AMENDMENT, MODIFICATION, RESTATEMENT AND
GENERAL PROVISIONS AGREEMENT
dated as of October 6, 2000
among
THE WARNACO GROUP, INC.,
WARNACO INC.,
THE OTHER SUBSIDIARIES OF THE WARNACO GROUP, INC.
PARTY HERETO,
THE BANK OF NOVA SCOTIA and CITIBANK, N.A.,
as Debt Coordinators,
THE BANK OF NOVA SCOTIA,
as Administrative Agent
and
STATE STREET BANK AND TRUST COMPANY,
as Collateral Trustee
TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Definitions...........................................................................1
SECTION 1.2 Accounting Terms......................................................................1
ARTICLE II
AMENDMENTS AND MODIFICATIONS TO THE EXISTING FACILITIES; PROVISIONS
APPLICABLE TO THE COVERED FACILITIES AND THE LOAN DOCUMENTS
SECTION 2.1 Amendment, Modification and Restatement...............................................2
SECTION 2.2 Commitment Termination; Committed Facilities; Maturity Date...........................2
SECTION 2.3 Use of Proceeds.......................................................................2
SECTION 2.4 Interest Rate; Commitment/Facility Fees...............................................2
SECTION 2.5 Affirmative Covenants.................................................................4
SECTION 2.6 Negative Covenants...................................................................10
SECTION 2.7 Financial Covenants..................................................................21
SECTION 2.8 Reporting Requirements...............................................................23
SECTION 2.9 Mandatory Payments...................................................................25
SECTION 2.10 Release of Collateral................................................................26
SECTION 2.11 Increased Costs, Etc.................................................................26
SECTION 2.12 Taxes................................................................................28
SECTION 2.13 Payments and Computations............................................................31
SECTION 2.14 Certain Post-Closing Matters.........................................................31
SECTION 2.15 Successor Agent......................................................................32
SECTION 2.16 Certain Amendments...................................................................32
ARTICLE III
CONDITIONS OF LENDING AND EXTENSIONS OF CREDIT
SECTION 3.1 Conditions Precedent to Each Credit Extension........................................35
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties of the Loan Parties...................................36
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.1 Events of Default....................................................................43
ARTICLE VI
CONDITIONS OF EFFECTIVENESS
SECTION 6.1 Conditions of Effectiveness..........................................................47
SECTION 6.2 Determinations Under Section 6.1.....................................................53
ARTICLE VII
EFFECTIVE DATE PAYMENTS AND COMMITMENT REDUCTIONS
SECTION 7.1 Facility Reductions..................................................................53
SECTION 7.2 Extension Fee........................................................................54
ARTICLE VIII
THE DEBT COORDINATORS, ADMINISTRATIVE AGENT AND COLLATERAL TRUSTEE
SECTION 8.1 Duties...............................................................................54
SECTION 8.2 Costs and Expenses...................................................................55
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Notices, Etc.........................................................................55
SECTION 9.2 Amendments...........................................................................56
SECTION 9.3 No Waiver; Remedies..................................................................56
SECTION 9.4 Execution in Counterparts............................................................56
SECTION 9.5 Binding Effect.......................................................................56
SECTION 9.6 Jurisdiction; Process Agent; Judgment Currency; Waiver of Immunities;
Etc..................................................................................56
SECTION 9.7 Governing Law........................................................................58
SECTION 9.8 Waiver of Jury Trial.................................................................58
SECTION 9.9 Appointment and Acknowledgment.......................................................58
SECTION 9.10 Conflict with Other Agreements.......................................................59
SECTION 9.11 Foreign Subsidiary Collateral Limitation.............................................59
AMENDMENT, MODIFICATION, RESTATEMENT AND GENERAL PROVISIONS
AGREEMENT (this "Agreement") dated as of October 6, 2000 among The Warnaco
Group, Inc. ("Group"), Warnaco Inc. ("Warnaco"), the other direct and indirect
Subsidiaries of Group party hereto from time to time, The Bank of Nova Scotia
("Scotiabank"), as Administrative Agent (the "Administrative Agent"), Scotiabank
and Citibank, N.A. ("Citibank"), as Debt Coordinators (the "Debt Coordinators"),
for themselves and as representative of each of the Lender Parties, and STATE
STREET BANK AND TRUST COMPANY, as Collateral Trustee (the "Collateral Trustee").
RECITALS
A. Group and certain of its Subsidiaries have entered into that certain
Intercreditor Agreement dated as of the date hereof (the "Intercreditor
Agreement") with Scotiabank and Xxxxxxx Xxxxx Xxxxxx Inc. ("SSBI"), as Lead
Arrangers, Scotiabank, SSBI, Xxxxxx Guaranty Trust Company of New York,
Commerzbank A.G. and Societe Generale, as Arrangers and the other financial
institutions from time to time parties thereto.
B. The parties desire to enter into this Agreement to, among other
things, (a) amend, modify, restate and, in certain cases, extend the Existing
Facilities in accordance with the terms and conditions set forth in this
Agreement, (b) provide for certain common terms to be applicable to both the
Existing Facilities and the New Facilities and (c) provide for the giving of
certain guarantees and the granting of security interests in certain collateral
as security for the Obligations of the Loan Parties under the Covered
Facilities.
NOW, THEREFORE, in consideration of the premises and for other
valuable consideration, the receipt and sufficiency of which the parties
acknowledge, the parties agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Definitions. As used in this Agreement, terms have
the meanings as specified in Part I of Annex A hereto, and the rules of
interpretation and construction set forth in Part II of such Annex A shall
apply.
SECTION 1.2 Accounting Terms. All accounting terms not
specifically defined herein shall be construed, and all covenants and other
financial calculations shall be made (except to the extent explicitly provided
herein), in accordance with generally accepted accounting principles as in
effect on the Effective Date ("GAAP"); provided that all effects resulting from
any change in GAAP relating to the Equity Derivatives enacted prior to the
Effective Date shall be eliminated from all covenant and financial calculations.
ARTICLE II
AMENDMENTS AND MODIFICATIONS TO THE EXISTING FACILITIES;
PROVISIONS APPLICABLE TO THE COVERED FACILITIES
AND THE LOAN DOCUMENTS
SECTION 2.1 Amendment, Modification and Restatement. On and as
of the Effective Date, upon satisfaction of the conditions specified in Article
VI hereof, each of the Existing Facilities is hereby amended and modified as
provided in this Agreement, with the affirmative, negative and financial
covenants and undertakings corresponding to affirmative, negative and financial
covenants (including those covenants and undertakings in respect of the
providing of guarantees or the pledge of collateral), reporting requirements,
mandatory prepayment requirements, collateral release provisions, increased cost
provisions, tax gross-up provisions, allocation of prepayment provisions,
provisions related to market disruption and illegality events, representations
and warranties, and event of default provisions (other than those relating to
payment defaults) of each Covered Facility being replaced and superseded by the
terms and provisions of this Agreement and the other Loan Documents (provided
that those provisions in the Existing Facilities which require L/C Related Liens
be created or incurred in applicable circumstances shall continue in full force
and effect and provided, further, that the terms of the Equity Derivatives shall
continue in full force and effect), and each such Existing Facility shall
thereupon be deemed to be restated in its entirety as in effect immediately
prior to the effectiveness of this Agreement and as amended and modified hereby.
All existing guarantees by any Warnaco Entity under any Covered Facility are
hereby amended and restated in their entirety by the Subsidiary Guaranty or the
Parent Guaranty, as the case may be.
SECTION 2.2 Commitment Termination; Committed Facilities;
Maturity Date. The commitment termination date or, as applicable, maturity date
for each loan and other credit extension under each of the Extending Facilities,
shall be extended to the Termination Date; provided that the Loans, Acceptances
and reimbursement obligations under (and as defined in) the Trade Credit
Facility shall continue to be payable in accordance with the terms of the Trade
Credit Facility. Uncommitted Facilities shall become committed facilities as of
the Effective Date and shall mature on the Termination Date, subject to the
limitations set forth on Schedule 7.1. The commitment termination date or, as
applicable, maturity date for each loan and other credit extension under each of
the other Existing Facilities shall remain unchanged.
SECTION 2.3 Use of Proceeds. The proceeds of all loans,
letters of credit, bankers' acceptances and other credit extensions under each
Existing Facility shall be used solely as specified in such Existing Facility.
SECTION 2.4 Interest Rate; Commitment/Facility Fees. (a)
Notwithstanding anything in the Covered Facilities to the contrary, with respect
to each of the Existing Facilities, the "Applicable Margin" (or other
designation for the percentage margin per annum over the applicable rate of
interest in such Existing Facility) and (ii), the fees for issuing standby
letters of
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credit, bankers' acceptances and bankers guarantees, shall in each case be
amended to mean, for any date, a percentage per annum determined by the Debt
Rating in effect on such date as set forth below:
-------------------------------------------------------------------------------------------------------------------------
Standby Letter of Credit Fees;
Base Rate Bankers' Guarantee/
or Acceptance Fees;
Rating Prime Rate Eurodollar Rate Advances;
Level Debt Rating Advances Equity Derivative Notes
-------------------------------------------------------------------------------------------------------------------------
Level 1 BBB+ or Baa1 or higher 0.25% 1.25%
-------------------------------------------------------------------------------------------------------------------------
Level 2 BBB or Baa2 or higher 0.50% 1.50%
-------------------------------------------------------------------------------------------------------------------------
Xxxxx 0 XXX- xxx Xxx0 or higher 0.75% 1.75%
-------------------------------------------------------------------------------------------------------------------------
Level 4 BBB- or higher and Ba1, 1.00% 2.00%
or Baa3 or higher and
BB+
-------------------------------------------------------------------------------------------------------------------------
Xxxxx 0 BB+ and Ba1 or higher 1.50% 2.50%
-------------------------------------------------------------------------------------------------------------------------
Level 6 BB or Ba2 or higher 2.00% 3.00%
-------------------------------------------------------------------------------------------------------------------------
Xxxxx 0 Xxxxx xxxx XX xx Xx0 2.50% 3.50%
-------------------------------------------------------------------------------------------------------------------------
provided that (i) until the date which is 6 months after the Effective Date,
Level 4 pricing shall apply if the Debt Rating otherwise qualifies as Xxxxx 0, 0
xx 0, (xx) each of the foregoing percentages applicable to Levels 5, 6 and 7
will increase by 0.50% starting on the date which is 12 months after the
Effective Date, such increase to be effective for the period during which
Designated Capital Markets Transactions yielding Net Cash Proceeds of
$300,000,000 or more have not occurred and (iii) for the period of time
following the occurrence and during the continuance of an Event of Default, each
of the foregoing percentages (after giving effect to any other increase then in
effect) will increase by an additional 2.00% per annum.
(b) With respect to each of the Existing Facilities, the fees
payable with respect to documentary letters of credit shall be amended
to mean, for any date, a percentage per annum determined by the Debt
Rating in effect on such date as set forth below:
-------------------------------------------------------------------------------------------------------------------------
Rating Applicable
Level Debt Rating Percentage
-------------------------------------------------------------------------------------------------------------------------
Level 1 BBB+ or Baa1 or higher 0.375%
-------------------------------------------------------------------------------------------------------------------------
Level 2 BBB or Baa2 or higher 0.450%
-------------------------------------------------------------------------------------------------------------------------
Xxxxx 0 XXX- xxx Xxx0 or higher 0.525%
-------------------------------------------------------------------------------------------------------------------------
Level 4 BBB- or higher and Ba1, 0.600%
or Baa3 or higher and BB+
-------------------------------------------------------------------------------------------------------------------------
Xxxxx 0 BB+ and Ba1 or higher 0.750%
-------------------------------------------------------------------------------------------------------------------------
Level 6 BB or Ba2 or higher 1.000%
-------------------------------------------------------------------------------------------------------------------------
Xxxxx 0 Xxxxx xxxx XX xx Xx0 1.250%
-------------------------------------------------------------------------------------------------------------------------
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provided that (i) until the date which is 6 months after the Effective Date,
Level 4 pricing shall apply if the Debt Rating otherwise qualifies as Xxxxx 0, 0
xx 0 xxx (xx) for the period of time following the occurrence and during the
continuance of an Event of Default, each of the foregoing percentages (after
giving effect to any other increase then in effect) will increase by an
additional 2.00% per annum.
(c) With respect to (i) each of the Revolving Facilities and
(ii) the Trade Credit Facility, the "facility fee" or "commitment fee",
as applicable, (or other designation for the fee paid based on the
unused portion of the revolving or letter of credit commitments
thereunder) shall be amended to mean a percentage per annum determined
by the Debt Rating in effect on such date as set forth below:
-------------------------------------------------------------------------------------------------------------------------
Rating Applicable
Level Debt Rating Percentage
-------------------------------------------------------------------------------------------------------------------------
Level 1 BBB+ or Baa1 or higher 0.25%
-------------------------------------------------------------------------------------------------------------------------
Level 2 BBB or Baa2 or higher 0.30%
-------------------------------------------------------------------------------------------------------------------------
Xxxxx 0 XXX- xxx Xxx0 or higher 0.35%
-------------------------------------------------------------------------------------------------------------------------
Level 4 BBB- or higher and Ba1, or 0.40%
Baa3 or higher and BB+
-------------------------------------------------------------------------------------------------------------------------
Xxxxx 0 BB+ and Ba1 or higher 0.50%
-------------------------------------------------------------------------------------------------------------------------
Level 6 BB or Ba2 or higher 0.625%
-------------------------------------------------------------------------------------------------------------------------
Xxxxx 0 Xxxxx xxxx XX xx Xx0 0.75%
-------------------------------------------------------------------------------------------------------------------------
provided that until the date which is 6 months after the Effective Date, Level 4
pricing shall apply if the Debt Rating otherwise qualifies as Level 1, 2 or 3.
SECTION 2.5 Affirmative Covenants. Until the Debt Termination
Date, each respective Loan Party agrees as follows:
(a) Compliance with Laws, Etc. It will comply, and cause each
of its Subsidiaries to comply, in all material respects, with all
applicable laws, rules, regulations and orders, such compliance to
include, without limitation, compliance with ERISA and Environmental
Laws, except where the failure to so comply would not reasonably be
expected to have a Material Adverse Effect.
(b) Payment of Taxes, Etc. It will pay and discharge, and
cause each of its Subsidiaries to pay and discharge, before the same
shall become delinquent, (i) all taxes (excluding state and local taxes
that are not material), assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all taxes and other
lawful claims that, if unpaid, might by law become a Lien upon its
property; provided, however, that neither Group nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained in accordance with GAAP, unless and until any Liens
resulting therefrom attach to its property and become
4
enforceable against its other creditors so long as any such amount
shall not exceed $10,000,000 in the aggregate.
(c) Compliance with Environmental Laws. It will comply, and
cause each of its Subsidiaries and all lessees and other Persons
operating or occupying its properties to comply, in all material
respects, with all applicable Environmental Laws and Environmental
Permits; obtain and renew and cause each of its Subsidiaries to obtain
and renew all material Environmental Permits necessary for its
operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of
its properties, in accordance with and to the extent required by all
applicable Environmental Laws; provided, however, that neither Group
nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect
to such circumstances.
(d) Maintenance of Insurance. It will maintain, and cause each
of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations (I) in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning properties in the same general areas in
which Group or such Subsidiary operates and (ii) as otherwise specified
in Section 11 of the Security Agreement and in Section 1.05 of each
Mortgage.
(e) Preservation of Corporate Existence, Etc. It will preserve
and maintain, and cause each of its Subsidiaries to preserve and
maintain, its existence, legal structure, legal name, rights (charter
and statutory), permits, licenses, approvals, privileges and franchises
(except for the failure to pay any franchise tax, which failure is
promptly cured); provided, however, that Group and its Subsidiaries may
consummate any merger or consolidation permitted under Section 2.6(c);
and provided further that neither Group nor any of its Subsidiaries
shall be required to preserve any right, permit, license, approval,
privilege or franchise if the Board of Directors of Group or such
Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of the business of Group or such Subsidiary,
as the case may be, and that the loss thereof is not disadvantageous in
any material respect to Group, such Subsidiary or the Lender Parties.
(f) Visitation Rights. It will at any reasonable time and from
time to time, permit any of the Agents or any of the Lender Parties, or
any agents or representatives thereof, upon reasonable notice to Group,
to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, Group and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of
Group and any of its Subsidiaries with any of their officers or
directors and, in the presence of any officer or director of Group,
with their independent certified public accountants.
5
(g) Keeping of Books. It will keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which full
and correct entries shall be made of all financial transactions and the
assets and business of Group and each such Subsidiary in accordance
with GAAP.
(h) Maintenance of Properties, Etc. It will maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve,
all of its properties that are used or useful in the conduct of its
business in good working order and condition, ordinary wear and tear
excepted.
(i) Compliance with Terms of Leaseholds. It will (i) make all
payments and otherwise perform all obligations in respect of all leases
of real property to which Group or any of its Subsidiaries is a party,
(ii) keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to
be forfeited or cancelled, (iii) notify the Administrative Agent of any
default by any party with respect to such leases and cooperate with the
Debt Coordinators in all respects to cure any such default, and (iv)
cause each of its Subsidiaries to do so, except, in any of the
foregoing clauses (i) through (iv), where the failure to do so, either
individually or in the aggregate, would not be reasonably likely to
have a Material Adverse Effect.
(j) Transactions with Affiliates. It will conduct, and cause
each of its Subsidiaries to conduct, other than with respect to
transactions among Group and/or any Subsidiaries, all transactions
otherwise permitted under the Loan Documents with any of their
Affiliates on terms that are no less favorable to it or such Subsidiary
than it would obtain in a comparable arm's-length transaction with a
Person not an Affiliate, provided, however, that the foregoing
restriction shall not apply to transactions pursuant to any agreement
referred to in Section 2.6(a)(iv), and provided further that no Loan
Party shall engage in any transaction with any other Loan Party or any
Subsidiary of a Loan Party that would render such Loan Party or
Subsidiary insolvent or cause a default under, or a breach of, any
material contract to which such Loan Party or Subsidiary is a party.
(k) Covenant to Guarantee Obligations and Give Security. Upon
the (v) formation or acquisition of any Domestic Subsidiaries by Group
or any of its Domestic Subsidiaries after the Effective Date, (w)
formation or acquisition of any Included Foreign Subsidiary by Group or
any of its Subsidiaries after the Effective Date, (x) receipt of notice
by the Administrative Agent pursuant to Section 2.8(i) to the effect
that a Foreign Subsidiary has, during the period described in such
notice, become an Included Foreign Subsidiary, (y) acquisition after
the Effective Date of any property by any Credit Party (other than
Excluded Property), and such property, in the judgment of the Debt
Coordinators, shall not already be subject to a perfected first
priority security interest in favor of the Collateral Trustee for the
benefit of the Secured Parties or (z), with respect to clause (vii)
below, upon the request of the Debt Coordinators after the occurrence
and during the continuance of a Default, then Group will, or will cause
its Subsidiaries to, in each case at such Credit Party's expense:
6
(i) in connection with the formation or acquisition
of a Subsidiary, or a Foreign Subsidiary becoming an Included
Foreign Subsidiary, in each case as specified above, within 30
days after such formation or acquisition, or in the case of
clause (x) above, within 30 days after the delivery of such
notice, cause each such (A) Domestic Subsidiary to duly
execute and deliver to the Collateral Trustee a Domestic
Subsidiary Guaranty Supplement and (B) Included Foreign
Subsidiary to duly execute and deliver to the Collateral
Trustee a guaranty or guaranty supplement, in form and
substance reasonably satisfactory to the Debt Coordinators,
guaranteeing such of the other Foreign Subsidiaries'
Obligations under those Loan Documents and Covered Facilities
the result of which, in each case under this clause (B), is
reasonably determined by the Debt Coordinators to not impose
any material adverse tax consequences on Group and its
Subsidiaries, taken as a whole; provided that the Debt
Coordinators may extend the 30 day time periods specified in
this subsection (i) by up to an additional 45 days if
requested by Group,
(ii) within 30 days after such formation or
acquisition, or in the case of clause (x) above, within 30
days after the delivery of such notice, furnish to the
Collateral Trustee a description of the real and personal
properties of such Domestic Subsidiary or Included Foreign
Subsidiary and their respective Subsidiaries in Included
Foreign Jurisdictions in detail reasonably satisfactory to the
Debt Coordinators,
(iii) within 60 days after such formation or
acquisition, or in the case of clause (x) above, within 60
days after the delivery of such notice, cause such Domestic
Subsidiary or Included Foreign Subsidiary to duly execute and
deliver, (A) and cause each such Domestic Subsidiary and (with
respect to stock pledges) each direct and indirect parent of
such Domestic Subsidiary and each Included Foreign Subsidiary
(if it has not already done so) to duly execute and deliver,
to the Collateral Trustee mortgages with respect to Material
Real Property, lease assignments or mortgages with respect to
Material Leased Property, pledges, security agreement
supplements, intellectual property security agreement
supplements and other security agreements, all as specified by
and in form and substance reasonably satisfactory to the Debt
Coordinators, securing payment of all the Obligations of the
applicable Credit Party under the Loan Documents and the
Covered Facilities (provided that none of such agreements
shall cover Excluded Property) and (B) with respect to each
first-tier Foreign Subsidiary of Group or such Domestic
Subsidiary, to the Collateral Trustee a pledge of 66% of the
shares of capital stock (or other Equity Interests) of such
first-tier Foreign Subsidiary, securing payment of all the
Obligations of Group or the applicable Domestic Subsidiary
under the Loan Documents and the Covered Facilities; provided
that the Debt Coordinators may extend the 60 day time periods
specified in this subsection (iii) by up to an additional 45
days if requested by Group,
7
(iv) within 60 days after such formation or
acquisition, or in the case of clause (x) above, within 60
days after the delivery of such notice, take, and cause such
Credit Party to take, whatever action (including, without
limitation, the recording of mortgages, the filing of Uniform
Commercial Code financing statements, the giving of notices
and the endorsement of notices on title documents) may be
necessary or advisable in the reasonable judgment of the Debt
Coordinators to vest in the Collateral Trustee (or in any
representative of the Collateral Trustee designated by it)
valid and subsisting Liens on the properties purported to be
subject to the mortgages, pledges, assignments, security
agreement supplements, intellectual property security
agreement supplements and security agreements delivered
pursuant to this Section 2.5(k), enforceable against all third
parties in accordance with their terms; provided that the Debt
Coordinators may extend the 60 day time periods specified in
this subsection (iv) by up to an additional 45 days if
requested by Group,
(v) within 60 days after such formation or
acquisition, or in the case of clause (x) above, within 60
days after the delivery of such notice, deliver to the
Collateral Trustee, upon the request of the Debt Coordinators
in their sole discretion, a signed copy of a favorable
opinion, addressed to the Collateral Trustee and the other
Secured Parties, of counsel for the Credit Parties acceptable
to the Debt Coordinators as to the matters contained in
clauses (i) and (iii) above, as to such guaranties, guaranty
supplements, mortgages, pledges, assignments, security
agreement supplements, intellectual property security
agreement supplements and security agreements being legal,
valid and binding obligations of each Credit Party thereto
enforceable in accordance with their terms, as to the matters
contained in clause (iv) above, as to such recordings,
filings, notices, endorsements and other actions being
sufficient to create valid perfected Liens on such properties,
and as to such other matters as the Debt Coordinators may
reasonably request; provided that the Debt Coordinators may
extend the 60 day time periods specified in this subsection
(v) by up to an additional 45 days if requested by Group,
(vi) within 60 days after such formation or
acquisition, or in the case of clause (x) above, within 60
days after the delivery of such notice, deliver, upon the
reasonable request of the Debt Coordinators, to the Collateral
Trustee with respect to each parcel of Material Real Property
owned, or Material Leased Property held, by the entity that is
the subject of such request, formation or acquisition, such
documents and reports of the type specified in Section
6.1(a)(v) hereof and (if available) engineering, soils,
environmental assessment and other reports, each in scope,
form and substance reasonably satisfactory to the Debt
Coordinators, provided however that to the extent that Group
or any of its Subsidiaries shall have otherwise received any
of the foregoing items with respect to such Material Real
Property or Material Leased Property, such items shall,
promptly after the receipt
8
thereof, be delivered to the Debt Coordinators; provided
further that the Debt Coordinators may extend the 60 day time
periods specified in this subsection (vi) by up to an
additional 45 days if requested by Group,
(vii) upon request of the Debt Coordinators after the
occurrence and during the continuance of a Default, (A)
promptly cause to be deposited any and all cash dividends paid
or payable to it or any of its Subsidiaries from any of its
Subsidiaries from time to time into the Collateral Account,
and (B) with respect to all other dividends paid or payable to
it or any of its Subsidiaries from time to time, promptly
execute and deliver, or cause such Subsidiary to promptly
execute and deliver, as the case may be, any and all further
instruments and take or cause such Subsidiary to take, as the
case may be, all such other action as the Debt Coordinators
may deem necessary or desirable in order to obtain and
maintain from and after the time such dividend is paid or
payable a perfected, first priority Lien on and security
interest in such dividends, and
(viii) at any time and from time to time, promptly
execute and deliver any and all further instruments and
documents (including, to the extent not previously delivered,
a supplement to this Agreement, in form and substance
reasonably acceptable to the Debt Coordinators) and take all
such other action as the Debt Coordinators may deem reasonably
necessary or desirable in obtaining the full benefits of, or
in perfecting and preserving the Liens of, such guaranties,
mortgages, pledges, assignments, security agreement
supplements, intellectual property security agreement
supplements and security agreements.
