Exhibit 99.2
SENIOR SECURED REVOLVING CREDIT AGREEMENT
DATED AS OF FEBRUARY 4, 2003
among
WARNACO INC.,
as Borrower
THE WARNACO GROUP, INC.,
as a Guarantor
THE LENDERS AND ISSUERS FROM TIME TO TIME PARTY HERETO
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
JPMORGAN CHASE BANK,
as Syndication Agent
BANK OF AMERICA, NA,
THE CIT GROUP/COMMERCIAL SERVICES, INC.,
CONGRESS FINANCIAL CORPORATION (CENTRAL)
as Co-Documentation Agents
AND
XXXXXXX XXXXX XXXXXX INC., and X.X.XXXXXX SECURITIES, INC.
as Joint Lead Arrangers and Joint Lead Book Managers
WEIL, GOTSHAL & XXXXXX LLP
000 XXXXX XXXXXX
XXX XXXX, XXX XXXX 00000-0000
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS..................................1
Section 1.1 Defined Terms.....................................................................1
Section 1.2 Computation of Time Periods......................................................36
Section 1.3 Accounting Terms and Principles..................................................36
Section 1.4 Conversion of Foreign Currencies.................................................36
ARTICLE II THE FACILITIES...................................................................37
Section 2.1 The Commitments..................................................................37
Section 2.2 Borrowing Procedures.............................................................38
Section 2.3 Swing Loans......................................................................39
Section 2.4 Letters of Credit................................................................40
Section 2.5 Reduction and Termination of the Commitments.....................................45
Section 2.6 Repayment of Loans...............................................................45
Section 2.7 Evidence of Debt.................................................................45
Section 2.8 Optional Prepayments.............................................................46
Section 2.9 Mandatory Prepayments............................................................46
Section 2.10 Interest.........................................................................47
Section 2.11 Conversion/Continuation Option...................................................48
Section 2.12 Fees.............................................................................49
Section 2.13 Payments and Computations........................................................50
Section 2.14 Special Provisions Governing Eurodollar Rate Loans...............................52
Section 2.15 Capital Adequacy.................................................................54
Section 2.16 Taxes............................................................................54
Section 2.17 Substitution of Lenders..........................................................56
Section 2.18 Facility Increase................................................................57
ARTICLE III CONDITIONS TO LOANS AND LETTERS OF CREDIT........................................58
Section 3.1 Conditions Precedent to Initial Loans and Letters of Credit......................58
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit...........................62
Section 3.3 Determinations of Initial Borrowing Conditions...................................63
ARTICLE IV REPRESENTATIONS AND WARRANTIES...................................................63
Section 4.1 Corporate Existence; Compliance with Law.........................................64
Section 4.2 Corporate Power; Authorization; Enforceable Obligations..........................64
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TABLE OF CONTENTS
(continued)
Page
Section 4.3 Ownership of Group, Borrower; Subsidiaries.......................................65
Section 4.4 Financial Statements.............................................................65
Section 4.5 Material Adverse Change..........................................................66
Section 4.6 Solvency.........................................................................66
Section 4.7 Litigation.......................................................................66
Section 4.8 Taxes............................................................................67
Section 4.9 Full Disclosure..................................................................67
Section 4.10 Margin Regulations...............................................................67
Section 4.11 No Burdensome Restrictions; No Defaults..........................................67
Section 4.12 Investment Company Act; Public Utility Holding Company Act.......................68
Section 4.13 Use of Proceeds..................................................................68
Section 4.14 Insurance........................................................................68
Section 4.15 Labor Matters....................................................................68
Section 4.16 ERISA............................................................................69
Section 4.17 Environmental Matters............................................................69
Section 4.18 Intellectual Property; Material License..........................................70
Section 4.19 Title; Real Property.............................................................70
Section 4.20 Related Documents................................................................71
Section 4.21 Confirmation Order...............................................................71
ARTICLE V FINANCIAL COVENANTS..............................................................71
Section 5.1 Maximum Leverage Ratio...........................................................71
Section 5.2 Minimum Fixed Charge Coverage Ratio..............................................72
Section 5.3 Capital Expenditures.............................................................72
ARTICLE VI REPORTING COVENANTS..............................................................73
Section 6.1 Financial Statements.............................................................73
Section 6.2 Default Notices..................................................................75
Section 6.3 Litigation.......................................................................75
Section 6.4 Asset Sales......................................................................75
Section 6.5 Notices under Second Lien Note Documents.........................................75
Section 6.6 SEC Filings; Press Releases......................................................75
Section 6.7 Labor Relations..................................................................75
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TABLE OF CONTENTS
(continued)
Page
Section 6.8 Tax Returns......................................................................76
Section 6.9 Insurance........................................................................76
Section 6.10 ERISA Matters....................................................................76
Section 6.11 Environmental Matters............................................................76
Section 6.12 Borrowing Base Determination.....................................................76
Section 6.13 Material Licenses................................................................77
Section 6.14 Other Information................................................................77
ARTICLE VII AFFIRMATIVE COVENANTS............................................................78
Section 7.1 Preservation of Corporate Existence, Etc.........................................78
Section 7.2 Compliance with Laws, Etc........................................................78
Section 7.3 Conduct of Business..............................................................78
Section 7.4 Payment of Taxes, Etc............................................................78
Section 7.5 Maintenance of Insurance.........................................................78
Section 7.6 Access...........................................................................78
Section 7.7 Keeping of Books.................................................................79
Section 7.8 Maintenance of Properties, Etc...................................................79
Section 7.9 Application of Proceeds..........................................................79
Section 7.11 Additional Personal Property Collateral and Guaranties...........................80
Section 7.12 Landlord Waivers and Bailee's Letters............................................81
Section 7.13 Real Property....................................................................81
Section 7.14 Post Closing Matters.............................................................82
ARTICLE VIII NEGATIVE COVENANTS...............................................................82
Section 8.1 Indebtedness.....................................................................82
Section 8.2 Liens, Etc.......................................................................83
Section 8.3 Investments......................................................................84
Section 8.4 Sale of Assets...................................................................85
Section 8.5 Restricted Payments..............................................................86
Section 8.6 Prepayment and Cancellation of Indebtedness......................................87
Section 8.7 Restriction on Fundamental Changes...............................................88
Section 8.8 Change in Nature of Business.....................................................89
Section 8.9 Transactions with Affiliates.....................................................89
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TABLE OF CONTENTS
(continued)
Page
Section 8.10 Restrictions on Subsidiary Distributions; No New Negative Pledge.................89
Section 8.11 Modification of Constituent Documents............................................90
Section 8.12 Modification of Related Documents and Certain Debt...............................90
Section 8.13 Modification of Debt Agreements..................................................90
Section 8.14 Accounting Changes; Fiscal Year..................................................90
Section 8.15 Margin Regulations...............................................................90
Section 8.16 Operating Leases; Sale and Leasebacks Transactions...............................90
