EXECUTION COPY
AMENDMENT NO. 3 AND WAIVER
This AMENDMENT NO. 3 AND WAIVER dated as of February 5, 2002 (this
"Amendment and Waiver"), among Warnaco Inc., a Delaware corporation, as debtor
and debtor in possession under chapter 11 of the Bankruptcy Code (the
"Borrower"), The Warnaco Group, Inc. ("Group") and the Domestic Subsidiaries (as
defined in the Credit Agreement referred to below) of Group, as debtors and
debtors in possession under chapter 11 of the Bankruptcy Code (the "Subsidiary
Guarantors" and, together with Group, the "Guarantors"), the Lenders (as defined
in the Credit Agreement referred to below) party hereto and the Administrative
Agent (as defined below) amends certain provisions of the Senior Secured
Super-Priority Debtor In Possession Revolving Credit Agreement dated as of June
11, 2001, as amended by the Amendment and Waiver, dated as of August 27, 2001,
and Amendment No. 2 dated December 21, 2001, in each case among the Borrower,
Group and the Subsidiary Guarantors, the Lenders, the Issuers (as defined
therein), Citibank, N.A., as administrative agent for the Lenders and the
Issuers (in such capacity, the "Administrative Agent"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Inc., The Bank of Nova Scotia and ▇.▇. ▇▇▇▇▇▇ Securities, Inc. as joint lead
arrangers (such agreement, the "Credit Agreement").
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Lenders, the Issuers and the
Administrative Agent are parties to the Credit Agreement and, as of the date
hereof, the undersigned Lenders constitute the Requisite Lenders;
WHEREAS, the Borrower has requested, and the Requisite Lenders and the
Administrative Agent have agreed, (a) to consent to the consummation of the Sale
Transactions (as defined below) and the GJM Licensing Transaction (as defined
below) on the terms provided for herein; and (b) to make certain amendments to
the Credit Agreement as more fully set forth herein;
WHEREAS, pursuant to Section 13.1 (Amendments, Waiver, Etc.) of the
Credit Agreement, the consent of the Requisite Lenders is required to consent to
the consummation of the Sale Transactions and to amend the provisions of the
Credit Agreement as set forth herein;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and obligations herein set forth and other good and valuable consideration, the
adequacy and receipt of which are hereby acknowledged, and in reliance upon the
representations, warranties and covenants herein contained, the parties hereto,
intending to be legally bound, hereby agree as follows:
Section 1. Definitions. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to such terms in the Credit
Agreement. In addition, the following terms shall have the following meanings:
"Bra Company Sale" means the disposition by Warnaco U.K. of
all of its interest in The Bra Company SARL for a nominal sum to ▇▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ (or his designee) pursuant to that certain Framework Agreement to be
entered into among Warnaco U.K., ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, The Bra Company SARL,
Atlantic Group SA and Les Ateliers de Lingerie SARL.
"GJM Licensing Transaction" means the license of (a) the non
exclusive right to design and manufacture sleepwear under the ▇▇▇▇ "▇▇▇▇▇▇'▇"
and (b) the exclusive right to sell the foregoing together with all other items
of sleepwear as the licensors shall approve to Kohl's retails stores within the
United States by the Borrower and Warnaco U.S., Inc. to Luen Thai Overseas
Limited for a period of two years.
"GJM Sale" means the sale by (A) Warnaco (HK) Ltd ("Warnaco
Hong Kong") of all of the equity interests directly or indirectly owned by it in
the following subsidiaries: G.J.M. (H.K.) Manufacturing Ltd., Panyu GJM Shatou
Manufacturing Ltd., GJM Lanka Manufacturing (Private) Ltd. and GJM (Philippines)
Manufacturing, Inc. and (B) Warnaco Hong Kong, Warnaco and Warnaco U.K. of
certain other specified assets relating to the women's intimate apparel and
other apparel business of the GJM companies; in each case pursuant to and as
described in that certain Stock and Asset Sale Agreement, dated as of December
21, 2001 (the "Stock and Asset Sale Agreement"), among Warnaco, Warnaco U.K.,
Warnaco Hong Kong and Luen Thai Overseas Limited.
"Izka Settlement Transactions" has the meaning set forth in
Amendment No. 2 to the Credit Agreement dated as of December 21, 2001 among the
Loan Parties, the Administrative Agent and the Requisite Lenders.
"Penhaligon's Sale" means the sale by (A) Mullion
International Limited ("Mullion") of (1) all of the shares of capital stock of
LMK Limited, (2) 41
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ordinary shares of capital stock of Penhaligon's & Jeavons Investment Co.
