Exhibit 99.4
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of February 4, 2003, is entered
into among CITICORP NORTH AMERICA, INC., as Senior Agent (as defined below),
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Noteholder Indenture
Trustee (as defined below), WILMINGTON TRUST COMPANY, as Noteholder Collateral
Trustee (as defined below), Warnaco Inc. ("Warnaco"), The Warnaco Group, Inc.
("Group") and each subsidiary of Group party hereto.
W I T N E S S E T H :
WHEREAS, Warnaco, as borrower (in such capacity, the "Borrower"),
Group, as the parent company of the Borrower, the financial institutions party
to the Senior Credit Agreement referred to below as lenders and issuing banks,
Citicorp North America, Inc., as administrative agent and collateral agent for
such lenders and issuing banks (in such capacity, the "Senior Agent") and
JPMorgan Chase Bank, as syndication agent for such lenders and issuing banks,
have entered into a Credit Agreement, dated as of the date hereof (as such
agreement may be amended, amended and restated, supplemented or otherwise
modified, from time to time at the option of the parties thereto, together with
any other principal agreement evidencing Senior Lender Claims and any other
agreements pursuant to which any of the foregoing indebtedness, commitments,
obligations, costs, expenses, fees, reimbursements, indemnities or other
obligations payable or owing thereunder may be refinanced, restructured,
renewed, extended, increased, refunded or replaced as any such other agreements
may from time to time at the option of the parties thereto be amended, amended
and restated, supplemented, renewed or otherwise modified, being collectively
referred to herein the "Senior Credit Agreement"); and
WHEREAS, Warnaco, as issuer (in such capacity, the "Issuer"), Group,
as parent guarantor, and each of Group's domestic subsidiaries, as subsidiary
guarantors (together with Group, the "Note Guarantors"), and ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as the indenture trustee (the "Noteholder
Indenture Trustee") under the Indenture referred to below, have entered into an
Indenture, dated as of the date hereof (as such Indenture may be amended,
amended and restated, supplemented or otherwise modified pursuant to the terms
hereof, the "Indenture") which governs the rights and duties of the Issuer and
the Note Guarantors under the Second Lien Notes due 2008 (the "Second Lien
Notes"); and
WHEREAS, Wilmington Trust Company has been appointed as collateral
trustee for the benefit of the Noteholders (the "Noteholder Collateral Trustee")
under that certain Collateral Trust Agreement, dated as of the date hereof (as
such Collateral Trust Agreement may be amended, amended and restated,
supplemented or otherwise modified pursuant to the terms thereof the "Collateral
Trust Agreement"); and
WHEREAS, it is a condition precedent to the effectiveness of the
Senior Credit Agreement and the Indenture that the Senior Agent (for itself and
for the benefit of the Senior Lenders), each of the Noteholder Indenture Trustee
and the Noteholder Collateral Trustee (collectively, the "Noteholder Trustees")
(in each case for itself and for the benefit of the Noteholders) and the Warnaco
Obligors (as defined below) enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and for 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. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and the plural form of the terms indicated) and capitalized
terms defined in the Senior Credit Agreement used (but not otherwise defined)
herein shall have the meanings ascribed to them in the Senior Credit Agreement:
"Agreement" shall mean this Agreement, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
"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 and other cash management arrangements)
provided on and after the date hereof to any Warnaco Obligor (regardless of
whether these or similar services were provided prior to the date hereof),
including obligations for the payment of fees, interest, charges, expenses,
attorneys' fees and disbursements in connection therewith.
"Comparable Noteholder Collateral Document" means in relation to any
Shared Collateral subject to any Senior Lender Collateral Document, that
Noteholder Collateral Document which creates a security interest in the same
Shared Collateral.
"DIP Financing" has the meaning specified in Section 6.1 of this
Agreement.
"Discharge of Senior Lender Claims" shall mean the payment in full in
cash of the principal of, premium, if any, and interest on all Senior Lender
Claims and, with respect to Hedging Obligations or letters of credit outstanding
thereunder, delivery of cash collateral or backstop letters of credit in respect
thereof in compliance with the Senior Credit Agreement, in each case after or
concurrently with termination of all Commitments thereunder, and payment in full
in cash of any other Senior Lender Claims that are due and payable at or prior
to the time such principal and interest are paid.
"Guarantor" means "Guarantor" as defined in the Senior Credit
Agreement and the Noteholder Documents.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under all interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements and interest rate
insurance, 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.
"Indebtedness" means, with respect to any specified Person without
duplication, any indebtedness of such Person, whether or not contingent (a) in
respect of borrowed money; (b) evidenced by bonds, notes, debentures or other
similar instruments or letters of credit (or reimbursement agreements in respect
thereof); (c) in respect of banker's acceptances; (d) representing obligations
in connection with Capital Leases; (e) representing the deferred and unpaid
balance of the purchase price of any property, except any such balance that
constitutes an
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accrued expense or trade payable, if and to the extent any of the preceding
items (other than letters of credit) would appear as a liability upon a balance
sheet of the specified Person prepared in accordance with GAAP. In addition, the
term "Indebtedness" includes all Indebtedness of another Person secured by a
Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) to the extent of the fair market value of such
asset where the Indebtedness so secured is not the Indebtedness of such Person
and, to the extent not otherwise included, the guaranty by the specified Person
of the Indebtedness of any other Person. The amount of any Indebtedness
outstanding as of any date will be (i) the accreted value of the Indebtedness,
in the case of any Indebtedness issued with original issue discount; and (ii)
the principal amount of the Indebtedness, together with any interest on the
Indebtedness that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" shall have the meaning set forth in the recitals hereto.
"Insolvency or Liquidation Proceeding" shall mean (a) any voluntary or
involuntary case or proceeding under the Bankruptcy Code with respect to any
Warnaco Obligor, (b) any other voluntary or involuntary insolvency,
reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding with respect to
any Warnaco Obligor or with respect to any of their respective assets, (c) any
liquidation, dissolution, reorganization or winding up of any Warnaco Obligor
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy or (d) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of any Warnaco Obligor.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, deposit arrangement, encumbrance, lien or
preference priority or other security agreement or other preferential
arrangement whatsoever, including, without limitation, any right of setoff, any
conditional sale or other title retention agreement, the interest of a lessor
under a lease or any financing lease having substantially the same economic
effect as any of the foregoing and the filing of any financing statement naming
the owner of the asset to which such Lien relates as debtor.
"Necessary Lenders" shall mean, with respect to any amendment or
modification of the Senior Credit Agreement, or any termination or waiver of any
provision of the Senior Credit Agreement, or any consent or departure by the
Warnaco Obligors therefrom, the Senior Agent or those Senior Lenders, as the
case may be, the approval of which is required to approve such amendment or
modification, termination or waiver or consent or departure.
"Noteholder Claims" shall mean all indebtedness, obligations and other
liabilities (contingent or otherwise) arising under or with respect to the
Noteholder Documents or any of them. "Noteholder Claims" shall include all
interest accrued or accruing (or which would, absent the commencement of an
Insolvency or Liquidation Proceeding, accrue) after the commencement of an
Insolvency or Liquidation Proceeding in accordance with and at the rate
specified in the Indenture whether or not the claim for such interest is allowed
as a claim in such Insolvency or Liquidation Proceeding. To the extent any
payment with respect to the Noteholder Claims (whether by or on behalf of any
Warnaco Obligor, as proceeds of security, enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside or required to be paid to a debtor in possession, trustee, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
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"Noteholder Collateral" shall mean all of the assets of each Warnaco
Obligor whether real, personal or mixed, in which the Noteholders or the
Noteholder Collateral Trustee or any of them now or hereafter holds a Lien as
security for any Noteholder Claim.