Section 8.17 No Speculative Transactions......................................................91
Section 8.18 Compliance with ERISA............................................................91
Section 8.19 Environmental....................................................................91
ARTICLE IX EVENTS OF DEFAULT.................................................... ...........91
Section 9.1 Events of Default................................................................91
Section 9.2 Remedies.........................................................................93
Section 9.3 Actions in Respect of Letters of Credit..........................................93
ARTICLE X THE ADMINISTRATIVE AGENT.........................................................93
Section 10.1 Authorization and Action.........................................................93
Section 10.2 Agent's Reliance, Etc............................................................94
Section 10.3 The Administrative Agent Individually............................................95
Section 10.4 Lender Credit Decision...........................................................95
Section 10.5 Indemnification..................................................................95
Section 10.6 Successor Agent..................................................................95
Section 10.7 Concerning the Collateral and the Collateral Documents...........................96
Section 10.8 Collateral Matters Relating to Related Obligations...............................97
Section 10.9 Posting of Approved Electronic Communications....................................98
Section 10.10 Syndication Agent; Co-Documentation Agents; Arrangers............................98
ARTICLE XI MISCELLANEOUS....................................................................99
Section 11.1 Amendments, Waivers, Etc.........................................................99
Section 11.2 Assignments and Participations..................................................100
Section 11.3 Costs and Expenses..............................................................104
Section 11.4 Indemnities.....................................................................105
Section 11.5 Limitation of Liability.........................................................106
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TABLE OF CONTENTS
(continued)
Page
Section 11.6 Right of Set-off................................................................106
Section 11.7 Sharing of Payments, Etc........................................................106
Section 11.8 Notices, Etc....................................................................107
Section 11.9 No Waiver; Remedies.............................................................108
Section 11.10 Binding Effect..................................................................108
Section 11.11 Governing Law...................................................................109
Section 11.12 Submission to Jurisdiction; Service of Process..................................109
Section 11.13 Waiver of Jury Trial............................................................109
Section 11.14 Marshaling; Payments Set Aside..................................................109
Section 11.15 Section Titles..................................................................110
Section 11.16 Execution in Counterparts.......................................................110
Section 11.17 Entire Agreement................................................................110
Section 11.18 Confidentiality.................................................................110
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SCHEDULES
Schedule I - Commitments
Schedule II - Applicable Lending Offices and Addresses for Notices
Schedule 2.4 - Existing Letters of Credit
Schedule 4.2 - Consents
Schedule 4.3 - Ownership of Warnaco Entities
Schedule 4.15 - Labor Matters
Schedule 4.16 - ERISA Matters
Schedule 4.19 - Real Property
Schedule 5.3 - Capital Expenditure Adjustments
Schedule 8.1 - Existing Indebtedness
Schedule 8.2 - Existing Liens
Schedule 8.3 - Existing Investments
Schedule 8.4 - Permitted Asset Sales
Schedule 8.7 - Scheduled Dissolutions
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Note
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Letter of Credit Request
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Notice of Conversion or Continuation
Exhibit G - Form of Opinion of Counsel for the Loan Parties
Exhibit H - Form of Compliance Certificate
Exhibit I - Form of Pledge and Security Agreement
Exhibit J - Form of Guaranty
vi
SENIOR SECURED REVOLVING CREDIT AGREEMENT dated as of February 4,
2003, among Warnaco Inc., a Delaware corporation, (the "Borrower"), The Warnaco
Group, Inc., a Delaware corporation ("Group"), the Lenders (as defined below),
the Issuers (as defined below), Citicorp North America, Inc. ("CNAI"), as
administrative agent and collateral agent for the Lenders and the Issuers (in
such capacity, the "Administrative Agent"), JPMorgan Chase Bank, as syndication
agent for the Lenders and the Issuers (in such capacity, the "Syndication
Agent") and Bank of America, NA, The CIT Group/Commercial Services, Inc., and
Congress Financial Corporation (Central), each as a co-documentation agent for
the Lenders and Issuers (in such capacity, collectively, the "Co-Documentation
Agents").
W i t n e s s e t h:
WHEREAS, on June 11, 2001, Group, the Borrower and each of Group's
other Domestic Subsidiaries (as defined below) each filed a voluntary petition
for relief (collectively, the "Cases") under chapter 11 of the Bankruptcy Code
with the United States Bankruptcy Court for the Southern District of New York
(the "Bankruptcy Court");
WHEREAS, on October 1, 2002, Group, the Borrower and Group's other
Domestic Subsidiaries filed a Plan of Reorganization (as amended as of November
8, 2002, the "Plan of Reorganization") and related Disclosure Statement with the
Bankruptcy Court in the Cases;
WHEREAS, on the Effective Date (as defined in the Plan of
Reorganization), Group, the Borrower and Group's other Domestic Subsidiaries
shall consummate the restructuring of their corporate and capital structure, on
the terms provided in the Plan of Reorganization;
WHEREAS, pursuant to the Plan of Reorganization, as a condition to the
effectiveness of such Plan of Reorganization, the Borrower is required to
establish, as of the effective date of the Plan of Reorganization, a secured
revolving line of credit or liquidity facility of a maximum principal amount of
$275,000,000 for the provision of working capital to Group and its Subsidiaries
after such effective date, and the Borrower has requested that the Lenders and
Issuers make available to the Borrower a revolving credit and a letter of credit
facility to satisfy such condition; and
WHEREAS, the Lenders and Issuers are willing to make available to the
Borrower such revolving credit and letter of credit facility upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
Section 1.1 Defined Terms. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Account" has the meaning specified in the Pledge and Security
Agreement.
"Account Debtor" has the meaning specified in the Pledge and Security
Agreement.
"Adjusted Orderly Liquidation Value Rate" means 85% of the Orderly
Liquidation Value Rate.
"Administrative Agent" has the meaning specified in the preamble to
this Agreement.
"Advance Rate" means the rates set forth below, in each case up to the
rate set forth opposite such category of Collateral:
-----------------------------------------------
CATEGORY RATE
-----------------------------------------------
Eligible Receivables 75%
-----------------------------------------------
Eligible Finished Inventory 69%
-----------------------------------------------
Eligible Other Inventory consisting of:
-----------------------------------------------
Raw Materials 27%
-----------------------------------------------
Inventory covered by Documentary
Letters of Credit 50%
-----------------------------------------------
Work in Process 5%;
-----------------------------------------------
provided, that (a) if at any time the product of (i) the Adjusted Orderly
Liquidation Value Rate and (ii) the sum of Eligible Finished Inventory and
Eligible Other Inventory of each Loan Party (valued, in each case, at the lower
of cost and market on a first-in, first-out basis) (the "Inventory Orderly
Liquidation Value") is less than the aggregate Borrowing Base attributable to
such Inventory (calculated using the above Advance Rates), then, at the sole
discretion of the Administrative Agent, exercised reasonably, the effective
Advance Rates for Eligible Finished Inventory and Eligible Other Inventory will
be adjusted (until delivery of the next Appraisal) to levels that would cause
such Advance Rates to effectively equal the Adjusted Orderly Liquidation Value
Rate; and (b) any reduction in the foregoing advance rates (or any increase up
to the rates set forth above), shall be determined by the Administrative Agent
in its sole discretion exercised reasonably and shall take effect 10 Business
Days (or, if pursuant to clause (a) above, 3 Business Days) after the
Administrative Agent delivers written notice thereof to the Borrower.
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person, each officer, director, general partner or joint-venturer of
such Person, and each Person who is the beneficial owner of 10% or more of any
class of Voting Stock of such Person. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Affiliated Account Debtor" means, (a) in relation to an Account
Debtor that is a Governmental Authority, any other Account Debtor that is a
Governmental Authority, and (b) in relation to an Account Debtor that is not a
Governmental Authority, each Account Debtor that is an Affiliate of such Account
Debtor.
"Agent" means the Administrative Agent or the Syndication Agent.
"Agent Affiliate" has the meaning specified in Section 10.9(c).
"Agreement" means this Senior Secured Revolving Credit Agreement.
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"Alternative Currency" means the lawful currency of each of the
European Union, the United Kingdom, Canada and Hong Kong, provided that in each
case such currency is freely transferable into Dollars.
"Applicable Lending Office" means, with respect to each Lender, its
Domestic Lending Office, in the case of a Base Rate Loan, and its Eurodollar
Lending Office, in the case of a Eurodollar Rate Loan.
