinion.
With regard to the foregoing, on behalf of each Loan Party, I hereby certify that:
1. I am familiar with the business of each Loan Party and its subsidiaries, and due inquiry
has been made of all persons deemed necessary or appropriate to verify or confirm the statements
contained herein.
2. SASM&F may rely on the respective representations and warranties that each Loan Party has
made in the Credit Agreement, each of the other Transaction Agreements and each of the certificates
delivered pursuant thereto. 1 have made a careful review of each of such representations and
warranties and hereby confirm, to the best of my knowledge and belief, that such representations
and warranties are true, correct and complete on and as of the date of this certificate.
3. Set forth on Schedule I hereto is a complete and accurate list of the agreements and
instruments to which each Loan Party is subject which are material to the business or financial
condition of the Loan Parties, taken as a whole or that are relevant to the transactions
contemplated by the Transaction Agreements.
19
4. Set forth on Schedule II hereto is a complete and accurate list of those orders and decrees
of any governmental authority of the State of New York and the United States of America by which
any Loan Party is bound that are material to the business or financial condition of the Loan
Parties, taken as a whole or that are relevant to the transactions contemplated by the Transaction
Agreements.
5. Set forth on Schedule III hereto is a complete and accurate list of those Governmental
Approvals applicable to any of the Loan Parties that are material to the business or financial
condition of the Loan Parties, taken as a whole or that are relevant to the transactions
contemplated by the Transaction Agreements.
6. Less than twenty-five percent (25%) of the assets of each Loan Party and its subsidiaries
on a consolidated basis and on an unconsolidated basis consist of Margin Stock (as defined below).
7. The Loan Parties are primarily engaged directly, or indirectly through Majority-Owned
Subsidiaries, in the business of the manufacture, sale and distribution of apparel; and no Loan
Party (i) is, or holds itself out as being engaged primarily, or proposes to engage primarily, in
the business of investing, reinvesting or trading in Securities, (ii) has or is engaged in, or
proposes to engage in, the business of issuing Face-Amount Certificates of the Installment Type or
has such certificate outstanding and (iii) owns or proposes to acquire Investment Securities having
a Value exceeding forty percent (40%) of the Value of the total assets of such Loan Party
(exclusive of Government Securities and cash items) on an unconsolidated basis.
8. As used in paragraph 6 of this certificate, the following term shall have the
following meaning:
“Margin Stock” means: (i) any equity security registered or having unlisted trading
privileges on a national securities exchange; (ii) any OTC security designated as qualified for
trading in the National Market System under a designation plan approved by the Securities and
Exchange Commission; (iii) any debt security convertible into a margin stock or carrying a warrant
or right to subscribe to or purchase a margin stock; (iv) any warrant or right to subscribe to or
purchase a margin stock; or (v) any security issued by an investment company registered under
Section 8 of the Investment Company Act of 1940.
9. As used in paragraphs 7 and 9 of this certificate, the following terms shall have
the following meanings:
“Exempt Fund” means a company that is excluded from treatment as an investment company solely
by section 3(c)(l) or 3(c)(7) of the Investment Company Act of 1940 (applicable to certain
privately offered investment funds).
20
“Face-Amount Certificate of the Installment Type” means any certificate, investment
contract, or other Security that represents an obligation on the part of its issuer to pay a stated
or determinable sum or sums at a fixed or determinable date or dates more than 24 months after the
date of issuance, in consideration of the payment of periodic installments of a stated or
determinable amount.
“Government Securities” means all Securities issued or guaranteed as to principal or
interest by the United States, or by a person controlled or supervised by and acting as an
instrumentality of the government of the United States pursuant to authority granted by the
Congress of the United States; or any certificate of deposit for any of the foregoing.
“Investment Securities” includes all Securities except (A) Government Securities, (B)
Securities issued by companies the only shareholders in which are employees and former employees of
a company and its subsidiaries, members of the families of such persons and the company and its
subsidiaries and (C) Securities issued by Majority-Owned Subsidiaries of Group which are not
engaged and do not propose to be engaged in activities within the scope of clause (i), (ii) or
(iii) of paragraph 7 of this Certificate or which are exempted or excepted from treatment as an
investment company by statute, rule or governmental order (other than Exempt Funds).
“Majority-Owned Subsidiary” of a person means a company fifty percent (50%) or more of
the outstanding Voting Securities of which are owned by such person, or by a company which, within
the meaning of this paragraph, is a Majority-Owned Subsidiary of such person.