(l) Further Assurances. Group will promptly upon request by
any Lender Party through the Debt Coordinators (i) correct, and cause
each of its Subsidiaries promptly to correct, any material defect or
error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (ii) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, conveyances, pledge
agreements, mortgages, deeds of trust, trust deeds, assignments,
financing statements and continuations thereof, termination statements,
notices of assignment, transfers, certificates, assurances and other
instruments as any Lender Party through the Debt Coordinators, may
reasonably require from time to time in order to (A) carry out more
effectively the purposes of the Loan Documents, (B) to the fullest
extent permitted by applicable law, subject any Credit Party's
properties, assets, rights or interests (other than Excluded Property)
to the Liens now or hereafter intended to be covered by any of the
Collateral Documents, (C) perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and any
of the Liens intended to be created thereunder and (D) assure, convey,
grant, assign, transfer, preserve, protect and confirm more effectively
unto the Secured Parties the rights granted or now or hereafter
intended to be granted to the Secured Parties under any Loan Document
or under any other instrument executed in connection with any Loan
Document to which any Credit Party is or is to be a party, and cause
each of its Subsidiaries which is a Credit
9
Party to do so.
(m) Preparation of Environmental Reports. At the request of
the Debt Coordinators from time to time after receipt of a notice of
the type specified in Section 2.8(j), Group will provide to the Lender
Parties within 60 days after such request, at its own expense, an
environmental assessment report for the applicable property described
in such notice, prepared by an environmental consulting firm reasonably
acceptable to the Debt Coordinators, indicating the presence of
Hazardous Materials that could reasonably be expected to give rise to a
material liability and the estimated cost of any compliance, removal or
remedial action in connection with any Hazardous Materials that could
reasonably be expected to give rise to a material liability on such
properties; without limiting the generality of the foregoing, if the
Debt Coordinators determine at any time that a material risk exists
that any such report will not be provided within the time referred to
above, the Debt Coordinators may retain an environmental consulting
firm to prepare such report at the expense of Group, and Group hereby
grants and agrees to cause any Subsidiary that owns any property
described in such request to grant at the time of such request to the
Debt Coordinators, such firm and any agents or representatives thereof
an irrevocable non-exclusive license, subject to the rights of tenants,
to enter onto their respective properties to undertake such an
assessment, and to, or to cause its Subsidiaries to, cooperate in all
reasonable respects with the preparation of such assessment.
SECTION 2.6 Negative Covenants. Until the Debt Termination
Date, each respective Loan Party agrees as follows:
(a) Liens, Etc. Group will not create, incur, assume or suffer
to exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Lien on or with respect to any of its properties
of any character (including, without limitation, accounts) whether now
owned or hereafter acquired, or sign or file or suffer to exist, or
permit any of its Subsidiaries to sign or file or suffer to exist,
under the Uniform Commercial Code of any jurisdiction, a financing
statement that names any Loan Party or any of its Subsidiaries as
debtor, or sign or suffer to exist, or permit any of its Subsidiaries
to sign or suffer to exist, any security agreement authorizing any
secured party thereunder to file such financing statement, or assign,
or permit any of its Subsidiaries to assign, any accounts or other
right to receive income, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described
on Schedule 4.1(t) hereto, and the replacement or renewal of
any such Lien upon or in the same property theretofore subject
to such Lien, together with the replacement, extension or
renewal (without increase in the amount or change in any
direct or contingent obligor) of the Debt secured thereby;
10
(iv) Liens on receivables of any kind (and in
property securing or otherwise supporting such receivables)
not in excess of $10,000,000 in the aggregate in connection
with agreements for limited recourse sales or financings by
Group or any of its Subsidiaries for cash of such receivables
or interests therein, provided that (A) any such agreement is
of a type and on terms customary for comparable transactions
in the good faith judgment of the Board of Directors of Group
and (B) such transaction does not create any interest in any
asset other than receivables (and property securing or
otherwise supporting such receivables), related general
intangibles and proceeds of the foregoing,
(v) purchase money Liens upon or in real property or
equipment acquired or held by Group or any of its Subsidiaries
in the ordinary course of business to secure the purchase
price of such property or equipment or to secure Debt incurred
solely for the purpose of financing the acquisition of any
such property or equipment to be subject to such Liens or
incurred in connection with a Specified Sale-Leaseback
Transaction, or Liens existing on any such property or
equipment at the time of acquisition (other than any such
Liens created in contemplation of such acquisition that do not
secure the purchase price), or extensions, renewals or
replacements of any of the foregoing for the same or a lesser
amount; provided, however, that no such Lien shall extend to
or cover any property other than the property or equipment
being acquired and the proceeds thereof, and no such
extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended,
renewed or replaced; and provided further that the aggregate
principal amount of the Debt secured by Liens permitted by
this clause (v) shall not exceed the amount permitted under
Section 2.6(b)(iii) at any time outstanding;
(vi) Liens securing Capitalized Leases;
(vii) any interest or title of a lessor, and Liens
arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating
to leases permitted by the Loan Documents;
(viii) Liens securing the Securitization Facility;
(ix) L/C Related Liens; and
(x) other Liens securing obligations in an
amount not to exceed $10,000,000 in an aggregate amount
outstanding at any time.
(b) Debt. Group will not create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Debt, except:
11
(i) Debt under the Covered Facilities; provided that
all New Facilities will be subject to the approval procedures
specified in Section 2.4 of the Intercreditor Agreement,
(ii) Designated Capital Markets Transactions,
(iii) Debt secured by Liens permitted by Section
2.6(a)(v) not to exceed in the aggregate $5,000,000 at any
time outstanding,
(iv) Capitalized Leases not to exceed in the
aggregate $15,000,000 at any time outstanding,
(v) Debt in respect of Hedge Agreements designed to
hedge against fluctuations in interest rates or foreign
exchange rates incurred in the ordinary course of business and
consistent with prudent business practice,
(vi) Debt owing by any U.S. Credit Party to (or
Contingent Obligations made in respect of the obligations of
any U.S. Credit Party by) any other U.S. Credit Party, (x)
which Debt shall constitute Pledged Debt and (y) any
promissory notes evidencing such Pledged Debt shall be pledged
as security for the Obligations of the holder thereof under
the Loan Documents to which such holder is a party and
delivered to the Collateral Trustee pursuant to the terms of
the Security Agreement,
(vii) Debt owing by any Foreign Subsidiary to (or
Contingent Obligations made in respect of the obligations of
any Foreign Subsidiary by) any U.S. Credit Party, not to
exceed in the aggregate $10,000,000 at any time outstanding
under this clause (vii), which Debt, in the case of any
Foreign Credit Party, (x) shall constitute Pledged Debt and
(y) any promissory notes relating to such Debt (which shall be
prepared in certificated form if determined in the reasonable
judgment of the Debt Coordinators to be necessary or advisable
under applicable law to vest in the Collateral Trustee a valid
and subsisting Lien on such Debt) shall be pledged as security
for the Obligations of the holder thereof under the Loan
Documents to which such holder is a party and delivered to the
Collateral Trustee pursuant to the terms of the Collateral
Documents;
(viii) Debt owing by any U.S. Credit Party or any
Foreign Subsidiary to (or Contingent Obligations made in
respect of the obligations of any U.S. Credit Party or any
Foreign Subsidiary by) any Excluded Foreign Subsidiary;
(ix) Debt owing by any Foreign Credit Party to (or
Contingent Obligations made in respect of the obligations of
any Foreign Credit Party by) another Foreign Credit Party,
provided that (A) no such Debt can be incurred after the
occurrence and during the continuance of a Default, (B) such
Debt is otherwise
12
in compliance with Schedule III hereto, (C) such Debt shall
constitute Pledged Debt and (D) any promissory notes relating
to such Debt (which shall be prepared in certificated form if
determined in the reasonable judgment of the Debt Coordinators
to be necessary or advisable under applicable law to vest in
the Collateral Trustee a valid and subsisting Lien on such
Debt) shall be pledged as security for the Obligations of the
holder thereof under the Loan Documents to which such holder
is a party and delivered to the Collateral Trustee pursuant to
the terms of the Collateral Documents;
(x) Debt owing by any Excluded Foreign Subsidiary to
(or Contingent Obligations made in respect of the obligations
of any Excluded Foreign Subsidiary by) any Foreign Credit
Party, not to exceed in the aggregate $10,000,000 at any time
outstanding under this clause (x) and (A) which Debt shall
constitute Pledged Debt and (B) any promissory notes relating
to such Debt (which shall be prepared in certificated form if
determined in the reasonable judgment of the Debt Coordinators
to be necessary or advisable under applicable law to vest in
the Collateral Trustee a valid and subsisting Lien on such
Debt) shall be pledged as security for the Obligations of the
holder thereof under the Loan Documents to which such holder
is a party and delivered to the Collateral Trustee pursuant to
the terms of the Collateral Documents;
(xi) Debt consisting of Contingent Obligations
pursuant to which a U.S. Credit Party guarantees operating
lease obligations of Foreign Subsidiaries, not to exceed in
the aggregate $5,000,000 during any Fiscal Year;
(xii) Debt of any Person that becomes a Subsidiary of
Group after the date hereof in accordance with the terms of
Section 2.6(e)(x) which Debt is existing at the time such
Person becomes a Subsidiary of Group (other than Debt incurred
solely in contemplation of such Person becoming a Subsidiary
of Group); provided that after giving effect to such Debt, the
Leverage Ratio, calculated on a pro-forma basis (and using for
this purpose "Total Bank Outstandings" rather than
"Indebtedness for Borrowed Money" in such calculation) as if
such Debt had been incurred immediately prior to the beginning
of the most recent period of four consecutive Fiscal Quarters
for which financial statements have been delivered hereunder,
will not have increased;
(xiii) Debt in respect of the Securitization
Facility;
(xiv) Debt existing on the date hereof and described
on Schedule 2.6(b), and any Debt extending the maturity of, or
refunding or refinancing, in whole or in part, such Debt
(which, in the case of Debt consisting of guarantees of
operating lease obligations, shall include guarantees of any
replacement leases, provided that the Contingent Obligation
under such guarantees may not increase as a result thereof),
provided that the (A) terms of any such extending, refunding
or
13
refinancing Debt, and of any agreement entered into and of any
instrument issued in connection therewith, are otherwise
permitted by the Loan Documents, (B) principal amount of such
Debt shall not be increased above the principal amount thereof
outstanding immediately prior to such extension, refunding or
refinancing, and the direct and contingent obligors therefor
shall not be changed as a result of or in connection with such
extension, refunding or refinancing and (C) terms relating to
principal amount, amortization, maturity, collateral (if any),
subordination (if any), and other material terms taken as a
whole, of any such extending, refunding or refinancing Debt,
and of any agreement entered into and of any instrument issued
in connection therewith, are no less favorable in any material
respect to the Loan Parties or the Lender Parties than the
terms of any agreement or instrument governing the Debt being
extended, refunded or refinanced and the interest rate
applicable to any such extending, refunding or refinancing
Debt does not exceed the then applicable market interest rate;
and
(xv) Specified Debt.
(c) Mergers, Etc. Group will not merge into or
consolidate with any Person or permit any Person to merge into it, or
permit any of its Subsidiaries to do so, except that:
(i) any Subsidiary of Group may merge into or
consolidate with Group or any Domestic Subsidiary, provided
that, in the case of any such merger or consolidation, the
Person formed by such merger or consolidation shall be a U.S.
Credit Party;
(ii) any Excluded Foreign Subsidiary may merge into
or consolidate with any Foreign Subsidiary, provided that, in
the case of any such merger or consolidation, the Person
formed by such merger or consolidation shall be a Wholly-Owned
Subsidiary of Group;
(iii) any Foreign Credit Party may merge into or
consolidate with any other Foreign Credit Party, provided that
(A) the Person formed by such merger or consolidation shall be
a Foreign Credit Party and (B) such merger or consolidation is
otherwise in compliance with Schedule III hereto;
(iv) in connection with any acquisition permitted
under Section 2.6(e), any (A) Subsidiary of Group may merge
into or consolidate with any other Person or permit any other
Person to merge into or consolidate with it if the Person
surviving such merger shall be a U.S. Credit Party, (B)
Excluded Foreign Subsidiary may merge into or consolidate with
any other Person or permit any other Person to merge into or
consolidate with it if the Person surviving such merger shall
be a Wholly-Owned Subsidiary of Group and (C) Foreign Credit
Party may merge into or consolidate with other Person or
permit any other Person to merge into or consolidate with it
if (1) the Person surviving such merger shall be
14
a Foreign Credit Party and (2) such merger or consolidation
is otherwise in compliance with Schedule III hereto; and
(v) in connection with any sale or other disposition
permitted under Section 2.6(d) (other than clause (ii)
thereof), any Subsidiary of Group may merge into or
consolidate with any other Person or permit any other Person
to merge into or consolidate with it;
provided, however, that in each case under this clause (c), both before and
immediately after giving effect thereto, no event shall occur and be continuing
that constitutes a Default.
(d) Sales, Etc., of Assets. Group will not sell, lease,
transfer or otherwise dispose of, or permit any of its Subsidiaries to
sell, lease, transfer or otherwise dispose of, any assets, or grant any
option or other right to purchase, lease or otherwise acquire any
assets, except:
(i) sales of Inventory in the ordinary course of its
business;
(ii) in a transaction permitted by Section 2.6(c)
(other than clause (v) thereof);
(iii) sales of assets set forth on Schedule
2.6(d)(iii) so long as (A) the purchase price paid to Group or
any of its Subsidiaries for such asset shall be no less than
the fair market value of such asset at the time of such sale
and (B) no less than 85% of the purchase price for such asset
shall be paid to Group or such Subsidiary in cash, and the
Collateral Trustee (on behalf of the Secured Parties) shall
receive a first priority perfected security interest in all
consideration which is not in the form of cash (unless such
consideration is not owned by a Credit Party);
(iv) the sale of any asset or assets by Group or any
of its Subsidiaries so long as (A) the purchase price paid to
Group or such Subsidiary for such asset shall be no less than
the fair market value of such asset at the time of such sale,
(B) no less than 85% of the purchase price for such asset
shall be paid to Group or such Subsidiary in cash, and the
Collateral Trustee (on behalf of the Secured Parties) shall
receive a first priority perfected security interest in all
consideration which is not in the form of cash (unless such
consideration is not owned by a Credit Party), (C) after
giving effect to any such sale, the Leverage Ratio, calculated
on a pro-forma basis (and using for this purpose "Total Bank
Outstandings" rather than "Indebtedness for Borrowed Money" in
such calculation) as if such sale had occurred immediately
prior to the first day of the most recent period of four
consecutive Fiscal Quarters for which financial statements
have been delivered to the Lender Parties pursuant to Section
2.8 or 4.1, will not have increased, (D) after giving effect
to such sale and any associated repayment of debt, Group shall
be in pro forma compliance with the covenants
15
contained in Section 2.7(a) and (b), calculated based on the
financial statements most recently delivered to the Lender
Parties pursuant to Section 2.8 or 4.1 and as though such sale
had occurred at the beginning of the four-quarter period
covered thereby, (E) such sale does not require consent under
applicable corporate law, (F) the Net Cash Proceeds thereof
are applied to the prepayment of the Covered Facilities in
accordance with Section 2.9, (G) neither the seller of such
assets nor any of its Affiliates shall have any subsequent
payment obligations in respect of such sale, other than
customary and standard indemnity obligations and (H) the
aggregate purchase price paid to Group and all of its
Subsidiaries for all assets sold pursuant to this clause (iv)
shall not exceed $25,000,000 in the aggregate;
(v) so long as no Default shall occur and be
continuing, the grant of any option or other right to purchase
any asset in a transaction that would be permitted under the
provisions of this Section 2.6(d);
(vi) transfers of assets from (A) any Foreign
Subsidiary or any U.S. Credit Party to any U.S. Credit Party,
(B) any Excluded Foreign Subsidiary to any Foreign Subsidiary,
(C) any U.S. Credit Party to any Foreign Subsidiary, provided
that the aggregate fair market value of assets sold, leased,
transferred or otherwise disposed of to Foreign Subsidiaries
by U.S. Credit Parties shall not exceed $25,000,000 in the
aggregate, and provided further that no Excluded Intellectual
Property may at any time be transferred to a Foreign
Subsidiary, (D) any Foreign Credit Party to any Excluded
Foreign Subsidiary, provided that the aggregate fair market
value of assets sold, leased, transferred or otherwise
disposed of to Excluded Foreign Subsidiaries by Foreign Credit
Parties shall not exceed $5,000,000 in the aggregate and (E)
any Foreign Credit Party to another Foreign Credit Party,
provided that such sale is otherwise in compliance with
Schedule III hereto;
(vii) the sale or discount of accounts (A) in an
aggregate amount not exceeding $10,000,000 in face amount per
Fiscal Year or (B) that are past due by more than 90 days,
provided that the sale or discount of such accounts is in the
ordinary course of Group's business and consistent with
prudent business practices;
(viii) the licensing of trademarks and trade names by
Group or any of its Subsidiaries in the ordinary course of its
business, provided that such licensing takes place on an
arm's-length basis in the ordinary course of business
consistent with prior practice;
(ix) the rental by Group and its Subsidiaries, as
lessors or sub-lessors, in the ordinary course of their
respective businesses, on an arm's-length basis, of real
property and personal property, in each case under leases
(other than Capitalized Leases);
16
(x) the sale or disposition of machinery and
equipment no longer used or useful in the business of the
Warnaco Entities;
(xi) sales of accounts receivable and related
property under the Securitization Facility; and
(xii) sales of equipment in connection with a
Specified Sale-Leaseback Transaction in an aggregate amount
not exceeding $40,000,000 in each Fiscal Year;
provided that in the case of sales of assets pursuant to clause (iii), (iv),
(vii), (viii), (ix) and (x) above, Group shall, on the date of receipt by it or
any of its Subsidiaries of the Net Cash Proceeds from such sale, pay such Net
Cash Proceeds to the Administrative Agent pursuant to Section 2.9 hereof for
allocation as specified in Section 2.1 of the Intercreditor Agreement.
(e) Investments in Other Persons. Group will not make or hold,
or permit any of its Subsidiaries to make or hold, any Investment in
any Person, except:
(i) Investments by (A) Group and its Subsidiaries in
their Subsidiaries outstanding on the date hereof and
additional investments by (A) Group or any of its Subsidiaries
in U.S. Credit Parties, (B) Excluded Foreign Subsidiaries in
any Subsidiaries of Group, (C) U.S. Credit Parties in Foreign
Subsidiaries in an aggregate amount invested from the date
hereof under this clause (C) not to exceed $5,000,000, (D)
Foreign Credit Parties in Excluded Foreign Subsidiaries in an
aggregate amount invested from the date hereof under this
clause (D) not to exceed $5,000,000, (E) U.S. Credit Parties
in Foreign Subsidiaries, such Investments to be used solely to
permit such Foreign Subsidiaries to comply with statutory
capital requirements under applicable local law, in an
aggregate amount invested from the date hereof under this
clause (E) not to exceed $15,000,000; provided further that no
more than an aggregate of $5,000,000 invested from the date
hereof under this clause (E) may be invested in Excluded
Foreign Subsidiaries and (F) Foreign Credit Parties in other
Foreign Credit Parties, provided that such investment is
otherwise in compliance with Schedule III hereto;
(ii) Investments by Group and its Subsidiaries in
Cash Equivalents;
(iii) Investments existing on the date hereof and
described on Schedule 4.1(w) hereto;
(iv) Investments in joint ventures in an aggregate
amount not to exceed $5,000,000;
(v) Investments consisting of Equity Interests,
obligations, securities or
17
other property received in a bankruptcy proceeding or in
settlement of claims arising in the ordinary course of
business;
(vi) (A) advances or loans to directors or employees
of Group that do not exceed $1,000,000 in the aggregate at any
one time outstanding and (B) advances for employee travel,
relocation and other similar and customary expenses incurred
in the ordinary course of business;
(vii) notes received pursuant to an asset sale
permitted by Section 2.6(d)(iv);
(viii) Investments consisting of intercompany Debt
and Contingent Obligations permitted under Sections
2.6(b)(vi), (vii), (viii), (ix), (x) and (xi);
(ix) Investments by Group to the extent the
consideration paid by Group consists of Group common stock;
and
(x) other Investments in an aggregate amount invested
not to exceed $5,000,000 for the period from the Effective
Date through December 31, 2001, and $10,000,000 for the period
from the Effective Date through the Debt Termination Date;
provided that with respect to Investments made under this
clause (x): (A) any newly acquired or organized Subsidiary of
Group shall be a Wholly-Owned Subsidiary of Warnaco, (B)
immediately before and after giving effect thereto, no Default
shall have occurred and be continuing or would result
therefrom, (C) the business conducted by any company or
business acquired or invested in pursuant to this clause (ix)
shall be a line of business permitted under Section 2.6(o),
(D) immediately after giving effect to the acquisition of a
company or business pursuant to this clause (x), Group shall
be in pro forma compliance with the covenants contained in
Section 2.7, calculated based on the financial statements most
recently delivered to the Lender Parties pursuant to Section
2.8 or 4.1 and as though such acquisition had occurred at the
beginning of the four-quarter period covered thereby, as
evidenced by a certificate of a Responsible Financial Officer
of Group delivered to the Lender Parties demonstrating such
compliance and (E) additional Investments consisting of
contractual "earn-outs" or purchase price or similar
adjustments specified on Schedule 2.6(e) and made after the
Effective Date shall be permitted without giving effect to the
$5,000,000 and $10,000,000 amount limits specified above.
(f) Restricted Payments. Group will not declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for
value any of its Equity Interests now or hereafter outstanding, return
any capital to its stockholders, partners or members (or the equivalent
Persons thereof) as such, make any distribution of assets, Equity
Interests, obligations or securities to its stockholders, partners or
members (or the equivalent Persons thereof) as such or issue or sell
any Equity Interests (other than
18
Designated Capital Market Transactions, and, except with respect to
issuances or sales of Equity Interests to satisfy obligations under the
Equity Derivatives, common stock) or accept any capital contributions,
or permit any of its Subsidiaries to do any of the foregoing, or permit
any of its Subsidiaries to purchase, redeem, retire, defease or
otherwise acquire for value any Equity Interests in Group or to issue
or sell any Equity Interests therein, except that, so long as no
Default shall have occurred and be continuing at the time of any action
described in clause (i) or (ii) below or would result therefrom:
(i) Group may (A) declare and pay dividends and
distributions payable only in common stock of Group, (B)
except to the extent the Net Cash Proceeds thereof are
required to be paid to the Administrative Agent pursuant to
Section 2.9, purchase, redeem, retire, defease or otherwise
acquire shares of its capital stock with the proceeds received
contemporaneously from the issue of new shares of its capital
stock with equal or inferior voting powers, designations,
preferences and rights and (C) declare and pay cash dividends
to its stockholders on or about October 5, 2000 in an amount
equal to or less than $5,000,000;
(ii) (A) any Subsidiary of Group may declare and pay
dividends to any U.S. Credit Party, (B) any Excluded Foreign
Subsidiary may declare and pay dividends to any Foreign
Subsidiary, (C) any Foreign Credit Party may declare and pay
dividends to another Foreign Credit Party, provided that it is
reasonably determined by the Debt Coordinators that the rights
and remedies of the Administrative Agent, the Debt
Coordinators and the Collateral Trustee under the applicable
Collateral Documents shall not be materially adversely
affected thereby and (D) Group may declare and pay dividends
pursuant to an equity Designated Capital Markets Transaction;
(iii) Group may satisfy its obligations under the
Equity Derivatives in accordance with the terms thereof, other
than through the issuance or sale of Equity Interests; and
(iv) the Trust Stock may be converted into common
stock of Designer Holdings Ltd. in accordance with the TOPRs
Documents.