"Applicable Margin" means (a) during the period commencing on the
Closing Date and ending on the first anniversary of the Closing Date, with
respect to Loans maintained as (i) Base Rate Loans, a rate equal to 1.50% per
annum and (ii) Eurodollar Rate Loans, a rate equal to 2.50% per annum and (b)
thereafter, as of any date of determination, a per annum rate equal to the rate
set forth below opposite the applicable type of Loan and the then applicable
Leverage Ratio of Group (determined on the last day of the most recent Fiscal
Quarter for which Financial Statements have been delivered pursuant to Section
6.1(b) or Section 6.1(c)) set forth below:
-----------------------------------------------------------------------
EURODOLLAR RATE
LEVERAGE RATIO BASE RATE LOANS LOANS
-----------------------------------------------------------------------
Greater than or equal to 1.5 to 1
-----------------------------------------------------------------------
In the event no Margin Reduction
Event has occurred 1.50% 2.50%
-----------------------------------------------------------------------
From and after the occurrence of
the Margin Reduction Event 1.25% 2.25%
-----------------------------------------------------------------------
Less than 1.5 to 1 and equal to or
greater than 1.0 to 1 1.25% 2.25%
-----------------------------------------------------------------------
Less than 1.0 to 1 1.00% 2.00%
-----------------------------------------------------------------------
Changes in the Applicable Margin resulting from a change in the Leverage Ratio
on the last day of any subsequent Fiscal Quarter shall become effective as to
all Loans 10 Business Days after delivery by the Borrower to the Administrative
Agent of new Financial Statements pursuant to Section 6.1(b) or Section 6.1(c)
as applicable. Notwithstanding anything to the contrary set forth in this
Agreement (including the then effective Leverage Ratio of Group), if the
Borrower shall fail to deliver such Financial Statements within any of the time
periods required under Section 6.1(b) or Section 6.1(c) (as either such section
has been amended, waived or otherwise modified), the Applicable Margin from and
including the day on which such Financial Statements were due, to but not
including the date the Borrower delivers to the Administrative Agent such
Financial Statements, shall equal the highest possible Applicable Margin
provided for by this definition.
"Applicable Unused Commitment Fee Rate" means 0.375% per annum.
"Appraisal" means each Initial Appraisal and each Updated Appraisal.
"Approved Electronic Communications" means each notice, demand,
communication, information, document and other material that any Loan Party is
obligated to, or otherwise chooses to, provide to the Administrative Agent
pursuant to any Loan Document or the transactions contemplated therein,
including (a) any supplement to the Guaranty, any joinder to the Pledge and
Security Agreement and any other written Contractual Obligation delivered or
required to be delivered in respect of any Loan Document or the transactions
contemplated therein and (b) any Financial Statement, financial and other
report, notice, request, certificate and other information material, provided,
however, that, "Approved Electronic Communication" shall exclude (x) any Notice
of Borrowing, Letter of Credit Request, Swing Loan Request, Notice of Conversion
or Continuation, and
3
any other notice, demand, communication, information, document and other
material relating to a request for a new, or a conversion of an existing,
Borrowing, (ii) any notice pursuant to Section 2.8 or Section 2.9 and any other
notice relating to the payment of any principal or other amount due under any
Loan Document prior to the scheduled date therefor, (iii) any notice of any
Default or Event of Default and (iv) any notice, demand, communication,
information, document and other material required to be delivered to satisfy any
of the conditions set forth in Article II or Section 2.4(a) or any other
condition to any Borrowing or other extension of credit hereunder or any
condition precedent to the effectiveness of this Agreement.
"Approved Electronic Platform" has the meaning specified in Section
10.9.
"Approved Fund" means any Fund that is advised or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or Affiliate of an entity
that administers or manages a Lender.
"Arrangers" means Xxxxxxx Xxxxx Xxxxxx Inc. and X.X.Xxxxxx Securities,
Inc., as joint lead arrangers.
"Asset Sale" has the meaning specified in Section 8.4.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Administrative
Agent, in substantially the form of Exhibit A.
"Assumption Agreement" means an assumption agreement entered into by a
Lender or an Eligible Assignee pursuant to Section 2.18, in form acceptable to
the Administrative Agent.
"Authentic Receivable" means an Eligible Receivable owned by Authentic
Fitness Products, Inc. or a Subsidiary thereof.
"Availability Reserves" means, as of 3 Business Days after the date of
written notice of any determination thereof to the Borrower by the
Administrative Agent, such amounts as the Administrative Agent may from time to
time establish against the Facility, in the Administrative Agent's sole
discretion exercised reasonably, in order to (a) preserve the value of the
Collateral or the Administrative Agent's Lien thereon and/or (b) provide for the
payment of unanticipated liabilities of any of the Loan Parties arising after
the Closing Date and/or (c) provide for the effect, or anticipated effect, of
the loss of the benefit to the Warnaco Entities of a Material License.
"Available Credit" means, at any time, (a) the lesser of (i) the
Commitments in effect at such time and (ii) the Borrowing Base at such time
minus (b) the sum of (i) the aggregate Outstandings at such time and (ii) the
aggregate amount of any Availability Reserve in effect at such time.
"Bailee's Letter" means a letter in form and substance acceptable to
the Administrative Agent and executed by any Person (other than a Loan Party)
that is in possession of Inventory on behalf of a Loan Party pursuant to which
such Person acknowledges, among other things, the Administrative Agent's Lien
with respect thereto.
"Bankruptcy Code" means title 11, United States Code, as amended from
time to time.
"Bankruptcy Court" is defined in the recitals to this Agreement or
shall mean any other court having competent jurisdiction over the Cases.
4
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of:
(A) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(B) the sum (adjusted to the nearest 0.25% or, if there is no nearest
0.25%, to the next higher 0.25%) of (i) 0.5% per annum plus (ii) the rate
per annum obtained by dividing (A) the latest three week moving average of
secondary market morning offering rates in the United States for three
month certificates of deposit of major United States money market banks,
such three week moving average being determined weekly on each Monday (or,
if any such day is not a Business Day, on the next succeeding Business Day)
for the three week period ending on the previous Friday by Citibank on the
basis of such rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations for such rates
received by Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to 100%
minus the average of the daily percentages specified during such three week
period by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) for Citibank in respect of liabilities consisting of
or including (among other liabilities) three month U.S. dollar nonpersonal
time deposits in the United States, plus (iii) the average during such
three week period of the maximum annual assessment rates estimated by
Citibank for determining the then current annual assessment payable by
Citibank to the Federal Deposit Insurance Corporation (or any successor)
for insuring Dollar deposits in the United States; and
(C) the sum of (i) 0.5% per annum plus (ii) the Federal Funds Rate.
"Base Rate Loan" means any Loan or any Swing Loan during any period in
which it bears interest based on the Base Rate.
"Blocked Account" has the meaning specified in the Pledge and Security
Agreement.
"Blocked Account Bank" has the meaning specified in the Pledge and
Security Agreement.
"Blocked Account Letter" has the meaning specified in the Pledge and
Security Agreement.
"Borrower" has the meaning set forth in the preamble to this
Agreement.
"Borrowing" means a borrowing consisting of Revolving Loans made on
the same day by the Lenders ratably according to their respective Commitments.
"Borrowing Base" means, at any time, the Dollar Equivalent of (a) the
sum of (i) the product of the Advance Rate then in effect for Eligible
Receivables and the face amount of all Eligible Receivables of each Loan Party
(calculated net of all finance charges, late fees and other fees which are
unearned, sales, excise or similar taxes, and credits or allowances granted at
such time), and (ii) the sum of (x) the product of the Advance Rate then in
effect for each type of Eligible Finished Inventory of such Loan Party and such
type of Eligible Finished Inventory of each Loan Party (valued, in each case, at
the lower of cost and market on a first-in, first-out basis), and (y) the
product of the
5
Advance Rate then in effect for each type of Eligible Other Inventory of such
Loan Party and such type of Eligible Other Inventory of each Loan Party (valued,
in each case, at the lower of cost and market on a first-in, first-out basis)
minus (b) any Eligibility Reserve, and, in the case of Eligible Receivables, any
Dilution Reserve then in effect.