“Security” means any note, stock, treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing agreement, collateral-trust
certificate, preorganization certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional undivided interest in
oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security
(including a certificate of deposit) or on any group or index of securities (including any interest
therein or based on the value thereof), or any put, call, straddle, option, or privilege entered
into on a national securities exchange relating to foreign currency, or, in general, any interest
or instrument commonly known as a “security,” or any certificate of interest or participation in,
temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe
to or purchase, any of the foregoing.
“Value” means (i) with respect to Securities owned at the end of the last preceding fiscal
quarter for which market quotations are readily available, the market value at the end of such
quarter; (ii) with respect to other Securities and assets owned at the end of the last preceding
fiscal quarter, fair value at the end of such quarter, as determined in good faith by or under the
direction of the board of directors; and (iii) with respect to securities and other assets acquired
after the end of the last preceding fiscal quarter, the cost thereof.
“Voting Security” means any security presently entitling the owner or holder thereof
to vote for the election of directors of a company (or its equivalent, e.g., general partner or
manager of a limited liability company).
21
IN WITNESS THEREOF, I have executed this certificate this 26th day of August, 2008.
| By: | /s/ Ericka Alford | |||
| Name: | Ericka Alford | |||
| Title: | Assistant Secretary | |||
[OPINION CERTIFICATE]
SCHEDULE I
(Applicable Contracts)
(Applicable Contracts)
| 1. | Jeanswear License Agreement, dated as of August 4, 1994, between Calvin Klein, Inc. and Calvin Klein Jeanswear Company, as amended. |
| 2. | Settlement Agreement dated as of January 22, 2001, between the Calvin Klein Trademark Trust, Calvin Klein, Inc., Calvin Klein, Linda Wachner, The Warnaco Group, Inc., Warnaco Inc., Designer Holdings, Ltd., CKJ Holdings, Inc., Jeanswear Holdings Inc., Calvin Klein Jeanswear Company and Outlet Holdings, Inc. |
| 3. | Amendment and Agreement dated June 5, 2003 between Calvin Klein, Inc., Philips Van-Heusen Corporation, Warnaco Inc., Calvin Klein Jeanswear Company and CKJ Holdings Inc. amending each of the Calvin Klein Jeanswear and Underwear Agreements and setting forth terms of the Calvin Klein Swimwear Agreements. |
| 4. | CK/Calvin Klein Jeans Store License for Central and South America dated July 26, 2004 (and effective as of June 1, 2004) between Calvin Klein, Inc., CKJ Holdings, Inc. and Calvin Klein Jeanswear Company, as amended. |
| 5. | Speedo License Agreement, dated as of May 10, 1990, among Speedo Knitting Mills Pty. Limited, Warnaco Inc. and Warnaco International Inc., as amended. |
| 6. | Speedo License Agreement, dated as of May 10, 1990, among Speedo International Limited and Authentic Fitness Corporation, as amended. |
| 7. | Amendment to the Speedo Licenses dated November 25, 2002, among Speedo International Limited, Authentic Fitness Corporation and Authentic Fitness Products Inc. |
| 8. | Chaps Sportswear Amended and Restated Design Services Agreement, effective as of as of January 1, 1996, between Polo Ralph Lauren Enterprises, L.P. and Warnaco Inc., as amended. |
| (a) | Chaps Canada Sportswear Amended and Restated Trademark License Agreement, dated as of November 1, 1995, between PRL USA, Inc., as successor to Polo Ralph Lauren, L.P. and Warnaco of Canada Company, as amended. |
| (b) | CHAPS Letter Agreement and Amendment dated June 16, 1999 between Polo Ralph Lauren Corporation and Warnaco Inc. | ||
| (c) | License Agreement and Design Services Agreement Amendment and Extension to CHAPS Licenses dated September, 2003 between PRL USA, Inc., as successor to Polo Ralph Lauren, L.P., The Polo/Lauren Company, LP and Warnaco Inc. and Warnaco of Canada Company, as amended. |
| 9. | Administration Agreement between Calvin Klein, Inc. and Warnaco Inc., dated as of March 14, 1994, as amended by Amendment and Agreement dated June 5, 2003. |
| 10. | Men’s Underwear License Agreement between Calvin Klein, Inc. and Calvin Klein Trademark Trust, dated as of March 14, 1994. |