(g) Amendments of Constitutive Documents. Group will not
amend, or permit any of its Subsidiaries to amend, its certificate of
incorporation or bylaws or other constitutive documents in any manner
that could adversely affect the rights of the Administrative Agent, the
Debt Coordinators, the Collateral Trustee or any Lender Party under the
Loan Documents or any Covered Facility.
(h) Accounting Changes. Group will not make or permit, or
permit any of its Subsidiaries to make or permit, any change in (i)
accounting policies or reporting practices, except as required or
permitted by GAAP or the Financial Accounting Standards Board, or (ii)
Fiscal Year.
19
(i) Prepayments, Etc., of Debt. Group will not prepay, redeem,
purchase, defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner, or make any payment in violation of any
subordination terms of, any Debt, except the prepayment of the Covered
Facilities in accordance with the terms of this Agreement and Debt
permitted under Section 2.6(b)(vi), (vii), (viii), (ix), (x) and (xi).
(j) Negative Pledge. Group will not enter into or suffer to
exist, or permit any of its Subsidiaries to enter into or suffer to
exist, any agreement prohibiting or conditioning the creation or
assumption of any Lien upon any of its property or assets except (i) in
favor of the Secured Parties, (ii) as provided in any other agreement
as existing on the Effective Date, (iii) any Capitalized Lease
permitted by Section 2.6(b)(iv) solely to the extent that such
Capitalized Lease prohibits a Lien on the property subject thereto,
(iv) as to any asset that is subject to a contract of sale permitted by
Section 2.6(d), (v) restrictions under the Securitization Facility,
(vi) restrictions consisting of customary non-assignment provisions
that are entered into in the ordinary course of business consistent
with prior practice to the extent that such provisions restrict the
transfer or assignment of such contract, and (vii) restrictions under
any purchase money financing permitted by Section 2.6(b)(iii) solely to
the extent that such purchase money financing prohibits a Lien on the
property subject thereto.
(k) Partnerships, Etc. Group will not become a general partner
in any general or limited partnership or permit any of its Subsidiaries
to do so.
(l) Speculative Transactions. Group will not engage, or permit
any of its Subsidiaries to engage, in any transaction involving
commodity options, futures contracts, speculative Hedge Agreements or
any similar speculative transactions.
(m) Capital Expenditures. Group will not make, or permit any
of its Subsidiaries to make, any Capital Expenditures that would cause
the aggregate of all such Capital Expenditures made by Group and its
Subsidiaries in any period set forth below to exceed the amount set
forth below for such period:
--------------------------------------
Year Ending In Amount
--------------------------------------
2000 $80,000,000
--------------------------------------
2001 $70,000,000
--------------------------------------
2002 $70,000,000
--------------------------------------
2003 $70,000,000
--------------------------------------
2004 $70,000,000
--------------------------------------
provided however that if for any Fiscal Year set forth above, the amount
specified above for such Fiscal Year exceeds the aggregate amount of Capital
Expenditures made by Group and its Subsidiaries during such Fiscal Year (the
amount of such excess being the "Excess Amount"), Group and its Subsidiaries
shall be entitled to make additional Capital Expenditures in the immediately
succeeding Fiscal Year in an amount equal to 50% of the Excess Amount.
20
(n) Payment Restrictions Affecting Subsidiaries. Group will
not directly or indirectly, enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any agreement
or arrangement limiting the ability of any of its Subsidiaries to
declare or pay dividends or other distributions in respect of its
Equity Interests or repay or prepay any Debt owed to, make loans or
advances to, or otherwise transfer assets to or invest in, Group or any
of its Subsidiaries (whether through a covenant restricting dividends,
loans, asset transfers or investments, a financial covenant or
otherwise), except (i) the Loan Documents and the Covered Facilities,
(ii) restrictions in existence on the Effective Date, (iii) contractual
restrictions consisting of customary non-assignment provisions that are
entered into in the ordinary course of business consistent with prior
practice to the extent that such provisions restrict the transfer of
such contract, (iv) any Capitalized Lease permitted by Section
2.6(b)(iv) solely to the extent that the transfer of the property that
is subject to such Capitalized Lease is prohibited, (v) restrictions
under any purchase money financing permitted by Section 2.6(b)(iii)
solely to the extent that the transfer of the property that is subject
to such financing is prohibited, (vi) restrictions on the transfer of
any asset that is subject to a contract of sale permitted by Section
2.6(d) and (vii) restrictions on transfer and dividends in the
Securitization Facility.
(o) Change in Nature of Business. Group will not make, or
permit any of its Subsidiaries to make, any material change in the
nature of its business as carried on at the Effective Date.
SECTION 2.7 Financial Covenants. Until the Debt Termination
Date, Group will, on a Consolidated basis:
(a) Leverage Ratio. Maintain at the end of each Fiscal
Quarter, as tested on the date that Group's Annual Report on Form 10-K
or Quarterly Report on Form 10-Q, as applicable, is required to be
delivered to the SEC, a Leverage Ratio not more than the ratio set
forth below for each period set forth below:
---------------------------------------------------
Quarter Ending Ratio
---------------------------------------------------
December 31, 2000 5.30
---------------------------------------------------
March 31, 2001 5.80
---------------------------------------------------
June 30, 2001 5.35
---------------------------------------------------
September 30, 2001 5.35
---------------------------------------------------
December 31, 2001 4.25
---------------------------------------------------
March 31, 2002 4.25
---------------------------------------------------
June 30, 2002 4.25
---------------------------------------------------
September 30, 2002 4.25
---------------------------------------------------
December 31, 2002 3.50
---------------------------------------------------
March 31, 2003 3.50
---------------------------------------------------
June 30, 2003 3.50
---------------------------------------------------
September 30, 2003 3.50
---------------------------------------------------
December 31, 2003 3.00
---------------------------------------------------
21
---------------------------------------------------
March 31, 2004 3.00
---------------------------------------------------
June 30, 2004 3.00
---------------------------------------------------
September 30, 2004 3.00
---------------------------------------------------
December 31, 2004 3.00
---------------------------------------------------
(b) Fixed Charge Coverage Ratio. Maintain at the end of each
Fiscal Quarter, as tested on the date that Group's Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as applicable, is required
to be delivered to the SEC, a Fixed Charge Coverage Ratio not less than
the ratio set forth below for each period set forth below:
---------------------------------------------------
Quarter Ending Ratio
---------------------------------------------------
December 31, 2000 1.05
---------------------------------------------------
March 31, 2001 1.05
---------------------------------------------------
June 30, 2001 1.05
---------------------------------------------------
September 30, 2001 1.10
---------------------------------------------------
December 31, 2001 1.10
---------------------------------------------------
March 31, 2002 1.10
---------------------------------------------------
June 30, 2002 1.10
---------------------------------------------------
September 30, 2002 1.20
---------------------------------------------------
December 31, 2002 1.20
---------------------------------------------------
March 31, 2003 1.30
---------------------------------------------------
June 30, 2003 1.30
---------------------------------------------------
September 30, 2003 1.30
---------------------------------------------------
December 31, 2003 1.30
---------------------------------------------------
March 31, 2004 1.40
---------------------------------------------------
June 30, 2004 1.40
---------------------------------------------------
September 30, 2004 1.40
---------------------------------------------------
December 31, 2004 1.40
---------------------------------------------------
(c) Net Worth. Maintain at the end of each Fiscal Quarter, as
tested on the date that Group's Annual Report on Form 10-K or Quarterly
Report on Form 10-Q, as applicable, is required to be delivered to the
SEC, an excess of Consolidated total assets over Consolidated total
liabilities, of not less than an amount equal to (i) $384,000,000 plus
(ii) 50% of an amount (but not less than zero) equal to (a) the
aggregate net income of Group computed on a Consolidated cumulative
basis since the first day of the last Fiscal Quarter in 2000 less (b)
the aggregate amount of cash dividends paid by Group computed on a
cumulative basis since the Effective Date less (c) the aggregate amount
paid by Group or any of its Subsidiaries in settlement of the Equity
Derivatives in the third Fiscal Quarter of 2002 plus, without
duplication, (d) any reduction in net income relating to the Equity
Derivatives resulting from any change in GAAP enacted prior to the
Effective Date.
(d) Limitation on Debt. Not permit the Total Bank Outstandings
as of the last
22
Business Day of each Fiscal Year set forth below to exceed the
corresponding amount for such year as set forth below; and in each case
Group will certify the foregoing within 10 Business Days after each
such date to the Administrative Agent in a certificate with supporting
calculations in reasonable detail by a Responsible Financial Officer of
Group in each case prepared, to the best knowledge of such officer, in
accordance with GAAP:
-------------------------------------------------------
Fiscal Year Amount
-------------------------------------------------------
2000 $2,035,000,000
-------------------------------------------------------
2001 $1,950,000,000
-------------------------------------------------------
2002 $1,900,000,000
-------------------------------------------------------
2003 $1,800,000,000
-------------------------------------------------------
2004 $1,700,000,000
-------------------------------------------------------
SECTION 2.8 Reporting Requirements. Until the Debt Termination
Date, Group will furnish to the Administrative Agent and the Lender Parties:
(a) as soon as available and in any event within 50 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year,
Consolidated balance sheets of Group and its Subsidiaries as of the end
of such Fiscal Quarter and Consolidated statements of income and
Consolidated statements of cash flows of Group and its Subsidiaries for
the period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter, and also setting forth a variance
analysis of monthly results during such Fiscal Quarter as compared to
monthly budgeted amounts specified in the forecast for such Fiscal
Quarter previously delivered pursuant to clause (h) below (or, with
respect to such financial statements for the Fiscal Quarter ended
December 30, 2000, compared to the monthly financial statements
delivered to the Lender Parties pursuant to Section 6.1(a)(xiv)), duly
certified (subject to year-end audit adjustments) by a Responsible
Financial Officer of Group as having been prepared in accordance with
GAAP and certifying compliance with the terms of this Agreement and
setting forth in reasonable detail the calculations necessary to
demonstrate compliance with Section 2.7;
(b) as soon as available and in any event within 95 days after
the end of each Fiscal Year of Group, a copy of the annual audit report
for such year for Group and its Subsidiaries, containing Consolidated
balance sheet of Group and its Subsidiaries as of the end of such
Fiscal Year and Consolidated statements of income and cash flows of
Group and its Subsidiaries for such Fiscal Year, in each case
accompanied by an opinion of any Approved Accounting Firm or by other
independent public accountants acceptable to the Debt Coordinators
without any going concern or similar qualification, and a certificate
of a Responsible Financial Officer of Group as to compliance with the
terms of this Agreement and setting forth in reasonable detail the
calculations necessary to demonstrate compliance with Section 2.7;
(c) as soon as available and in any event within 30 days after
the end of each month, Consolidated balance sheets of Group and its
Subsidiaries as of the end of such
23
month and Consolidated statements of income of Group and its
Subsidiaries for the period commencing at the end of the previous month
and ending with the end of such month, duly certified (subject to
year-end audit adjustments) by a Responsible Financial Officer of Group
as having been prepared in accordance with GAAP;
(d) as soon as possible and in any event within two Business
Days after the occurrence of each Default continuing on the date of
such statement, a statement of a Responsible Financial Officer of Group
setting forth details of such Default and the action that the Loan
Parties have taken and propose to take with respect thereto;
(e) promptly after the sending or filing thereof, copies of
all reports that the Loan Parties send to any of their security holders
generally, and copies of all reports and registration statements that
Group or any Subsidiary files with the Securities and Exchange
Commission or any national securities exchange;
(f) promptly after the commencement thereof, notice of all
actions and proceedings before any court, governmental agency or
arbitrator affecting the Loan Parties or any of their Subsidiaries of
the type described in Section 4.1(f);
(g) within one Business Day after receipt thereof by any Loan
Party, copies of each notice from S&P or Xxxxx'x indicating any change
in the Debt Rating;
(h) as soon as available and in any event no later than 45
days after the end of each Fiscal Year, (A) forecasts of balance
sheets, income statements and cash flow statements on a monthly basis
for the Fiscal Year then beginning and (B) an annual business plan for
the next succeeding Fiscal Year and forecast on an annual basis for
each Fiscal Year thereafter for the balance of the term of the Covered
Facilities; in each case prepared by management of Group and
satisfactory in form to the Debt Coordinators;
(i) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Responsible Financial
Officer of Group specifying which Foreign Subsidiaries, if any, that
were not previously Credit Parties prior to the most recently ended
Fiscal Quarter, are to be classified, as of the end of such Fiscal
Quarter, as Included Foreign Subsidiaries;
(j) promptly after the assertion or occurrence thereof, notice
of any Environmental Action against or of any noncompliance by Group or
any of its Subsidiaries with any Environmental Law or Environmental
Permit that would reasonably be expected to (i) have a Material Adverse
Effect or (ii) cause any Material Real Property or Material Leased
Property to be subject to any material restrictions on ownership,
occupancy, use or transferability under any Environmental Law;
(k) as soon as available and in any event within 50 days after
the end of the third Fiscal Quarter of 2000, monthly forecasts for the
fourth Fiscal Quarter of 2000 and
24
an annual business plan for the next succeeding four Fiscal Years; in
each case prepared by management of Group and satisfactory in form to
the Debt Coordinators; and
(l) such other information respecting the Loan Parties or any
of their Subsidiaries as any Loan Party through the Debt Coordinators
may from time to time reasonably require.
SECTION 2.9 Mandatory Payments. (a) Group shall, on the date
of receipt of the Net Cash Proceeds by any Loan Party or any of its Subsidiaries
from (A) the sale, lease, transfer or other disposition of any assets of any
Loan Party or any of its Subsidiaries (other than (1) any sale, lease, transfer
or other disposition of assets pursuant to clause (i), (ii), (v), (vi), (xi) or
(xii) of Section 2.6(d) and (2) Net Cash Proceeds from the sale, lease, transfer
or other disposition of assets under any other clause of Section 2.6(d) in an
amount of up to $10,000,000 in the aggregate), (B) the incurrence or issuance by
any Loan Party or any of its Subsidiaries of any Debt incurred or issued under
or in connection with any New Facility (other than the New Trade Credit
Facility) and any Designated Capital Markets Transaction, (C) the sale or
issuance by any Loan Party or any of its Subsidiaries of any Equity Interests
(including, without limitation, receipt of any capital contribution) and (D) any
Extraordinary Receipt received by or paid to or for the account of any Loan
Party or any of its Subsidiaries and not otherwise included in clause (A), (B)
or (C) above, pay an amount equal to the amount of such Net Cash Proceeds to the
Administrative Agent; provided that with respect to clause (C) above, during the
period after all Obligations of the Loan Parties under the Bridge Facility shall
have been repaid in full, Group shall be required to pay to the Administrative
Agent 50% of the Net Cash Proceeds received by any Loan Party or any of its
Subsidiaries from the sale or issuance by any Loan Party or any of its
Subsidiaries of any Equity Interests (including, without limitation, receipt of
any capital contribution).
(b) All such payments made to the Administrative Agent
pursuant to this Section 2.9 shall be (i) applied by the Administrative
Agent as specified in Section 2.1 of the Intercreditor Agreement and
(ii) made together with accrued interest to the date of such payment on
the principal amount prepaid.
(c) Notwithstanding anything to the contrary contained in
paragraph (a) of this Section 2.9 or in Section 2.6(d), so long as no
Default shall have occurred and be continuing, if, on any date on which
a payment to the Administrative Agent would otherwise be required
pursuant to this Section 2.9 or Section 2.6(d), the aggregate amount of
Net Cash Proceeds or other amounts otherwise required by such Sections
to be paid to the Administrative Agent on such date are less than or
equal to $5,000,000, Group may defer such prepayment until the date on
which the aggregate amount of Net Cash Proceeds or other amounts
otherwise required by such Sections to be paid to the Administrative
Agent exceeds $5,000,000, provided that during such deferral period
such amounts, to the extent originally constituting Net Cash Proceeds,
shall otherwise be deemed to retain their original character as Net
Cash Proceeds for application as required by this Section 2.9. Upon the
occurrence of a Default, Group shall immediately pay to the
Administrative
25
Agent the amount of all Net Cash Proceeds received by any Loan Party or
any of its Subsidiaries and other amounts, as applicable, that are
required to be paid to the Administrative Agent by this Section 2.9
(without giving effect to the first and second sentences of this
paragraph (c)) but which have not previously been so paid.
SECTION 2.10 Release of Collateral. Upon the sale, transfer or
other disposition of any item of Collateral (including 100% of the capital stock
of a Subsidiary) of any Loan Party to any third party which is not an Affiliate
in accordance with the terms of the Loan Documents, and the payment by Group of
the Net Cash Proceeds thereof to the Administrative Agent in accordance with the
provisions of Section 2.9 hereof (if applicable), the Collateral Trustee will,
at Group's expense, execute and deliver to such Loan Party such documents as
such Loan Party may reasonably request (without representation or warranty) to
evidence the release of such (i) Subsidiary from the Loan Documents to which it
is a party and (ii) item of Collateral from the assignment and security interest
granted under the Collateral Documents in accordance with the terms of the Loan
Documents.
SECTION 2.11 Increased Costs, Etc. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining eurodollar rate credit extensions under any
Covered Facility or of agreeing to issue or of issuing or maintaining or
participating in letters of credit or bankers' acceptances or other credit
extensions (excluding, for purposes of this Section 2.11, any such increased
costs resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall
govern) and (y) changes in the basis of taxation of overall net income or
overall gross income by the United States or by the foreign jurisdiction or
state under the laws of which such Lender Party is organized or has its
applicable lending office or any political subdivision thereof), then Group
shall from time to time, upon demand by such Lender Party (with a copy of such
demand to the Debt Coordinators), pay to the Administrative Agent for the
account of such Lender Party additional amounts sufficient to compensate such
Lender Party for such increased cost; provided, however, that before making any
such demand, a Lender Party claiming additional amounts under this Section
2.11(a) agrees to use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different applicable
lending office if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost that may thereafter accrue and would
not, in the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party. A certificate as to the amount of such
increased cost, submitted to Group by such Lender Party, shall be conclusive and
binding for all purposes, absent manifest error.
(b) If any Lender Party determines that compliance with any
law or regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of law)
affects or would affect the amount of capital required or expected to
be maintained by such Lender Party or any corporation controlling such
Lender Party and that the amount of such capital is increased by or
based upon the
26
existence of such Lender Party's commitment to lend or provide other
credit extensions under the Covered Facilities (or similar contingent
obligations), then, upon demand by such Lender Party or such
corporation (with a copy of such demand to the Debt Coordinators),
Group shall pay to the Administrative Agent for the account of such
Lender Party, from time to time as specified by such Lender Party,
additional amounts sufficient to compensate such Lender Party in the
light of such circumstances, to the extent that such Lender Party
reasonably determines such increase in capital to be allocable to the
existence of such Lender Party's commitment to provide credit
extensions under the Covered Facilities. A certificate as to such
amounts submitted to Group by such Lender Party shall be conclusive and
binding for all purposes, absent manifest error.
(c) If, with respect to any eurodollar rate credit extensions
under the Covered Facilities, the Required Lenders notify the Debt
Coordinators that the eurodollar rate for any applicable interest
period for any credit extensions under any Covered Facility will not
adequately reflect the cost to such Lender Parties of making, funding
or maintaining their eurodollar rate credit extensions for such
interest period, the Debt Coordinators shall forthwith so notify Group
and the Lender Parties, whereupon (i) each such eurodollar rate credit
extension under the Covered Facilities will automatically, on the last
day of the then existing interest period therefor, convert into a base
rate credit extension and (ii) the obligation of the Lender Parties to
make, or to convert credit extensions under the Covered Facilities
into, eurodollar rate credits shall be suspended until the Debt
Coordinators shall notify Group that the Required Lenders have
determined that the circumstances causing such suspension no longer
exist; provided, that any Covered Facility that does not by its terms
provided for base rate loans shall be deemed in the circumstances
described in this clause (c) to provided for interest at the "Base
Rate" (as defined in the Bridge Facility).
(d) Notwithstanding any other provision of this Agreement, any
other Loan Document or any Covered Facility, if the introduction of or
any change in or in the interpretation of any law or regulation shall
make it unlawful, or any central bank or other governmental authority
shall assert that it is unlawful, for any Lender Party or its
eurodollar rate lending office to perform its obligations under any
Covered Facility to make eurodollar rate credit extensions or to
continue to fund or maintain eurodollar rate credit extensions under
the Covered Facilities, then, on notice thereof and demand therefor by
such Lender Party to Group through the Debt Coordinators, (i) each
eurodollar rate credit extension, and each commitment by such Lender
Party to make eurodollar rate credit extensions, under the Covered
Facilities will automatically, upon such demand, convert into a base
rate credit extension or commitment and (ii) the obligation of the
Lender Parties to make, or maintain or to convert credit extensions
into, eurodollar rate credit extensions under the Covered Facilities
shall be suspended until the Debt Coordinators shall notify Group that
such Lender Party has determined that the circumstances causing such
suspension no longer exist, provided, however, that, before making any
such demand, such Lender Party agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to designate a different
27
eurodollar lending office if the making of such a designation would
allow such Lender Party or its eurodollar lending office to continue to
perform its obligations to make eurodollar rate credit extensions or to
continue to fund or maintain eurodollar rate credit extensions and
would not, in the judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party.
SECTION 2.12 Taxes. (a) Any and all payments by the Loan
Parties under the Loan Documents and under the Covered Facilities, and by any
Lender Party to any other Lender Party under the Loan Documents, shall be made
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender Party and each Agent,
taxes that are imposed on its overall net income by the United States and taxes
that are imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the state or foreign jurisdiction under the laws of which such
Lender Party or such Agent, as the case may be, is organized or any political
subdivision thereof and, in the case of each Lender Party, taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the state or foreign jurisdiction of such Lender Party's applicable lending
office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments under the Loan Documents or under the Covered Facilities being
hereinafter referred to as "Taxes"). If any Loan Party or Lender Party shall be
required by law to deduct any Taxes from or in respect of any sum payable under
any Loan Documents or under any Covered Facility to any Lender Party or any
Agent, (i) the sum payable by such Loan Party or Lender Party shall be increased
as may be necessary so that after the Loan Party or Lender Party, as applicable,
and the Debt Coordinators have made all required deductions (including
deductions applicable to additional sums payable under this Section 2.12) such
Lender Party or such Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Loan Party
or Lender Party making such payment shall make all such deductions and (iii)
Group shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(b) In addition, the Loan Parties shall pay any present or
future stamp, documentary, excise, property or similar taxes, charges
or levies that arise from any payment made by any Loan Party under the
Loan Documents or under the Covered Facilities, or by any Lender Party
under the Loan Documents, or from the execution, delivery or
registration of, performance under, or otherwise with respect to, any
of the Loan Documents or Covered Facilities (hereinafter referred to as
"Other Taxes").
(c) The Loan Parties shall indemnify each Lender Party and
each Agent for and hold them harmless against the full amount of Taxes
and Other Taxes, and for the full amount of taxes of any kind imposed
by any jurisdiction on amounts payable under this Section 2.12, imposed
on or paid by such Lender Party or such Agent (as the case may be) and
any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such Lender
Party or such Agent (as the case may be) makes written
28
demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
Group shall furnish to the Administrative Agent, at its address
referred to in Section 8.1 of the Intercreditor Agreement, the original
or a certified copy of a receipt evidencing such payment. In the case
of any payment made under the Loan Documents or under the Covered
Facilities by or on behalf of the Loan Parties through an account or
branch outside the United States or by or on behalf of the Loan Parties
by a payor that is not a United States person, if Group determines that
no Taxes are payable in respect thereof, Group shall furnish, or shall
cause such payor to furnish, to the Administrative Agent, at such
address, an opinion of counsel acceptable to the Debt Coordinators
stating that such payment is exempt from Taxes. For purposes of this
Section 2.12, the terms "United States" and "United States person"
shall have the meanings specified in Section 7701 of the Code.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States, on or prior to the date that it
becomes a party to this Agreement or any Covered Facility, and from
time to time thereafter if requested in writing by Group or the agent
under the applicable Covered Facility (but only so long as such Lender
Party remains lawfully able to do so), shall provide Group and the
agent under the applicable Covered Facility with two original Internal
Revenue Service forms W-8 BEN or W-8 ECI, as appropriate, or any
successor or other form prescribed by the Internal Revenue Service,
certifying that such Lender Party is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to
any Loan Document or Covered Facility. If any Lender Party which is not
a "United States person" determines that it is unable to submit to
Group or the agent under the applicable Covered Facility any form or
certificate that such Lender Party is otherwise required to submit
pursuant to this Section 2.12, or that is required to withdraw or
cancel any such form or certificate, or that any such form or
certificate previously submitted has otherwise become ineffective or
inaccurate, such Lender Party shall promptly notify Group and the agent
under the applicable Covered Facility of such fact. In addition, if a
Lender Party provides a form W-8 (or any successor form) to the agent
under the applicable Covered Facility and Group pursuant to this
Section 2.12, such Lender Party shall also provide a certificate
stating that it is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code, and shall promptly notify the agent under the
applicable Covered Facility and Group if such Lender Party determines
that it is no longer able to provide such certification. If the form
provided by a Lender Party at the time such Lender Party first becomes
a party to any Loan Document or Covered Facility indicates a United
States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes unless and until
such Lender Party provides the appropriate form certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes for periods governed by such
form; provided, however, that, if at the date of the Joinder Agreement
or relevant assignment and acceptance pursuant to which a Lender Party
becomes a party to the Intercreditor Agreement or any Covered Facility,
as applicable, the Lender Party or Lender Party assignor, as
applicable, was entitled to
29
payments under subsection (a) in respect of United States withholding
tax with respect to interest paid at such date, then, to such extent,
the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect
to the Lender Party or Lender Party assignee, as applicable, on such
date. Upon the reasonable request of Group or the agent under the
applicable Covered Facility, each Lender Party that has not provided
the forms or other documents, as provided above, on the basis of being
a United States person shall submit to Group and the agent under the
applicable Covered Facility a certificate to the effect that it is such
a "United States person" (as defined in Section 7701(a)(30) of the
Internal Revenue Code).
(f) For any period with respect to which a Lender Party has
failed to provide Group with the appropriate form described in Section
2.12(e) (other than if such failure is due to a change in law occurring
subsequent to the date on which such Lender Party became a Lender
Party, or if such form otherwise is not required under the first
sentence of subsection (e) above because Group has not requested in
writing such form subsequent to the date on which such Lender Party
became a Lender Party), such Lender Party shall not be entitled to
indemnification under Section 2.12(a) or (c) with respect to Taxes
imposed by the United States; provided, however, that should a Lender
Party become subject to Taxes because of its failure to deliver a form
required hereunder, Group shall take such steps as the Lender Party or
Debt Coordinators shall reasonably request to assist the Lender Party
to recover such Taxes.
(g) Any Lender Party claiming any additional amounts payable
pursuant to this Section 2.12 shall use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its eurodollar lending office if the making
of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in
the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party.
(h) Within 60 days after the written request of Group or the
Administrative Agent, each Lender Party shall execute and deliver to
Group such certificates or forms as are reasonably requested by Group
in such request, which can be furnished consistent with the facts and
which are reasonably necessary to assist the Loan Parties in applying
for refunds of Taxes paid by the Loan Parties hereunder or any Covered
Facility or making payment of Taxes hereunder or any Covered Facility;
provided, however, that no Lender Party or Agent shall be required to
furnish to Group any financial or other information which it considers
confidential. The cost of preparing any materials referred to in the
previous sentence shall be borne by Group. If a Lender Party or Agent
determines in good faith that it has received a refund of any Taxes or
Other Taxes with respect to which the Loan Parties have made a payment
of additional amounts, such Lender Party or Agent shall pay to Group an
amount that such Lender Party or Agent determines in good faith to be
equal to the net benefit, after tax, that was obtained by such Lender
Party or Agent (as the case may be) as a consequence of such refund.
30
SECTION 2.13 Payments and Computations. (a) Each Lender Party
and each Loan Party, as applicable, shall make each payment hereunder and under
each other Loan Document, not later than 11:00 A.M. (New York City time) on the
day when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds, with payments being received by the
Administrative Agent after such time being deemed to have been received on the
next succeeding Business Day. The Administrative Agent will promptly thereafter
cause like funds to be distributed in accordance with the terms of the
Intercreditor Agreement.
(b) All computations of amounts due under the Loan Documents
shall be made by the Debt Coordinators on the basis of a year of 360
days, in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such
amounts are payable. Each determination by the Debt Coordinators of an
amount due under the Loan Documents shall be conclusive and binding for
all purposes, absent manifest error.
(c) Whenever any payment under any of the Loan Documents shall
be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of payment of
interest or commitment fee, as the case may be.
SECTION 2.14 Certain Post-Closing Matters. (a) With respect to
those Subsidiaries of Group incorporated or organized under the laws of Belgium,
Mexico, Hong Kong and Barbados, Group will cause to be furnished, within 60 days
after the Effective Date, all documents and instruments, and cause to be
performed, by such date, all actions, in each case of the type specified in
Section 6.1(a) with respect to Foreign Credit Parties, including counterparts of
this Agreement in form and substance reasonably satisfactory to the Debt
Coordinators and the Subsidiary Guaranty executed and delivered by all
Subsidiaries in such jurisdictions, and such other documents sufficient in the
judgment of the Debt Coordinators to create in favor of the Collateral Trustee
for the benefit of the Secured Parties a perfected first priority security
interest in the property of all such Subsidiaries (other than Excluded
Property), such documents to include evidence of corporate good standing,
corporate authority and legal opinions, and all other related documentation;
provided that the Debt Coordinators may extend the 60 day time period specified
in this subsection (a) by up to an additional 45 days if requested by Group.
(b) With respect to all material intellectual property license
agreements to which Group or any of its Subsidiaries is a party (other
than any such license agreements which are the subject of actual
litigation between the licensor and licensee as of the Effective Date),
Group will use all commercially reasonable efforts to cause, within 30
days after the Effective Date, all licensors party to such license
agreements to consent to a grant of a security interest in such license
(but not to the exercise by the Collateral Agent or any Secured Party
of any remedies with respect thereto) to the Collateral Trustee for the
benefit of the Secured Parties.
31
(c) Group will within 6 months after the Effective Date either
sell, transfer or otherwise dispose of the assets defined on Schedule
2.6(d)(iii) as the Costa Rica Assets, Paris Apartment, German Real
Estate and NYC Apartment, with the Net Cash Proceeds therefrom applied
as specified in Section 2.9, or by such date, (i) Costa Rica will be
deemed to be an Included Foreign Jurisdiction for all purposes
hereunder, and Group will, by such date, cause to be furnished all
documents and instruments, and cause to be performed all actions, in
each case of the type specified in Section 6.1(a) with respect to
Foreign Credit Parties, including the execution and delivery of
counterparts of this Agreement in form and substance reasonably
satisfactory to the Debt Coordinators and of the Subsidiary Guaranty by
all Subsidiaries in such jurisdictions, and such other documents
sufficient in the judgment of the Debt Coordinators to create in favor
of the Collateral Trustee for the benefit of the Secured Parties a
perfected first priority security interest in the relevant property of
such jurisdiction and (ii) with respect to all other assets specified
above, Group will, by such date, cause to be furnished all documents
and instruments, and cause to be performed all actions, in each case of
the type specified in Section 6.1(a) with respect to such assets as are
sufficient in the judgment of the Debt Coordinators to create in favor
of the Collateral Trustee for the benefit of the Secured Parties a
perfected first priority security interest in such assets.
(d) With respect to all leasehold mortgages to be delivered
pursuant to Section 6.1(a)(v), Group will use all commercially
reasonable efforts to cause, within 30 days after the Effective Date,
all landlords to consent to the granting of a leasehold mortgage in
form and substance satisfactory to the Debt Coordinators.
(e) With respect to the delivery of certain non-U.S.
Collateral, Group will cause to be furnished all documents and
instruments, and cause to be performed all actions, in each case of the
type, and by the respective dates, specified therefor in Schedule
2.14(e).
SECTION 2.15 Successor Agent. (a) Citibank, N.A. hereby
resigns in its capacity as agent under each Existing Facility to which it is a
party as agent, and Citicorp USA, Inc. is hereby appointed as successor agent in
each such respective capacity under each such facility. Citicorp USA, Inc.
hereby accepts such appointment, and the "Required Lenders" and the "Borrower"
(each as defined in each such respective facility) hereby approves such
appointment.
SECTION 2.16 Certain Amendments. (a) Section 2.03(c) of the
Old Five-Year Credit Agreement is amended by inserting the following after the
fourth sentence thereof:
"The obligation of each Revolving Credit Lender to
purchase an assignment of its Pro Rata Share of the
Letter of Credit Advance to refund and refinance the
Letter of Credit Advances previously made by the
Issuing Bank to the Borrower under this clause shall
be
32
absolute and unconditional and shall not be affected
by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right
which any Lender may have against the Issuing Bank,
the Administrative Agent, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence
or continuance of any Default or the inability of the
Borrower to otherwise satisfy the conditions
precedent set forth in Article III; (iii) any adverse
change in the condition (financial or otherwise) of
the Borrower; (iv) the acceleration or maturity of
any Letter of Credit Advances or other Obligations or
the termination of any Commitment after the making of
any Letter of Credit Advance; (v) any breach of this
Agreement or any other Loan Document by the Borrower,
or any Lender; or (vi) any other circumstance,
happening or event whatsoever, whether or not similar
to any of the foregoing."
(b) Section 2.03 of the Old Five-Year Credit Agreement is
further amended by inserting at the end thereof the following new
clause (e):
"(e) Reimbursement of Issuing Bank for Amounts Returned or
Disgorged. Each Letter of Credit issued and each
Letter of Credit Advance made, shall, effective upon
its issuance or creation, as the case may be, and
without further action, be issued and/or created on
behalf of all Lenders (including the Issuing Bank
thereof) according to their respective Pro Rata
Shares. Each Lender shall, to the extent of its Pro
Rata Share, be deemed irrevocably to have
participated in the issuance of such Letter of Credit
and the creation of such Letter of Credit Advance and
shall be responsible to promptly reimburse the
Issuing Bank thereof for Letter of Credit Advances
which have not been reimbursed by the Borrower or
reimbursed by the Borrower but must be returned,
restored or disgorged by the Issuing Bank for any
reason, and each Lender shall, to the extent of its
Pro Rata Share, be entitled to receive from the
Administrative Agent a ratable portion of all fees
and interest with respect to such Letter of Credit
and/or such Acceptance (including the letter of
credit fees received by the Administrative Agent,
with respect to each Letter of Credit, but excluding
any Issuing fees and other charges payable to the
Issuing Bank qua Issuing Bank). In the event the
Issuing Bank must for any reason return or disgorge
such reimbursement, the Issuing Bank shall promptly
notify each Lender of the unreimbursed amount of such
drawing and of such Lender's respective participation
therein. Each Lender shall make
33
available to the Issuing Bank, whether or not any
Default shall have occurred and be continuing, an
amount equal to its respective participation in same
day or immediately available funds in accordance with
the procedures in Section 2.03(c). In the event that
any Lender fails to make available to the Issuing
Bank the amount of such Lender's participation in
such Letter of Credit or such Letter of Credit
Advance, as provided herein, the Issuing Bank shall
be entitled to recover such amount on demand from
such Lender together with interest at the Federal
Funds Rate from the date such amount is due through
(but excluding) the date such payment is made
(together with such other compensatory amounts as may
be required to be paid by such Lender to the
Administrative Agent pursuant to the Rules for
Interbank Compensation of the council on
International Banking or the Clearinghouse
Compensation Committee, as the case may be, as in
effect from time to time).
(c) Section 2.05(c)(ii) of the Old Five-Year Credit Agreement
is amended by inserting after the word "Borrower" in the first line
thereof the following: ", and each Lender's obligation to risk
participate in Letters of Credit, in each case".
(d) Section 2.05(c) of the Old Five-Year Credit Agreement is
further amended by inserting at the end thereof the following new
clause (iii):
"(iii) The obligations of the Borrower and the Lenders
hereunder shall remain in full force and effect and
shall apply to any alteration to or extension of the
expiration date of any Letter of Credit or any Letter
of Credit issued to replace, extend or alter any
Letter of Credit during the term of this Agreement.
None of the foregoing shall affect, impair or prevent
the vesting of any of the rights or powers granted to
the Issuing Bank or any Lender hereunder. In
furtherance and extension and not in limitation or
derogation of any of the foregoing, any action taken
or omitted to be taken by the Issuing Bank in good
faith (and not constituting gross negligence or
willful misconduct) shall be binding upon each
Borrower, and each such Lender, and shall not put the
Issuing Bank under any resulting liability to any
Borrower or any such Lender, as the case may be."
(e) Section 8.07(a) of the Old Five-Year Credit Agreement is
amended by deleting the words "Administrative Agent and (so long as no
Default has occurred and is continuing) the Borrower, such consent not
to be unreasonably withheld or delayed" appearing starting in the 14th
line thereof, and inserting in lieu thereof the following:
"Administrative Agent, the Issuing Bank and Swing Line Bank".
34
(f) Section 8.07(a) of the Old Five-Year Credit Agreement is
further amended by deleting the amount "$1,000,000" appearing starting
in the 22nd line thereof, and inserting in lieu thereof the amount
"$500,000".
ARTICLE III
CONDITIONS OF LENDING AND EXTENSIONS OF CREDIT
SECTION 3.1 Conditions Precedent to Each Credit Extension. The
obligation of each Lender Party to make a loan, issue a letter of credit,
bankers' acceptance or other credit extension pursuant to any Covered Facility
and the right of any Loan Party to request a borrowing, the issuance of a letter
of credit, bankers' acceptance or to request any other credit extension, shall
be, in addition to the conditions precedent present in the applicable Covered
Facility, subject to the further conditions precedent that on the date of such
borrowing, issuance or other credit extension (a) the following statements shall
be true (and the acceptance by such Loan Party of the proceeds of such
borrowing, issuance or other credit extension shall constitute a representation
and warranty by Group and such Loan Party that on the date of such borrowing,
issuance or other credit extension such statements are true):
(i) the representations and warranties contained in
each Loan Document are correct in all material respects on and
as of such date, before and after giving effect to such
borrowing, issuance of letter of credit, bankers' acceptance
or other credit extension and to the application of the
proceeds therefrom, as though made on and as of such date,
other than any such representations or warranties that, by
their terms, refer to a specific date other than the date of
such borrowing, issuance of letter of credit, bankers'
acceptance or other credit extension, in which case such
representations and warranties shall be correct in all
material respects as of such specific date; and
(ii) no Default has occurred and is continuing under
the Loan Documents and no payment default has occurred and is
continuing under any Covered Facility, or would result from
such borrowing, issuance of letter of credit, bankers'
acceptance or other credit extension or from the application
of the proceeds therefrom;
and (b) the Administrative Agent shall have received such other information as
the Debt Coordinators may reasonably request in order to confirm the (i)
accuracy of the representations and warranties of the Loan Parties in the Loan
Documents and Covered Facilities, (ii) timely compliance by the Loan Parties
with the terms, covenants and agreements set forth in the Loan Documents and the
Covered Facilities and (iii) absence of any Default under the Loan Documents or
the Covered Facilities.
35
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties of the Loan
Parties. Each Loan Party represents and warrants as follows:
(a) Each Loan Party and each of its Subsidiaries (i)
is a corporation or other entity duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, (ii) is
duly qualified and in good standing as a foreign corporation
or otherwise in each other jurisdiction in which it owns or
leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the
failure to so qualify or be licensed would not be reasonably
likely to have a Material Adverse Effect and (iii) has all
requisite corporate (or other) power and authority (including,
without limitation, all material governmental licenses,
permits and other approvals) to own or lease and operate its
properties and to carry on its business as now conducted and
as proposed to be conducted.
(b) Set forth on Schedule 4.1(b) hereto is a complete
and accurate list of all Subsidiaries of Group on the date
hereof, showing (as to each such Subsidiary) the jurisdiction
of its incorporation or organization, the number of shares of
each class of its Equity Interests authorized, and the number
outstanding, on the date hereof and the percentage of each
such class of its Equity Interests owned (directly or
indirectly) by such Loan Party and the number of shares
covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date hereof.
Schedule 4.1(b) also identifies all Foreign Subsidiaries of
Group in the Included Foreign Jurisdictions which (i) are
classified as inactive or dormant (or other similar
designation) under the applicable laws of any Included Foreign
Jurisdiction or (ii) have assets with an aggregate fair market
value of less than $150,000. All of the outstanding Equity
Interests in each Loan Party's Subsidiaries have been validly
issued, are fully paid and non-assessable and are owned by
such Loan Party or one or more of its Subsidiaries (except as
described on Schedule 4.1(b)) free and clear of all Liens,
except those created under the Collateral Documents.
(c) The execution, delivery and performance by each
Loan Party of each Loan Document and each Covered Document to
which it is or is to be a party and the other transactions
contemplated by the Loan Documents and the Covered Documents,
are within such Loan Party's corporate or other powers, have
been duly authorized by all necessary corporate or other
action, and do not (i) contravene such Loan Party's charter or
bylaws or other constitutive documents, (ii) violate any law,
rule, regulation (including, without limitation,
36
Regulation X of the Board of Governors of the Federal Reserve
System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the
breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party, any of its
Subsidiaries or any of their properties or (iv) except for the
Liens created under the Loan Documents and the Covered
Documents, result in or require the creation or imposition of
any Lien upon or with respect to any of the properties of any
Loan Party or any of its Subsidiaries. No Loan Party or any of
its Subsidiaries is in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which would be
reasonably likely to have a Material Adverse Effect.
(d) Except as specified in Section 2.14, as set forth
on Schedule 4.1(d) or for which provision has been duly made,
no authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory
body or any other third party is required for (i) the due
execution, delivery, recordation, filing or performance by any
Loan Party of any Loan Document and any Covered Document to
which it is or is to be a party, or the other transactions
contemplated by the Loan Documents and the Covered Documents,
(ii) the grant by any Loan Party of the Liens granted by it
pursuant to the Collateral Documents and the Covered
Documents, (iii) the perfection or maintenance of the Liens
created under the Collateral Documents (including the first
priority nature thereof) and the Covered Documents or (iv) the
exercise by any Agent or any Lender Party of its rights under
the Loan Documents and the Covered Documents or the remedies
in respect of the Collateral pursuant to the Collateral
Documents and the Covered Documents.
(e) This Agreement and each Covered Document has
been, and each other Loan Document when delivered will have
been, duly executed and delivered by each Loan Party thereto.
This Agreement and each Covered Document is, and each other
Loan Document when delivered will be, the legal, valid and
binding obligation of each Loan party thereto, enforceable
against such Loan Party in accordance with its terms, except
as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is
sought in equity or at law).
(f) There is no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of
its Subsidiaries or any of its or their respective properties,
including any Environmental Action, pending or threatened
before any court, governmental agency or arbitrator that (i)
would be reasonably likely to have a Material Adverse Effect
or (ii) purports to affect the legality, validity or
enforceability of any Loan Document or Covered Document or the
transactions contemplated by the Loan Documents and the
Covered Documents.
37
(g) The Consolidated balance sheet of Group and its
Subsidiaries as at January 1, 2000, and the related
Consolidated statements of operations, stockholders' equity
and cash flow of Group and its Subsidiaries for the Fiscal
Year then ended, accompanied by an unqualified opinion of
Deloitte & Touche LLP, and the Consolidated balance sheet of
Group and its Subsidiaries as at July 1, 2000, and the related
Consolidated statements of operations, stockholders' equity
and cash flow of Group and its Subsidiaries for the six months
then ended, duly certified by a Responsible Financial Officer
of Group, copies of which have been furnished to each Lender
Party, fairly present, subject, in the case of said balance
sheet as at July 1, 2000, and said statements of operations,
stockholders' equity and cash flow for the six months then
ended, to year-end audit adjustments, the Consolidated
financial condition of Group and its Subsidiaries as at such
dates and the Consolidated results of operations of Group and
its Subsidiaries for the periods ended on such dates, all in
accordance with GAAP applied on a consistent basis.
(h) The Consolidated forecasted balance sheet,
statements of operations, stockholders' equity and cash flow
of Group and its Subsidiaries delivered to the Lender Parties
pursuant to Section 2.8 and 6.1(a)(xiv) were prepared in good
faith on the basis of the assumptions stated therein, which
assumptions were fair in light of the conditions existing at
the time of delivery of such forecasts, and represented, at
the time of delivery, Group's best estimate of its future
financial performance.
(i) There shall have occurred no material adverse
change in (i) the business, condition (financial or
otherwise), operations, performance, properties or prospects
of Group and its Subsidiaries, taken as a whole, from that
which was, in each case on and as of the Effective Date,
either publicly disclosed, or otherwise furnished in writing
to the Lender Parties, by or on behalf of Group, (ii) the
ability of any Loan Party to perform its obligations under the
Loan Documents or (iii) the ability of the Administrative
Agent, the Collateral Trustee, the Debt Coordinators or the
Lender Parties to enforce the Loan Documents.
(j) The written information, exhibits and reports
furnished by or on behalf of any Loan Party to any Agent or
any Lender Party in connection with the negotiation of the
Loan Documents or pursuant to the terms of the Loan Documents,
taken as a whole, contained no untrue statement of a material
fact and did not omit to state a material fact necessary to
make the statements made therein not misleading.
(k) Neither any Loan Party nor any of its
Subsidiaries is engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any loan or drawing under any letter of credit or
bankers' acceptance or other credit extension under any
Covered Facility will be
38
used to purchase or carry any Margin Stock or to extend credit
to others for the purpose of purchasing or carrying any Margin
Stock (except for purchases of Group Equity Interests pursuant
to the Equity Derivatives).
(l) Neither any Loan Party nor any of its
Subsidiaries is an "investment company", or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the making
of any loan, nor the issuance of any letter of credit or
bankers' acceptance or any other credit extension under any
Covered Facility, nor the application of the proceeds or
repayment thereof by any Loan Party or any of its
Subsidiaries, nor the consummation of the other transactions
contemplated by the Loan Documents, will violate any provision
of such Act or any rule, regulation or order of the Securities
and Exchange Commission thereunder.
(m) Neither any Loan Party nor any of its
Subsidiaries is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or
subject to any charter or corporate restriction that would be
reasonably likely to have a Material Adverse Effect.
(n) The Collateral Documents create a valid and
perfected first priority security interest (to the extent
applicable) in the Collateral, securing the payment of the
Secured Obligations, and all filings and other actions
necessary or desirable to perfect and protect such security
interest have been duly taken or provided for. The Loan
Parties are the legal and beneficial owners of the Collateral
free and clear of any Lien, except for the liens and security
interests created or permitted under the Loan Documents, and
where applicable, the Covered Facilities.
(o) Each Loan Party is, individually and together
with its Subsidiaries, Solvent.
(p) Set forth on Schedule 4.1(p) hereto is a complete
and accurate list of all Plans, Multiemployer Plans and
Welfare Plans on the date hereof. Except as set forth on
Schedule 4.1(p):
(i) No ERISA Event has occurred or is
reasonably expected to occur with
respect to any Plan that has
resulted in or is reasonably
expected to result in a material
liability of any Loan Party or any
ERISA Affiliate.
(ii) Schedule B (Actuarial Information)
to the most recent annual report
(Form 5500 Series) for each Plan,
copies of which have been filed with
the Internal Revenue Service and
furnished to the Lender Parties, is
complete and
39
accurate and fairly presents the
funding status of such Plan, and
since the date of such Schedule B
there has been no material adverse
change in such funding status.
(iii) Neither any Loan Party nor any ERISA
Affiliate has incurred or is
reasonably expected to incur any
Withdrawal Liability exceeding
$5,000,000 to any Multiemployer
Plan.