"Borrowing Base Certificate" means a certificate to be executed and
delivered from time to time by the Borrower to the Administrative Agent
substantially in the form of Exhibit E.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City, and, (a) in the case of Letters of
Credit Issued in Euros or within the European Union, in London, (b) in the case
of Letters of Credit Issued in Canadian dollars or in Canada, in Canada, (c) in
the case of Letters of Credit Issued in Hong Kong dollars or in Hong Kong, in
Hong Kong, and, (d) if the applicable Business Day relates to notices,
determinations, fundings and payments in connection with the Eurodollar Rate or
any Eurodollar Rate Loans, a day on which dealings in Dollar deposits are also
carried on in the London interbank market.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate of amounts that would be reflected as additions to
property, plant or equipment on a consolidated balance sheet of such Person and
its Subsidiaries on a consolidated basis prepared in conformity with GAAP,
excluding interest capitalized during construction.
"Capital Lease" means, with respect to any Person, any lease of
property by such Person as lessee which would be accounted for as a capital
lease on a balance sheet of such Person prepared in conformity with GAAP.
"Capital Lease Obligations" means, with respect to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capital Leases, as determined on a consolidated basis in conformity with
GAAP.
"Cases" has the meaning specified in the recitals hereto.
"Cash Collateral Account" has the meaning specified in the Pledge and
Security Agreement.
"Cash Equivalents" means (a) securities issued or fully guaranteed or
insured by the United States government or any agency thereof (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) certificates of deposit, eurodollar time deposits, overnight
bank deposits and bankers' acceptances of any commercial bank organized under
the laws of the United States, any state thereof, the District of Columbia, any
foreign bank, or its branches or agencies (fully protected against currency
fluctuations) which, at the time of acquisition, are rated at least "A-1" by
Standard & Poor's Rating Services ("S&P") or "P-1" by Xxxxx'x Investors
Services, Inc. ("Moody's"), (c) commercial paper of an issuer rated at least
"A-1" by S&P or "P-1" by Moody's, and (d) shares of any money market fund that
(i) has at least 95% of its assets invested continuously in the types of
investments referred to in clauses (a) through (c) above, (ii) has net assets of
not less than $500,000,000 and (iii) is rated at least "A-1" by S&P or "P-1" by
Moody's; provided, however, that the maturities of all obligations of the type
specified in clauses (a) through (c) above shall not exceed 365 days.
6
"Cash Interest Expense" means, with respect to any Person for any
period, the Interest Expense of such Person for such period less the Non-Cash
Interest Expense of such Person for such period.
"Cash Management Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person in respect
of cash management services (including treasury, depository, overdraft, credit
or debit card, electronic funds transfer and other cash management arrangements)
provided after the date hereof (regardless of whether these or similar services
were provided prior to the Closing Date by any Lender or any Affiliate of any
Lender) by any Lender or any Affiliate of any Lender in connection with this
Agreement or any Loan Document, including obligations for the payment of fees,
interest, charges, expenses, attorneys' fees and disbursements in connection
therewith.
"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.
"Change of Control" means any of the following: (a) Group shall at any
time cease to have legal and beneficial ownership of 100% of the capital stock
of the Borrower, or, directly or indirectly, any other Loan Party (except if
such parties shall merge, liquidate or dissolve in accordance with Section 8.7);
or (b) any Person, or two or more Persons acting in concert, 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 35% or more of the combined voting power of all
Voting Stock of Group; or (c) any Person, or two or more Persons acting in
concert 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 35%
or more of combined voting power of all Voting Stock of Group or (d) any "Change
of Control" as defined in the Second Lien Note Indenture or any Take-Out
Securities Document.
"Chargeback" means a deduction from a Receivable taken by a customer.
"Chattel Paper" has the meaning specified in the Pledge and Security
Agreement.
"Citibank" means Citibank, N.A., a national banking association.
"Closing Date" means the first date on which each of the conditions
set forth in Section 3.1 have been satisfied.
"CNAI" has the meaning specified in the preamble to this Agreement.
"Co-Documentation Agents" has the meaning specified in the preamble to
this Agreement.
"Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.
7
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Loan Party in or upon which a
Lien is granted under any Collateral Document.
"Collateral Documents" means the Pledge and Security Agreement, other
pledge or security agreements, the Mortgages, the Blocked Account Letters, the
Restricted Account Letters, the Control Account Agreements and any other
document executed and delivered by a Loan Party granting a Lien on any of its
property to secure payment of the Secured Obligations.
"Collections" means, with respect to any Receivable: (a) all funds
that are received by any Loan Party in payment of any amounts owed in respect of
such Receivable (including purchase price, finance charges, interest and all
other charges), or applied to amounts owed in respect of such Receivable
(including insurance payments and net proceeds of the sale or other disposition
of repossessed goods or other collateral or property of the related Account
Debtor or any other Person directly or indirectly liable for the payment of such
Receivable and available to be applied thereon) and (b) all other proceeds of
such Receivable.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make Revolving Loans and acquire interests in other Outstandings
in the aggregate principal amount outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule I (Commitments) under the caption
"Commitment," as amended to reflect each Assignment and Acceptance executed by
such Lender and as such amount may be adjusted pursuant to this Agreement; in an
initial aggregate amount up to $275,000,000; and "Commitments" means the
aggregate Commitments of all Lenders.
"Compliance Certificate" has the meaning specified in Section 6.1(d).
"Confirmation Order" has the meaning specified in Section 3.1(b).
"Consolidated Net Income" means, for any Person for any period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis in conformity with GAAP; provided, however,
that (a) the net income of any other Person in which such Person or one of its
Subsidiaries has a joint interest with a third party (which interest does not
cause the net income of such other Person to be consolidated into the net income
of such Person in accordance with GAAP) shall be included only to the extent of
the amount of dividends or distributions paid to such Person or Subsidiary, (b)
the net income of any Subsidiary of such Person that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or limitation,
(c) any net gain (but not loss) resulting from an Asset Sale by such Person or
any of its Subsidiaries other than in the ordinary course of business shall be
excluded, and (d) extraordinary gains and losses and any one-time increase or
decrease to net income which is required to be recorded because of the adoption
of new accounting policies, practices or standards required by GAAP shall be
excluded.
"Constituent Documents" means, with respect to any Person, (a) the
articles/certificate of incorporation (or the equivalent organizational
documents) of such Person, (b) the by-laws (or the equivalent governing
documents) of such Person and (c) any document setting forth the manner of
election and duties of the directors or managing members of such Person (if any)
and the designation, amount and/or relative rights, limitations and preferences
of any class or series of such Person's Stock.
"Contaminant" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a
8
pollutant or by other words of similar meaning or regulatory effect, including
any petroleum or petroleum-derived substance or waste, asbestos and
polychlorinated biphenyls.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any
of its properties is subject.
"Control Account" has the meaning specified in the Pledge and Security
Agreement.
"Control Account Agreement" has the meaning specified in the Pledge
and Security Agreement.
"Corporate Chart" means a corporate organizational chart, list or
other similar document in each case in form reasonably acceptable to the
Administrative Agent and setting forth, for each Person that is a Loan Party,
that is subject to Section 7.11 or that is a Subsidiary of any of them, (a) the
full legal name of such Person (and any trade name, fictitious name or other
name such Person may have had or operated under), (b) the jurisdiction of
organization, the organizational number (if any) and the tax identification
number (if any) of such Person, (c) the location of such Person's chief
executive office (or sole place of business) and (d) the number of shares of
each class of such Person's Stock authorized (if applicable), the number
outstanding as of the date of delivery and the number and percentage of such
outstanding shares for each such class owned (directly or indirectly) by any
Loan Party or any Subsidiary of any of them.