| 11. | Women’s Intimate Apparel License Agreement between Calvin Klein, Inc. and Calvin Klein Trademark Trust, dated as of March 14, 1994. |
| 12. | Calvin Klein Women’s Swimwear Agreement effective July 1, 2004 between Calvin Klein, Inc. and Warnaco Swimwear Inc., as amended. |
| 13. | Indenture, dated as of June 12, 2003, among Warnaco Inc. and certain of its subsidiaries and Wells Fargo Bank Minnesota, National Association as the Indenture Trustee. |
| 14. | Amended and Restated License Agreement dated January 1, 1997 between Calvin Klein, Inc. and CK Jeanswear Europe, S.p.A., as amended. |
| 15. | Amended and Restated License Agreement dated January 1, 1997 between Calvin Klein, Inc. and Calvin Klein Jeanswear Asia Ltd., as amended. |
| 16. | CK Jeanswear World Store License dated July 16, 1997 between Calvin Klein, Inc. and CK Jeanswear N.V., as amended. |
| 17. | Jeans Accessories License Agreement dated January 31, 2006 between Calvin Klein, Inc., CK Jeanswear Europe S.p.A., CK Jeanswear Asia Limited and WF Overseas Fashion C.V. |
| 18. | Bridge Accessories License Agreement dated January 31, 2006 between Calvin Klein, Inc., CK Jeanswear Europe S.p.A. and WF Overseas Fashion C.V. |
| 19. | Bridge Apparel License Agreement dated January 31, 2006 between Calvin Klein, Inc., CK Jeanswear Europe S.p.A. and WF Overseas Fashion C.V. |
SCHEDULE II
(Applicable Orders)
(Applicable Orders)
None
SCHEDULE III
(Governmental Approvals)
(Governmental Approvals)
None
EXHIBIT H
TO
CREDIT AGREEMENT
TO
CREDIT AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
Reference is made to the Credit Agreement, dated as of August
_____, 2008 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Warnaco Inc., a Delaware corporation, as borrower (the “Borrower”), The Warnaco Group, Inc.
(“Group”), the Lenders and Issuers party thereto, Bank of America, N.A., as administrative agent
for the Revolving Credit Facility and as Collateral Agent for the Lenders and the Issuers, and
certain other Persons. Capitalized terms used herein without definition have the meanings ascribed
to them in the Credit Agreement. This Compliance Certificate is submitted concurrently with the
[quarterly][annual] financial statements of Group for the period ended
_____ ___, 20_____
[(the
“Fiscal Period End Date”)]9. Pursuant to Section 6.1(d) of the Credit Agreement, the
undersigned hereby certifies that he/she is a Responsible Officer of Group and further certifies on
behalf of Group as follows:
1. The calculations attached hereto as Annex A with respect to the covenant set forth in
Section 5.1 of the Credit Agreement [(as if a Trigger Event had occurred and the Fiscal Period End
Date were the last day of a Test Period)]10 and the Applicable Margin are true, accurate
and complete, and are made in accordance with the terms and provisions of the Credit Agreement.
2. [No Default or Event of Default has occurred and is continuing and no Default or Event of
Default (as defined in the Canadian Facility) has occurred and is continuing.] [A Default or Event
of Default or a Default or Event of Default (as defined in the Canadian Facility) has occurred and
is continuing. The nature thereof and the action which Group proposes to take with respect thereto
is as follows:
_____].
3. [The amount of the Available Credit at any time during the period covered by this
Compliance Certificate did not fall to an amount which gave rise to an Accelerated Borrowing Base
Certificate Delivery Date or a Trigger Event.] [During the period covered by this Compliance
Certificate, the Available Credit fell to an amount which gave rise to an Accelerated Borrowing
Base Certificate Delivery Date and/or a Trigger Event.] [Describe which occurred and date when
first occurred]].
| 9 | Bracketed text to be used only if no Trigger Event has
occurred and therefore Section 5.1 financial covenant not currently being
tested. |
|
| 10 | Bracketed text to be used only if no Trigger Event has
occurred and therefore Section 5.1 financial covenant not currently being
tested. |
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand on this
_____
day of
_____,
_____
| THE WARNACO GROUP, INC. | ||||||
| By: | ||||||
| Title | ||||||
EXHIBIT I
TO
CREDIT AGREEMENT
TO
CREDIT AGREEMENT
FORM OF PLEDGE AND SECURITY AGREEMENT
See Exhibit 10.3 to The Warnaco Group, Inc.’s Form 10-Q filed November 9, 2010
EXHIBIT J
TO
CREDIT AGREEMENT
TO
CREDIT AGREEMENT
FORM OF GUARANTY
See Exhibit 10.2 to The Warnaco Group, Inc.’s Form 10-Q filed August 6, 2010