(iv) Neither any Loan Party nor any ERISA
Affiliate has been notified by the
sponsor of a Multiemployer Plan that
such Multiemployer Plan is in
reorganization or has been
terminated, within the meaning of
Title IV of ERISA, and no such
Multiemployer Plan is reasonably
expected to be in reorganization or
to be terminated, within the meaning
of Title IV of ERISA.
(q) (i) The operations and properties of
each Loan Party and each of its
Subsidiaries comply in all material
respects with all applicable
Environmental Laws and Environmental
Permits, all material past
non-compliance with such
Environmental Laws and Environmental
Permits has been resolved without
ongoing material obligations or
costs, and no circumstances exist
that would be reasonably likely to
(A) form the basis of an
Environmental Action against any
Loan Party or any of its
Subsidiaries or any of their
properties that could be reasonably
expected to have a Material Adverse
Effect or (B) cause any such
property to be subject to any
material restrictions on ownership,
occupancy, use or transferability
under any Environmental Law.
(ii) None of the properties currently or
formerly owned or operated by any
Loan Party or any of its
Subsidiaries is, to the knowledge of
any Loan Party with respect to
formerly owned properties, listed or
proposed for listing on the NPL or
on the CERCLIS or any analogous
foreign, state or local list or is
adjacent to any such property,
except where such listing would not
reasonably be expected to have a
Material Adverse Effect; there are
no and never have been any
underground or aboveground storage
tanks or any surface impoundments,
septic tanks, pits, sumps or lagoons
in which Hazardous Materials are
being or have been treated, stored
or disposed on any property
currently owned or operated by any
Loan Party or any of its
Subsidiaries or, to
40
the best of its knowledge, on any
property formerly owned or operated
by any Loan Party or any of its
Subsidiaries that in any case could
reasonably be expected to have a
Material Adverse Effect; there is no
asbestos or asbestos-containing
material on any property currently
owned or operated by any Loan Party
or any of its Subsidiaries that in
any case could reasonably be
expected to have a Material Adverse
Effect; and Hazardous Materials have
not been released, discharged or
disposed of on any property
currently or, to the best knowledge
of the Loan Parties, formerly owned
or operated by any Loan Party or any
of its Subsidiaries that in any case
could reasonably be expected to have
a Material Adverse Effect.
(iii) Neither any Loan Party nor any of
its Subsidiaries is undertaking, and
has not completed, either
individually or together with other
potentially responsible parties, any
investigation or assessment or
remedial or response action relating
to any actual or threatened release,
discharge or disposal of Hazardous
Materials at any site, location or
operation, either voluntarily or
pursuant to the order of any
governmental or regulatory authority
or the requirements of any
Environmental Law that in any case
could reasonably be expected to have
a Material Adverse Effect; and all
Hazardous Materials generated, used,
treated, handled or stored at, or
transported to or from, any property
currently or formerly owned or
operated by any Loan Party or any of
its Subsidiaries have been disposed
of in a manner not reasonably
expected to result in material
liability to any Loan Party or any
of its Subsidiaries.
(r) (i) Each Loan Party and each of its
Subsidiaries and Affiliates has
filed, has caused to be filed or has
been included in all tax returns
(Federal, state, local and foreign)
required to be filed and has paid
all taxes shown thereon to be due,
together with applicable interest
and penalties.
(ii) Set forth on Schedule 4.1(r) hereto
is a complete and accurate list, as
of the date hereof, of each taxable
year of each Loan Party and each of
its Subsidiaries and Affiliates for
which Federal income tax returns
have been filed and for which the
expiration of the applicable statute
of limitations for assessment or
collection has not occurred by
reason of extension or otherwise (an
"Open Year").
41
(ii) The aggregate unpaid amount, as of
the date hereof, of adjustments to
the Federal income tax liability of
each Loan Party and each of its
Subsidiaries and Affiliates proposed
by the Internal Revenue Service with
respect to Open Years does not
exceed $5,000,000. Set forth on
Schedule 4.1(r) hereto is a complete
and accurate description, as of the
date hereof, of each such item that
separately, for all such Open Years,
together with applicable interest
and penalties, exceeds $1,000,000.
No issues have been raised by the
Internal Revenue Service in respect
of Open Years that, in the
aggregate, would be reasonably
likely to have a Material Adverse
Effect.
(iii) The aggregate unpaid amount, as of
the date hereof, of adjustments to
the state, local and foreign tax
liability of each Loan Party and its
Subsidiaries and Affiliates proposed
by all state, local and foreign
taxing authorities (other than
amounts arising from adjustments to
Federal income tax returns) does not
exceed $5,000,000. No issues have
been raised by such taxing
authorities that, in the aggregate,
would be reasonably likely to have a
Material Adverse Effect.
(s) Neither the business nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that would be reasonably
likely to have a Material Adverse Effect.
(t) Set forth on Schedule 4.1(t) hereto is a complete and
accurate list of all Liens on the property or assets of any Loan Party
on the date hereof, showing the lienholder thereof and the property or
assets of such Loan Party subject thereto.
(u) Set forth on Schedule 4.1(u) hereto is a complete and
accurate list of all Material Real Property owned by any Loan Party on
the date hereof, showing the street address, county or other relevant
jurisdiction, state and record owner thereof. Each Loan Party or such
Subsidiary has good and marketable fee simple title to such real
property, free and clear of all Liens, other than Liens created or
permitted by the Loan Documents.
(v) Set forth on Schedule 4.1(v) hereto is a complete and
accurate list of all Material Leased Property under which any Loan
Party or any of its Subsidiaries is the lessee on the date hereof,
showing the street address, county or other relevant jurisdiction,
state, lessor, lessee, expiration date and annual rental cost thereof.
42
(w) Set forth on Schedule 4.1(w) hereto is a complete and
accurate list of all Investments held by any Loan Party or any of its
Subsidiaries on the date hereof, showing the amount, obligor or issuer
and maturity, if any, thereof.
(x) Set forth on Schedule 4.1(x) hereto is a complete and
accurate list as of the date hereof of all United States and Included
Foreign Jurisdiction patents, trademarks, trade names, service marks
and registered copyrights, and all applications therefor, of each
Credit Party, showing the United States and each Included Foreign
Jurisdiction in which registered, the registration number and the date
of registration.
(y) Each Foreign Subsidiary owned directly or indirectly by
Group is either a "controlled foreign corporation", as defined under
Section 957 of the Code, or owned, directly or indirectly, by one or
more "controlled foreign corporations".
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.1 Events of Default. If any of the following events
("Events of Default") shall occur hereunder, or under any other Loan Document,
and be continuing:
(a) any Loan Party shall fail to pay any amounts payable under
any Loan Document after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made;
or
(c) any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in Section 2.5(f), (j), (k), (m) or
Section 2.6, 2.7, 2.8 or 2.9; or
(d) any Loan Party shall fail to perform or observe any other
term, covenant or agreement contained in any Loan Document or any
Covered Document (to the extent not superseded and replaced pursuant to
Section 2.1 hereof) on its part to be performed or observed if such
failure shall remain unremedied for 10 Business Days (i) after written
notice thereof shall have been given to such Loan Party by the Debt
Coordinators or (ii) if earlier, after any Authorized Officer of Group
or Warnaco obtains knowledge thereof; or
(e) any Loan Party or any of its Subsidiaries shall fail to
pay any principal of or premium or interest on or any other amount
payable in respect of any Debt that is outstanding in a principal or
reimbursement amount (or, in the case of any Hedge Agreement, its
Agreement Value) of (i) with respect to any Covered Facility, at least
43
$5,000,000 or (ii) with respect to any Debt, at least $20,000,000 in
the aggregate; in any case either individually or in the aggregate of
such Loan Party or such Subsidiary (as the case may be), when the same
becomes due and payable whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise, and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument
relating to any such Debt as specified in clause (ii) and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt
as specified in clause (ii) or otherwise to cause, or to permit the
holder thereof to cause, such Debt as specified in clause (ii) to
mature; or any such Debt as specified in clause (ii) shall be declared
to be due and payable or is then required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt as specified in clause (ii) shall be then
required to be made, in each case prior to the stated maturity thereof;
or
(f) any Loan Party or any of its Subsidiaries (other than any
Immaterial Subsidiary) shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan
Party or any of its Subsidiaries (other than any Immaterial Subsidiary)
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, or other similar official for it or for any
substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 30 days or any of
the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or any Loan Party or any
of its Subsidiaries (other than any Immaterial Subsidiary) shall take
any corporate action to authorize any of the actions set forth above in
this subsection (f); or
(g) any judgment or order for the payment of money in excess
of $20,000,000 shall be rendered against any Loan Party or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect, provided however that any judgment
or order shall not give rise to an Event of Default if and for so long
as (A) the amount of such judgment or order which remains unsatisfied
is covered by a valid and binding insurance policy issued by an insurer
rated at least "A" by A.M. Best and covering full payment thereof and
(B)
44
such insurer has been notified, and has not disputed the claim made
for payment, of the amount of such judgment or order; or
(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that could be
reasonably likely to have a Material Adverse Effect, and there shall be
any period of 10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(i) any provision of any Loan Document, after delivery thereof
pursuant to Section 2.5(k) or 6.1, shall for any reason cease to be
valid and binding on or enforceable against any Loan Party to it, or
any such Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 2.5(k) or 6.1 shall for any reason (other than pursuant to the
terms thereof) cease to create a valid and perfected first priority
lien on and security interest in the Collateral purported to be covered
thereby; or
(k) (i) Group shall at any time cease to have legal and
beneficial ownership of 100% of the capital stock of Warnaco, or,
directly or indirectly, any other Loan Party (except (A) if such
parties shall merge in accordance with Section 2.6(c) and (B) as
described in the definition of Wholly-Owned Subsidiary); or (ii) any
Person, or two or more Persons acting in concert (other than Excluded
Persons), shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of Voting
Stock of Group (or other securities convertible into such Voting Stock)
representing 25% or more of the combined voting power of all Voting
Stock of Group; or (iii) any Person, or two or more Persons acting in
concert (other than Excluded Persons) shall have acquired by contract
or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of,
the power to exercise, directly or indirectly, a controlling influence
over the management or policies of Group, or control over Voting Stock
of Group (or other securities convertible into such securities)
representing 25% or more of combined voting power of all Voting Stock
of Group; or (iv) Continuing Directors shall cease for any reason to
constitute a majority of the board of directors of Group; or (v) Xxxxx
X. Xxxxxxx (or, in the case of her death or disability, another officer
or officers of comparable experience and ability selected by Group
within 180 days thereafter after consultation with the Debt
Coordinators) shall cease to be Chairman and Chief Executive Officer of
Group and Warnaco; or
(l) any ERISA Event shall have occurred with respect to a Plan
and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any
and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Loan Parties and the
ERISA Affiliates related to such ERISA Event) exceeds $5,000,000; or
state in
45
writing; or
(m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Loan Parties and the ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds
$5,000,000 or requires payments exceeding $5,000,000 per annum; or any
Loan Party or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV
of ERISA, and as a result of such reorganization or termination the
aggregate annual contributions of the Loan Parties and the ERISA
Affiliates to all Multiemployer Plans that are then in reorganization
or being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $5,000,000;
then, and in any such event, the Debt Coordinators (i) shall at the request, or
may with the consent, of the Required Lenders, by notice to Group, declare all
commitments of each Lender Party and the obligation of each Lender Party under
the Covered Facilities to make loans, issue letters of credit or bankers'
acceptances or make other credit extensions (other than reimbursements to other
Lender Parties in respect of loans and drawn letters of credit and bankers'
acceptances) to be terminated, whereupon the same shall forthwith terminate, and
(ii) shall at the request, or may with the consent, of the Required Lenders, (A)
by notice to Group, declare all loans, all interest thereon and all other
amounts payable under the Covered Facilities and the Loan Documents to be
forthwith due and payable, whereupon the loans, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by all of the Loan Parties, (B) by notice to each party required under
the terms of any agreement in support of which a letter of credit or bankers'
acceptance is issued, request that all Obligations under such agreement be
declared to be due and payable and (C) by notice to each applicable letter of
credit and bankers' acceptance issuing bank, direct such issuing bank to deliver
a "default termination notice" (or similar notice) to the beneficiary of each
letter of credit or bankers' acceptance issued by it, and such issuing bank
shall deliver such default termination notices (or similar notices); provided
that in the event of an actual or deemed entry of an order for relief with
respect to Group or any of its Subsidiaries under the Federal Bankruptcy Code (a
"Bankruptcy Event"), (x) the commitments of each Lender Party and the obligation
of each Lender Party to make loans, issue letter of credit, bankers' acceptance
or other credit extensions under the Covered Facilities (other than
reimbursements to other Lender Parties in respect of drawn letters of credit and
bankers' acceptances) shall automatically be terminated and (y) all loans under
all Covered Facilities, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
all Loan Parties.
46
ARTICLE VI
CONDITIONS OF EFFECTIVENESS
SECTION 6.1 Conditions of Effectiveness. Articles II and III
of this Agreement shall become effective as of the date first above written (the
"Effective Date") when and only when all of the conditions set forth in this
Article VI have been satisfied.
(a) The Administrative Agent shall have received (except as
otherwise specified in Section 2.14) on or before the Effective Date
the following, each dated such day (unless otherwise specified), in
form and substance satisfactory to, or waived by, the Debt Coordinators
(unless otherwise specified) and in sufficient copies for each Lender
Party:
(i) A counterpart of this Agreement executed by each
Loan Party, the Collateral Trustee, the Administrative Agent
and the Debt Coordinators.
(ii) A security agreement in substantially the form
of Exhibit A hereto (together with (A) each other security
agreement and security agreement supplement delivered pursuant
to Section 2.5(k), and (B) with respect to each Included
Foreign Subsidiary, one or more security agreements securing
such Credit Parties' Obligations; in each of the foregoing
cases as amended, collectively, the "Security Agreement"),
duly executed by each Credit Party, together with the
following instruments and documents:
(1) certificates representing the Pledged
Shares (other than where the Pledged Shares are
uncertificated) referred to therein accompanied,
where applicable, by undated stock powers executed in
blank and instruments evidencing the Pledged Debt
indorsed in blank (or other notations or actions as
may be required under local law to perfect the pledge
of the Pledged Shares),
(2) proper financing statements in form for
filing, under the Uniform Commercial Code of all
jurisdictions that the Debt Coordinators may deem
necessary or desirable in order to perfect and
protect the first priority liens and security
interests created under the Security Agreement,
covering the Collateral described in the Security
Agreement,
(3) completed requests for information,
dated on or before the Effective Date, listing all
effective financing statements filed in the
jurisdictions referred to in clause (2) above that
name any U.S. Credit Party as debtor, together with
copies of such other financing statements,
(4) preparation and execution of all
other recordings and
47
filings of or with respect to the Security Agreement
that the Debt Coordinators may reasonably deem
necessary or desirable in order to create a valid
first priority Lien against the applicable Collateral
(subject to Permitted Liens and excluding all filings
necessary to perfect security interests in Collateral
consisting of fixtures located in third party retail
locations and used to display finished goods in such
locations), including, with respect to Foreign Credit
Parties, such local law pledge agreements, deeds of
trust, powers of attorney, notations in shareholders'
registries, or such other documents or instruments as
may be required under local law to create and perfect
security interests in the applicable Collateral, in
each case as determined by, and in form and substance
satisfactory to, the Debt Coordinators,
(5) evidence of the insurance required by
the terms of the Security Agreement, and
(6) evidence that all other action that the
Debt Coordinators may deem necessary or desirable in
order to perfect and protect the first priority liens
and security interests created under the Security
Agreement will be taken (including, without
limitation, receipt of duly executed payoff letters
and UCC-3 termination statements).
(iii) A Domestic Subsidiary Guaranty, together with
(A) each other Domestic Subsidiary Guaranty Supplement
delivered pursuant to Section 2.5(k) and (B) with respect to
each Included Foreign Subsidiary, a guaranty of such of the
other Loan Parties' Obligations under those Existing
Facilities as was guaranteed by such Subsidiary immediately
prior to the Effective Date, in form and substance reasonably
acceptable to the Debt Coordinators; in each of the foregoing
cases as amended, (collectively, the "Subsidiary Guaranty"),
duly executed by each Credit Party other than Group.
(iv) A guaranty in substantially the form of Exhibit
C hereto (as amended, the "Parent Guaranty"), duly executed by
Group.
(v) (A) Deeds of trust, trust deeds, mortgages,
leasehold mortgages and leasehold deeds of trust in
substantially the form of Exhibit D hereto and covering the
properties listed on Schedule 4.1(u) and Part A of Schedule
4.1(v) (together with the Assignments of Leases and Rents
referred to therein and each other mortgage delivered pursuant
to Section 2.5(k)), in each case as amended, the "Mortgages")
and (B) assignments of leases and rents to a special purpose
Subsidiary of Group (other than Warnaco Operations
Corporation), with respect to those leases described in Part A
of Schedule 4.1(v) as to which the landlord has not consented
to the granting of a leasehold mortgage or leasehold deed of
trust in form and substance satisfactory to the Debt
Coordinators (together with the
48
assignments of leases and rents delivered pursuant to Section
2.5(k)), to the extent such assignment is permitted by the
applicable lease, in each case as amended, the "Leasehold
Assignments"); in each case duly executed by the appropriate
Credit Party, together with the following instruments and
documents:
(1) evidence that counterparts of the
Mortgages have been duly executed on or before the
Effective Date and will be recorded on or after the
Effective Date in all filing or recording offices
that the Debt Coordinators may deem reasonably
necessary or desirable in order to create a valid
first and subsisting Lien on the property described
therein in favor of the Collateral Trustee for the
benefit of the Secured Parties and that all filing
and recording taxes and fees have been paid,
(2) fully paid American Land Title
Association Lender's Extended Coverage title
insurance policies or marked-up unconditional
commitments to insure (the "Mortgage Policies") in
form and substance, with endorsements and in amounts
reasonably acceptable to the Debt Coordinators,
issued, coinsured and reinsured by title insurers
reasonably acceptable to the Debt Coordinators (but
not to exceed the fair market value of such
property), insuring the Mortgages to be valid first
and subsisting Liens on the property described
therein, free and clear of all defects (including,
but not limited to, mechanics' and materialmen's
Liens) and encumbrances, excepting only Permitted
Liens, and providing for such other affirmative
insurance (including endorsements for future advances
under the Loan Documents and for mechanics' and
materialmen's Liens) and such coinsurance and direct
access reinsurance as the Debt Coordinators may deem
necessary or desirable,
(3) the Assignments of Leases and Rents in
form attached to the Mortgages, duly executed by the
appropriate Loan Party,
(4) such consents and agreements of lessors
and other third parties, and such estoppel letters
and other confirmations, as the Debt Coordinators may
reasonably deem necessary or desirable,
(5) evidence of the insurance, if any,
required by the terms of the Mortgages, and
(6) evidence that all other action that the
Debt Coordinators may deem reasonably necessary or
desirable in order to create valid first and
subsisting Liens on the property described in the
Mortgages has been taken.
Notwithstanding anything to the contrary contained
in this Section
49
6.1(a)(v), in the event that the provisions of any
lease for any Material Leased Property require that
the tenant obtain the consent of the landlord prior
to (i) mortgaging or encumbering such lease or (ii)
assigning its interest in such lease, the applicable
Credit Party shall use commercially reasonable
efforts (which shall not include the payment of money
to such landlord to satisfy any other condition in
connection with the giving of such consent) to obtain
such consent(s) from the landlord and, in the event
the applicable Credit Party is unable to obtain such
consent(s) after using commercially reasonable
efforts, the applicable Credit Party shall deliver
written notice thereof to the Debt Coordinators and
shall have no further obligation to deliver the
Mortgage or lease assignment to the Debt Coordinators
with respect to such Material Leased Property.
(vi) Intellectual property security agreements in
substantially the form of Exhibit E-1 and E-2 hereto (together
with each other intellectual property security agreement and
intellectual property security agreement supplement delivered
pursuant to Section 2.5(k), in each case as amended,
collectively, the "Intellectual Property Security Agreement"),
duly executed by each Credit Party, together with evidence
that all action that the Debt Coordinators may reasonably deem
necessary or desirable in order to perfect and protect the
first priority liens and security interests required to be
created under the Intellectual Property Security Agreement has
been taken or provided for.
(vii) A Collateral Trust Agreement in substantially
the form of Exhibit F hereto (as amended, the "Collateral
Trust Agreement"), duly executed by Group, the Collateral
Trustee and the Debt Coordinators.
(viii) Certified copies of the resolutions of the
Board of Directors (or other equivalent body) of each Loan
Party (and, where necessary, resolutions of the shareholders
of the Loan Parties) approving the transactions contemplated
by the Loan Documents and each Loan Document to which it is or
is to be a party, and of all documents evidencing other
necessary corporate action and governmental and other third
party approvals and consents, if any, with respect to the
other transactions contemplated by the Loan Documents and each
Loan Document to which it is or is to be a party.
(ix) A copy of a certificate of the Secretary of
State (or equivalent agency) of the jurisdiction of
incorporation or organization of each Loan Party, dated
reasonably near the Effective Date, certifying (A) as to a
true and correct copy of the charter (or other constitutive
documents) of such Loan Party and each amendment thereto on
file in such Secretary's (or equivalent) office and (B) that
(1) such amendments are the only amendments to such Loan
Party's charter (or other constitutive documents) on file in
such Secretary's (or equivalent) office, (2) such Loan Party
has paid all franchise taxes to the date of such certificate
and
50
(C) such Loan Party is duly incorporated or organized and in
good standing or presently subsisting under the laws of the
jurisdiction of its incorporation.
(x) A certificate of each Loan Party, signed on
behalf of such Loan Party by its President or a Vice President
and its Secretary or any Assistant Secretary or a director (or
other equivalent officer), dated the Effective Date (the
statements made in which certificate shall be true on and as
of the Effective Date), certifying as to (A) the absence of
any amendments to the charter (or other constitutive
documents) of such Loan Party since the date of the
governmental certificate referred to in Section 6.1(a)(ix),
(B) a true and correct copy of the bylaws (or other
constitutive documents) of such Loan Party as in effect on the
date on which the resolutions referred to in Section
6.1(a)(viii) were adopted and on the Effective Date, (C) the
due incorporation and good standing or valid existence of such
Loan Party as a corporation organized under the laws of the
jurisdiction of its incorporation or organization, and the
absence of any proceeding for the dissolution or liquidation
of such Loan Party, (D) the truth of the representations and
warranties contained in the Loan Documents as though made on
and as of the Effective Date and (E) the absence of any event
occurring and continuing under the Loan Documents that
constitutes a Default, and such certificate otherwise being in
such form as the Debt Coordinators shall approve.
(xi) A certificate of the director or Secretary or an
Assistant Secretary of each Loan Party certifying the names
and true signatures of the officers of such Loan Party
authorized to sign each Loan Document to which it is or is to
be a party and the other documents to be delivered hereunder
and thereunder.
(xii) A certificate of a Responsible Financial
Officer of Group, in form and substance satisfactory to the
Debt Coordinators, attesting to the Solvency of each Loan
Party.
(xiii) Appraisals of intellectual property from
Xxxxxxxx Xxxxx Xxxxxx & Xxxxx.
(xiv) Such financial, business and other information
regarding each Loan Party and its Subsidiaries as the Lender
Parties shall have requested, including, without limitation,
information as to possible contingent liabilities, tax
matters, environmental matters, obligations under Plans,
Multiemployer Plans and Welfare Plans, collective bargaining
agreements and other arrangements with employees, interim
financial statements dated July 1, 2000 and audited annual
financial statements dated January 1, 2000, in form and
substance satisfactory to the Debt Coordinators.
(xv) Evidence, in form and substance satisfactory to
the Debt Coordinators, that all applicable Environmental Laws
shall have been complied
51
with in all material respects. To the extent that any
information that may become available to the Debt Coordinators
or any Lender Parties shall disclose any hazards, costs or
liabilities under Environmental Laws or otherwise that the
Debt Coordinators deem material, the Debt Coordinators shall
be satisfied that such hazards, costs or liabilities were
adequately reflected in the financial reserves shown on the
financial statements provided pursuant to Section 6.1(a)(xiv).
