FIRST AMENDMENT AND WAIVER
TO THE AMENDED AND RESTATED RECEIVABLES
PURCHASE AGREEMENT AND RELEASE
THIS FIRST AMENDMENT AND WAIVER TO THE AMENDED AND RESTATED RECEIVABLES
PURCHASE AGREEMENT AND RELEASE (this "Amendment") is made as of April 19, 2001,
among;
(1) WARNACO OPERATIONS CORPORATION, a Delaware corporation, as seller (the
"Seller");
(2) ▇▇▇▇▇▇▇ STREET, INC., a Delaware corporation, as initial Servicer (the
"Servicer");
(3) THE BANK OF NOVA SCOTIA, a Canadian chartered bank acting through its
New York agency, as a purchaser ("BNS");
(4) CITIBANK, N.A., a national banking association, as a purchaser
("CITIBANK"; and together with BNS, the "Purchasers");
(5) THE BANK OF NOVA SCOTIA, a Canadian chartered bank acting through its
New York agency, as agent for the Purchasers (in such capacity, the "Agent");
and
(6) CITIBANK, N.A., a national banking association, as co-agent (in such
capacity, the "Co-Agent");
RECITALS
WHEREAS, the Seller, the Servicer, the Purchasers, the Agent and the
Co-Agent have entered into that certain Amended and Restated Restated
Receivables Purchase Agreement, dated as of October 6, 2000 (as amended through
the date hereof, the "Receivables Purchase Agreement"); and
WHEREAS, the parties to the Receivables Purchase Agreement now desire to
amend the Receivables Purchase Agreement in certain respects;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and in the Receivables Purchase Agreement, the parties hereto
agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined herein
are used as defined in Exhibit 1 to the Receivables Purchase Agreement.
SECTION 2. Amendment to Receivables Purchase Agreement. As of the Effective
Date (as defined below), the Receivables Purchase Agreement is hereby amended as
follows:
2.1. Section 1.1(a) of the Receivables Purchase Agreement is hereby
amended to add the following sentences immediately at the end thereof:
"Notwithstanding the foregoing, until the date (the "Commitment
Date") on which the Seller shall deliver an executed Commitment
Letter to the Agent and the Co-Agent (which Commitment Letter
shall be in a form and substance reasonably satisfactory to the
Agent and the Co-Agent), the Aggregate Capital shall not exceed
$189,000,000. As used herein, "Commitment Letter" shall mean the
letter agreement between The Warnaco Group, Inc. and General
Electric Capital Corporation providing for the refinancing in full
of the outstanding Aggregate Capital and accrued and unpaid
Discount thereon."
2.2. The definition of "Dilution Reserve Percentage" set forth in
Exhibit 1 to the Receivables Purchase Agreement is hereby amended in its
entirety as follows:
"Dilution Reserve Percentage" means a percentage equal to the
greater of (a) 15.00%, and (b) the average of the Dilution Ratios
for the twelve most recent calendar months; provided, however,
that upon at least 10 Business Days notice to the Seller, the
Agent may increase such Dilution Reserve Percentage to such
greater percentage as may be necessary based on portfolio
performance in the Agent's sole discretion, to protect the
Purchasers against increased dilution risk with respect to the
Pool Receivables; provided, further, that such Dilution Reserve
Percentage shall only be decreased upon unanimous consent of all
Purchasers."
2.3. Paragraph (n) of the definition of "Eligible Receivable" set forth
in Exhibit 1 to the Receivables Purchase Agreement is hereby amended in its
entirety as follows:
"(n) (i) for the period commencing on (and including) the
Effective Date (as defined in Section 4.1 of the First Amendment
to the Receivables Purchase Agreement) and ending on (and
including) May 25, 2001, (solely with respect to Obligors with the
eleven (11) largest Outstanding Balances of all Pool Receivables)
for which the aggregate of the Defaulted Receivables of each such
Obligor and any of its Affiliated Obligors does not exceed 25% of
the Outstanding Balance of all such Obligor's Receivables that are
Pool Receivables and (ii) at all times thereafter, for which the
aggregate of the Defaulted Receivables of the related Obligor and
any of its Affiliated Obligors does not exceed 50% of the
Outstanding Balance of all such Obligor's Receivables that are
Pool Receivables."
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2.4. Exhibit 1 of the Receivables Purchase Agreement is hereby amended by
adding the following in the appropriate alphabetical order:
'Recovery Rate' means (a) for the period commencing on (and
including) the Effective Date (as defined in Section 4.1 of the
First Amendment to the Receivables Purchase Agreement) and ending
on (and including) May 25, 2001, 50%, (b) for the period
commencing on (and including) May 26, 2001, and ending on (and
including) June 15, 2001, 37.50%, (c) for the period commencing on
(and including) June 16, 2001, and ending on (and including) July
15, 2001, 12.50% and (d) and at all time thereafter 0%."
2.5. The term "Permitted Dilution Amount" as set forth in Exhibit 1 to the
Receivables Purchase Agreement is hereby globally changed throughout each
Transaction Document such that from and after the Effective Date of this
Amendment each use of such term in any such Transaction Document shall be deemed
to be a reference to the term "Permitted Charge Back Amount." Accordingly, in
order to give effect to the immediately preceding sentence, from and after the
Effective Date of this Amendment, the term "Permitted Dilution Amount" as set
forth in Exhibit 1 to the Receivables Purchase Agreement shall be deleted
therefrom and the following term (together with its corresponding definition)
shall be substituted therefor in the appropriate alphabetical order:
'Permitted Charge Back Amount' means at any time the product
of the Recovery Rate and the Monthly Net Charge Back Amount;
provided, however, than prior to (and including) July 15, 2001,
the "Permitted Charge Back Amount" shall not exceed $22,000,000;
provided, further, that at all times prior to the Commitment Date
(as defined in Section 1.1) the 'Permitted Charge Back Amount'
shall not exceed $15,000,000."
2.6. The term "Weekly Report" as set forth in Exhibit 1 to the Receivables
Purchase Agreement is hereby globally changed throughout each Transaction
Document such that from and after the Effective Date of this Amendment each use
of such term in any such Transaction Document shall be deemed to be a reference
to the term "Biweekly Report." Accordingly, in order to give effect to the
immediately preceding sentence, from and after the Effective Date of this
Amendment, the term "Weekly Report" as set forth in Exhibit 1 to the Receivables
Purchase Agreement shall be deleted therefrom and the following term (together
with its corresponding definition) shall be substituted therefor in the
appropriate alphabetical order:
'Biweekly Report' means a report, together with an officer's
certified certificate attached thereto, in substantially the form
of Annex D to the Agreement."
2.7. The term "Weekly Report Date" as set forth in Exhibit 1 to the
Receivables Purchase Agreement is hereby globally changed throughout each
Transaction Document such that from and after the Effective Date of this
Amendment each use of such term in any such Transaction Document shall be deemed
to be a reference to the term "Biweekly Report Date." Accordingly, in order to
give effect to the immediately preceding sentence, from and after the Effective
Date of this Amendment,
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the term "Weekly Report Date" as asset forth in Exhibit 1 to the Receivables
Purchase Agreement shall be deleted therefrom and the following term (together
with its corresponding definition) shall be substituted therefor in the
appropriate alphabetical order:
'Biweekly Report Date' means each Monday and Thursday of each
week or if such day is not a Business Day, the next succeeding
Business Day."
2.8. Clause (iii)(b) of Section 2(f) of Exhibit IV to the Receivables
Purchase Agreement is hereby amended in its entirety as follows:
"(b) on each Biweekly Report Date, for each week, a Biweekly Report
reflecting information as of five Business Days prior to such Biweekly
Report Date."
2.9. Paragraph (d) of Exhibit V to the Receivables Purchase Agreement is
hereby amended in its entirety as follows:
"(d) the Servicer shall fail to deliver any Monthly Report on the
related Monthly Report Date, and such failure shall remain unremedied for
five Business Days, or the Servicer shall fail to deliver any Biweekly
Report on the related Biweekly Report Date."
2.10. Clause (i) of Paragraph (g) of Exhibit V to the Receivables Purchase
Agreement is hereby amended by replacing the percentage "9.0%" with the
percentage "10.5%" therein.
2.11. Clause (iii) of Paragraph (g) of Exhibit V to the Receivables Purchase
Agreement is hereby amended by replacing the percentage "11.0%" with the
percentage "11.5" therein.
SECTION 3. Waiver.
The Agent hereby waives the requirements of (a) Section 2(f)(i)(a)(B) of
Exhibit IV of the Receivables Purchase Agreement to deliver the 1998, 1999 and
2000 fiscal quarterly financial statements within 50 days after the end of each
of the first three fiscal quarters of the Servicer and (b) Section 1(i)(j) of
Exhibit IV of the Receivables Purchase Agreement and Section 2(f)(ii)(a)(B) of
Exhibit IV of the Receivables Purchase Agreement to deliver the 1998, 1999 and
2000 fiscal years financial statements within 95 days after the end of such
fiscal years of the Seller and the Servicer, respectively; provided, however,
that each of the Seller and the Servicer shall provide to the Agent and the
Co-Agent its respective 2000 fiscal year financial statements within thirty days
from the Effective Date.
SECTION 4. Miscellaneous.
4.1. Effectiveness. This Amendment shall become effective as of the date
(the "Effective Date") that the following conditions precedent shall have been
satisfied:
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(a) the Agent shall have received an original counterpart (our
counterparts) of this Amendment, executed and delivered by each of the
parties hereto and
(b) all costs and expenses payable under the Receivables Purchase
Agreement (including any field exam costs and expenses of the Agent and
Co-Agent and Attorney Costs) shall have been paid to the Agent.
The Seller hereby authorizes the Agent to deduct from the proceeds of the
next purchase all such costs and expenses referred to in clause(b) of this
Section 3.1.
4.2. Opinion of Counsel. No later than Wednesday, April 25, 2001, the Seller
shall deliver to the Agent and the Co-Agent opinions of counsel regarding the
authorization by, and enforceability of this Amendment against each of the
Seller, the Servicer, the Originators and The Warnaco Group, Inc., in form and
substance reasonably satisfactory to the Agent and the Co-Agent. Failure to so
delivery such opinions shall constitute a "Termination Event" under the
Receivables Purchase Agreement.
4.3. Amendment Fee. If the refinancing in full of the outstanding Aggregate
Capital and accrued and unpaid Discount is not effective in accordance with the
Commitment Letter by the close of business on May 25, 2001, then the Company
shall pay on such day to the Agent (on behalf of the Agent and the Co-Agent) an
amendment fee (the "Amendment Fee") equal to the product of the Purchase Limit
and 0.50%, such amendment fee to be divided between the Agent and the Co-Agent
equally. The Seller hereby authorizes the Agent to deduct from the proceeds of a
future purchase the Amendment Fee, if applicable.
4.4. Release. Each of the Seller, the Servicer, each Originator and The
Warnaco Group, Inc., ("Group") hereby acknowledges and agrees that it does not
have any defenses, counterclaims, offsets, cross-complaints, claims or demands
of any kind or nature whatsoever that can be asserted to reduce or eliminate all
or any part of liability of the Seller, the Servicer, any Originator or Group to
repay the Agent, the Co-Agent or any Purchaser as provided in the Receivables
Purchase Agreement and the other Transaction Documents or to seek affirmative
relief or damages of any kind or nature from the Agent, the Co-Agent or any
Purchaser. Each of the Seller, the Servicer, each Originator and Group hereby
voluntarily and knowingly releases and forever discharges the Agent, the
Co-Agent and the Purchasers, and the Agent's the Co-Agent's and each Purchaser's
predecessors, agents, employees, successors and assigns, from all possible
claims, demands, actions, causes of action, damages, costs, or expenses, and
liabilities whatsoever, known or unknown, anticipated or unanticipated,
suspected or unsuspected, fixed, contingent, or conditional, at law or in
equity, originating in whole or in part on or before the date of this Amendment
is executed, which each of the Seller, the Servicer, each Originator and Group
may now or hereafter have against any such Agent, Co-Agent or Purchasers, and
the Agent's, the Co-Agent's or the Purchaser's predecessors, agents employees,
successors and assigns, if any, and irrespective of whether any such claims
arise out of contract, tort, violation of law or regulations, or otherwise,
including, without limitation, the exercise of any rights and remedies under the
Receivables Purchase Agreement or other Transaction Documents, and negotiation
and execution of this Amendment.
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4.5. References to the Agreement. Upon the effectiveness of this Amendment,
each reference in the Receivables Purchase Agreement to "this Agreement",
"hereunder", "hereof", "herein", or words of like import shall mean and be a
reference to the Receivables Purchase Agreement and each reference to the
Receivables Purchase Agreement in any other document, instrument or agreement
executed and/or delivered in connection with the Receivables Purchase Agreement
shall mean and be a reference to the Receivables Purchase Agreement as amended
by this Amendment.
4.6. Effect on Agreements. Except as specifically amended above, the
Receivables Purchase Agreement and all other documents, instruments and
agreements executed and/or delivered in connection therewith shall remain in
full force and effect and are hereby ratified and confirmed.
4.7. No Waiver. The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of any party under
the Receivables Purchase Agreement or any other document, instrument or
agreement executed in connection therewith, nor constitute a waiver of any
provision contained therein, except as specifically set forth herein.
4.8. Governing Law. This Amendment, including the rights and duties of the
parties hereto, shall be governed by, and construed in accordance with, the
internal laws of the State of New York without reference to principles of
conflicts of law.
4.9. Successors and Assigns. This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.
4.10. Headings. The Section headings in this Amendment are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Amendment or any provision hereof.
4.11. Counterparts. This Amendment may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.
WARNACO OPERATIONS CORPORATION
By ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
...................................
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer and Assistant
Secretary
▇▇▇▇▇▇▇ STREET, INC.,
as Servicer
By ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
...................................
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
(First Amendment to Amended and Restated Receivables Purchase Agreement)
S-1
AUTHENTIC FITNESS PRODUCTS, INC.,
as an Originator
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
...................................
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
▇▇▇▇▇▇ ▇▇▇▇▇ JEANSWEAR COMPANY,
as an Originator
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
...................................
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
WARNACO INC.,
as an Originator
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
...................................
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President,
General Counsel
and Secretary
THE WARNACO GROUP, INC.,
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
...................................
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President,
General Counsel
and Secretary
(First Amendment to Amended and Restated Receivables Purchase Agreement)
S-2
THE BANK OF NOVA SCOTIA,
as Agent
By ▇▇▇▇ ▇. ▇▇▇▇▇▇
...................................
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
THE BANK OF NOVA SCOTIA,
as a Purchaser
By ▇▇▇▇ ▇. ▇▇▇▇▇▇
...................................
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
(First Amendment to Amended and Restated Receivables Purchase Agreement)
S-3
CITIBANK, N.A.,
as Co-Agent
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
...................................
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CITIBANK, N.A.,
as a Purchaser
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
...................................
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
(First Amendment to Amended and Restated Receivables Purchase Agreement)
S-4