Limited (being 51% of its issued share capital), (3) 20,400 ordinary shares of
capital stock of Mulmkion BV (being 51% of its issued share capital), (4) 50
ordinary shares of capital stock of Penhaligon's Pacific Limited (being 50% of
its issued share capital) and (B) Mullion and Warnaco of certain other specified
assets relating to the business of the Penhaligon's companies; in each case
pursuant to and as described in that certain Agreement Relating to the Sale and
Purchase of the Entire Issued Share Capital of LMK Limited and Shares in the
Capital of Penhaligon's & Jeavons Investment Co. Limited, Mulmkion BV and
Penhaligon's Pacific Limited, dated December 18, 2001, between Mullion and Royal
Holdings, Inc.
"Prepetition Facility Amendment" means the letter consent and
amendment No. 1 to the October 2000 Amendment Agreement to be dated on or about
the date hereof and entered into by certain of the Lender Parties (as defined
therein), Group and its Subsidiaries party thereto.
"Prepetition Secured Parties" means the Lender Parties and the
Debt Coordinators, in each case as defined in the October 2000 Amendment
Agreement.
"Sale Transactions" means, collectively, the Penhaligon's
Sale, the GJM Sale and the Bra Company Sale.
"Warnaco U.K." means Warners (United Kingdom) Limited, a
company incorporated in Northern Ireland with registered number NI 5449 and
registered in England and Wales with number FC 14629.
Section 2. Amendments to Credit Agreement. Effective as of the
Effective Date and subject to the terms and conditions set forth herein, Section
7.1 of the Credit Agreement is hereby amended by inserting, immediately prior to
the period at the end thereof, the following:
; provided further, however, that any Subsidiary of any Loan
Party 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 $25,000 or had revenues of less than
$25,000 during the most recent 12-month period) may be
dissolved, so long as if such inactive or dormant Subsidiary
is a Loan Party, all assets distributed upon dissolution
shall be distributed to a Loan Party
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Section 3. Waiver and Consent.
(a) The Lenders constituting the Requisite Lenders hereby
consent to the consummation of the Sale Transactions and the GJM
Licensing Transaction and the repayment of any portion of any of the
Covered Facilities (as defined in the October 2000 Amendment Agreement)
with the net cash proceeds thereof received by Group or a Subsidiary
thereof and, solely in connection therewith, hereby waive the
application of the provisions of Sections 2.5, 2.9, 8.4 and 8.5 of the
Credit Agreement; provided, that:
(i) Upon consummation of any Sale Transaction
net cash proceeds thereof received by Group
or a Subsidiary thereof shall first be
applied to repay the Tranche A Loans to the
extent the Borrowing Base is reduced by the
consummation of such transactions; and
(ii) Any portion of such net cash proceeds of any
Sale Transaction (other than the Bra Company
Sale) received by Group or a Subsidiary
thereof not used to repay:
(A) the Tranche A Loans pursuant to clause
(i) above, or
(B) up to a maximum amount of $51,000 to
General Electric Capital Corporation
("GECC"), pursuant to the order of the
Bankruptcy Court dated January 17, 2002, in
satisfaction of GECC's claim with respect to
the assets subject to the GJM Sale, or
(C) up to a maximum amount of
'L'3,200,000 plus accrued interest and
fees thereon to the European Revolver Agent
(as defined below) in full and final
satisfaction of all of Penhaligon's Ltd.
obligations under the FF480,000,000
Revolving Credit, Guarantee and Overdraft
Agreement dated August 14, 1996, as
supplemented by Supplement Agreement dated
April 17, 1998 (and as further amended,
supplemented or otherwise modified through
the date hereof) among Warnaco, the other
Loan Parties party thereto, the
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Lender Parties party thereto and Societe
Generale, as managing and administrative
agent (the "European Revolver Agent").