(xvi) Evidence of insurance naming the Collateral
Trustee as additional insured and loss payee with such
responsible and reputable insurance companies or associations,
and in such amounts and covering such risks, as is
satisfactory to the Debt Coordinators, including, without
limitation, business interruption insurance.
(xvii) A favorable opinion of (i) X.X. Xxxxxx & Co.,
local counsel to the Loan Parties in the United Kingdom, (ii)
Stibbe Simont Xxxxxxx Durhot & Xxxxxx, local counsel to the
Loan Parties in France, (iii) Lovells Boesebeck Droste, local
counsel to the Loan Parties in Germany, (iv) Loyens Loeff,
local counsel to the Loan Parties in the Netherlands, (v)
Xxxxxxx Xxxxxxxxxx Xxxxxxx, local counsel to the Loan Parties
in Canada, (vi) Tuke, Xxxx & Xxxxxxx, PLC, local counsel to
the Loan Parties in Tennessee, (vii) Obermeyer, Rebmann, local
counsel to the Loan Parties in Pennsylvania, (viii) Xxxxxxx &
Xxxxxxx, local counsel to the Loan Parties in Connecticut,
(ix) Womble, Carlisle, Xxxxxxxxx & Rice, local counsel to the
Loan Parties in Georgia, (x) Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, special New York counsel to the Loan Parties, (xi)
General Counsel to the Loan Parties and (xii) Xxxxxx Xxxxxxxxx
& Xxxxxxxxx, special intellectual property counsel to the Loan
Parties in substantially the form of Exhibit H-1 through H-12
hereto, and as to such other matters as any Lender Party
through the Debt Coordinators may reasonably request in form
and substance satisfactory to the Debt Coordinators.
(xviii) Certified copies of the Existing Facilities.
(b) Group shall have paid all (i) accrued fees of the Agents
and the Lender Parties to the Administrative Agent for deposit in the
Administrative Agent's Account, and the Administrative Agent will
distribute such funds to the Lender Parties not later than the next
succeeding Business Day thereafter and (ii) all accrued expenses of the
Agents (including the accrued fees and expenses of counsel to the Debt
Coordinators) invoiced prior to the Effective Date.
(c) Each Loan Party which is a Foreign Subsidiary shall have
appointed Corporation Service Company as its agent to receive service
of process, in accordance with the provisions specified in Section
9.6(c) hereof.
(d) The following statements shall be true and the
Administrative Agent shall
52
have received on behalf of each Lender Party a certificate signed by a
duly authorized officer of Group, dated the Effective Date, stating
that:
(i) the representations and warranties contained in
each Loan Document and in each Covered Facility are correct on
and as of the Effective Date, other than any such
representations or warranties that, by their terms, refer to a
specific date other than the Effective Date, in which case as
of such specific date; and
(ii) no Default has occurred and is continuing, or
would result from the transactions contemplated by this
Agreement and the other Loan Documents;
(e) Group shall have delivered the Modification Notes required
to be delivered under the Memoranda of Understanding as in effect on
the Effective Date and referred to in items B.18 and B.19 of Schedule
II to the Intercreditor Agreement and shall have paid the amounts
required to be paid under Section 2 of such Memoranda of Understanding;
and
(f) the Administrative Agent shall have received such other
approvals, opinions or documents as the Debt Coordinators may
reasonably request.
SECTION 6.2 Determinations Under Section 6.1. For purposes of
determining compliance with the conditions specified in Section 6.1, each Lender
Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Debt Coordinators responsible for the transactions contemplated
by the Loan Documents shall have received notice from such Lender Party prior to
the Effective Date specifying its objection thereto.
ARTICLE VII
EFFECTIVE DATE PAYMENTS AND COMMITMENT REDUCTIONS
SECTION 7.1 Facility Reductions. On the Effective Date, the
committed amounts of the Covered Facilities shall be reduced and certain amounts
reallocated as described in Schedule 7.1 (which Schedule will specify in detail
the allocations to be made in respect of each Covered Facility). To the extent
the aggregate outstanding credit extensions under any Covered Facility exceed
the aggregate commitments thereunder (as so reduced), such credit extensions
constituting loans shall be prepaid by depositing sufficient funds with the
Administrative Agent in the Administrative Agent's Account on the Effective Date
in the amount of such excess, and the Administrative Agent will distribute such
funds to the Lender Parties not later than the next succeeding Business Day
thereafter.
53
SECTION 7.2 Extension Fee. On the Effective Date, Group shall
pay to the Administrative Agent for deposit in the Administrative Agent's
Account, for the pro rata benefit of the Lender Parties party to the Extending
Facilities and the New Trade Credit Facility, an extension fee of 0.75% of the
outstanding commitments, and, without duplication, loans and other credit
extensions outstanding, under each of the Extending Facilities, and the
Administrative Agent will distribute such funds to the Lender Parties not later
than the next succeeding Business Day thereafter.
SECTION 7.3 Approval Fee. On the Effective Date, Group shall
pay to the Administrative Agent for deposit in the Administrative Agent's
Account, for the pro rata benefit of the Lender Parties party to the Existing
Facilities that are not Extending Facilities and who execute and deliver this
Agreement, an amendment fee of 0.25% of the outstanding principal balance of the
term loans and revolving credit commitments of such Lender Parties outstanding
under such Existing Facilities, and the Administrative Agent will distribute
such funds to the Lender Parties not later than the next succeeding Business Day
thereafter.
ARTICLE VIII
THE DEBT COORDINATORS, ADMINISTRATIVE AGENT
AND COLLATERAL TRUSTEE
SECTION 8.1 Duties. The Debt Coordinators, the Administrative
Agent and the Collateral Trustee (i) shall have no duties or responsibilities
under this Agreement other than as specifically provided hereunder, together
with such powers and discretion as are reasonably incidental thereto, (ii) shall
be entitled to advice of counsel concerning all matters pertaining to their
powers and duties hereunder, (iii) shall not be responsible for the negligence
or misconduct of any agents, nominees or attorneys-in-fact reasonably selected
by them, (iv) may rely, and shall be fully protected in acting, upon any
resolution, statement, certificate, instrument, opinion, report, notice,
request, consent, order or other paper or document which it believes in good
faith to be genuine and to have been signed or presented by the proper party or
parties or, in the case of telecopies, to have been sent by the proper party or
parties to the Debt Coordinators, the Administrative Agent or the Collateral
Trustee, as applicable, (v) shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders or all of the Lender Parties, as
applicable, and such instructions shall be binding upon all Lender Parties;
provided that neither Debt Coordinator, the Administrative Agent nor the
Collateral Trustee shall be required to take any action that exposes them to
personal liability or that is contrary to this Agreement or the other Loan
Documents or applicable law, and the Collateral Trustee shall be entitled to the
rights and protections of the Collateral Trust Agreement.
54
SECTION 8.2 Costs and Expenses. (a) The Loan Parties agree to
pay on demand (i) to the Debt Coordinators, the Administrative Agent, the Lead
Arrangers and the Collateral Trustee all reasonable costs and expenses,
including, without limitation, the reasonable costs and expenses of their
counsel and of any experts and agents, that the Debt Coordinators, the
Administrative Agent, the Lead Arrangers and the Collateral Trustee may incur in
connection with (A) the administration of this Agreement and the other Loan
Documents, (B) the exercise or enforcement of any rights of the Debt
Coordinators, the Administrative Agent, the Collateral Trustee or the Lender
Parties hereunder or under any of the other Loan Documents or (C) the failure of
any Loan Party to perform or observe any of the provisions hereof and (ii) to
the Debt Coordinators, the Administrative Agent, the Lead Arrangers, the
Collateral Trustee and each Lender Party all costs and expenses, including,
without limitation, the costs and expenses of their counsel and of any experts
and agents, that the Debt Coordinators, the Administrative Agent, the Lead
Arrangers, the Collateral Trustee and each Lender Party may incur after the
commencement of any bankruptcy, insolvency or similar proceeding affecting
creditors' rights generally in connection with the administration of this
Agreement and the other Loan Documents or the exercise or enforcement of any
rights.
(b) The Loan Parties agree to indemnify and hold harmless each
Debt Coordinator, the Administrative Agent, the Collateral Trustee, the
Lender Parties and, in each case, each of their Affiliates and their
respective officers, directors, employees, agents and advisors (each,
an "Indemnified Party") from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or
proceeding or preparation of a defense in connection therewith) this
Agreement (including, without limitation, enforcement of this
Agreement), except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. Without prejudice to the
survival of any other agreement of any Loan Party hereunder or under
any other Loan Document, the agreements and obligations of the Loan
Parties contained in this Section 8.2 shall survive the payment in full
of all amounts payable under the Covered Facilities or any of the Loan
Documents.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and sent as specified in Section 8.1
of the Intercreditor Agreement. Amendments.
55
SECTION 9.2 Amendments. No amendment or waiver of any
provision of this Agreement, nor consent to any departure therefrom by any party
hereto, shall in any event be effective unless the same shall be in writing and
otherwise in compliance with the provisions specified in Section 2.2 of the
Intercreditor Agreement.
SECTION 9.3 No Waiver; Remedies. No failure on the part of the
Debt Coordinators, the Administrative Agent or the Collateral Trustee to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 9.4 Execution in Counterparts. This Agreement 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. Manual delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
SECTION 9.5 Binding Effect. This Agreement shall become
effective when it shall have been executed by the Loan Parties, the Debt
Coordinators, the Administrative Agent and the Collateral Trustee and thereafter
shall be binding upon and inure to the benefit of the Loan Parties, the Debt
Coordinators, the Administrative Agent and the Collateral Trustee and their
respective successors and assigns, except that no Loan Party shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Debt Coordinators.
SECTION 9.6 Jurisdiction; Process Agent; Judgment Currency;
Waiver of Immunities; Etc. (a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or any
of the other Loan Documents to which it is a party or any of the Covered
Documents, or for recognition or enforcement of any judgment (other than, in any
case, with respect to any foreclosure or other enforcement action with respect
to or in any way related to the Collateral which is reasonably determined by the
Debt Coordinators to be advisable to be brought in a court of local
jurisdiction), and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such Federal court (or, in such local court, as
aforesaid). Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the
56
fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement or any of
the other Loan Documents to which it is a party in any New York State
or Federal court. Each of the parties hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such
court.
(c) Each Loan Party which is a Foreign Subsidiary hereby
irrevocably and unconditionally appoints Corporation Service Company
with an office on the date hereof at 0 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, Xxxxxx Xxxxxx and its successors hereunder (the "Process
Agent"), as its agent to receive on behalf of such Loan Party and its
property service of copies of the summons and complaint and any other
process which may be served in any such suit, action or proceeding
brought in any New York State court or Federal court of the United
States of America sitting in New York City, and any appellate court
from any thereof. Such service may be made by mailing or delivering a
copy of such process to Group in care of the Process Agent at the
address specified above for the Process Agent, and each such Loan Party
hereby irrevocably authorizes and directs the Process Agent to accept
such service on its behalf. Each such Loan Party further consents to
service of process which may be served in any action or suit brought in
any New York State court or Federal court of the United States of
America sitting in New York City, and any appellate court from any
thereof, by mailing copies thereof by registered or certified mail,
postage prepaid, to such Loan Party at its address for notice
hereunder, such service to become effective 30 days after mailing.
Failure of the Process Agent to give notice to any such Loan Party or
failure of any such Loan Party to receive notice of such service of
process shall not affect in any way the validity of such service on the
Process Agent or such Loan Parties. Each Loan Party which is a Foreign
Subsidiary covenants and agrees that it shall take any and all
reasonable action, including the execution and filing of any and all
documents, that may be necessary to continue the designation of the
Process Agent above in full force and effect, and to cause the Process
Agent to act as such. In the event that at any time such Process Agent
shall for any reason cease to maintain an office in the Borough of
Manhattan in New York City, or cease to act as Process Agent, then as
an alternate method of service, each such Loan Party irrevocably
consents to the service of any and all process in any such suit, action
or proceeding in any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate
court from any thereof, by mailing of copies of such process to such
Loan Party at its address specified in Section 8.1 of the Intercreditor
Agreement. Each such Loan Party acknowledges and agrees that nothing
herein shall affect the right to effect service of process in any other
manner permitted by law or shall limit the right to xxx in any other
jurisdiction.
(d) If for the purpose of obtaining judgment in any court it
is necessary to convert a sum due hereunder to any party hereunder in
one currency into another currency, the parties hereto agree, to the
fullest extent permitted by law, that the rate of exchange used shall
be that at which in accordance with normal banking procedures such
57
party could purchase the first currency with such other currency in New
York City on the day which is at least two Business Days prior to the
day on which final judgment is rendered.
(e) To the fullest extent permitted by law, the obligation of
any party in respect of any sum payable hereunder by it to any other
party hereunder shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than Dollars (the "Agreement Currency"), be
discharged only to the extent that on the Business Day following
receipt by such other party of any sum adjudged to be so due in the
Judgment Currency such other party may in accordance with normal
banking procedures purchase the Agreement Currency with the Judgment
Currency; if the amount of the Agreement Currency which could have been
so purchased is less than the sum originally due to such other party in
the Agreement Currency, such first party agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such
other party against such loss, and, if the amount of the Agreement
Currency which could have been so purchased exceeds the sum originally
due to such other party, such other party agrees to remit to such first
party such excess.
(f) To the extent that any of the parties hereto has or
hereafter may acquire any immunity (sovereign or otherwise) from any
legal action, suit or proceeding, form jurisdiction of any court or
from set-off or any legal process (whether service or notice,
attachment prior to judgment, attachment in aid of execution of
judgment, execution or judgment or otherwise) with respect to itself or
any of its property each of the parties hereto hereby irrevocably
waives and agrees not to plead or claim such immunity in respect of its
obligations under this Agreement and the other Loan Documents. Each of
the parties hereto agrees that the waivers set forth above shall have
the fullest extent permitted under the Foreign Sovereign Immunities Act
of the United States of America and are intended to be irrevocable and
not subject to withdrawal for purposes of such act.
SECTION 9.7 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
SECTION 9.8 Waiver of Jury Trial. Each of the parties hereto
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Agreement or any of the Loan Documents or the actions of the
Debt Coordinators, the Administrative Agent or the Collateral Trustee or any
Lender Party in the negotiation, administration, performance or enforcement
hereof or thereof.
SECTION 9.9 Appointment and Acknowledgment. Each Subsidiary of
Group which is a party hereto hereby (i) irrevocably appoints Group as its
representative in connection with the entering into of the Intercreditor
Agreement, and agrees to be bound by the terms and provisions of the
Intercreditor Agreement as though it had been a signatory thereto and (ii)
acknowledges that Group will, concurrently with the execution and delivery of
this Agreement,
58
execute and deliver the Intercreditor Agreement in its individual capacity and
as representative of each such Subsidiary.
SECTION 9.10 Conflict with Other Agreements. In the event of
any conflict between this Agreement (or any portion thereof) and any Collateral
Document now existing or hereafter entered into (excluding the Collateral Trust
Agreement), the terms of this Agreement shall prevail. In the event of any
conflict between this Agreement (or any portion thereof) and the Collateral
Trust Agreement, the terms of the Collateral Trust Agreement shall prevail.
SECTION 9.11 Foreign Subsidiary Collateral Limitation.
Notwithstanding any provision of any Loan Document to the contrary, (i) no more
than 66% of the Equity Interests in or of any Foreign Subsidiary shall be
pledged or similarly hypothecated to guaranty or support any Obligation of any
U.S. Credit Party, (ii) no Foreign Subsidiary shall guaranty or otherwise
support any Obligation of any U.S. Credit Party and (iii) no security or similar
interest in the assets of any Foreign Subsidiary (other than not more than 66%
of the Equity Interests in or of any Foreign Subsidiary) shall guarantee or
support any Obligation of any U.S. Credit Party. The parties agree that any
pledge, guaranty or security or similar interest made or granted in
contravention of this Section 9.11 shall be void ab initio.
[remainder of this page intentionally left blank]
59
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE BANK OF NOVA SCOTIA,
as Administrative Agent
and Debt Coordinator
By: /s/ Xxxx Xxxxxxx
---------------------------------
Title: Managing Director
CITIBANK, N.A.,
as Debt Coordinator
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Title: Vice President
STATE STREET BANK AND
TRUST COMPANY,
as Collateral Trustee
By: /s/ [Illegible]
----------------------------------
Title: Vice President
CITICORP USA, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Title: Vice President
THE WARNACO GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President, General
Counsel and Secretary
WARNACO INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
1
Title: Vice President, General
Counsel and Secretary
DESIGNER HOLDINGS LTD.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President, General
Counsel and Secretary
OUTLET STORES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
OUTLET HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
RIO SPORTSWEAR, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
AEI MANAGEMENT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
JEANSWEAR HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
XXXXXX XXXXX JEANSWEAR COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
2
CKJ HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
CKJ SOURCING, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
ABBEVILLE MANUFACTURING COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
KAI JAY MANUFACTURING COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
NEW BEDFORD SHIPPERS CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
MYRTLE AVENUE, INC.
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Title: Assistant Treasurer
XXXXXXX STREET INC.
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Title: Treasurer
WARNACO U.S., INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
3
Title: Vice President and Secretary
WARNACO MEN'S SPORTSWEAR INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
X.X. XXXXXXXX COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
PENHALIGON'S BY REQUEST, INC.
By: /s/ Xxxxx Xxxxxxxxxx
----------------------------------
Title: President and Secretary
WARNACO VENTURES LTD.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Secretary
VENTURES LTD.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Secretary
A.B.S. CLOTHING COLLECTION, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
WARNACO INTERNATIONAL, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Vice President and Secretary
4
XXXXXXX INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
000 XXXXXX XXXXXX INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
WARNACO INTERNATIONAL INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
WARMANA LIMITED
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
WARNACO SOURCING INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
WARNER'S DE COSTA RICA INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
AUTHENTIC FITNESS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
5
AUTHENTIC FITNESS PRODUCTS INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
AUTHENTIC FITNESS RETAIL INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
AUTHENTIC FITNESS ON-LINE INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
CCC ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
CCC ACQUISITION REALTY CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
UBERTECH PRODUCTS INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
WARNACO PUERTO RICO, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Vice President and Secretary
0
XXXXXX'X (XXXXXX XXXXXXX) LTD.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Power of Attorney
WARNER'S (EIRE) TEORANTA
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Director
PENHALIGON'S LIMITED
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Power of Attorney
PENHALIGON'S & JEAVONS INVESTMENT
COMPANY LIMITED
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Power of Attorney
AUTHENTIC FITNESS OF CANADA INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Officer
WARNACO OF CANADA COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Director and Secretary
WARNACO LAC ONE GmbH
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Director/Officer
7
WARNACO LAC TWO GmbH
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Director/Officer
ERATEX-WARNACO LAC TWO
GmbH & CO. KG
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Director/Officer
WARNER'S AIGLON S.A.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Officer
XXXXXX XXXXX FRANCE SA
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Officer
WARNACO FRANCE SARL
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Officer
PMJ S.A.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Officer
IZKA S.C.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Officer
LEJABY S.A.S
8
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Officer
EURALIS S.A.S.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Officer
WARNACO B.V.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------------------------------------
Title: Director Director
WARNACO HOLLAND B.V.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------------------------------------
Title: Director Director
WARNACO NETHERLANDS B.V.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------------------------------------
Title: Director Director
WARNER'S COMPANY (BELGIUM) S.A.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Director
DONATEX WARNACO S.A.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Director
LINTEX-WARNACO S.A.
9
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Title: Director
LENITEX-WARNACO
HANDELSGESELLSCHAST m.b.H.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: President and Director
WARNACO S.r.l.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------------------
Title: Secretary
WARNACO (HK) LTD.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Director, Vice President
and Assistant Secretary
10
ANNEX A
COMMON TERMS AND RULES OF CONSTRUCTION
FOR THE LOAN DOCUMENTS
PART I. DEFINITIONS
"Administrative Agent" has the meaning specified in the preamble to the
Intercreditor Agreement.
"Administrative Agent's Account" means the account of the Administrative
Agent maintained by the Administrative Agent with The Bank of Nova Scotia at its
office at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No. 6136-30,
Reference: Warnaco Account, or such other account as the Administrative Agent
shall specify in writing to the Debt Coordinators and Group.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, control of a Person shall include
the power, direct or indirect, (a) to vote 10% or more of the securities or
other interests having ordinary voting power for the election of directors or
other managing Persons of such Person or (b) to direct or cause direction of the
management and policies of such Person whether by contract or otherwise.
"Agents" means each of the Lead Arrangers, the Arrangers, the Debt
Coordinators, the Collateral Trustee, the Security Agent and the Administrative
Agent, together, in each case, with any successor or successors of any thereof
appointed pursuant to Article VI of the Intercreditor Agreement.
"Agreement Value" means, (A) for each Hedge Agreement (other than the
Equity Derivatives), on any date of determination, an amount determined by the
Debt Coordinators equal to: (a) in the case of a Hedge Agreement documented
pursuant to the Master Agreement (Multicurrency-Cross Border) published by the
International Swap and Derivatives Association, Inc. (the "Master Agreement"),
the amount, if any, that would be payable by any Loan Party or any of its
Subsidiaries to its counterparty to such Hedge Agreement, as if (i) such Hedge
Agreement was being terminated early on such date of determination, (ii) such
Loan Party or Subsidiary was the sole "Affected Party", and (iii) the Debt
Coordinators were the sole parties determining such payment amount (with the
Debt Coordinators making such determination pursuant to the provisions of the
form of Master Agreement); or (b) in the case of a Hedge Agreement traded on an
exchange, the xxxx-to-market value of such Hedge Agreement, which will be the
unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a
Loan Party to such Hedge Agreement determined by the Debt Coordinators based on
the settlement price of such Hedge Agreement on such date of determination, or
(c) in all other cases, the xxxx-to-market value of such Hedge Agreement, which
will be the unrealized loss on such Hedge Agreement to the Loan Party or
Subsidiary of a Loan Party to such Hedge Agreement reasonably
11
determined by the Debt Coordinators as the amount, if any, by which (i) the
present value of the future cash flows to be paid by such Loan Party or
Subsidiary exceeds (ii) the present value of the future cash flows to be
received by such Loan Party or Subsidiary pursuant to such Hedge Agreement;
capitalized terms used and not otherwise defined in this definition shall have
the respective meanings set forth in the above described Master Agreement and
(B) with respect to each Equity Derivative, on any date of determination, an
amount determined by the Debt Coordinators to be the total commitment under such
Equity Derivative, which shall be equal to the sum of (a) the aggregate
principal amount of each Equity Derivative Note on such date plus (b) the
Forward Price (as defined in the Equity Forward Agreement for such Equity
Derivative on the Effective Date) on such date multiplied by the number of
shares of Group stock subject to such Equity Derivative.
"Approved Accounting Firm" means Xxxxxx Xxxxxxxx LLP, Deloitte & Touche
LLP, Ernst & Young LLP, PricewaterhouseCoopers LLP or KPMG Peat Marwick LLP, or
any successor thereof.
"Arrangers" has the meaning specified in the preamble to the
Intercreditor Agreement.
"Authorized Officer" means the Chairman of the Board, the Chief
Financial Officer, the General Counsel, the Secretary or the Treasurer of a
Person or any other officer designated as an
"Authorized Officer" by the Board of Directors (or equivalent governing
body) of such Person.
"Bankruptcy Event" has the meaning specified in Section 5.1 of the
Facility Agreement.
"Bridge Facility" has the meaning specified on Schedule II to the
Intercreditor Agreement.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City and, if the applicable Business
Day relates to any eurodollar rate credit extensions, on which dealings are
carried on in the London interbank market.
"Capital Expenditures" for any period means all capital expenditures
made by Group and its Subsidiaries during such period in accordance with GAAP,
excluding (i) capital expenditures funded directly or indirectly with the
proceeds of insurance or condemnation proceeds (to the extent of such insurance
or condemnation proceeds received) and made to replace or repair the assets
which are the subject of such casualty or condemnation, (ii) capital
expenditures funded directly or indirectly with the Net Cash Proceeds of asset
sales as described in clause (iv) of the definition of Net Cash Proceeds, (iii)
capital expenditures consisting of like-kind exchanges not exceeding $5,000,000
in the aggregate and made in the ordinary course of business consistent with
prior practice, (iv) in the case where actual Capital Expenditures (including
any Specified Sale Leaseback Transactions) in any period of four consecutive
Fiscal Quarters are equal to or exceed the sum of $30,000,000 plus projected
Capital Expenditures for such period as specified in Schedule I to the Facility
Agreement ("Projected CapEx"), an amount equal to: $30,000,000
12
less the actual dollar amount of Specified Sale Leaseback Transactions in such
period; provided that such amount in this clause (iv) shall at no time exceed
$30,000,000 and (v) in the case where actual Capital Expenditures (including any
Specified Sale Leaseback Transactions) in any period of four consecutive Fiscal
Quarters are less than the sum of $30,000,000 plus Projected CapEx, an amount
(but not less than zero) equal to: $30,000,000 less the actual dollar amount of
Specified Sale Leaseback Transactions in such period less an amount equal to (i)
Projected CapEx plus $30,000,000 less (ii) actual Capital Expenditures
(including any Specified Sale Leaseback Transactions) in such period.
"Capitalized Leases" has the meaning specified in clause (e) of the
definition of "Debt".
"Cash Equivalents" means any of the following, to the extent owned by
Group or any of its Subsidiaries free and clear of all Liens other than Liens
created under the Collateral Documents and having a maturity of not greater than
180 days from the date of issuance thereof: (a) readily marketable direct
obligations of the Government of the United States or any agency (including,
without limitation, the Federal Home Loan Mortgage Association, the Federal Home
Loan Bank, the Federal National Mortgage Association and the Governmental
National Mortgage Association) or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the Government of the
United States, (b) insured certificates of deposit of or time deposits with any
commercial bank that is a Lender Party or a member of the Federal Reserve
System, which issues (or the parent of which issues) commercial paper rated at
least "Prime-1" (or the then equivalent grade) by Moody's or "A-1" (or the then
equivalent grade) by S&P, is organized under the laws of the United States or
any State thereof and has combined capital and surplus of at least $1 billion,
(c) repurchase agreements entered into by any Person with a bank or trust
company (including any of the Lender Parties) or recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States in which such Person shall
have a perfected first priority security interest (subject to no other Liens)
and having, on the date of purchase thereof, a fair market value of at least
100% of the amount of the repurchase obligations or (d) Investments, classified
in accordance with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited only to Investments of the
character described in the foregoing clauses (a) through (c).
"Cash Management Bank" has the meaning specified in the definition of
"Cash Management Services".
"Cash Management Register" has the meaning specified in Section 8.4(c)
of the Intercreditor Agreement.
"Cash Management Services" means daylight overdraft facilities or
similar cash management accounts entered into by any Warnaco Entity with any
financial institution in the ordinary course of business in an amount not to
exceed $20,000,000 in an aggregate amount outstanding at any time for all such
financial institutions; provided that Group and each respective
13
financial institution party to such facility or maintaining such account ( a
"Cash Management Bank") shall provide written notice to the Collateral Trustee
of the existence and maximum amount of such facility or account for recordation
in the Cash Management Register as provided in Section 8.4(c) of the
Intercreditor Agreement, and provided further that each such facility or account
shall be deemed to remain in place for purposes of compliance with the
$20,000,000 aggregate amount specified above until written notice of the
termination of such facility or account is delivered to the Collateral Trustee
by Group and such Cash Management Bank, at which time the Collateral Trustee
will delete such facility or account from the Cash Management Register.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental Protection
Agency.
"Citibank" has the meaning specified in the preamble to the
Intercreditor Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means all "Collateral" referred to in the Collateral
Documents (and any Covered Facility, as applicable) and all other property that
is or is intended to be subject to any Lien in favor of the Collateral Trustee
for the benefit of the Secured Parties.
"Collateral Account" has the meaning specified in the Security
Agreement.
"Collateral Documents" means, collectively, the Security Agreement, the
Subsidiary Guaranty, the Parent Guaranty, each Mortgage, the Leasehold
Assignments, the Intellectual Property Security Agreement, the Collateral Trust
Agreement, the Foreign Collateral Documents, each of the collateral documents,
instruments and agreements delivered pursuant to Section 2.5(k) and 2.14 of the
Facility Agreement and each other agreement that creates or purports to create a
Lien in favor of the Collateral Trustee for the benefit of the Secured Parties.
"Collateral Trust Agreement" has the meaning specified in Section
6.1(a)(vii) hereto.
"Collateral Trustee" has the meaning specified in the preamble to the
Intercreditor Agreement.
"Commerzbank" has the meaning specified in the preamble to the
Intercreditor Agreement.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Contingent Obligation" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to guarantee
any Debt, leases, dividends or other payment
14
Obligations ("primary obligations") of any other Person (the "primary obligor")
in any manner, whether directly or indirectly, including, without limitation,
(a) the direct or indirect guarantee, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the Obligation of a primary
obligor, (b) the Obligation to make take-or-pay or similar payments, if
required, regardless of nonperformance by any other party or parties to an
agreement or (c) any Obligation of such Person, whether or not contingent, (i)
to purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for the purchase
or payment of any such primary obligation or (B) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, assets, securities
or services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made (or, if less, the maximum amount of such primary obligation for which
such Person may be liable pursuant to the terms of the instrument evidencing
such Contingent Obligation) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder), as determined by such Person in good faith.
"Continuing Directors" means, as of any date, collectively, all members
of the Board of Directors of Group (i) on the Effective Date and (ii) whose
appointment or nomination for election was approved by a vote of at least 50% of
the Continuing Directors in office immediately prior to such appointment or
nomination.
"Covered Documents" means, collectively, all of the agreements,
instruments and documents evidencing the terms of the Covered Facilities, in
each case as in effect from time to time.
"Covered Facilities" means the Existing Facilities and the New
Facilities.
"Credit Party" means any U.S. Credit Party and any Foreign Credit Party.
"Debt" of any Person means, without duplication, the following:
(a) all indebtedness for borrowed money,
(b) all Obligations of such Person for the deferred purchase price of
property or services (other than (1) Obligations of the type specified
in Section 2.6(b)(vi), (vii), (viii), (ix), (x) and (xi) of the Facility
Agreement, (2) trade payables not overdue by more than 90 days incurred
in the ordinary course of such Person's business and (3) trade payables
incurred in the ordinary course of such Person's business which are
overdue by more than 90 days, (A) which are being contested in good
faith and by proper proceedings and as to
15
which appropriate reserves are being maintained in accordance with GAAP
and (B) as to which there shall be any period of 10 consecutive days
during which a stay of any enforcement, collection, execution, levy or
foreclosure proceedings, if commenced, shall not be in effect),
including, without limitation, the Trade Credit Facility,
(c) all Obligations of such Person evidenced by notes, bonds, debentures
or other similar instruments,
(d) all Obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property),
(e) all Obligations of such Person as lessee under leases that have been
or should be, in accordance with GAAP, recorded as capital leases
("Capitalized Leases"),
(f) all Obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities,
(g) all Obligations of such Person to purchase, redeem, retire, defease
or otherwise make any payment in respect of any Equity Interest in such
Person or any other Person or any warrants, rights or options to acquire
such Equity Interests, valued, in the case of Redeemable preferred
stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends,
(h) all Obligations of such Person in respect of Hedge Agreements,
(i) all Contingent Obligations of such Person, and
(j) all Debt referred to in clauses (a) through (i) above of another
Person secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable
for the payment of such Debt.
"Debt Coordinators" has the meaning specified in the preamble to the
Intercreditor Agreement
"Debt Rating" means, as of any date, the ratings that have been most
recently announced by S&P and Moody's for any class of non-credit enhanced
long-term senior unsecured debt issued by Group in effect on such date, provided
that if such ratings are (i) both "investment grade" (BBB- or Baa3 or higher)
but shall fall within different levels, the higher of such ratings shall apply
or (ii) either or both below "investment grade" but shall fall within different
levels, the lower of such ratings shall apply (except that if the ratings
specified in Level 4 of the pricing
16
grids in Section 2.4 are in effect, the pricing specified for Level 4 in such
grids shall apply); provided further that if neither S&P nor Moody's shall have
in effect such a rating, the pricing specified in Level 7 of the pricing grids
in Section 2.4 shall apply. For purposes of the foregoing, if (a) only one of
S&P and Moody's shall have in effect a Debt Rating, the pricing specified in the
pricing grids in Section 2.4 shall be determined by reference to the available
rating; (b) any rating established by S&P or Moody's shall be changed, such
change shall be effective as of the date on which such change is reported to
Group; and (c) S&P or Moody's shall change the basis on which ratings are
established, each reference above to the Debt Rating announced by S&P or
Moody's, as the case may be, shall refer to the then equivalent rating by S&P or
Moody's, as the case may be.
"Debt Termination Date" means the date on which (i) all loans or other
credit extensions and all outstanding reimbursement obligations in respect of
letters of credit and bankers' acceptances under all Covered Facilities have
been paid in full, (ii) all commitments to lend or issue any letter of credit or
bankers' acceptance or provide any other credit extension under any Covered
Facility have been terminated, and (iii) all letters of credit and bankers'
acceptances under any Covered Facility shall have either been cancelled or cash
collateralized or covered by a back-up letter of credit in a manner satisfactory
to the issuing bank thereof.
"Default" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both.
"Defaulted Advance" means, with respect to any Lender Party at any time
under a Covered Facility, the portion of any loan, letter of credit, bankers'
acceptance or other credit extension required to be made by such Lender Party to
or for the account of a Loan Party under such Covered Facility at or prior to
such time that has not been made by such Lender Party or by any agent or
representative for the account of such Lender Party as of such time.
"Defaulted Amount" means, with respect to any Lender Party at any time,
any amount required to be paid by such Lender Party to any agent or other
representative of such Lender Party or made available (including in respect of
any letter of credit or bankers' acceptance) to or for the account of any Loan
Party or to any other Lender Party hereunder or under any other Loan Document or
Covered Facility at or prior to such time that has not been so paid as of such
time.
"Defaulted Facility" has the meaning specified in Section 2.3 of the
Intercreditor Agreement.
"Defaulting Lender" means, at any time, any Lender Party that, at such
time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any
action or be the subject of any action or proceeding of a type described in
Section 5.1(f) of the Facility Agreement.
"Derivative Agreements" means, collectively, the Secured Hedge
Agreements and the Equity Derivatives.
17
"Designated Capital Markets Transaction" means the (a) incurrence or
issuance by any Loan Party or any of its Subsidiaries of any Debt other than
Debt which is secured on a pari passu basis with the Covered Facilities and/or
(b) sale or issuance by any Loan Party or any of its Subsidiaries of any Equity
Interests (other than the issuance by Group of options or stock to officers or
employees of Group); in either case in a public or private transaction.
"DHL Convertible Debentures" means the 6% Convertible Subordinated
Debentures Due 2016 issued under the November 6, 1996 Indenture between Designer
Holdings Ltd. and IBJ Xxxxxxxxx Bank & Trust Company.
"Dollars" and "$" means lawful money of the United States.
"Domestic Subsidiary Guaranty" means a guaranty substantially in the
form of Exhibit C hereto.
"Domestic Subsidiary Guaranty Supplement" means the guaranty supplement
in substantially the form attached to the Domestic Subsidiary Guaranty.
"Domestic Subsidiary" means any direct or indirect Subsidiary of Group
incorporated or formed under the laws of a state of the United States or any
territory thereof.
"EBITDA" means, for any period, net income (or net loss) from
operations, determined (i) without giving effect to (A) non-cash extraordinary
and non-recurring gains or losses, (B) gains or losses resulting from the sale
of any asset for proceeds of $500,000 or more or (C) all cash extraordinary or
non-recurring (1) employee severance and benefit costs, (2) costs arising from
the permanent closing or realignment of any owned or leased real property
locations, (3) costs arising from the early termination of any leases or other
contracts and (4) legal and other administrative and other related costs
incurred in connection with the foregoing clauses (1) through (3); provided that
no more than an aggregate amount of $50,000,000 may be included in EBITDA until
the Termination Date pursuant to this clause (C) and (ii) with giving effect to
the non-recurring gain realized from the sale of equity interests of Interworld
Corporation; plus, to the extent deducted in calculating such net income (loss),
the sum of (a) Interest Expense, (b) income tax expense, (c) depreciation
expense, (d) amortization expense and (e) restructuring charges taken through
the Fiscal Quarter ended July 1, 2000; in each case determined in accordance
with GAAP.
"Effective Date" has the meaning specified in Section 4.1 of the
Intercreditor Agreement.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to health, safety or
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and
18
(b) by any governmental or regulatory authority or third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any Federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, writ, judgment, injunction,
decree or judicial or judicially enforceable agency interpretation, policy or
guidance relating to pollution or protection of the environment, health, safety
or natural resources, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equity Derivative Note" means each Modification Note and each
Subsequent Note referred to in items B.18 and B.19 on Schedule II of the
Intercreditor Agreement.
"Equity Derivatives" means, collectively, items B.18 and B.19 on
Schedule II of the Intercreditor Agreement, in each case as amended, modified or
otherwise supplemented to the date hereof.
"Equity Interests" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under common
control with any Loan Party, within the meaning of Section 414 of the Internal
Revenue Code.
"ERISA Event" means (a)(i) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day
notice requirement with respect to such event has been waived by the PBGC or
(ii) the requirements of Section 4043(b) of ERISA apply with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan, pursuant to
19
Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of any Loan Party or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by any
Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan
year for which it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA; (f) the conditions for imposition of a lien under Section 302(f) of
ERISA shall have been met with respect to any Plan; (g) the adoption of an
amendment to a Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to
terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition described in Section 4042 of ERISA that constitutes grounds
for the termination of, or the appointment of a trustee to administer, such
Plan.
"Events of Default" has the meaning specified in Section 5.1 of the
Facility Agreement.
"Excluded Foreign Subsidiary" means a direct or indirect Foreign
Subsidiary of Group which is not a Foreign Credit Party.
"Excluded Intellectual Property" means those items of intellectual
property specified on Schedule 2.6(d)(vi) of the Facility Agreement.
"Excluded Person" means (i) Xxxxx X. Xxxxxxx or (ii) any trust of which
Xxxxx X. Xxxxxxx is the sole trustee or is a trustee with effective control over
the voting stock held by such trust or over the management or policies of Group
(or, in case of her death or disability, another trustee of comparable
experience and ability selected by Group within 180 days thereafter after
consultation with the Debt Coordinators).
"Excluded Property" means (i) any owned real property that is not
Material Real Property, (ii) any leased real property that is not Material
Leased Property, (iii) any registration of intellectual property in a
jurisdiction other than the United States and Included Foreign Jurisdictions,
(iv) general intangibles or other rights arising under contracts as to which the
grant of a security interest therein would constitute a violation of a valid and
enforceable restriction on such grant, unless and until any required consents
shall have been obtained or such restrictions are rendered ineffective as a
matter of law (at which time the Collateral will include such General
Intangibles and other rights automatically and without any further action by any
Grantor, the Collateral Trustee or any other Person), but all proceeds of any
such contracts (and the right to receive future proceeds) shall not be "Excluded
Property", (v) property subject to purchase money financing and Capitalized
Leases permitted under Section 2.6(b)(iii), (iv) and (xiv) of the Facility
Agreement, (vi) interests in the Trust Stock and any shares of Designer Holdings
Ltd. into which such interests are converted pursuant to the TOPRs Documents and
(vii) all accounts receivable and related property sold under the Securitization
Facility.
"Existing Facilities" means each of the credit facilities listed on
Schedule II of the Intercreditor Agreement.
20
"Extending Facilities" means the Existing Facilities identified in
Schedule II to the Intercreditor Agreement under the heading "Extending
Facilities".
"Extraordinary Receipt" means any cash received by or paid to or for the
account of any Person not in the ordinary course of business, including, without
limitation, each tax refund in excess of $100,000 (provided that 10% of each tax
refund in excess of $100,000 received at any time by Group shall not constitute
"Extraordinary Receipts"), pension plan reversions, judgment and settlement
awards (other than any amounts received as compensation for actual economic
losses) in each case in excess of $100,000, proceeds of insurance (other than
proceeds of business interruption insurance to the extent such proceeds
constitute compensation for lost earnings), condemnation awards (and payments in
lieu thereof), indemnity payments (other than any amounts received as
compensation for actual economic losses) in each case in excess of $100,000 and
any purchase price adjustment in excess of an aggregate of $1,000,000 per Fiscal
Year received in connection with any purchase agreement; provided that an
Extraordinary Receipt shall not include cash receipts received from proceeds of
insurance or condemnation awards (or payments in lieu thereof) (i) of less than
$1,000,000 in respect of any single casualty event, (ii) in respect of loss or
damage to equipment, fixed assets, inventory or real property which are applied
(or in respect of which expenditures were previously incurred) to replace or
repair the equipment, fixed assets, inventory or real property in respect of
which such proceeds were received, so long as such application, or a contractual
commitment to apply such funds or replace such property, is made no later than
60 days after the receipt by such Person of such funds (provided that the Debt
Coordinators may extend the 60 day time period specified in this clause (ii) by
up to an additional 45 days if requested by Group) or (iii) received by any
Person in respect of any third party claim against such Person and applied
within a reasonable period of time to pay (or to reimburse such Person for its
prior payment of) such claim.
"Facility Agreement" has the meaning specified in Section 4.1(a)(ii) of
the Intercreditor Agreement.
"Fiscal Quarter" means a fiscal quarter of Group and its Consolidated
Subsidiaries ending on or about March 31, June 30, September 30 and December 31
of each year.
"Fiscal Year" means a fiscal year of Group and its Consolidated
Subsidiaries ending on or about December 31 of each year.
"Fixed Charge Coverage Ratio" means, for any period of four consecutive
Fiscal Quarters, on a Consolidated basis, the ratio of (a) an amount equal to
EBITDA of Group and its Subsidiaries for such period, less the aggregate of all
Capital Expenditures made by Group and its Subsidiaries during such period to
(b) the sum of (i) all cash Interest Expense of Group and its Subsidiaries paid
or accrued during such period, (ii) all cash taxes paid by Group and its
Subsidiaries for such period (net of tax refunds received in such period), (iii)
all principal amortization payments made by Group and its Subsidiaries for such
period and (iv) all cash dividends paid by Group for such period in respect of
Designated Capital Markets Transactions. "Foreign Collateral Documents" means,
collectively, all documents, instruments and agreements
21
specified on Schedule IV to the Facility Agreement, each of the collateral
documents, instruments and agreements delivered pursuant to Section 2.5(k) and
2.14 of the Facility Agreement and each other agreement that creates or purports
to create a Lien on property or assets of the Foreign Credit Parties in favor of
the Collateral Trustee for the benefit of the Secured Parties or grants or
purports to grant a power of attorney to any Person for purposes of creating
such a Lien.
"Foreign Credit Party" means any Foreign Subsidiary organized under the
laws of any Included Foreign Jurisdiction, or that is an Included Foreign
Subsidiary. Unless otherwise expressly provided, a Subsidiary which either (i)
is classified as inactive or dormant (or other similar designation) under the
applicable laws of any Included Foreign Jurisdiction or (ii) has assets with an
aggregate fair market value of less than $150,000 shall not be considered a
"Foreign Credit Party" for purposes of this definition.
"Foreign Facilities" means, collectively, items A.3, B.2 through B.4,
B.9 and B.17 on Schedule II of the Intercreditor Agreement.
"Foreign Subsidiary" means a direct or indirect Subsidiary of Group
which is not a Domestic Subsidiary.
"Fully Satisfied" means, with respect to the Payment Obligations as of
any date, that, on or before such date, (a) the principal of (or, as applicable,
stated or face amount of) and interest accrued to such date on all outstanding
loans, reimbursement obligations in respect of letters of credit and bankers'
acceptances and other credit extensions shall have been paid in full in cash,
(b) all commitments to lend, issue any letter of credit, bankers' acceptance or
other credit extension shall have been terminated in full, (c) all outstanding
letters of credit and bankers' acceptances shall have been (i) terminated or
(ii) cash collateralized by an amount sufficient in the reasonable judgment of
the Debt Coordinators to secure any claims thereunder or (iii) supported by one
or more letters of credit or other instruments on terms and conditions, and with
one or more financial institutions, reasonably satisfactory to the Debt
Coordinators and (d) all fees, expenses and other amounts then due and payable
which constitute Payment Obligations shall have been paid in full in cash;
provided, however, that on such date none of the Agents or any Lender Party
shall have made any other claims in respect of Payment Obligations against any
Loan Party under any provision of any of the Loan Documents or Covered
Facilities that has not been cash collateralized by an amount sufficient in the
reasonable judgment of the Debt Coordinators and any such Lender Party to secure
such claim.
"GAAP" has the meaning specified in Section 1.2 of the Intercreditor
Agreement.
"Group" has the meaning specified in the preamble of the Intercreditor
Agreement.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated,
22
classified or regulated as hazardous or toxic or as a pollutant or contaminant
under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
forward or option contracts and other hedging agreements.
"Hedge Bank" means any Lender Party or an Affiliate of a Lender Party in
its capacity as a party to a Secured Hedge Agreement.
"Immaterial Subsidiary" means, as of any date of determination, any
direct or indirect Subsidiary of Group that (i) does not hold any material
trademarks or other intellectual property and (ii) on a Consolidated basis with
its Subsidiaries (A) has assets with an aggregate fair market value of less than
$1,000,000 or (B) had revenues of less than $1,000,000 during the past 12-month
period.
"Included Foreign Jurisdictions" means Canada, Germany, France, the
Xxxxxx Xxxxxxx, xxx Xxxxxxxxxxx, Xxxxxxx, Xxxxxx, Xxxx Xxxx and Barbados, and
each other jurisdiction of organization, if any, of the Included Foreign
Subsidiaries.
"Included Foreign Subsidiary" means any Foreign Subsidiary not otherwise
an existing Foreign Credit Party, and which has, as of any date of determination
on a Consolidated basis with its Subsidiaries, as calculated in accordance with
GAAP, (i) EBITDA for the last four Fiscal Quarters of at least $5,000,000 or
(ii) total assets as of the last day of the most recently ended Fiscal Quarter
of at least $20,000,000.
"Indebtedness for Borrowed Money" of any Person means all Debt of such
Person for borrowed money or evidenced by notes, bonds, debentures or other
similar instruments (other than Trust Stock and DHL Convertible Debentures, both
as in effect on the Effective Date), all Obligations of such Person for the
deferred purchase price of any property, service or business (other than trade
accounts payable incurred in the ordinary course of business and constituting
current liabilities, but including all loans in excess of $350,000,000 under the
Trade Credit Facility and under the New Trade Credit Facility), and all
Obligations of such Person under Capitalized Leases (limited in each case to the
principal amount thereof); provided that Indebtedness for Borrowed Money (i)
shall exclude (A) Specified Debt and (B) all amounts under any Securitization
Facility that are classified, in accordance with GAAP, as credit extensions from
the receivables servicer rather than purchases of accounts receivable, as
resulting from any modification of the securitization structure in effect as of
the Effective Date, as such modification is made and agreed to from time to time
by the applicable servicer, Group and the Debt Coordinators and (ii) on any
testing date shall be (A) decreased (increased) by the amount which "Total
Outstanding Capital" (or similar term) under and as defined in the
Securitization Facility is less (more) than the projected outstanding amount
under the Securitization Facility for such time as specified in Schedule II to
the Facility Agreement, provided that such amount in this clause (ii) shall not
exceed $25,000,000 unless, and only to the extent, such increase (decrease) is
due to a
23
change in the structure of the Securitization Facility.
"Intellectual Property Security Agreement" has the meaning specified in
Section 6.1(a)(vi) of the Facility Agreement.
"Interest Expense" means, with respect to any Person for any period of
measurement, the excess, if any, of (a) interest expense (whether cash or
accretion) of such Person during such period determined in accordance with GAAP
(but excluding interest expense with respect to the Specified Debt), and shall
include in any event, without limitation, interest expense with respect to all
loans, bankers' acceptances and all letter of credit fees under the Trade Credit
Facility, the Interim Trade Credit Facility and the New Trade Credit Facility,
and, without duplication, interest expense with respect to Indebtedness for
Borrowed Money, payments under interest rate Hedge Agreements (in the case of
any interest rate cap, amortized over the life thereof) and cash interest
payments made in respect of the Trust Stock over (b) interest income of such
Person for such period, including, without limitation, payments received under
interest rate Hedge Agreements.