"Noteholder Collateral Documents" shall mean the Noteholder Security
Agreement, the Noteholder Mortgages, and any document or instrument executed and
delivered pursuant to any Noteholder Document at any time or otherwise pursuant
to which a Lien is granted by a Warnaco Obligor to secure the Noteholder Claims
or under which rights or remedies with respect to any such Lien are governed, as
the same may be amended, renewed, extended, supplemented or modified from time
to time.
"Noteholder Collateral Trustee" shall include, in addition to the
Noteholder Collateral Trustee referred to in the recitals hereto, the then
acting collateral agent for the Noteholders and any successor thereto exercising
substantially the same rights and powers, or if there is no collateral agent
acting for the Noteholders, the Noteholders holding a majority in principal
amount of Noteholder Claims then outstanding.
"Noteholder Documents" shall mean the Indenture, the Second Lien
Notes, the Noteholder Collateral Documents, and any other related document or
instrument executed and delivered pursuant to any Noteholder Document at any
time or otherwise evidencing any Noteholder Claims, as the same may be amended,
renewed, extended, supplemented or modified from time to time.
"Noteholder Indenture Trustee" shall include, in addition to the
Noteholder Indenture Trustee referred to in the recitals hereto, the then acting
indenture trustee for the Noteholders and any successor thereto exercising
substantially the same rights and powers, or if there is no indenture trustee
acting for the Noteholders, the Noteholders holding a majority in principal
amount of Noteholder Claims then outstanding.
"Noteholder Mortgages" shall mean a collective reference to each
mortgage, deed of trust and any other document or instrument under which any
Lien on real property owned by any Warnaco Obligor is granted to secure the
Noteholder Claims or under which rights or remedies with respect to any such
Liens are governed, as the same may be amended, renewed, extended, supplemented
or modified.
"Noteholder Security Agreement" shall mean the Pledge and Security
Agreement, dated as of the date hereof, between the Warnaco Obligors and the
Noteholder Collateral Trustee, as the same may be amended, renewed, extended,
supplemented or modified from time to time in accordance with the terms thereof.
"Noteholder Trustees" has the meaning specified in the recitals to
this Agreement.
"Noteholders" shall mean the Persons holding Noteholder Claims.
"Obligations" shall mean any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness (including any obligation to post
cash collateral in respect of letters of credit and any other obligations), or
any Cash Management Obligations or Hedging Obligations.
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"Person" shall mean any person, individual, sole proprietorship,
partnership, joint venture, corporation, unincorporated organization,
association, institution, entity or other party, including, without limitation,
any government and any political subdivision, agency or instrumentality thereof.
"Pledged Collateral" shall mean the "Pledged Notes" and the "Pledged
Stock" under, and as defined in, the Security Agreements or other Senior Lender
Collateral Documents cash and other items in the Lockbox Accounts, and any other
property in the possession of the Senior Agent (or its agents or bailees) or, if
applicable, the Collateral Trustee (or its agents or bailees).
"Recovery" shall have the meaning set forth in Section 6.5 hereof.
"Security Agreements" means the Senior Lender Security Agreement and
the Noteholder Security Agreement.
"Senior Agent" shall include, in addition to the Senior Agent referred
to in the recitals hereto, the then acting collateral agent for the Senior
Lenders (or if there is more than one agent, a majority of them) under the
Senior Lender Documents and any successor thereto exercising substantially the
same rights and powers, or if there is no acting Senior Agent under the Senior
Credit Agreement, the Necessary Lenders.
"Senior Credit Agreement" shall have the meaning set forth in the
recitals hereto.
"Senior Cash Management Obligation" means, as applied to any Warnaco
Obligor, 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 and other cash
management arrangements) provided on and after the date hereof to any Warnaco
Obligor (regardless of whether these or similar services were provided prior to
the date hereof by any Senior Lender or any Affiliate of any Senior Lender) by
the Senior Agent, any Senior Lender or any Affiliate of any of them in
connection with the Senior Credit Agreement or any Senior Lender Document,
including obligations for the payment of fees, interest, charges, expenses,
attorneys' fees and disbursements in connection therewith.
"Senior Lender Claims" shall mean (a) all Indebtedness outstanding
under one or more of the Senior Lender Documents and all extensions of credit
under any financing under section 364 of the Bankruptcy Code or any arrangement
for use of cash collateral under section 363 of the Bankruptcy Code (the terms
of which are consented to by the Senior Agent in its capacity as such) in each
case under this clause (a), the principal amount of which constitutes "Debt" as
defined and permitted by the Indenture and (b) all other obligations (not
constituting "Debt" as defined by the Indenture) of a Warnaco Obligor under the
Senior Lender Documents, including, without limitation, all Senior Lender
Hedging Obligations and Senior Cash Management Obligations. "Senior Lender
Claims" shall include all interest accrued or accruing (or which would, absent
the commencement of an Insolvency or Liquidation Proceeding, accrue) after the
commencement of an Insolvency or Liquidation Proceeding in accordance with and
at the rate specified in the Senior Credit Agreement whether or not the claim
for such interest is allowed as a claim in such Insolvency or Liquidation
Proceeding. To the extent any payment with respect to the Senior Lender Claims
(whether by or on behalf of any Warnaco Obligor, as proceeds of security,
enforcement of any right of setoff or otherwise) is declared to be fraudulent or
preferential in any respect, set aside or required to be paid to a debtor in
possession, trustee,
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receiver or similar Person, then the obligation or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred.
"Senior Lender Collateral" shall mean all of the assets of each
Warnaco Obligor whether real, personal or mixed, in which the Senior Lenders or
the Senior Agent or any of them now or hereafter holds a Lien as security for
any Senior Lender Claim.
"Senior Lender Collateral Documents" shall mean the Senior Lender
Security Agreement, the Mortgages, and any Loan Document or other document or
instrument pursuant to which a Lien is granted securing the Senior Lender
Claims, as the same may be amended, renewed, extended, supplemented or modified
from time to time.
"Senior Lender Documents" shall mean the Senior Credit Agreement, the
Guaranty, the Senior Lender Collateral Documents and each of the other Loan
Documents, each document or instrument evidencing a Senior Lender Hedging
Obligation or Senior Cash Management Obligation, all documents and instruments
evidencing any other obligation under the Senior Credit Agreement, any other
related document or instrument executed or delivered pursuant to any Senior
Lender Document at any time and any other related document or instrument
otherwise evidencing any Senior Lender Claims, as any such document or
instrument may from time to time be amended, replaced, renewed, restated,
supplemented or otherwise modified.
"Senior Lender Hedging Obligations" means Secured Obligations (as
defined in the Senior Credit Agreement) constituting Hedging Obligations of any
Warnaco Obligor.