shall be deposited into a Cash Collateral Account (as defined in the
Prepetition Facility Amendment) for the benefit of the Prepetition
Secured Parties to be applied pursuant to the terms of the Prepetition
Facility Amendment; provided, that no portion of such net cash
proceeds shall be released from a Cash Collateral Account to any person
until the date on which all Tranche B Obligations have been repaid in
full and the Tranche B Commitments have been terminated; and
(b) The Lenders constituting the Requisite Lenders hereby
consent to the repayment of any portion of any of the Covered
Facilities with the net cash proceeds of the Izka Settlement
Transactions and, solely in connection therewith, hereby waive the
application of the provisions of Sections 2.5, 2.9, 8.4 and 8.5 of the
Credit Agreement; provided, that all net cash proceeds of the Izka
Settlement Transactions to which Group or any Subsidiary thereof is
entitled shall be deposited into the Cash Collateral Account (as
defined in the Prepetition Facility Amendment) for the benefit of the
Prepetition Secured Parties to be applied pursuant to the terms of the
Prepetition Facility Amendment; provided, that no portion of such net
cash proceeds shall be released from the Cash Collateral Account to any
person until the date on which the Tranche B Commitments have been
reduced to zero and have been terminated;
(c) The Lenders constituting the Requisite Lenders:
(i) hereby waive the application of Section
11.10 of the Credit Agreement solely with
respect to the Sale Transactions and the
GJM Licensing Transaction so far as such
provision requires the repayment of the
Obligations with the Net Cash Proceeds from
the sale of any asset prior to the release
by the Administrative Agent of its lien
thereon;
(ii) together with the Administrative Agent, (A)
pursuant to Section 11.10 and 13.1 of the
Credit Agreement, and (B) solely upon
receipt of evidence satisfactory to the
Administrative Agent that net cash proceeds
of the
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subject Sale Transaction have been deposited
into the Cash Collateral Account or
otherwise applied as provided for herein,
release the Collateral as necessary to
effect the applicable Sale Transaction, from
the security interest granted under the
Credit Agreement by the applicable Loan
Party, and the Lenders constituting the
Requisite Lenders direct the Administrative
Agent to execute such termination agreements
or similar instruments satisfactory to it
as may be necessary to effect the Sale
Transactions; and
(iii) together with the Administrative Agent, (A)
pursuant to Section 11.10 and 13.1 of the
Credit Agreement and (B) solely in
connection with the dissolution of any
inactive or dormant Subsidiary in accordance
with Section 7.1 of the Credit Agreement (as
hereby amended), agree to release such
inactive or dormant Subsidiary from the Loan
Documents to which it is a party and release
any Collateral then owned by such inactive
or dormant Subsidiary from the security
interest granted under the Credit Agreement
by such Subsidiary or in respect of such
Subsidiary's capital stock in accordance
with the terms of the Loan Documents.
Section 4. Sale and Purchase Agreements. The Administrative Agent
hereby acknowledges for the purposes of Section 7.16 of the Credit Agreement
that the sale and purchase agreements relating to the GJM Sale and the
Penhaligon's Sale previously provided to the Administrative Agent are
satisfactory.
Section 5. Conditions Precedent to the Effectiveness of this Amendment
and Waiver. This Amendment and Waiver shall become effective as of the date when
the following conditions precedent have been satisfied (the "Effective Date"):
(a) Certain Documents. The Administrative Agent shall have
received on or before the Effective Date all of the following, all of
which shall be in form and substance satisfactory to the Administrative
Agent:
(i) in sufficient executed copies for each of
the Lenders, this Amendment and Waiver
executed by the Bor-
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rower, the Guarantors and the Lenders
constituting the Requisite Lenders;
(ii) evidence satisfactory to the Administrative
Agent that the Prepetition Facility
Amendment is in full force and effect; and
(iii) a copy of the order of the Bankruptcy Court
dated January 17, 2002 approving the GJM
Sale.
(b) Representations and Warranties. Each of the
representations and warranties made by the Borrower or any Guarantor in
or pursuant to the Credit Agreement and the other Loan Documents to
which the Borrower or any Guarantor is a party or by which the
Borrower, or any Guarantor is bound, shall be true and correct in all
material respects, after giving effect to the terms of this Amendment
and Waiver, on and as of the Effective Date (other than representations
and warranties in any such Loan Document which expressly speak as of a
different date).
(c) No Events of Default. No Event of Default or Default shall
have occurred and be continuing on the Effective Date after giving
effect to the terms of this Amendment and Waiver.
Section 6. Representations and Warranties. The Borrower hereby
represents and warrants to the Administrative Agent and the Lenders that as of
the date hereof, after giving effect to the terms of this Amendment and Waiver,
(x) no Event of Default or Default under the Credit Agreement shall have
occurred and be continuing and (y) all of the representations and warranties of
the Loan Parties contained in Article IV of the Credit Agreement and in any
other Loan Document continue to be true and correct as of the date of execution
hereof in all material respects, as though made on and as of such date (other
than representations and warranties in any such Loan Document which expressly
speak as of a different date).
Section 7. Costs and Expenses. The Borrower agrees to pay on demand in
accordance with the terms of Section 13.3 of the Credit Agreement all costs and
expenses of the Administrative Agent in connection with the preparation,
reproduction, execution and delivery of this Amendment and Waiver and all other
Loan Documents entered into in connection herewith, including the reasonable
fees, expenses and disbursements of Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel for the
Administrative Agent with respect thereto.
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Section 8. Reference to and Effect on the Loan Documents.
(a) Upon the effectiveness of this Amendment and Waiver, on
and after the date hereof, each reference in the Credit Agreement to
"this Agreement", "hereunder", "hereof" or words of like import, and
each reference in each other Loan Document, shall mean and be a
reference to the Credit Agreement as amended hereby.
(b) Except as specifically amended hereby, all of the terms of
the Credit Agreement and all other Loan Documents shall remain
unchanged and in full force and effect.