"Credit and Collection Policy" means, as the context may require,
those receivables credit and collection policies and practices of the Loan
Parties in effect on the Closing Date and as disclosed in writing to the
Lenders, as such credit and collection policies and practices may be modified
with the prior written consent of the Administrative Agent.
"Customary Permitted Liens" means, with respect to any Person, any of
the following Liens:
(a) Liens with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due and payable or
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained to the extent required by GAAP;
(b) Liens of landlords arising by statute and liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other liens
imposed by law created in the ordinary course of business for amounts not
yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by GAAP,
or deposits or pledges to obtain the release of any such Liens;
(c) deposits made in the ordinary course of business in connection
with worker's compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money), public or
statutory obligations, and surety, stay, appeal, customs or performance
bonds, or similar obligations arising in each case in the ordinary course
of business;
9
(d) encumbrances arising by reason of zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar encumbrances or such other matters
as disclosed in Mortgagee's Title Insurance Policy on the use of Real
Property which do not materially detract from the value of such Real
Property or interfere with the ordinary conduct of the business conducted
and proposed to be conducted at such Real Property;
(e) encumbrances arising under leases or subleases of Real Property
which do not in the aggregate materially detract from the value of such
Real Property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such Real Property; and
(f) financing statements of a lessor's rights in and to personal
property leased to such Person in the ordinary course of such Person's
business.
"Debt Issuance" means the incurrence of Indebtedness of the type
specified in clause (a) and (b) of the definition of "Indebtedness" by Group or
any of its Subsidiaries.
"Default" means any event which with the passing of time or the giving
of notice or both would become an Event of Default.
"Defaulted Receivable" means a Receivable:
(a) in the case of a Receivable that is not an Extended Term
Receivable, as to which any payment, or part thereof, remains unpaid for 91
days or more from the original due date for such payment,
(b) in the case of a Receivable that is an Extended Term Receivable,
as to which any payment, or part thereof, remains unpaid for 30 days or
more from the original due date for such payment,
(c) the Account Debtor of such Receivable (or any other Person
obligated thereon or owning any Related Security with respect thereto) has:
(i) filed a petition for bankruptcy or any other relief under the
Bankruptcy Code or any other law relating to bankruptcy, insolvency,
reorganization or relief of debtors; (ii) made an assignment for the
benefit of creditors; (iii) had filed against it any petition or other
application for relief under the Bankruptcy Code or any such other law;
(iv) has failed, suspended business operations, become insolvent, called a
meeting of its creditors for the purpose of obtaining any financial
concession or accommodation; or (v) had or suffered a receiver or a trustee
to be appointed for all or a significant portion of its assets or affairs,
or
(d) which, has been, or, consistent with the Credit and Collection
Policy would be, written off such Loan Party's books as uncollectible.
"Deposit Account" has the meaning given to such term in the UCC.
"Dilution" means, at any given time in respect of all Accounts of the
Loan Parties, 100 times a quotient, (a) the numerator of which is the sum (for
the most recent twelve months) of any net credits, rebates, markdowns, freight
charges, cash discounts, volume, early payment and other discounts, cooperative
advertising expenses, warranties, warehouse and other allowances, disputes,
chargebacks, defective returns, other returned or repossessed goods, reductions
in balance in respect of
10
billing errors or adjustments to estimated billing settlements for defective
products or other reasons, allowances for early payments and other similar
allowances that are made or coordinated with the usual practices of the
Borrowers owning such Account and (b) the denominator of which is the sum (for
the most recent twelve months) of the gross amount of any sales made on account
(including, without limitation, the original balances of such Accounts); and in
any event shall be calculated monthly in accordance with the methodology
utilized in connection with the DIP Credit Agreement.
"Dilution Reserve" means, effective as of 3 Business Days following
the date of written notice of any determination thereof to the Borrower by the
Administrative Agent, such amounts as the Administrative Agent may from time to
time establish against the gross amounts of Eligible Receivables, calculated in
accordance with the formula set forth in the table below:
-----------------------------------------------------------------------------------------------
DILUTION REPORTED BY THE BORROWER IN MOST RECENT
BORROWING BASE CERTIFICATE DELIVERED TO THE DILUTION RESERVE AS A PERCENTAGE OF ELIGIBLE
ADMINISTRATIVE AGENT RECEIVABLES
-----------------------------------------------------------------------------------------------
Less than or equal to 15% 0.00%
-----------------------------------------------------------------------------------------------
Greater than 15% and equal to or less than 17.5% 3.34%
-----------------------------------------------------------------------------------------------
Greater than 17.5% and equal to or less than 20% 6.67%
-----------------------------------------------------------------------------------------------
Greater than 20% and equal to or less than 25% 13.33%
-----------------------------------------------------------------------------------------------
Greater than 25% and equal to or less than 30% 20.00%
-----------------------------------------------------------------------------------------------
Greater than 30% In the sole discretion of the Agent,
exercised reasonably
-----------------------------------------------------------------------------------------------
"DIP Credit Agreement" means the senior secured super-priority debtor
in possession revolving credit agreement dated as of June 11, 2001, among
Warnaco Inc., as debtor and debtor in possession under chapter 11 of the
Bankruptcy Code, Group and the Domestic Subsidiaries (as defined therein) of
Group, as debtors and debtors in possession under chapter 11 of the Bankruptcy
Code, the Lenders (as defined therein), the Issuers (as defined therein),
Citibank, N.A., as administrative agent for the Lenders and the Issuers, and
Xxxxxxx Xxxxx Xxxxxx Inc., The Bank of Nova Scotia and X.X.Xxxxxx Securities,
Inc. as joint lead arrangers.
"Disclosure Statement" means the amended and restated disclosure
statement of The Warnaco Group, Inc. and its Domestic Subsidiaries, dated
November 8, 2002, as amended, supplemented or otherwise modified from time to
time, describing the First Amended Plan of Reorganization (and the transactions
and events contemplated thereby), filed with the Bankruptcy Court on November 8,
2002.
"Document" has the meaning specified in Article 9 of the UCC.
"Documentary Letter of Credit" means any Letter of Credit Issued by an
Issuer pursuant to Section 2.4 for the account of the Borrower, which is
drawable upon presentation of documents evidencing the sale or shipment of goods
purchased by Group or any of its Subsidiaries in the ordinary course of its
business.
"Dollar Equivalent" of any amount means, at the time of determination
thereof, (a) if such amount is expressed in Dollars, such amount, (b) if such
amount is expressed in an Alternative Currency, the equivalent of such amount in
Dollars determined by using the mid-range rate of exchange quoted by the Wall
Street Journal for such Alternative Currency under its "Exchange Rates" column
on the Business Day preceding the date of determination and (c) if such amount
is
11
denominated in any other currency, the equivalent of such amount in Dollars as
determined by the Administrative Agent using any method of determination it
reasonably deems appropriate; provided, however, if such amount is expressed in
an Alternative Currency and such amount relates to the Issuance of a Letter of
Credit by any Issuer, the "Dollar Equivalent" shall mean the equivalent of such
amount in Dollars as determined by such Issuer using any customary method of
determination it reasonably deems appropriate.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II (Applicable Lending Offices and Addresses for Notices) or on
the Assignment and Acceptance by which it became a Lender or such other office
of such Lender as such Lender may from time to time specify to the Borrower and
the Administrative Agent.
"Domestic Subsidiary" means any Subsidiary of Group organized under
the laws of any state of the United States of America or the District of
Columbia.