"Senior Lender Security Agreement" shall mean the Pledge and Security
Agreement, dated as of the date hereof, between the Warnaco Obligors and the
Senior Agent, as the same may be amended, renewed, extended, supplemented or
modified from time to time in accordance with the terms thereof.
"Senior Lenders" shall mean the Persons holding Senior Lender Claims,
including, without limitation, the Senior Agent.
"Shared Collateral" shall mean all of the assets of any Warnaco
Obligor whether real, personal or mixed, constituting both Senior Lender
Collateral and Noteholder Collateral.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code of the State of New York, as amended.
"Warnaco Obligor" means Warnaco, in its capacity as Borrower, and as
Issuer, Group, as a Guarantor (as defined in the Senior Lender Documents and the
Noteholder Documents) and each Subsidiary of Group that is a Guarantor (as
defined in the Senior Lender Documents and the Noteholder Documents).
Section 2. Lien Priorities.
2.1 Subordination. Notwithstanding the date, manner or order of grant,
attachment or perfection of any Liens granted to the Noteholder Collateral
Trustee or the Noteholders on the Shared Collateral or of any Liens granted to
the Senior Agent or the Senior Lenders on the Shared Collateral and
notwithstanding any provision of the UCC, or any applicable law or the
Noteholder Documents or the Senior Lender Documents or any other
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circumstance whatsoever, the Noteholder Collateral Trustee, on behalf of itself
and the Noteholders, hereby agrees that: (a) any Lien on the Shared Collateral
securing the Senior Lender Claims now or hereafter held by the Senior Agent or
the Senior Lenders shall be senior and prior to any Lien on the Shared
Collateral securing the Noteholder Claims; and (b) any Lien on the Shared
Collateral now or hereafter held by the Noteholder Collateral Trustee or the
Noteholders regardless of how acquired, whether by grant, statute, operation of
law, subrogation or otherwise, shall be junior and subordinate in all respects
to all Liens on the Shared Collateral securing the Senior Lender Claims. All
Liens on the Shared Collateral securing the Senior Lender Claims shall be and
remain senior to all Liens on the Shared Collateral securing the Noteholder
Claims for all purposes, whether or not such Liens securing the Senior Lender
Claims are subordinated to any Lien securing any other obligation of any Warnaco
Obligor.
2.2 Prohibition on Contesting Liens. Each of the Noteholder Trustees,
for itself and on behalf of each Noteholder, and the Senior Agent, for itself
and on behalf of each Senior Lender, agrees that it shall not (and hereby waives
any right to) contest or support any other Person in contesting, in any
proceeding (including, without limitation, any Insolvency or Liquidation
Proceeding), the priority, validity or enforceability of a Lien held by the
Senior Lenders in the Senior Lender Collateral or by the Noteholders in the
Shared Collateral, respectively.
2.3 No New Liens. The parties hereto agree that prior to the Discharge
of Senior Lender Claims (a) if the Noteholder Collateral Trustee shall hold any
Lien on any assets of any Warnaco Entity securing the Noteholder Claims that are
not also subject to the first-priority Lien of the Senior Agent or have not been
consented to by the Necessary Lenders, under the Senior Lender Documents, the
Noteholder Collateral Trustee, upon demand by the Senior Agent, will either
release such Lien or assign a first-priority Lien to the Senior Agent as
security for the Senior Lender Claims, and (b) each Warnaco Obligor hereby
agrees not to grant any Lien on any of its assets, or permit any Subsidiary
thereof to ▇▇▇▇▇ ▇ ▇▇▇▇ on any of its assets, in favor of the Noteholder
Collateral Trustee, the Noteholder Indenture Trustee or the Noteholders unless
it, or such Subsidiary, has granted a similar Lien on such assets in favor of
the Senior Agent or such Lien has been consented to by the Necessary Lenders.
Section 3. Enforcement.
3.1 Exercise of Remedies.
(a) Prior to the Discharge of Senior Lender Claims, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against any
Warnaco Obligor: (i) the Noteholder Collateral Trustee and the Noteholders will
not exercise or seek to exercise any rights or remedies (including setoff) with
respect to any Shared Collateral, institute any action or proceeding with
respect to such rights or remedies, including, without limitation, any action of
foreclosure, contest, protest or object to any foreclosure proceeding or action
brought by the Senior Agent or any Senior Lender, the exercise of any right
under any Blocked Account Letter, Restricted Account Letter, Landlord Waiver or
Bailee's Letter or similar agreement or arrangement to which the Noteholder
Collateral Trustee or any Noteholder is a party, or any other exercise by any
such party, of any rights and remedies relating to the Shared Collateral under
the Noteholder Documents or otherwise, or object to the forbearance by the
Senior Lenders from bringing or pursuing any foreclosure proceeding or action or
any other exercise of any rights or remedies relating to the Shared Collateral;
and (ii) the Senior Agent and the Senior Lenders shall have the exclusive right
to enforce rights, exercise remedies (including, without limitation, setoff and
the right to credit bid their debt) and make determinations regarding release,
disposition, or
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restrictions with respect to the Shared Collateral without any consultation with
or the consent of the Noteholder Collateral Trustee or any Noteholder; provided,
however, that in the event the Senior Agent has not initiated the exercise of
any rights or remedies with respect to the Shared Collateral prior to the 90th
day following the acceleration of the Senior Lender Claims in accordance with
the terms of the Senior Loan Documents, then so long as no Insolvency or
Liquidation Proceeding has been commenced by or against any Warnaco Obligor, the
Noteholder Collateral Trustee shall be entitled to exercise any rights or
remedies or take any other action with respect to the Shared Collateral (it
being understood that any action shall in all respects comply with the terms of
this Agreement and applicable Requirements of Law).
(b) In exercising rights and remedies with respect to the Shared
Collateral, the Senior Agent and the Senior Lenders may enforce the provisions
of the Senior Lender Documents and exercise remedies thereunder, all in such
order and in such manner as they may determine in the exercise of their sole
discretion. Such exercise and enforcement shall include, without limitation, the
rights of an agent appointed by them to sell or otherwise dispose of Shared
Collateral upon foreclosure, to incur expenses in connection with such sale or
disposition, and to exercise all the rights and remedies of a secured lender
under the Uniform Commercial Code of any applicable jurisdiction and of a
secured creditor under bankruptcy or similar laws of any applicable
jurisdiction.
(c) Each Noteholder Trustee, on behalf of itself and the Noteholders,
agrees that, prior to the Discharge of Senior Lender Claims, it will not take or
receive any Shared Collateral or any proceeds of Shared Collateral in connection
with the exercise of any right or remedy (including setoff) with respect to any
Shared Collateral. Without limiting the generality of the foregoing, but,
subject to the proviso in Section 3.1(a), prior to the Discharge of Senior
Lender Claims, the sole right of the Noteholder Collateral Trustee and the
Noteholders with respect to the Shared Collateral is to hold a Lien on the
Shared Collateral pursuant to the Noteholder Documents for the period and to the
extent granted therein and to receive the proceeds thereof, if any, after the
Discharge of Senior Lender Claims.
(d) Each Noteholder Trustee, for itself or on behalf of the
Noteholders, (i) agrees that neither it nor the Noteholders will take any action
that would hinder any exercise of remedies undertaken by the Senior Agent under
the Senior Loan Documents, including any sale, lease, exchange, transfer or
other disposition of the Shared Collateral, whether by foreclosure or otherwise
(other than pursuant to the proviso in Section 3.1(a)) and (ii) hereby waives
any and all rights it or the Noteholders may have as a junior lien creditor or
otherwise to object to the manner in which the Senior Agent or the Senior
Lenders seek to enforce or collect the Senior Lender Claims or the Liens granted
in any of the Senior Lender Collateral (other than pursuant to the proviso in
Section 3.1(a)).
3.2 Cooperation. Each Noteholder Trustee, on behalf of itself and the
Noteholders, agrees that, prior to the Discharge of Senior Lender Claims, it
will not other than as permitted by the proviso in Section 3.1(a) commence, or
join with any Person (other than the Senior Lenders and the Senior Agent upon
the request thereof) in commencing any enforcement, collection, execution, levy
or foreclosure action or proceeding with respect to any Lien held by it under
any of the Noteholder Documents or otherwise.
Section 4. Payments.
4.1 Application of Proceeds. Prior to the Discharge of Senior Lender
Claims, the cash proceeds of Shared Collateral received in connection with the
sale of, or
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collection on, such Shared Collateral upon the exercise of remedies, shall be
applied by the Senior Agent to the Senior Lender Claims in such order as
specified in the Senior Credit Agreement. Following Discharge of Senior Lender
Claims, the Senior Agent shall deliver to the Noteholder Collateral Trustee any
proceeds of Shared Collateral held by it in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct. The Noteholder Collateral Trustee is hereby authorized to make any such
endorsements as agent for the Senior Agent or any such Senior Lender at any time
following the Discharge of Senior Lender Claims. This authorization is coupled
with an interest and is irrevocable.
4.2 Payments Over. Any Shared Collateral or proceeds thereof received
by either Noteholder Trustee or any Noteholder in connection with the exercise
of any right or remedy (including setoff) relating to the Shared Collateral
shall be segregated and held in trust and forthwith paid over to the Senior
Agent for the benefit of the Senior Lenders in the same form as received, with
any necessary endorsements or as a court of competent jurisdiction may otherwise
direct. The Senior Agent is hereby authorized to make any such endorsements as
agent for the Noteholder Collateral Trustee or any such Noteholder. This
authorization is coupled with an interest and is irrevocable.
Section 5. Other Agreements.
5.1 Releases.
(a) If in connection with:
(i) the exercise of the Senior Agent's remedies in respect of the
Shared Collateral provided for in Section 3.1, including any sale, lease,
exchange, transfer or other disposition of such Shared Collateral;
(ii) any sale, lease, exchange, transfer or other disposition of
Shared Collateral permitted under the terms of the Senior Credit Agreement
or permitted pursuant to a waiver or consent of a transaction otherwise
prohibited by the Senior Credit Agreement (whether or not an event of
default under, and as defined in the Senior Credit Agreement, has occurred
and is continuing); or
(iii) any agreement between the Senior Agent and the Warnaco
Obligors to release the Senior Agent's Lien on any portion of the Shared
Collateral or to release any Guarantor from its obligations under its
guaranty of the Senior Lender Claims;
the Senior Agent, for itself or on behalf of any of the Senior Lenders, releases
any of its Liens on any part of the Shared Collateral (or any Guarantor from its
obligations under its guaranty of the Senior Lender Claims), the Liens of the
Noteholder Collateral Trustee, for itself or for the benefit of the Noteholders,
on such Shared Collateral (and the obligations of such Guarantor under its
guaranty of the Noteholder Claims) shall be automatically, unconditionally and
simultaneously released and the Noteholder Collateral Trustee, for itself and on
behalf of each Noteholder, promptly shall execute and deliver to the Senior
Agent or Group, at Group's cost and expense, such termination statements,
releases and other documents as the Senior Agent or Group may reasonably request
to effectively confirm such release.
(b) The Noteholder Collateral Trustee, for itself and on behalf of the
Noteholders, hereby irrevocably constitutes and appoints the Senior Agent and
any officer or
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agent of the Senior Agent, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Noteholder Collateral Trustee or such holder from time to time
in the Senior Agent's discretion, for the purpose of carrying out the terms of
this Section 5.1, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Section 5.1, including, without limitation, any financing
statements, endorsements or other instruments or transfer or release.
Notwithstanding the grant of the foregoing power of attorney, nothing in this
clause (b) is intended to in any way relieve any Warnaco Obligor of its
obligations to comply with Requirements of Law or applicable Contractual
Obligations with respect to the release of collateral under the Noteholder
Documents.
5.2 Insurance. Prior to the Discharge of Senior Lender Claims:
(a) the Senior Agent and the Senior Lenders shall have the sole and
exclusive right, subject to the rights of the Warnaco Obligors under the Senior
Lender Documents, to adjust settlement for any insurance policy covering the
Shared Collateral in the event of any loss thereunder and to approve any award
granted in any condemnation or similar proceeding affecting the Shared
Collateral; and
(b) all proceeds of any insurance policy covering the Shared
Collateral and any award granted in any condemnation or similar proceeding
affecting the Shared Collateral shall be paid; first to the Senior Agent for the
benefit of the Senior Lenders to the extent required under the Senior Credit
Agreement, second to the Noteholder Collateral Trustee for the benefit of the
Noteholders to the extent required under the applicable Noteholder Documents,
and third to the owner of the subject property or as a court of competent
jurisdiction may otherwise direct. If either Noteholder Trustee or any
Noteholder shall, at any time, receive any proceeds of any such insurance policy
or any such award in contravention of this Agreement, it shall pay such proceeds
over to the Senior Agent in accordance with the terms of Section 4.2.
5.3 Amendments to Noteholder Documents.
(a) Without the prior written consent of the Senior Agent (with the
consent of the Necessary Lenders), no Noteholder Document may be amended,
supplemented or otherwise modified or entered into to the extent such amendment,
supplement or modification, or the terms of any new Noteholder Document would be
materially adverse to the Senior Lenders.
(b) In the event the Necessary Lenders enter into any amendment,
waiver or consent in respect of any of the Senior Lender Collateral Documents
for the purpose of adding to, or deleting from, or waiving or consenting to any
departures from any provisions of, any such Senior Lender Collateral Document or
changing in any manner the rights of the Senior Agent, the Senior Lenders, the
Warnaco Obligors thereunder, then such amendment, waiver or consent shall, by
this reference, apply automatically to any comparable provision of the
Comparable Noteholder Collateral Document without the consent of either
Noteholder Trustee or the Noteholders and without any action by either
Noteholder Trustee, or any Warnaco Obligor; provided, however, (A) that no such
amendment, waiver or consent shall have the effect of removing assets subject to
the Lien of the Noteholder Collateral Documents, except to the extent that a
release of such Lien is permitted by Section 5.1 and (B) notice of such
amendment, waiver or consent shall be given to the Noteholder Collateral
Trustee.
(c) The Noteholder Collateral Trustee agrees that each Noteholder
Mortgage shall include the following language:
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Notwithstanding anything herein to the contrary, the lien and security
interest granted to the Noteholder Collateral Trustee pursuant to this
Agreement and the exercise of any right or remedy by the Noteholder
Collateral Trustee hereunder are subject to the provisions of the
Intercreditor Agreement, dated as of _________ __, 2003 (the "Intercreditor
Agreement") among Citicorp North America, Inc., as Senior Agent, ▇▇▇▇▇
Fargo Bank Minnesota, National Association, as Noteholder Indenture Trustee
and Wilmington Trust Company, as Noteholder Collateral Trustee, Warnaco
Inc., The Warnaco Group and each domestic subsidiary thereof. In the event
of any conflict between the terms of the Intercreditor Agreement and this
Agreement, the terms of the Intercreditor Agreement shall govern.
In addition, the Noteholder Collateral Trustee agrees that each Noteholder
Collateral Document covering any Shared Collateral shall contain such language
as the Senior Agent may reasonably request to reflect the subordination of such
lien and security interest covering such Shared Collateral.
5.4 Rights As Unsecured Creditors.
(a) Nothing in this Agreement shall prohibit the receipt by either
Noteholder Trustee or any Noteholders of the required payments of principal and
interest so long as (i) such payment by the Warnaco Obligors is made in
accordance with the terms of the Senior Credit Agreement (as in effect as of the
date hereof except the extent amended to permit payments of principal and
interest in respect of the Second Lien Notes in addition to those permitted as
of the date hereof) and (ii) such receipt by the Noteholders is not the direct
or indirect result of the exercise by either Noteholder Trustee or any
Noteholder of rights or remedies as a secured creditor or enforcement of any
Lien held by any of them in contravention of this Agreement.
(b) Notwithstanding anything to the contrary in this Agreement, the
Noteholder Trustees and the Noteholders may exercise rights and remedies as an
unsecured creditor against the Warnaco Obligors in accordance with the terms of
the Noteholder Documents and applicable law. In the event either Noteholder
Trustee or any Noteholder becomes a judgment lien creditor in respect of Shared
Collateral as a result of its enforcement of its rights as an unsecured
creditor, such judgment lien shall be subordinated to the Liens securing Senior
Lender Claims on the same basis as the other Liens securing the Noteholder
Claims are so subordinated to such Senior Lender Claims under this Agreement.
Nothing in this Agreement modifies any rights or remedies the Senior Agent or
the Senior Lenders may have with respect to the Senior Lender Collateral.
5.5 Agent and Bailee for Perfection.
(a) The Senior Agent agrees to hold the Shared Collateral that is in
its possession or control (or in the possession or control of its agents or
bailees) as bailee or as agent, as the case may be, for the Noteholder
Collateral Trustee and any assignee solely for the purpose of perfecting the
security interest granted in such Shared Collateral pursuant to the Noteholder
Security Agreement or other applicable agreement, subject to the terms and
conditions of this Section 5.5. For the avoidance of doubt, solely for purposes
of perfecting the Lien in favor of the Noteholder Collateral Trustee, the Senior
Agent agrees that it shall be the agent of the Noteholder Collateral Trustee
with respect to any Deposit Accounts or Securities Accounts included in the
Shared Collateral that are controlled or held by it.
(b) Prior to the Discharge of Senior Lender Claims, the Senior Agent
shall be entitled to deal with the Shared Collateral in its possession or under
its control in accordance with
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the terms of the Senior Lender Documents and this Agreement. The rights of the
Noteholder Collateral Trustee shall at all times be subject to the terms of this
Agreement and to the Senior Agent's rights under the Senior Lender Documents and
this Agreement.
(c) The Senior Agent shall have no obligation whatsoever to the
Noteholder Collateral Trustee or any Noteholder to assure that the Shared
Collateral in its possession or under its control is genuine or owned by a
Warnaco Obligor or to preserve rights or benefits of any Person except as
expressly set forth in this Section 5.5. The duties or responsibilities of the
Senior Agent under this Section 5.5 shall be limited solely to holding the
Pledged Collateral as bailee and controlling Deposit Accounts and Securities
Accounts as agent, for the Noteholder Collateral Trustee for purposes of
perfecting the Lien thereon held by the Noteholder Collateral Trustee.
(d) The Senior Agent shall not have by reason of this Agreement or any
other document a fiduciary relationship in respect of the Noteholder Collateral
Trustee or any Noteholder.
(e) Following the Discharge of Senior Lender Claims, the Senior Agent
shall deliver to the Noteholder Collateral Trustee the Pledged Collateral
together with any necessary endorsements (or otherwise allow the Noteholder
Collateral Trustee to obtain control of such Pledged Collateral) or as a court
of competent jurisdiction may otherwise direct, and shall take all steps
reasonably requested by the Noteholder Collateral Trustee to (i) give the
Noteholder Collateral Trustee or its designated agents control over any Deposit
Accounts and Securities Accounts included in the Shared Collateral that are
under its control, to be held by the Noteholder Collateral Trustee for itself
and the Noteholders and (ii) release its Liens on the Shared Collateral (subject
to the terms of the applicable Senior Lender Collateral Document).
Section 6. Insolvency or Liquidation Proceedings.
6.1 Financing Issues. If any Warnaco Obligor shall be subject to any
Insolvency or Liquidation Proceeding and the Senior Agent shall desire to permit
the use of cash collateral or to permit the Warnaco Obligors (or any of them) to
obtain financing under section 363 or section 364 of the Bankruptcy Code ("DIP
Financing"), then each Noteholder Trustee, on behalf of itself and the
Noteholders, agrees that it will raise no objection to such use or DIP Financing
and will not request adequate protection or any other relief in connection
therewith (except to the extent required by Section 6.3) and, to the extent the
Liens securing the Senior Lender Claims are subordinated or pari passu with such
DIP Financing, the Noteholder Collateral Trustee will subordinate its Liens in
the Shared Collateral to such DIP Financing and all Obligations relating thereto
(in each case under this Section 6.1, to the extent such DIP Financing and
Obligations constitute "Senior Lender Claims") on the same basis as the Liens
securing the Noteholder Claims are subordinated to the other Senior Lender
Claims under this Agreement.
6.2 Relief from the Automatic Stay. Each Noteholder Trustee, on behalf
of itself and the Noteholders, agrees that, prior to the Discharge of Senior
Lender Claims, none of them shall seek relief from the automatic stay or any
other stay in any Insolvency or Liquidation Proceeding in respect of the Shared
Collateral, without the prior written consent of the Senior Agent (with the
consent of the Necessary Lenders).
6.3 Adequate Protection.
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(a) Each Noteholder Trustee, on behalf of itself and the Noteholders,
agrees that none of them shall contest (or support any other Person contesting)
(i) any request by the Senior Agent or the Senior Lenders for adequate
protection or (ii) any objection by the Senior Agent or the Senior Lenders to
any motion, relief, action or proceeding based on the Senior Agent or the Senior
Lenders claiming a lack of adequate protection.
(b) Notwithstanding the foregoing clause (a), in any Insolvency or
Liquidation Proceeding, if the Senior Lenders (or any subset thereof) are
granted adequate protection in the form of additional collateral in connection
with any DIP Financing or use of its cash collateral under section 363 or
section 364 of the Bankruptcy Code, then the Senior Agent (on behalf of the
Senior Lenders) will raise no objection to the grant of adequate protection in
the form of additional collateral to the Noteholder Collateral Trustee, on
behalf of itself or any of the Noteholders which Lien shall be subordinated to
the Liens securing the Senior Lender Claims and such DIP Financing (and all
Obligations relating thereto) on the same basis as the other Liens securing the
Noteholder Claims are so subordinated to the Senior Lender Claims under this
Agreement.
6.4 No Waiver. Nothing contained herein shall prohibit or in any way
limit the Senior Agent or any Senior Lender from objecting in any Insolvency or
Liquidation Proceeding or otherwise to any action taken by either Noteholder
Trustee or any of the Noteholders in contravention of this Agreement, including,
without limitation, the seeking by either Noteholder Trustee or any Noteholder
of adequate protection or the asserting by either Noteholder Trustee or any
Noteholder of any of its rights and remedies under the Noteholder Documents or
otherwise in contravention of this Agreement.
6.5 Preference Issues. If any Senior Lender is required in any
Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay
to the estate of any Warnaco Obligor any amount (a "Recovery"), then the Senior
Lender Claims shall be reinstated to the extent of such Recovery and the Senior
Lenders shall be entitled to the Discharge of Senior Lender Claims with respect
to all such recovered amounts. If this Agreement shall have been terminated
prior to such Recovery, this Agreement shall be reinstated in full force and
effect, and such prior termination shall not diminish, release, discharge,
impair or otherwise affect the obligations of the parties hereto from such date
of reinstatement.
6.6 Certain Noteholder Rights. Each Noteholder Trustee and each
Noteholder shall retain the right to vote and otherwise act in any Insolvency or
Liquidation Proceeding (including, without limitation, the right to vote to
accept or reject any plan of reorganization); provided that no such Person shall
vote with respect to any such plan of reorganization or take any other action in
any way to contest (i) the validity of any Liens granted to or for the benefit
of the Senior Agent, (ii) the relative rights and duties of the holders of the
Senior Lender Claims established in the Senior Lender Documents and this
Agreement with respect to such Liens or (iii) the enforceability of the Senior
Credit Agreement or this Agreement.
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Section 7. Reliance; Waivers; etc.
7.1 Reliance. The consent by the Senior Lenders to the execution and
delivery of the Noteholder Documents and the grant to the Noteholder Collateral
Trustee on behalf of the Noteholders of a Lien on the Shared Collateral and all
loans and other extensions of credit made or deemed made on and after the date
hereof by the Senior Lenders to the Borrower shall be deemed to have been given
and made in reliance upon this Agreement.
7.2 No Warranties or Liability. (a) Each Noteholder Trustee, on behalf
of itself and Noteholders, acknowledges and agrees that each of the Senior Agent
and the Senior Lenders have made no express or implied representation or
warranty, including, without limitation, with respect to the execution,
validity, legality, completeness, collectibility or enforceability of any of the
Senior Lender Documents. The Senior Lenders will be entitled to manage and
supervise their respective loans and extensions of credit to the Borrower in
accordance with law and as they may otherwise, in their sole discretion, deem
appropriate, and the Senior Lenders may manage their loans and extensions of
credit without regard to any rights or interests that either Noteholder Trustee
or any of the Noteholders have in the Shared Collateral or otherwise, except as
otherwise provided in this Agreement. Neither the Senior Agent nor any Senior
Lender shall have any duty to either Noteholder Trustee or any of the
Noteholders to act or refrain from acting in a manner which allows, or results
in, the occurrence or continuance of an event of default or default under any
agreements with the Borrower (including, without limitation, the Noteholder
Documents), regardless of any knowledge thereof which they may have or be
charged with.
(b) The Senior Agent, on behalf of itself and the Senior Lenders,
acknowledges and agrees that each of the Noteholder Trustees and the Noteholders
have made no express or implied representation or warranty, including, without
limitation, with respect to the execution, validity, legality, completeness,
collectibility or enforceability of any of the Noteholder Documents. The
Noteholders will be entitled to manage and supervise their respective extensions
of credit to the Issuer in accordance with law and as they may otherwise, in
their sole discretion, deem appropriate, and the Noteholders may manage their
extensions of credit without regard to any rights or interests that the Senior
Agent or any of the Senior Lenders have in the Shared Collateral or otherwise,
except as otherwise provided in this Agreement. Neither the Noteholder Trustees
nor any Noteholder shall have any duty to the Senior Agent or any of the Senior
Lenders to act or refrain from acting in a manner which allows, or results in,
the occurrence or continuance of an event of default or default under any
agreements with the Issuer (including, without limitation, the Senior Lender
Documents), regardless of any knowledge thereof which they may have or be
charged with.
7.3 No Waiver of Lien Priorities.
(a) No right of the Senior Lenders, the Senior Agent or any of them to
enforce any provision of this Agreement shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Warnaco
Obligor or by any act or failure to act by any Senior Lender or the Senior
Agent, or by any noncompliance by any Person with the terms, provisions and
covenants of this Agreement, any of the Senior Lender Documents or any of the
Noteholder Documents, regardless of any knowledge thereof which the Senior Agent
or the Senior Lenders, or any of them, may have or be otherwise charged with. No
right of the Noteholders, the Noteholder Trustees or any of them to enforce any
provision of this Agreement shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of any Warnaco Obligor or by
any act or failure to act by any Noteholder or Noteholder Trustee, or
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by any noncompliance by any Person with the terms, provisions and covenants of
this Agreement, any of the Noteholder Documents or any of the Senior Lender
Documents, regardless of any knowledge thereof which the Noteholder Trustees or
the Noteholders, or any of them, may have or be otherwise charged with.
(b) Without in any way limiting the generality of the foregoing
paragraph (but subject to the rights of the Warnaco Obligors under the Senior
Lender Documents), the Senior Lenders, the Senior Agent and any of them, may, at
any time and from time to time, without the consent of, or notice to, either
Noteholder Trustee or any Noteholder, without incurring any liabilities to
either Noteholder Trustee or any Noteholder and without impairing or releasing
the lien priorities and other benefits provided in this Agreement (even if any
right of subrogation or other right or remedy of such Noteholder Trustee or any
Noteholder is affected, impaired or extinguished thereby) do any one or more of
the following:
(i) change the manner, place or terms of payment or change or extend
the time of payment of, or renew, exchange, amend, increase (subject to the
terms of the Indenture) or alter, the terms of any of the Senior Lender
Claims or any Lien in any Senior Lender Collateral or guaranty thereof or
any liability of any Warnaco Obligor, or any liability incurred directly or
indirectly in respect thereof (including, without limitation, any increase
in or extension of the Senior Lender Claims), without any restriction as to
the amount (subject to the terms of the Indenture), tenor or terms of any
such increase or extension or otherwise amend, renew, exchange, extend,
modify or supplement in any manner any Liens held by the Senior Lenders,
the Senior Lender Claims or any of the Senior Lender Documents;
(ii) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any part of the Senior
Lender Collateral or any liability of any Warnaco Obligor to the Senior
Lenders or the Senior Agent, or any liability incurred directly or
indirectly in respect thereof;
(iii) settle or compromise any Senior Lender Claim or any other
liability of any Warnaco Obligor (other than the Noteholder Claims) or any
security therefor or any liability incurred directly or indirectly in
respect thereof and apply any sums by whomsoever paid and however realized
to any liability (including, without limitation, the Senior Lender Claims)
in any manner or order; and
(iv) exercise or delay in or refrain from exercising any right or
remedy against any security or any Warnaco Obligor or any other Person,
elect any remedy and otherwise deal freely with the Borrower and the Senior
Lender Collateral and any security and any guarantor or any liability of
any Warnaco Obligor to the Senior Lenders or any liability incurred
directly or indirectly in respect thereof.