(c) The execution, delivery and effectiveness of this
Amendment and Waiver shall not, except as expressly provided herein,
operate as a amendment or waiver of any right, power or remedy of any
Lender, any Issuer or the Administrative Agent under the Credit
Agreement or any of the Loan Documents, nor constitute an amendment or
waiver of any provision of the Credit Agreement or any of the Loan
Documents.
(d) This Amendment and Waiver is a Loan Document.
Section 9. Titles. The Section titles contained in this Amendment and
Waiver 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 10. Execution in Counterparts. This Amendment and Waiver may be
executed and delivered in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original and all of which taken together shall constitute one
and the same original agreement.
Section 11. Notices. All communications and notices to the
Administrative Agent hereunder shall be given as provided in the Credit
Agreement.
Section 12. Severability. If any term or provision set forth in this
Amendment and Waiver shall be invalid or unenforceable, the remainder of this
Amendment and Waiver, or the application of such terms or provisions to persons
or circumstances, other than those to which it is held unenforceable, shall not
in any way be affected or impaired thereby.
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Section 13. Successors. The terms of this Amendment and Waiver shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors or assigns.
Section 14. Governing Law. This Amendment and Waiver shall be
interpreted, and the rights and liabilities of the parties determined, in
accordance with the internal law of the State of New York.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment and Waiver to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
WARNACO INC.
as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name:
Title:
CITIBANK, N.A.,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name:
Title:
Lenders
CITIBANK, N.A.,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
THE CHASE MANHATTAN BANK,
as a Lender
By: /s/ Houston ▇. ▇▇▇▇▇▇▇▇
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Name: Houston ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
GENERAL ELECTRIC CAPITAL
CORPORATION,
as a Lender
By:
-------------------------------------------
Name:
Title:
THE CIT GROUP/COMMERCIAL
SERVICES, INC.,
as a Lender
By:
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Name:
Title:
SOCIETE GENERALE,
as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
FLEET NATIONAL BANK,
as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: SVP
THE BANK OF NEW YORK,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FIRST UNION NATIONAL BANK,
as a Lender
By:
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Name:
Title:
▇▇▇▇▇▇ FINANCIAL, INC.,
as a Lender
By:
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Name:
Title:
TEXTRON FINANCIAL CORPORATION,
as a Lender
By:
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Name:
Title:
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS
L.P.,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
BANK OF SCOTLAND,
as a Lender
By:
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Name:
Title:
THE PROVIDENT BANK,
as a Lender
By:
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Name:
Title:
SPECIAL SITUATIONS INVESTING GROUP,
INC.,
as a Lender
By: /s/ ▇▇▇▇▇ ▇. Book
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Name: ▇▇▇▇▇ ▇. Book
Title: Vice President
CONSENT, AGREEMENT AND AFFIRMATION OF GUARANTY
Each of the undersigned Guarantors hereby consents to the
terms of the foregoing Amendment and Waiver in its capacity as a guarantor under
the Credit Agreement and agrees that the terms of such agreement shall not
affect in any way its obligations and liabilities under its guaranty, all of
which obligations and liabilities shall remain in full force and effect and each
of which is hereby reaffirmed.
THE WARNACO GROUP INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ INC.
A.B.S. CLOTHING COLLECTION, INC.
ABBETVILLE MANUFACTURING COMPANY
AEI MANAGEMENT CORPORATION
AUTHENTIC FITNESS CORPORATION
AUTHENTIC FITNESS ON-LINE, INC.
AUTHENTIC FITNESS PRODUCTS INC.
AUTHENTIC FITNESS RETAIL INC.
▇▇▇▇▇▇▇ INC.
CCC ACQUISITION CORP.
CCC ACQUISITION REALTY CORP.
▇.▇. ▇▇▇▇▇▇▇▇ COMPANY
▇▇▇▇▇▇ ▇▇▇▇▇ JEANSWEAR COMPANY
OKI HOLDINGS, INC.
OKI SOURCING, INC.
DESIGNER HOLDINGS LTD.
JEANSWEAR HOLDINGS, INC.
KAIJAY MANUFACTURING COMPANY
MYRTLE AVENUE, INC.
OUTLET HOLDINGS, INC.
OUTLET STORES, INC.
RIO SPORTSWEAR, INC.
USERTECH PRODUCTS, INC.
VENTURES LTD.
WARMANA LIMITED
WARNACO INTERNATIONAL INC.
SCHEDULE 5.2
WARNACO MEN'S SPORTSWEAR INC.
WARNACO PUERTO RICO, INC.
WARNACO SOURCING INC.
WARNACO U.S., INC.
WARNACO VENTURES LTD.
WARNER'S DE COSTA RICA INC.
WARNACO INTERNATIONAL, L.L.C.
as Guarantors
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name:
Title:
▇▇▇▇▇▇▇ STREET, INC.
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name:
Title:
PENHALIGON'S BY REQUEST, INC.
As a Guarantor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name:
Title:
