EXHIBIT 99.2
LETTER WAIVER
Dated as of March 29, 2001
To the banks, financial institutions
and other institutional lenders
(collectively, the "Lender Parties")
party to the Intercreditor Agreement
referred to below and to The Bank
of Nova Scotia and Citibank, N.A.,
as debt coordinators (the "Debt
Coordinators")
Ladies and Gentlemen:
We refer to the (i) Amendment, Modification, Restatement and
General Provisions Agreement dated as of October 6, 2000 (as amended,
supplemented or otherwise modified through the date hereof, the "Facility
Agreement") among The Warnaco Group, Inc. ("Group"), Warnaco Inc., the
other direct and indirect Subsidiaries of Group party thereto, The Bank of
Nova Scotia ("Scotiabank"), as Administrative Agent (the "Administrative
Agent"), Scotiabank and Citibank, N.A., as Debt Coordinators (the "Debt
Coordinators"), for themselves and as representatives of each of the Lender
Parties, and State Street Bank and Trust Company, as Collateral Trustee
(the "Collateral Truste") and (ii) Intercreditor Agreement referred to in
the Facility Agreement. Capitalized terms not otherwise defined in this
Letter Waiver have the same meanings as specified in Annex A to the
Facility Agreement.
We hereby request that you waive, solely for the period
commencing on the date hereof through April 16, 2001 (the "Waiver
Termination Date"), the requirements of (i) Section 2.7 of the Facility
Agreement for the Fiscal Quarter ended December 31, 2000, (ii) Section
2.8(b) of the Facility Agreement and (iii) Section 2.14(c) of the Facility
Agreement with respect to the assets listed on Exhibit A hereto.
We agree that we will (i) not, and will not permit any other
Loan Party to, request the issuance of any letter of credit under any
Covered Facility for the period commencing on the date hereof through the
Waiver Termination Date, other than as specified on Schedule I hereto (it
being further understood that such permitted letters of credit will, to the
extent practicable, be requested, subject to availability (including
availability for issuance of international and foreign letters of credit),
only under the New Trade Credit Facility and the facility numbered B.7 on
Schedule II to the Intercreditor Agreement, such that the dollar amount of
letters of credit requested under such facilities will be as close to equal
as possible) and (ii) deliver weekly on each Tuesday (or if Tuesday is not
a Business Day, on the next succeeding Business Day), an 8-week rolling
forecast of domestic cash flow for Group, duly certified by a Responsible
Officer as having been prepared in a manner consistent with the cash flow
forecasts previously delivered to the Debt Coordinators, and otherwise in
form satisfactory to the Debt Coordinators.
This Letter Waiver and the agreements contained herein shall
become effective as of the date first above written when, and only when, on
or before the date hereof, the Administrative Agent shall have received (i)
counterparts of this Letter Waiver executed by all of the Loan Parties and
the Supermajority Lenders or, as to any of the Lender Parties, advice
satisfactory to the Debt Coordinators that such Lender Party has executed
this Letter Waiver, (ii) Consolidated statements of earnings before
interest and taxes ("EBIT") and sales for Fiscal Year 2000, and projections
for Fiscal Year 2001, for each product brand of Group and its Subsidiaries,
duly certified by a Responsible Officer as having been prepared in a manner
consistent with comparable statements previously delivered to the Debt
Coordinators, and otherwise in form satisfactory to the Debt Coordinators
and (iii) payment of all fees and expenses of the Debt Coordinators for
which statements have been delivered on or prior to the date hereof
(including the accrued fees and expenses and retainers of counsel and other
advisers to the Debt Coordinators). This Letter Waiver is requested
pursuant to the provisions of Section 2.2 of the Intercreditor Agreement.
The Facility Agreement and each of the other Loan Documents,
except to the extent of the waiver specifically provided above, are and
shall continue to be in full force and effect and are hereby in all
respects ratified and confirmed. The execution, delivery and effectiveness
of this Letter Waiver shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Lender Party, the
Debt Coordinators, the Administrative Agent or the Collateral Trustee under
any of the Loan Documents or Covered Documents, nor constitute a waiver of
any provision of any of the Loan Documents or Covered Documents.
On the day following the Waiver Termination Date, without any
further action by any Lender Party, the Debt Coordinators, the
Administrative Agent or the Collateral Trustee, all of the terms and
provisions set forth in the Loan Documents shall have the same force and
effect as if this Letter Waiver had not been entered into by the parties
hereto, and each Lender Party, the Debt Coordinators, the Administrative
Agent and the Collateral Trustee shall have all of the rights and remedies
afforded to them under the Loan Documents and Covered Documents as though
no waiver had been granted hereunder.
Each of the undersigned Loan Parties, as Guarantors under the
Parent Guaranty or the Subsidiary Guaranty, as applicable, hereby consents
to the execution and delivery of this Letter Waiver and hereby confirms and
agrees that (a) notwithstanding the effectiveness of this Letter Waiver,
the Guaranty to which such Loan Party is a party is, and shall continue to
be, in full force and effect and is hereby ratified and confirmed in all
respects and (b) the Collateral Documents to which such Grantor is a party
and all of the Collateral described therein do, and shall continue to,
secure the payment of all of the Secured Obligations (in each case, as
defined therein).
If you agree to the terms and provisions of this Letter Waiver,
please evidence such agreement by (i) faxing your signature page to Xxxxxx
Fine (tel. 000-000-0000; fax 000-000-0000) BY NO LATER THAN 12:00 NOON (NY
TIME) ON THURSDAY, MARCH 29 and (ii) executing and returning two
counterparts of this Letter Waiver to Xxxxxx Fine, Shearman & Sterling, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at your earliest convenience.
This Letter Waiver may be executed in any number of
counterparts and by different parties hereto 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. Delivery
of an executed counterpart of a signature page to this Letter Waiver by
telecopier shall be effective as delivery of a manually executed
counterpart of this Letter Waiver.
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This Letter Waiver shall be governed by, and construed in
accordance with, the laws of the State of New York.
Very truly yours,
THE WARNACO GROUP, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------
Title: Vice President and
Secretary
Agreed as of the date first above written:
WARNACO INC.
DESIGNER HOLDINGS LTD.
OUTLET STORES, INC.
OUTLET HOLDINGS, INC.
RIO SPORTSWEAR, INC.
AEI MANAGEMENT CORPORATION
JEANSWEAR HOLDINGS, INC.
XXXXXX XXXXX JEANSWEAR COMPANY
CKJ HOLDINGS, INC.
CKJ SOURCING, INC.
ABBEVILLE MANUFACTURING COMPANY
KAI JAY MANUFACTURING COMPANY
XXXXXXX INC.
000 XXXXXX XXXXXX INC.
WARNACO INTERNATIONAL INC.
WARMANA LIMITED
WARNACO SOURCING INC.
WARNER'S DE COSTA RICA INC.
AUTHENTIC FITNESS CORPORATION
AUTHENTIC FITNESS PRODUCTS INC.
WARNACO U.S., INC.
WARNACO MEN'S SPORTSWEAR, INC.
X.X. XXXXXXXX COMPANY
WARNACO VENTURES LTD.
VENTURES LTD.
A.B.S. CLOTHING COLLECTION, INC.
WARNACO INTERNATIONAL, L.L.C.
AUTHENTIC FITNESS RETAIL INC.
AUTHENTIC FITNESS ON-LINE, INC.
CCC ACQUISITION CORP.
CCC ACQUISITION REALTY CORP.
UBERTECH PRODUCTS, INC.
WARNACO PUERTO RICO, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President and Secretary
MYTRLE AVENUE, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Assistant Treasurer
XXXXXXX STREET, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Treasurer
PENHALIGON'S BY REQUEST, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Attorney-in-Fact
XXXXX VISTA DE TLAXCALA, S.A. DE C.V.
WAC INTERNATINAL DISTRIBUCION DE PUEBLA, S.A. DE C.V.
CENTRO DE CORTE TETLA, S.A. DE C.V.
VISTA DE HUAMANTLA, S.A. DE C.V.
VISTA DE PUEBLA, S.A. DE C.V.
XXXXX VISTA DE VERACRUZ, S.A. DE C.V.
OLGUITA DE MEXICO, S.A. DE C.V.
JUARMEX, S.A. DE C.V.
AUTHENTIC FITNESS DE MEXICO, S.A. DE C.V.
VISTA DE YUCATAN, S.A. DE X.X.
XXXXXX'X DE MEXICO, S.A. DE C.V.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Director
WARNACO (HK) LTD
PENHALIGON'S LIMITED
PENHALIGON'S PACIFIC LIMITED
AUTHENTIC FITNESS (HK) LTD
G.J.M. (H.K.) MANUFACTURING LIMITED
DESIGNER HOLDINGS OVERSEAS LIMITED
WARNER'S AIGLON S.A.
WARNACO FRANCE SARL
EURALIS S.A.S.
LEJABY S.A.S.
XXXXXX XXXXX FRANCE S.N.C.
IZKA S.C.
PMJ S.A.
WARNACO OF CANADA COMPANY
AUTHENTIC FITNESS OF CANADA INC.
WARNACO LAC ONE GMBH
WARNACO LAC TWO GMBH
ERATEX-WARNACO LAC TWO GMBH & CO. KG
WARNER'S (UNITED KINGDOM) LIMITED
PENHALIGON'S & JEAVONS INVESTMENT COMPANY LIMITED
MULMKION B.V.
DONATEX-WARNACO X.X.
XXXXXX'X COMPANY (BELGIUM)
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Director
WARNACO HOLLAND B.V.
WARNACO NETHERLANDS B.V.
WARNACO B.V.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Director
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Director
Agreed as of the date first above written:
THE BANK OF NOVA SCOTIA CITICORP USA, INC.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxxx
------------------------------ --------------------------------
Title: Managing Director Title: Vice President
By: /s/ Xxxx XxXxx
------------------------------ SOCIETE GENERALE
Title: Director
By: /s/ Xxxxx Xxxxxx
--------------------------------
XXXXXX GUARANTY TRUST Title: Director
COMPANY OF NEW YORK
By: /s/ Houston X. Xxxxxxxx SCOTIABANK EUROPE PLC
------------------------------
Title: Vice President By: /s/ Xxxx Xxxxxx
--------------------------------
Title: Director
COMMERZBANK AG, NEW YORK &
GRAND CAYMAN BRANCHES
XXX XXX COMMERCIAL BANK, LTD.,
By: /s/ Xxxxxx Xxxxxxx LOS ANGELES BRANCH
------------------------------
Title: Senior Vice President By: /s/ Xxxxxx Xxxxx
--------------------------------
By: /s/ Xxxxx Xxxxx Title: General manager
-------------------------------
Title: Assistant Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
SUNTRUST BANK By: /s/ Xxxxxx Haubaugh
---------------------------------
By: /s/ Xxxxx Xxxxxxxxx Title: Senior Vice President
-------------------------------
Title: Managing Director
FLEET NATIONAL BANK
THE BANK OF NEW YORK By: /s/ Xxxxx Xxxxx
--------------------------------
By: /s/ Xxxxx Xxxxxxxx Title: Senior Vice President
------------------------------
Title: Vice President
THE DAI-ICHI KANGYO BANK, LIMITED
BANK OF AMERICA, N.A. By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
By: /s/ Xxxxx Xxxxxxx Title: Senior Vice President
------------------------------
Title: Principal
SCOTIA CAPITAL (USA) INC.
XXXXXX BANK PLC By: /s/ X. Xxxxxxxxx
--------------------------------
By: /s/ Xxxxxxx Xxxxx Title: Chief Operating Officer
Xxxxxxx Xxxxxxxx
------------------------------
Title: Senior Vice Presidents XXX XXXX XX XXXX XXXXXX, XXXX XXXX
BRANCH
FIRST UNION NATIONAL BANK By: /s/ Xxxxxxx Xxxxxx
--------------------------------
By: /s/ Xxxxxx Canberra Title: Vice President & Manager
------------------------------
Title: Senior Vice President
BANK LEUMI USA
By: /s/ Xxxxx Xxx Hong
------------------------------
Title: Vice President
Schedule I to
Letter Waiver
Letters of Credit
WEEK ENDING WEEK ENDING
APRIL 6, 2001 APRIL 16, 2001
------------- --------------
DOMESTIC $16,622,000 $7,200,000
FOREIGN $9,156,000 $8,031,000
TOTAL $25,778,000 $15,231,000
Note: week ending April 6, 2001 includes $14,286,000 from week ending
March 30, 2001 due to restriction on issuance that week.
Exhibit A to
Letter Waiver
Certain Assets
Costa Rica Assets
Paris Apartment