"EBITDA" means, with respect to any Person for any period, EBITDAR for
such Person less to the extent included in the calculation of EBITDAR for such
Person, restructuring charges for such period.
"EBITDAR" means, with respect to any Person for any period, an amount
equal to (a) Consolidated Net Income of such Person for such period plus (b) the
sum of, in each case to the extent included in the calculation of such
Consolidated Net Income but without duplication, (i) any provision for income
taxes, (ii) Interest Expense, (iii) all restructuring charges announced during
the period, (iv) loss from extraordinary items and from the sale, exchange or
other disposition of capital assets, (v) depreciation, depletion and
amortization of intangibles or financing or acquisition costs and (vi) all other
non-cash charges and non-cash losses for such period, including non-cash charges
relating to any change in the methodology of estimating reserves against
Receivables and Inventory minus (c) the sum of, in each case to the extent
included in the calculation of such Consolidated Net Income but without
duplication, (i) any credit for income tax, (ii) interest income, (iii) gains
from extraordinary items for such period, (iv) any aggregate net gain (but not
any aggregate net loss) from the sale, exchange or other disposition of capital
assets by such Person, (v) any other non-cash gains which have been added in
determining Consolidated Net Income and (vi) cash payments for charges that have
been reserved.
"Effective Date" has the meaning specified in the Plan of
Reorganization.
"Eligibility Reserves" means, effective as of three (3) Business Days
after the date of written notice of any determination thereof to the Borrower by
the Administrative Agent, such amounts as the Administrative Agent, in its sole
discretion exercised reasonably, may from time to time establish against the
gross amounts of Eligible Receivables, Eligible Finished Inventory or Eligible
Other Inventory, to reflect (a) risks or contingencies arising after the Closing
Date which may affect any one or class of such items and which have not already
been taken into account in the calculation of the Borrowing Base and (b) Cash
Management Obligations owing to the Agents that constitute Secured Obligations
as of the date of the most recent report delivered to the Administrative Agent
pursuant to Section 6.12(e).
12
"Eligible Assignee" means (a) a Lender or an Affiliate or Approved
Fund of any Lender, (b) a commercial bank having total assets whose Dollar
Equivalent exceeds $5,000,000,000, (c) a finance company, insurance company or
any other financial institution or Fund, in each case reasonably acceptable to
the Administrative Agent and regularly engaged in making, purchasing or
investing in loans and having a net worth, determined in accordance with GAAP,
whose Dollar Equivalent exceeds $500,000,000 (or, to the extent net worth is
less than such amount, a finance company, insurance company, other financial
institution or Fund, reasonably acceptable to the Administrative Agent) or (d) a
savings and loan association or savings bank organized under the laws of the
United States or any State thereof having a net worth, determined in accordance
with GAAP, whose Dollar Equivalent exceeds $500,000,000.
"Eligible Finished Inventory" means the Inventory of a Loan Party
(other than any Inventory which has been consigned by such Loan Party) including
only finished goods:
(a) which is owned solely by a Loan Party,
(b) with respect to which the Administrative Agent has a valid and
perfected first priority Lien,
(c) with respect to which no representation or warranty contained in
any of the Loan Documents has been breached,
(d) which is not, in the Administrative Agent's sole discretion
exercised reasonably, obsolete or unmerchantable,
(e) with respect to which (in respect of any Inventory labeled with a
brand name or trademark and sold by a Loan Party pursuant to a trademark
owned by a Loan Party or a license granted to a Loan Party) the
Administrative Agent would have rights pursuant to this Agreement or any
other agreement satisfactory to the Administrative Agent to sell such
Inventory in connection with a liquidation thereof, and
(f) which the Administrative Agent has not deemed to be ineligible
based on such credit and collateral considerations relating thereto as the
Administrative Agent may, in its sole discretion exercised reasonably, deem
appropriate and as to which the Administrative Agent provides the Borrower
3 Business Days prior notice.
No Inventory of a Loan Party Borrower shall be Eligible Finished Inventory if
such Inventory consists of (i) goods returned or rejected by customers other
than goods that are undamaged or are resalable in the normal course of business,
(ii) goods to be returned to suppliers, (iii) goods in transit or (iv) goods
located, stored, used or held at the premises of a third party unless (A) the
Administrative Agent shall have received a Landlord Waiver or Bailee's Letter or
(B) in the case of Inventory located at a leased premises, an Eligibility
Reserve in an amount equal to the aggregate of three months gross lease payments
(or, in the case of Eligible Finished Inventory located at the premises of
Floor-Ready Apparel Company LLC, 6 weeks of average budgeted payments) or
otherwise satisfactory to the Administrative Agent shall have been established
with respect thereto.
"Eligible Foreign Account Debtor" means an Account Debtor (i) who is
organized under the laws of a country other than the United States or any state
thereof, (ii) whose Receivables are denominated and payable only in Dollars in
the United States, and (iii) the obligations of which are supported by a letter
of credit which letter of credit names the Administrative Agent as beneficiary
for
13
the benefit of the Secured Parties or in respect of which the issuer has
consented to the assignment to the Administrative Agent of the proceeds thereof.
"Eligible Other Inventory" means the Inventory of a Loan Party (other
than finished goods and other than any Inventory which has been consigned by
such Loan Party) including raw materials, works-in-process, parts and supplies:
(a) which is owned solely by a Loan Party and with respect to which
the Administrative Agent has a valid and perfected first priority Lien,
(b) with respect to which no representation or warranty contained in
any of the Loan Documents has been breached,
(c) which is not, in the Administrative Agent's sole discretion
exercised reasonably, obsolete or unmerchantable,
(d) with respect to which (in respect of any Inventory labeled with a
brand name or trademark and sold by such Loan Party pursuant to a trademark
owned by a Loan Party or a license granted to a Loan Party) the
Administrative Agent would have rights pursuant to this Agreement or any
other agreement satisfactory to the Administrative Agent to sell such
Inventory in connection with a liquidation thereof, and
(e) which the Administrative Agent has not deemed to be ineligible
based on such credit and collateral considerations relating thereto as the
Administrative Agent may, in its sole discretion exercised reasonably, deem
appropriate and as to which the Administrative Agent provides the Borrower
three Business Days prior notice.
No Inventory of a Loan Party shall be Eligible Other Inventory if such Inventory
consists of (i) goods returned or rejected by customers other than goods that
are undamaged or are resalable in the normal course of business, (ii) goods to
be returned to suppliers, (iii) goods in transit or (iv) goods located, stored,
used or held at the premises of a third party unless (A) the Administrative
Agent shall have received a Landlord Waiver or Bailee's Letter or (B) in the
case of Inventory located at a leased premises, an Eligibility Reserve in an
amount equal to the aggregate of three months gross lease payments or otherwise
satisfactory to the Administrative Agent shall have been established with
respect thereto. Notwithstanding the foregoing, Eligible Other Inventory shall
at any time be deemed to include eligible Inventory in an amount equal to the
aggregate undrawn amount of Documentary Letters of Credit at such time.