(c) The Senior Agent, on behalf of itself and the Senior Lenders, also
agrees that each Noteholder Trustee and the Noteholders shall have no liability
(other than pursuant to the terms here of and applicable Requirements of Law) to
the Senior Agent or any Senior Lender, and, subject to the terms here of and
applicable Requirements of Law, the Senior Agent, on behalf of itself and the
Senior Lenders, hereby waives any claim against any Noteholder Trustee or any
Noteholder, arising out of any and all actions which the Noteholders or the
Noteholder Trustee may take or permit or omit to take with respect to: (i) the
Noteholder Documents, (ii) the collection of the Noteholder Claims, (iii) the
foreclosure upon, or sale, liquidation or other disposition of, the Shared
Collateral pursuant to the proviso in Section 3.1(a), or (iv) the release
15
of any Lien in respect of any Shared Collateral. The Senior Agent, on behalf of
itself and the Senior Lenders, agrees that the Noteholders and the Noteholder
Trustees have no duty to them in respect of the maintenance or preservation of
the Noteholder Collateral, the Noteholder Claims or otherwise other than as
expressly set forth herein.
(d) Each Noteholder Trustee, on behalf of itself and the Noteholders,
also agrees that the Senior Lenders and the Senior Agent shall have no liability
(other than pursuant to the terms hereof and applicable Requirements of Law) to
any Noteholder Trustee or any Noteholder, and , subject to the terms here of and
applicable Requirements of Law, each Noteholder Trustee, on behalf of itself and
the Noteholders, hereby waives any claim against any Senior Lender or the Senior
Agent, arising out of any and all actions which the Senior Lenders or the Senior
Agent may take or permit or omit to take with respect to: (i) the Senior Lender
Documents, (ii) the collection of the Senior Lender Claims, (iii) the
foreclosure upon, or sale, liquidation or other disposition of, the Senior
Lender Collateral or the Shared Collateral, or (iv) the release of any Lien in
respect of any Shared Collateral. Each Noteholder Trustee, on behalf of itself
and the Noteholders, agrees that the Senior Lenders and the Senior Agent have no
duty to them in respect of the maintenance or preservation of the Senior Lender
Collateral, the Senior Lender Claims or otherwise other than as expressly set
forth herein.
(e) Each Noteholder Trustee, on behalf of itself and the Noteholders,
agrees not to assert and hereby waives, to the fullest extent permitted by law,
any right to demand, request, plead or otherwise assert or otherwise claim the
benefit of, any marshalling, appraisal, valuation or other similar right that
may otherwise be available under applicable law or any other similar rights a
junior secured creditor may have under applicable law.
7.4 Obligations Unconditional. All rights, interests, agreements and
obligations of the Senior Agent and the Senior Lenders and each Noteholder
Trustee and the Noteholders, respectively, hereunder shall remain in full force
and effect irrespective of:
(a) any lack of validity or enforceability of the Senior Lender
Documents or any Noteholder Documents;
(b) any change in the time, manner or place of payment of, or in any
other terms of, all or any of the Senior Lender Claims or Noteholder Claims, or
any amendment or waiver or other modification, including, without limitation,
any increase in the amount thereof, whether by course of conduct or otherwise,
of the terms of the Senior Credit Agreement or any other Senior Lender Document
or of the terms of the Indenture or any other Noteholder Document;
(c) any exchange of any security interest in any Shared Collateral or
any other collateral, or any amendment, waiver or other modification, whether in
writing or by course of conduct or otherwise, of all or any of the Senior Lender
Claims or Noteholder Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding in
respect of any Warnaco Obligor; or
(e) any other circumstances which otherwise might constitute a defense
available to, or a discharge of, any Warnaco Obligor in respect of the Senior
Lender Claims, or of either Noteholder Trustee or any Noteholder in respect of
this Agreement;
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Section 8. Miscellaneous.
8.1 Conflicts. In the event of any conflict between the provisions of
this Agreement and the provisions of the Senior Lender Documents or the
Noteholder Documents, the provisions of this Agreement shall govern.
8.2 Continuing Nature of this Agreement. Other than as expressly
provided herein, this Agreement shall continue to be effective until the
Discharge of Senior Lender Claims shall have occurred. This is a continuing
agreement of lien subordination and the Senior Lenders may continue, at any time
and without notice to either Noteholder Trustee or any Noteholder, to extend
credit and other financial accommodations and lend monies to or for the benefit
of the Borrower constituting Senior Lender Claims on the faith hereof. Each
Noteholder Trustee, on behalf of itself and the Noteholders, and the Senior
Agent, on behalf of itself and the Senior Lenders hereby waives any right it may
have under applicable law to revoke this Agreement or any of the provisions of
this Agreement. The terms of this Agreement shall survive, and shall continue in
full force and effect, in any Insolvency or Liquidation Proceeding.
8.3 Amendments; Waivers. No amendment, modification or waiver of any
of the provisions of this Agreement by either Noteholder Trustee or the Senior
Agent shall be deemed to be made unless the same shall be in writing signed on
behalf of each such party or its authorized agent. No such amendment,
modification or waiver shall be effective until notice thereof has been provided
to Warnaco. Each waiver, if any, shall be a waiver only with respect to the
specific instance involved and shall in no way impair the rights of the parties
making such waiver or the obligations of the other parties to such party in any
other respect or at any other time. No Warnaco Obligor shall have any right to
amend, modify or waive any provision of this Agreement without the consent of
the Noteholder Collateral Trustee and the Senior Agent nor shall any consent or
signed writing be required of any Warnaco Obligor to effect any amendment,
modification or waiver of any provision of this Agreement, except that no
amendment, modification or waiver affecting any obligation or right of any
Warnaco Obligor hereunder shall be made without the consent of such Warnaco
Obligor.
8.4 Information Concerning Financial Condition of the Borrower and its
Subsidiaries. The Senior Agent and the Senior Lenders, on the one hand, and the
Noteholder Trustees and the Noteholders, on the other hand, shall each be
responsible for keeping themselves informed of (a) the financial condition of
Group and its Subsidiaries and all endorsers and/or guarantors of the Noteholder
Claims or the Senior Lender Claims and (b) all other circumstances bearing upon
the risk of nonpayment of the Noteholder Claims or the Senior Lender Claims. The
Senior Agent and the Senior Lenders shall have no duty to advise any Noteholder
Trustee or any Noteholder of information known to it or them regarding such
condition or any such circumstances or otherwise and the Noteholder Trustees and
the Noteholders shall have no duty to advise the Senior Agent or any Senior
Lender of information known to it or them regarding such condition or any such
circumstances or otherwise. In the event the Senior Agent or any of the Senior
Lenders, in its or their sole discretion, undertakes at any time or from time to
time to provide any such information to either Noteholder Trustee or any
Noteholder, or in the event a Noteholder Trustee or any of the Noteholders, in
its or their sole discretion, undertakes at any time or from time to time to
provide any such information to the Senior Agent or any Senior Lender, such
provider of information shall be under no obligation (x) to provide any
additional information or to provide any such information on any subsequent
occasion, (y) to undertake any investigation or (z) to disclose any information
which, pursuant to accepted or reasonable commercial finance practices, such
party wishes to maintain confidential.
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8.5 Subrogation. Each Noteholder Trustee, on behalf of itself and the
Noteholders, hereby waives any rights of subrogation it may acquire as a result
of any payment hereunder until the Discharge of Senior Lender Claims has
occurred.
8.6 Application of Payments. All payments received by the Senior
Lenders may be applied, reversed and reapplied, in whole or in part, to such
part of the Senior Lender Claims as the Senior Lenders, in their sole
discretion, deem appropriate, subject to the terms of the Senior Lender
Documents.
8.7 Consent to Jurisdiction; Waivers. The parties hereto consent to
the non-exclusive jurisdiction of any state or federal court located in New
York, New York, and consent that all service of process may be made by
registered mail directed to such party as provided in Section 8.8 (with respect
to registered mail) below for such party. Service so made shall be deemed to be
completed three (3) days after the same shall be posted as aforesaid. The
parties hereto waive any objection to any action instituted in such courts as
aforesaid hereunder based on forum non conveniens, and any objection to the
venue of any such action instituted hereunder. Each of the parties hereto waives
any right it may have to trial by jury in respect of any litigation based on, or
arising out of, under or in connection with this Agreement, any Senior Lender
Document, any Noteholder Document, or any course of conduct, course of dealing,
verbal or written statement or action of any party hereto.
8.8 Notices. All notices to the Noteholders and the Senior Lenders
permitted or required under this Agreement may be sent to the Noteholder
Collateral Trustee and the Senior Agent, respectively. Unless otherwise
specifically provided herein, any notice or other communication herein required
or permitted to be given shall be in writing and may be personally served,
telecopied, electronically mailed or sent by courier service or U.S. mail and
shall be deemed to have been given when delivered in person or by courier
service, upon receipt of a telecopy or electronic mail or four Business Days
after deposit in the U.S. mail (registered or certified, with postage prepaid
and properly addressed). For the purposes hereof, the addresses of the parties
hereto shall be as set forth below each party's name on the signature pages
hereto, or, as to each party, at such other address as may be designated by such
party in a written notice to all of the other parties.
8.9 Further Assurances. Each Noteholder Trustee, on behalf of itself
and the Noteholders, agrees that each of them shall take such further action and
shall execute and deliver to the Senior Agent and the Senior Lenders such
additional documents and instruments (in recordable form, if requested) as the
Senior Agent or the Senior Lenders may reasonably request to effectuate the
terms of and the lien priorities contemplated by this Agreement. The Senior
Agent, on behalf of itself and the Senior Lenders, agrees that it shall take
such further action and shall execute and deliver to the Noteholder Trustees
such additional documents and instruments (in recordable form, if requested) as
the Noteholder Trustees may reasonably request to effectuate the terms of and
the lien priorities contemplated by this Agreement.
8.10 Governing Law. This Agreement has been delivered and accepted at
and shall be deemed to have been made at New York, New York and shall be
interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of New York.
8.11 Binding on Successors and Assigns. This Agreement shall be
binding upon the Senior Agent, the Senior Lenders, each Noteholder Trustee, the
Noteholders and their respective successors and permitted assigns.
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8.12 Specific Performance. The Senior Agent and the Noteholder
Trustees may demand specific performance of this Agreement. Each Noteholder
Trustee, on behalf of itself and the Noteholders hereby irrevocably waives any
defense based on the adequacy of a remedy at law and any other defense which
might be asserted to bar the remedy of specific performance in any action which
may be brought by the Senior Agent. The Senior Agent, on behalf of itself and
the Senior Lenders hereby irrevocably waives any defense based on the adequacy
of a remedy at law and any other defense which might be asserted to bar the
remedy of specific performance in any action which may be brought by a
Noteholder Trustee.
8.13 Section Titles; Time Periods. 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 this Agreement. In the computation of time
periods, unless otherwise specified, the word "from" means "from and including"
and each of the words "to" and "until" means "to but excluding" and the word
"through" means "to and including".
8.14 Counterparts. 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 shall be as effective as delivery of a manually executed
counterpart hereof.
8.15 Authorization. By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.
8.16 No Third Party Beneficiaries. This Agreement and the rights and
benefits hereof shall inure to the benefit of the Senior Agent and the Senior
Lenders and their respective successors and assigns and, to the extent
applicable, the Warnaco Obligors, each Noteholder Trustee and the Noteholders
and their respective permitted successors and assigns. No other Person, shall
have or be entitled to assert rights or benefits hereunder. Each Warnaco Obligor
shall cause each of its Subsidiaries to comply with the terms of this Agreement.
8.17 Effectiveness. This Agreement shall become effective when
executed and delivered by the parties hereto. This Agreement shall be effective
both before and after the commencement of any Insolvency or Liquidation
Proceeding. All references to any Warnaco Obligor shall include such Warnaco
Obligor as debtor and debtor-in-possession and any receiver or trustee for such
Warnaco Obligor (as the case may be) in any Insolvency or Liquidation
Proceeding.
8.18 Severability. If any term or provision set forth in this
Agreement shall be invalid or unenforceable, the remainder of this Agreement, or
the application of such terms or provisions to persons or circumstances, other
than those to which it is held unenforceable, shall not in any way be affected
or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CITICORP NORTH AMERICA, INC., as Senior Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy no.: (▇▇▇) ▇▇▇-▇▇▇▇
email address: ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Noteholder Indenture Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Address:
MAC ▇▇▇▇▇-▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
E-mail address: ▇▇▇▇▇▇▇.▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇
WILMINGTON TRUST COMPANY, as Noteholder
Collateral Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title:
Address:
Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇. 19890
Attn: Corporate Trust Administration
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Phone ▇▇▇-▇▇▇-▇▇▇▇
Facsimile ▇▇▇-▇▇▇-▇▇▇▇
20
WARNACO INC., as Borrower
THE WARNACO GROUP INC., as Group
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
A.B.S. Clothing Collection, Inc.
Abbeville Manufacturing Company
Authentic Fitness Corporation
Authentic Fitness On-Line, Inc.
Authentic Fitness Products Inc.
Authentic Fitness Retail Inc.
CCC Acquisition Corp.
CCC Acquisition Realty Corp.
▇.▇. ▇▇▇▇▇▇▇▇ Company
▇▇▇▇▇▇ ▇▇▇▇▇ Jeanswear Company
CKJ Holdings, Inc.
CKJ Sourcing, Inc.
Designer Holdings Ltd.
▇▇▇▇▇▇▇ Street, Inc.
Jeanswear Holdings, Inc.
Kai Jay Manufacturing Company
Myrtle Avenue, Inc.
Outlet Holdings, Inc.
Outlet Stores, Inc.
Penhaligon's by Request, Inc.
Rio Sportswear, Inc.
Ubertech Products, Inc.
Ventures Ltd.
Warnaco of Canada Company
Warnaco Puerto Rico, Inc.
Warnaco Sourcing Inc.
Warnaco U.S. Inc.
Warner's De Costa Rica Inc., as Guarantors
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
21
Warnaco International LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title:
22