"Interim Trade Credit Facility" means the Letter of Credit Agreement
dated as of July 27, 2000 among Warnaco, Group, certain of its Subsidiaries and
The Bank of Nova Scotia.
"Inventory" means all Inventory referred to in the Security Agreement.
"Investment" in any Person means any loan or advance to such Person, any
purchase or other acquisition of any Equity Interests or Debt or the assets
comprising a division or business unit or a substantial part or all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation and any arrangement pursuant to
which the investor incurs Debt of the types referred to in clause (i) or (j) of
the definition of "Debt" in respect of such Person.
"Joinder Agreement" means a Joinder Agreement in substantially the form
of Exhibit G of the Facility Agreement.
"L/C Related Liens" means Liens on any bills of lading, airway bills,
receipts and other applicable documents of title (and inventory and goods
covered thereby) delivered with respect to letters of credit issued for the
benefit of suppliers of inventory under the Foreign Facilities.
"Lead Arrangers" has the meaning specified in the preamble of the
Intercreditor Agreement.
"Leasehold Assignments" has the meaning specified in Section 6.1(a)(v)
of the Facility Agreement.
"Lender Parties" means the lenders, counterparties and other providers
of credit from time to time parties to the Covered Facilities.
24
"Leverage Ratio" means, on the last day of any Fiscal Quarter on a
Consolidated basis for Group and its Subsidiaries, the ratio of (i) Consolidated
Indebtedness for Borrowed Money as of such date to (ii) Consolidated EBITDA for
the four consecutive Fiscal Quarters ending on such date.
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"Loan Documents" means, collectively, the Intercreditor Agreement, the
Facility Agreement, the Collateral Documents, each Joinder Agreement and the
Secured Hedge Agreements, in each case as the same may be amended, modified or
supplemented from time to time.
"Loan Parties" means, collectively, Group and each of its Subsidiaries
who have executed and delivered this Agreement or any other Loan Document.
"Long-Term Facilities" means, collectively, items A.2 and A.3 on
Schedule II of the Intercreditor Agreement, and any New Facility that has a
final maturity date after the Termination Date.
"Margin Stock" has the meaning specified in Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
"Material Adverse Change" means any material adverse change in the (a)
business, condition (financial or otherwise), operations, performance,
properties or prospects of Group and its Subsidiaries, taken as a whole, since
January 1, 2000, (b) ability of the Loan Parties to perform their respective
obligations under the Loan Documents or (c) ability of the Administrative Agent,
the Debt Coordinators, the Collateral Trustee or the Lender Parties to enforce
the Loan Documents.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of Group and its Subsidiaries, taken as a whole, (b) the
rights and remedies of the Administrative Agent, the Debt Coordinators, the
Collateral Trustee or any Lender Party under any Loan Document or (c) the
ability of any Loan Party to perform its Obligations under any Loan Document to
which it is a party.
"Material Real Property" means all fee-owned real property of any Loan
Party (a) having a fair market value in excess of $1,000,000 as of the Effective
Date, or if later, the date of acquisition thereof or (b) that the Debt
Coordinators determine is material to the business, condition (financial or
otherwise) operations, performance or properties of Group and its Subsidiaries,
taken as a whole.
25
"Material Leased Property" means all real estate leasehold properties of
any Loan Party other than those (a) with respect to which the aggregate rental
payments under the term of the lease in any year are less than $1,000,000 or (b)
that relate to a site the loss of which would not otherwise have a material
adverse effect on the production, distribution or sales of Group and its
Subsidiaries, taken as a whole, or in any material geographic region where
business is conducted at any time by Group and its Subsidiaries.
"Moody's" means Xxxxx'x Investors Service, Inc.
-------
"Xxxxxx" has the meaning specified in the preamble of the Intercreditor
Agreement.
"Mortgage" has the meaning specified in Section 6.1(a)(v).
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset (an "Asset Sale") or the incurrence or issuance
of any Debt or the sale or issuance of any Equity Interests (including, without
limitation, any capital contribution) by any Person, or any Extraordinary
Receipt received by or paid to or for the account of any Person, the aggregate
amount of cash received from time to time (whether as initial consideration or
through payment or disposition of deferred consideration) by or on behalf of
such Person in connection with such transaction (excluding any cash received by
any Warnaco Entity as a result of the sale or issuance of Capital Stock to, or
receipt of a capital contribution from, another Warnaco Entity) after deducting
therefrom only (without duplication) (a) reasonable and customary brokerage
commissions, underwriting or placement fees and discounts, legal fees and
expenses, finder's fees and other similar fees, expenses and commissions, (b)
the amount of taxes payable in connection with or as a result of such
transaction, (c) the amount of any Debt secured by a Lien on such asset that, by
the terms of the agreement or instrument governing such Debt, is required to be
repaid upon such disposition, in each case to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt of such cash,
actually paid to a Person that is not an Affiliate of such Person or any Loan
Party or any Affiliate of any Loan Party and are properly attributable to such
transaction or to the asset that is the subject thereof (whether as principal,
interest, prepayment premium or similar expense) and (d) in the case of
subleased property, the amount due under the underlying lease; provided however,
that (i) in the case of taxes that are deductible under clause (b) above but for
the fact that, at the time of receipt of such cash, such taxes have not
26
been actually paid or are not then payable, such Loan Party or such Subsidiary
may deduct an amount (the "Reserved Amount") equal to the amount reserved in
accordance with GAAP for such Loan Party's or such Subsidiary's reasonable
estimate of such taxes, other than taxes for which such Loan Party or such
Subsidiary is indemnified, (ii) at the time such taxes are paid, an amount equal
to the amount, if any, by which the Reserved Amount for such taxes exceeds the
amount of such taxes actually paid shall constitute "Net Cash Proceeds" for all
purposes hereunder, (iii) the proceeds of any Asset Sale for an amount less than
$500,000 shall not constitute Net Cash Proceeds and (iv) the proceeds of any
Asset Sales of less than $20,000,000 in the aggregate that are reinvested (or
contractually committed to be reinvested) in assets used or useful in the
business of Group and its Subsidiaries within 90 days after the date of such
Asset Sale shall not constitute Net Cash Proceeds (provided that the Debt
Coordinators may extend the 90 day time period specified in this clause (iv) by
up to an additional 45 days if requested by Group).
"New Facilities" means those credit facilities entered into on or after
the Effective Date (i) pursuant to Section 2.4 of the Intercreditor Agreement,
(ii) pursuant to which the lenders and other financial institutions party
thereto become a party to the Intercreditor Agreement by executing and
delivering to the Administrative Agent a Joinder Agreement in accordance with
Section 8.4 of the Intercreditor Agreement (except that, with respect to the New
Trade Credit Facility, the execution and delivery of the Intercreditor Agreement
by the Lender Parties party to the Trade Credit Facility shall be sufficient to
classify the New Trade Credit Facility as a New Facility) and (iii) which will
in no case, other than in the New Trade Credit Facility, provide for any
scheduled payment of principal prior to the Termination Date. The Equity
Derivative Notes shall be Existing Facilities and not New Facilities. The New
Trade Credit Facility shall be a New Facility.
"New Trade Credit Facility" means the Credit Agreement, dated as of the
Effective Date, among Warnaco Inc., as U.S. Borrower, Designer Holdings, Ltd.,
as Sub Borrower, Authentic Fitness Products Inc. and those wholly-owned domestic
subsidiaries designated therein as Warnaco Sub Borrowers, Warnaco (HK) Ltd.,
Warnaco B.V., Warnaco Netherlands B.V. and Warnaco Holland B.V., as Foreign
Borrowers, The Warnaco Group, Inc., the financial institutions from time to time
party thereto as Lenders, Societe Generale, as Documentation Agent, Citibank,
N.A., as Syndication Agent and Scotiabank, as Administrative Agent, as the same
may be amended from time to time.
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any obligation of such
Person of any kind, including, without limitation, any liability of such Person
on any claim, whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 5.1(f) of the Facility Agreement. Without
limiting the generality of the foregoing, the Obligations of the Loan Parties
under the Loan Documents and
27
Covered Facilities include (a) the obligation to pay principal, interest,
charges, expenses, fees, attorneys' fees and disbursements, indemnities and
other amounts payable by any Loan Party under any Loan Document or Covered
Facility and (b) the obligation to reimburse any amount in respect of any of the
foregoing that any Lender Party or Agent, in its sole discretion, may elect to
pay or advance on behalf of such Loan Party.
"Old Five-Year Credit Agreement" means item A.1 on Schedule II of the
Intercreditor Agreement.
"Other Taxes" has the meaning specified in Section 2.12(b) of the
Facility Agreement.
"Parent Guaranty" has the meaning specified in Section 6.1(a)(iv) of the
Facility Agreement.
"Payment Obligations" shall mean all principal, interest, fees,
reimbursement obligations, letter of credit and bankers' acceptance commissions,
charges, expenses, attorneys' fees and expenses, indemnities and any other
amounts payable by the Loan Parties under the Loan Documents and the Covered
Facilities.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced:
(a) Liens, other than in favor of the PBGC, arising out of judgments or
awards in respect of which Group or any of its Subsidiaries shall in
good faith be prosecuting an appeal or proceedings for review and in
respect of which it shall have secured a subsisting stay of execution
pending such appeal or proceedings for review, provided it shall have
set aside on its books adequate reserves, in accordance with GAAP, with
respect to such judgment or award and provided further that the
aggregate amount secured by such Liens does not exceed $5,000,000 in any
one case or $10,000,000 in the aggregate;
(b) Liens for taxes, assessments or governmental charges or levies, that
are permitted under Section 2.5(b) of the Facility Agreement;
(c) deposits, Liens or pledges to secure payments of workmen's
compensation and other payments, unemployment and other insurance or
social security obligations, or the performance of bids, tenders,
leases, contracts (other than contracts for the payment of money),
public or statutory obligations, surety, stay or appeal bonds, or other
similar obligations arising in each case in the ordinary course of
business;
(d) mechanics', workmen's, repairmen's, warehousemen's, vendors' or
carriers' Liens or other similar Liens arising in the ordinary course of
business and securing sums which are not past due, or deposits or
pledges to obtain the release of any such Liens;
28
(e) statutory landlord's Liens under leases to which Group or any of its
Subsidiaries is a party;
(f) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of Group and its
Subsidiaries, taken as a whole;
(g) zoning restrictions, easements, rights of way, licenses and
restrictions on the use of real property or minor irregularities in
title thereto, which do not materially impair the use of such property
in the normal operation of the business of Group or any of its
Subsidiaries or the value of such property for the purpose of such
business;
(i) statutory or common law Liens (such as rights of set-off) on deposit
accounts of Group and its Subsidiaries and other Liens under the Covered
Facilities; and
(j) amounts delivered pursuant to Section 4 of the Memoranda of
Understanding as in effect on the Effective Date and referred to in
items B.18 and B.19 of Schedule II to the Intercreditor Agreement.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledged Debt" has the meaning specified in the Security Agreement.
"Pro Rata" means on a ratable basis for each Covered Facility, taking
into account (without double counting) the principal amount of all outstanding
loans and reimbursement obligations, the undrawn amount of any letters of
credit, the outstanding amount of all bankers' acceptances, the amount of all
undrawn commitments and, in respect of any Derivative Agreement, the xxxx-
to-market valuation thereof or total commitments thereunder, as applicable,
calculated as specified in the definition of "Agreement Value".
"Receivables" means all Receivables referred to in the Security
Agreement.
"Redeemable" means, with respect to any Equity Interest, any Debt or any
other right or Obligation, any such Equity Interest, Debt, right or Obligation
that (a) the issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer or (b) is
redeemable at the option of the holder; provided, however, that an Equity
Interest shall not be considered Redeemable solely because the holders thereof
have the right to require the issuer to repurchase such Equity Interest upon the
occurrence of a "change of control" or an "asset sale" if the terms of such
Equity Interest provide that the issuer may not repurchase or redeem any such
Equity Interest pursuant to such provisions unless such repurchase or redemption
is subject to the
29
condition that all Payment Obligations be Fully Satisfied or is otherwise
permitted under this Agreement.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Responsible Financial Officer" means the chief financial officer, the
treasurer or the controller.
"Required Lenders" means, at any time Lender Parties owed or holding at
least a majority in interest of the sum of the (a) aggregate principal amount of
all loans outstanding at such time under the Covered Facilities, (b) aggregate
available amount of all letters of credit, bankers' acceptances and other credit
extensions outstanding at such time under the Covered Facilities and (c)
aggregate unused commitments at such time under the Covered Facilities;
provided, however, that if any Lender Party shall be a Defaulting Lender at such
time, there shall be excluded from the determination of Required Lenders at such
time (A) the aggregate principal amount of the loans owing to such Lender Party
(in its capacity as a Lender Party) and outstanding at such time, (B) such
Lender Party's pro rata share of all letters of credit, bankers' acceptances and
other credit extensions outstanding at such time under the Covered Facilities
and (C) the aggregate unused commitments of such Lender Party at such time under
the Covered Facilities. For purposes of the application of this definition in
Section 2.2 of the Intercreditor Agreement, Obligations owing under Derivative
Agreements shall not be counted in the determination of
"Required Lenders", except to the extent of net obligations owing to any
Lender Party under the Equity Derivatives, as calculated based on xxxx-to-market
valuations thereof (calculated as specified in the definition of "Agreement
Value") at the time of such vote or other action by the Required Lenders under
Section 2.2 of the Intercreditor Agreement. For purposes of the application of
this definition in respect of any amendment or waiver of any provision of
Section 2.7 of the Facility Agreement, the sum of the (a) aggregate capital
outstanding under the Securitization Facility and (b) aggregate unused purchase
commitments under the Securitization Facility shall be counted in the
determination of "Required Lenders".
"Revolving Facilities" means those facilities numbered A.1 through A.3,
B.3, B.4, and B.10 through B.15 on Schedule II to the Intercreditor Agreement,
and any New Facilities that are revolving loan facilities.
"S&P" means Standard & Poor's Ratings Group, currently a division of The
XxXxxx-Xxxx Companies, Inc., or any successor thereto.
"Scotiabank" has the meaning specified in the preamble of the
Intercreditor Agreement.
"Secured Hedge Agreements" means any Hedge Agreement permitted under
Section 2.6(b)(v) of the Facility Agreement that is entered into by and between
any Loan Party and any Hedge Bank.
30
"Secured Obligations" has the meaning specified in the Security
Agreement, provided that, notwithstanding anything else to the contrary
contained herein or in any other Loan Document, all Obligations of any Warnaco
Entity in respect of Cash Management Services shall constitute Obligations under
the Loan Documents for purposes of the definition of "Secured Obligations" as
used in the Loan Documents.
"Secured Parties" means the Agents and the Lender Parties.
"Securitization Facility" means, collectively, the Receivables Purchase
Agreement dated as of the Effective Date among Warnaco Operations Corporation,
as seller, Xxxxxxx Street, Inc., as servicer, Liberty Street Funding Corp. and
Corporate Asset Funding Corp., as investors, The Bank of Nova Scotia, as agent,
and Citicorp North America, Inc., as the co-agent; and any replacement or
successor facility or facilities in a maximum amount at any time of up to
$300,000,000 and the form and substance of which are reasonably acceptable to
the Debt Coordinators.
"Security Agent" has the meaning specified in the preamble to the
Intercreditor Agreement.
"Security Agreement" has the meaning specified in Section 6.1(a)(ii) of
the Facility Agreement.
"SG" has the meaning specified in the preamble of the Intercreditor
Agreement.
"Short-Term Facilities" means, collectively, items A.1, A.4, A.7 and B.1
through B.17 on Schedule II of the Intercreditor Agreement and any New Facility
with a maturity date on the Termination Date.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and no Person other than the Loan Parties and the
ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party
or any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
31
become an actual or matured liability.
"Specified Debt" means Debt of Group incurred pursuant to that certain
(i) Memorandum of Understanding dated as of September 19, 2000 between Group and
SunTrust Bank and (ii) Memorandum of Understanding dated as of September 19,
2000 between Group and Scotia Capital (U.S.A.) Inc.
"Specified Facility" has the meaning specified on Schedule II to the
Intercreditor Agreement.
"Specified Facility Lender" means the Lender Party to the Specified
Facility.
"Specified Parameters" means, with respect to (i) Debt, any such Debt
(A) which is (1) unsecured or (2) secured by liens which are fully subordinated
and junior in right of payment to the prior indefeasible payment in full in cash
of all Obligations under the Existing Facilities, the New Trade Credit Facility
and the Loan Documents, without rights of the secured party under such Debt to
receive any payment or distribution of any kind or character or to vote or
direct enforcement actions or remedies, or block enforcement actions of the
Collateral Trustee, in each case with respect to the Collateral, until all
Payment Obligations are Fully Satisfied, (B) which is at or below a market rate
of interest for comparable instruments at such time, (C) with respect to which
no principal payments may be made prior to May 17, 2005, (D) which could not
impair the value of or have an adverse effect on the Existing Facilities or the
Covered Facilities or the rights or interests of the Lender Parties thereunder
and (E) which has no additional or more restrictive covenants, defaults,
required prepayment, required redemption or other similar terms more restrictive
or onerous on, or less favorable to, Group and its Subsidiaries, or any of the
Loan Parties, than those contained in the Existing Facilities or the Covered
Facilities and (ii) Equity Interests, any such Equity Interests (A) which could
not impair the value of or have an adverse effect on the Existing Facilities or
the Covered Facilities or the rights or interests of the Lender Parties
thereunder, (B) the economic terms of which are at or below the market rate for
comparable instruments at such time, (C) with respect to which no redemptions
may be made or other premiums paid prior to May 17, 2005 and (D) which have no
additional or more restrictive covenants, defaults or other similar terms more
restrictive or onerous on, or less favorable to, Group and its Subsidiaries, or
any of the Loan Parties, than comparable terms contained in the Existing
Facilities or the Covered Facilities. Notwithstanding the foregoing, any Debt or
Equity Interest that would not satisfy the Specified Parameter requirements
solely because the holders thereof have the right to require Group or any of its
Subsidiaries to repurchase such Debt or Equity Interest upon the occurrence of a
"change of control" or an "asset sale" shall be deemed to satisfy the Specified
Parameter requirements if the terms of such Debt or Equity Interest provide that
Group or such Subsidiary may not repurchase or redeem any such Debt or Equity
Interest pursuant to such provisions unless such repurchase or redemption is
subject to all Payment Obligations being Fully Satisfied, or is otherwise
permitted under the Facility Agreement.
"Specified Sale-Leaseback Transaction" means a transaction pursuant to
which a Warnaco Entity sells fixed assets to a third party in an amount at least
equal to the book value therefor and
32
simultaneously enters into an operating lease or a Capitalized Lease otherwise
permitted under Section 2.6(b)(iv) of the Facility Agreement with respect
thereto, in each case within 365 days of the date such assets were acquired.
"SSBI" has the meaning specified in the preamble of the Intercreditor
Agreement.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"Subsidiary Guaranty" has the meaning specified in Section 6.1(a)(iii).
"Supermajority Lenders" means, at any time Lender Parties owed or
holding at least 66- 2/3% in interest of the sum of the (a) aggregate principal
amount of all loans outstanding at such time under the Covered Facilities, (b)
aggregate available amount of all letters of credit, bankers' acceptances and
other credit extensions outstanding at such time under the Covered Facilities
and (c) aggregate unused commitments at such time under the Covered Facilities;
provided, however, that if any Lender Party shall be a Defaulting Lender at such
time, there shall be excluded from the determination of Supermajority Lenders at
such time (A) the aggregate principal amount of the loans owing to such Lender
Party (in its capacity as a Lender Party) and outstanding at such time, (B) such
Lender Party's pro rata share of all letters of credit, bankers' acceptances and
other credit extensions outstanding at such time under the Covered Facilities
and (C) the aggregate unused commitments of such Lender Party at such time under
the Covered Facilities. For purposes of the application of this definition in
Section 2.2 of the Intercreditor Agreement, Obligations owing under Derivative
Agreements shall not be counted in the determination of "Supermajority Lenders",
except to the extent of net obligations owing to any Lender Party under the
Equity Derivatives, as calculated based on xxxx-to-market valuations thereof
(calculated as specified in the definition of "Agreement Value") at the time of
such vote or other action by the Supermajority Lenders under Section 2.2 of the
Intercreditor Agreement. For purposes of the application of this definition in
respect of any amendment or waiver of any provision of Section 2.7 of the
Facility Agreement, the sum of the (a) aggregate capital outstanding under the
Securitization Facility and (b) aggregate unused purchase commitments under the
Securitization Facility shall be counted in the determination of " Supermajority
Lenders".
"Taxes" has the meaning specified in Section 2.12(a) of the Facility
Agreement.
"Termination Date" means August 12, 2002.
33
"TOPRs Documents" means the Indenture dated as of November 6, 1996
between Designer Holdings Ltd. and IBJ Xxxxxxxxx Bank & Trust Company, and all
related documents relating to the Trust and Trust Stock.
"Total Bank Outstandings" of Group and its Subsidiaries means, on a
Consolidated basis and without duplication, the following:
(a) all Indebtedness for Borrowed Money of such Persons,
(b) all Obligations of such Persons under the Securitization Facility,
(c) all loans under the Trade Credit Facility and New Trade Credit
Facility not otherwise included as Indebtedness for Borrowed Money, and
(d) all amounts outstanding under the Securitization Facility not
otherwise included as Indebtedness for Borrowed Money.
"Trade Credit Facility" has the meaning specified on Schedule II to the
Intercreditor Agreement.
"Trust" means Designer Finance Trust, a trust formed under the laws of
Delaware.
"Trust Stock" means the Trust Originated Preferred Securities issued by
the Trust.
"Uncommitted Facilities" means, collectively, items B.6 through B.15 on
Schedule II of the Intercreditor Agreement.
"U.S. Credit Party" means Group and any Domestic Subsidiary (other than
Warnaco Operations Corporation).
"Warnaco Entity" means Group and any of its Subsidiaries.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of which
any Loan Party could have liability.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person, all the outstanding shares of capital stock or other
Equity Interests of which (other than directors or similar qualifying shares
issued in compliance with requirements of local law) are at the time owned
directly or indirectly by such Person.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle E
of Title IV of ERISA.
34
PART II. INTERPRETATION AND CONSTRUCTION
The following shall constitute the rules of interpretation and
construction applicable to the terms defined herein and in the Loan Documents.
(a) With respect to any term that is defined by reference to any Loan
Document (capitalized terms used in this Annex A are used as defined herein),
for purposes hereof, such term shall continue to have the original definition
notwithstanding any termination, expiration or modification of such document
except to the extent the parties may otherwise agree in accordance with the
terms of such document.
(b) In each Loan Document in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding".
References in the Loan Documents to any agreement or contract "as amended" shall
mean and be a reference to such agreement or contract as amended, amended and
restated, supplemented or otherwise modified (by waiver or otherwise) from time
to time in accordance with its terms
(c) The words "hereof," "herein" and "hereunder" and words of similar
import, when used in any Loan Document, shall refer to such document as a whole
and not to any particular provision of such document, and section, subsection,
annex, appendix, schedule and exhibit references are to those contained in or
attached to such document unless otherwise specified.
(d) Each reference to "days" in any Loan Document shall mean calendar
days, unless the term "Business Days" shall be used. Each reference to a time of
day in any Loan Document shall mean such time in New York, New York, unless
otherwise specified.
(e) The meanings given to terms defined in this Annex or in any Loan
Document shall apply to both the singular and plural forms of such terms.
(f) Except as otherwise specified herein, each reference in this Annex
or in any Loan Document to any agreement shall be deemed (i) to include all
exhibits, annexes, schedules or other attachments thereto and (ii) to refer to
such agreement as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms of such Loan Document (to the
extent such terms are applicable to any amendment, supplement or modification of
such agreement).
(g) Except as otherwise specified in this Annex or in any Loan
Document, each reference in this Annex or in any Loan Document to a law or
requirement of law, shall be deemed to refer to such law or requirement of law,
as the same may be amended, supplemented or otherwise modified from time to
time.
(h) Each reference in this Annex or in any Loan Document to a Person
shall be deemed to include such Person's permitted successors and assigns.
35
(i) Each reference in this Annex or in any Loan Document to accounting
terms relating to the Loan Parties not defined in this Annex, to the extent not
defined, shall have the respective meanings given to them under GAAP.
36