"Eligible Receivable" means, at any time, any Receivable:
(a) in respect of which the Account Debtor (i) (A) is organized under
the laws of the United States or any state thereof and has its principal
place of business located in the United States or (B) is an Eligible
Foreign Account Debtor and (ii) is not an Affiliate of Group or any of its
Subsidiaries,
(b) that does not have a stated maturity which is more than 90 days
after the original invoice date of such Receivable unless such Receivable
is an Extended Term Receivable, in which case it does not have a stated
maturity which is more than 180 days after the original invoice date of
such Receivable,
14
(c) that arises under a duly authorized Sales Contract for the sale
and delivery of goods and services in the ordinary course of any Loan
Party's business,
(d) that is a legal, valid and binding obligation of the related
Account Debtor, enforceable against such Account Debtor in accordance with
its terms,
(e) that conforms in all material respects with all Requirements of
Law,
(f) that is not the subject of any dispute, offset, holdback, defense,
Lien (other than a Customary Permitted Lien) or other claim other than such
adjustments in the ordinary course of the applicable Loan Party's business
as such Loan Party's business is conducted on the date hereof (such
Receivable to be ineligible to the extent of such dispute, offset,
holdback, defense, Lien or claim),
(g) that satisfies all applicable requirements of the applicable
Credit and Collection Policy,
(h) that has not been modified, waived or restructured since its
creation,
(i) in which a Loan Party owns good and marketable title, free and
clear of any Lien (other than a Customary Permitted Lien and Liens created
by the Loan Documents and the Second Lien Note Documents), and that is
freely assignable by the Loan Party (including without any consent of the
related Account Debtor),
(j) for which the Administrative Agent, for the benefit of the Secured
Parties, has a valid and enforceable perfected security interest therein
and in the Related Security and Collections with respect thereto, in each
case free and clear of any Lien (other than a Customary Permitted Lien and
Liens created by the Loan Documents and the Second Lien Note Documents),
(k) that constitutes an account as defined in the UCC, and that is not
evidenced by Instruments or Chattel Paper,
(l) that is not a Defaulted Receivable,
(m) that represents all or part of the sales price of merchandise,
insurance or services within the meaning of Section 3(c)(5) of the
Investment Company Act of 1940,
(n) for which the aggregate of the Defaulted Receivables owed by the
related Account Debtor and any of its Affiliated Account Debtors does not
exceed 50% of the outstanding balance of all Receivables owed by such
Account Debtor,
(o) which is denominated and payable only in Dollars in the United
States,
(p) that represents amounts earned and payable by the Account Debtor
that are not subject to the performance of additional services by any Loan
Party,
(q) that has not been rewritten, canceled or rebilled or is not a
Receivable that has resulted from a rewritten, canceled or rebilled
Receivable, and
15
(r) that, when taken together with all other Eligible Receivables owed
by such Account Debtor to the Loan Parties does not exceed 20% of the
Eligible Receivables of the Loan Parties at such time (it being understood
that only the excess of such Eligible Receivables over such 20% threshold
shall be deemed ineligible pursuant to this clause, unless such Eligible
Receivable is covered by credit insurance acceptable to the Administrative
Agent, in which case that portion of such Eligible Receivable in excess of
the deductible for such credit insurance shall not be deemed ineligible
pursuant to this clause);
provided, however, that in no event shall any Chargeback qualify as an Eligible
Receivable.
"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
Contaminant 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 (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Environmental Laws" means all applicable Requirements of Law now or
hereafter in effect, as amended or supplemented from time to time, relating to
pollution or the regulation and protection of human health, safety, the
environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
'SS' 9601 et seq.); the Hazardous Material Transportation Act, as amended
(49 U.S.C. 'SS' 180 et seq.); the Federal Insecticide, Fungicide, and
Rodenticide Act, as amended (7 U.S.C. 'SS' 136 et seq.); the Resource
Conservation and Recovery Act, as amended (42 U.S.C. 'SS' 6901 et seq.);
the Toxic Substance Control Act, as amended (42 U.S.C. 'SS' 7401 et seq.);
the Clean Air Act, as amended (42 U.S.C. 'SS' 740 et seq.); the Federal Water
Pollution Control Act, as amended (33 U.S.C. 'SS' 1251 et seq.); the
Occupational Safety and Health Act, as amended (29 U.S.C. 'SS' 651 et seq.);
the Safe Drinking Water Act, as amended (42 U.S.C. 'SS' 300f et seq.); and
their state and local counterparts or equivalents and any transfer of ownership
notification or approval statute, including the Industrial Site Recovery Act
(N.J. Stat. Xxx. 'SS' 13:1K-6 et seq.).
"Environmental Liabilities and Costs" means, with respect to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any thereof arising under
any Environmental Law, Permit, order or agreement with any Governmental
Authority or other Person, which relate to any environmental, health or safety
condition or a Release or threatened Release, and result from the past, present
or future operations of, or ownership of property by, such Person or any of its
Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
16
"ERISA" means the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with Group or
any of its Subsidiaries within the meaning of Section 414 (b), (c), (m) or (o)
of the Code.
"ERISA Event" means (a) a reportable event described in Section
4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a
Title IV Plan or a Multiemployer Plan; (b) the withdrawal of the Borrower, any
of its Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial
withdrawal of the Borrower, any of its Subsidiaries or any ERISA Affiliate from
any Multiemployer Plan; (d) notice of reorganization or insolvency of a
Multiemployer Plan; (e) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of
ERISA; (f) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC; (g) the failure to make any required
contribution to a Title IV Plan or Multiemployer Plan; (h) the imposition of a
lien under Section 412 of the Code or Section 302 of ERISA on Group or any of
its Subsidiaries or any ERISA Affiliate; or (i) any other event or condition
which might reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurodollar Base Rate" means, with respect to any Interest Period for
any Eurodollar Rate Loan, the rate determined by the Administrative Agent to be
the offered rate for deposits in Dollars for the applicable Interest Period
which appears on the Dow Xxxxx Markets Telerate Page 3750 as of 11:00 a.m.,
London time, on the second full Business Day next preceding the first day of
each Interest Period. In the event that such rate does not appear on the Dow
Xxxxx Markets Telerate Page 3750 (or otherwise on the Dow Xxxxx Markets screen),
the Eurodollar Base Rate for the purposes of this definition shall be determined
by reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent, or, in the
absence of such availability, the Eurodollar Base Rate shall be the rate of
interest determined by the Administrative Agent to be the rate per annum at
which deposits in Dollars are offered by the principal office of Citibank in
London to major banks in the London interbank market at 11:00 A.M. (London time)
two Business Days before the first day of such Interest Period in an amount
substantially equal to the Eurodollar Rate Loan of Citibank for a period equal
to such Interest Period.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule II (Applicable Lending Offices and Addresses for Notices) or on
the Assignment and Acceptance by which it became a Lender (or, if no such office
is specified, its Domestic Lending Office) or such other office of such Lender
as such Lender may from time to time specify to the Borrower and the
Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period for any
Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b) a percentage equal to
100% minus the reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time by the
17
Federal Reserve Board for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities (or with respect
to any other category of liabilities which includes deposits by reference to
which the Eurodollar Rate is determined) having a term equal to such Interest
Period.
"Eurodollar Rate Loan" means any Loan that, for an Interest Period,
bears interest based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1.
"Extended Term Receivable" means an Authentic Receivable that has an
original stated maturity that is greater than 90 days after the original invoice
date of such Receivable and less than or equal to 180 days after the original
invoice date of such Receivable.
"Facility" means the Commitments and the provisions herein related to
the Revolving Loans, Swing Loans and Letters of Credit.
"Fair Market Value" means (a) with respect to any asset or group of
assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset (provided that in the case of assets with a
net book value in excess of $5,000,000, the "Fair Market Value" thereof shall be
as reasonably determined pursuant to the foregoing criteria by the Board of
Directors of Group) or, if such asset shall have been the subject of a
relatively contemporaneous appraisal by an independent third party appraiser,
the basic assumptions underlying which have not materially changed since its
date, the value set forth in such appraisal, and (b) with respect to any
marketable Security at any date, the closing sale price of such Security on the
Business Day next preceding such date, as appearing in any published list of any
national securities exchange or the NASDAQ Stock Market or, if there is no such
closing sale price of such Security, the final price for the purchase of such
Security at face value quoted on such Business Day by a financial institution of
recognized standing regularly dealing in Securities of such type and selected by
the Administrative Agent.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Fee Letter" shall mean the letter dated as of December 17, 2002,
addressed to the Borrower and Group from CNAI, JPMorgan Chase Bank and the
Arrangers and accepted by the Borrower and Group on December 17, 2002, with
respect to certain fees to be paid on the Closing Date and otherwise from time
to time to CNAI and the Arrangers.
18
"Final Order" means an order of the Bankruptcy Court that is in effect
and is not stayed, and as to which the time to appeal, petition for certiorari
or move for reargument or rehearing has expired and as to which no appeal,
petition for certiorari or other proceedings for reargument or rehearing shall
then be pending or as to which any right to appeal, petition for certiorari,
reargue or rehear shall have been waived in writing in form and substance
reasonably satisfactory to the Borrower or, in the event that an appeal, writ of
certiorari or reargument or rehearing thereof has been sought, such order of the
Bankruptcy Court shall have been affirmed by the highest court to which such
order was appealed, or certiorari, reargument or rehearing has been denied, and
the time to take any further appeal, petition for certiorari or move for
reargument or rehearing shall have expired.
"Financial Covenant Debt" of any Person means Indebtedness of the type
specified in clauses (a), (b), (d), (e), (f) and (h) of the definition of
"Indebtedness" and non-contingent obligations of the type specified in clause
(c) of such definition.
"Financial Statements" means the financial statements of Group and its
Subsidiaries delivered in accordance with Section 4.4 and Section 6.1.
"Fiscal Quarter" means each of the three-month fiscal periods ending
on or about March 31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve-month fiscal period ending on or about
December 31.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any period, the ratio of (a) EBITDAR of such Person for such period minus (x)
Capital Expenditures of such Person for such period and (y) cash consideration
paid during such period by such Person or any of its Subsidiaries in respect of
a Permitted Acquisition (net of any such cash consideration paid in the form of
a reinvestment of Net Cash Proceeds arising from an Asset Sale) up to a maximum
aggregate amount of Capital Expenditures and such cash consideration equal to
$35,000,000 (plus any carry over of Capital Expenditures permitted pursuant to
Section 5.3) for such period, minus the total income tax liability actually
payable by such Person and its Subsidiaries in respect of such period minus the
total restructuring charges incurred by such Person and its Subsidiaries after
the Effective Date and paid during such period to (b) the Fixed Charges of such
Person for such period.
"Fixed Charges" means, with respect to any Person for any period, the
sum, determined on a consolidated basis, of (a) the Cash Interest Expense of
such Person and its Subsidiaries for such period and (b) the principal amount of
Financial Covenant Debt of such Person and its Subsidiaries on a consolidated
basis having a scheduled due date (or, in the case of the Second Lien Notes,
actually paid) during such period.
"Foreign Plan" means an employee benefit plan to which any Warnaco
Entity or any ERISA Affiliate has any obligation or liability (contingent or
otherwise) with respect to employees who are not employed in the United States.
"Foreign Subsidiary" means a Subsidiary of Group incorporated under
the laws of a jurisdiction that is not within the United States of America.
"Fund" means any Person (other than a natural Person) that is or will
be engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
19
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"General Intangible" has the meaning specified in the Pledge and
Security Agreement.
"Governmental Authority" means any nation, sovereign or government,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Group" has the meaning specified in the preamble hereto.
"Guarantor" means Group and each Domestic Subsidiary of Group other
than the Borrower, Warnaco Operations and, subject to Section 7.11(a), each
Domestic Subsidiary set forth on Schedule 8.7(a) (Scheduled Dissolutions).
"Guaranty" means the guaranty, in substantially the form of Exhibit J,
executed by the Guarantors.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged, that any
agreement relating thereto will be complied with, or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof, including (a) the direct or indirect guaranty, 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 Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such Indebtedness or any security therefor or to
provide funds for the payment or discharge of such Indebtedness (whether in the
form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss or (v) to supply funds to, or in any other manner
invest in, such other Person (including to pay for property or services
irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under clause (b)(i), (ii),
(iii), (iv) or (v) above the primary purpose or intent thereof is to provide
assurance that Indebtedness of another Person will be paid or discharged, that
any agreement relating thereto will be complied with or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof. The amount of any Guaranty Obligation shall be equal to the amount of
the Indebtedness so guaranteed or otherwise supported.
"Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements, and all other similar agreements or
20
arrangements designed to alter the risks of any Person arising from fluctuations
in interest rates, currency values or commodity prices.
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments or which
bear interest, (c) all reimbursement and all obligations with respect to letters
of credit, bankers' acceptances, surety bonds and performance bonds, whether or
not matured, (d) all indebtedness for the deferred purchase price of property or
services, other than trade payables incurred in the ordinary course of business,
(e) all indebtedness 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), (f) all Capital Lease Obligations of such Person, (g) all
Guaranty Obligations of such Person, (h) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any Stock or
Stock Equivalents of such Person, valued, in the case of redeemable preferred
stock, at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends, (i) all payments that such Person would have
to make in the event of an early termination on the date Indebtedness of such
Person is being determined in respect of Hedging Contracts of such Person and
(j) all Indebtedness of the type referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including Accounts and General
Intangibles) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness.
"Indemnitees" has the meaning specified in Section 11.4.
"Initial Appraisals" has the meaning specified in Section 3.1(f).
"Instrument" has the meaning specified in the Pledge and Security
Agreement.
"Insurance Assets" means sums payable to the insured under an
insurance policy, including, any gross unearned premiums and any payment on
account of loss which results in a reduction of unearned premium with respect to
the underlying policy.
"Intellectual Property" has the meaning specified in the Pledge and
Security Agreement.
"Intercreditor Agreement" means the intercreditor agreement dated as
of the date hereof among the Administrative Agent, the Second Lien Collateral
Agent and the Loan Parties, as may be amended from time to time.
"Interest Expense" means, for any Person for any period, (a) total
interest expense of such Person and its Subsidiaries for such period determined
on a consolidated basis in conformity with GAAP and including, in any event,
interest capitalized during construction for such period and net costs under
Interest Rate Contracts for such period minus (b) the sum of (i) net gains of
such Person and its Subsidiaries under Interest Rate Contracts for such period
determined on a consolidated basis in conformity with GAAP plus (ii) any
interest income of such Person and its Subsidiaries for such period determined
on a consolidated basis in conformity with GAAP.
"Interest Period" means, in the case of any Eurodollar Rate Loan, (a)
initially, the period commencing on the date such Eurodollar Rate Loan is made
or on the date of conversion of a Base Rate Loan to such Eurodollar Rate Loan
and ending one, two, three or six months thereafter, as
21
selected by the Borrower in its Notice of Borrowing or Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.2 or
Section 2.11, and (b) thereafter, if such Loan is continued, in whole or in
part, as a Eurodollar Rate Loan pursuant to Section 2.11, a period commencing on
the last day of the immediately preceding Interest Period therefor and ending
one, two, three or six months thereafter, as selected by the Borrower in its
Notice of Conversion or Continuation given to the Administrative Agent pursuant
to Section 2.11; provided, however, that all of the foregoing provisions
relating to Interest Periods in respect of Eurodollar Rate Loans are subject to
the following:
(a) if any Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless the result of such extension would be to extend such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month;
(c) the Borrower may not select any Interest Period that ends after
the Scheduled Termination Date;
(d) the Borrower may not select any Interest Period in respect of
Loans having an aggregate principal amount of less than $10,000,000; and
(e) there shall be outstanding at any one time no more than ten (10)
Interest Periods in the aggregate.
"Interest Rate Contracts" means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and interest rate
insurance.
"Inventory" has the meaning specified in the Pledge and Security
Agreement.
"Investment" means, with respect to any Person, (a) any purchase or
other acquisition by that Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by that Person of
assets constituting a business conducted by another Person, (c) any loan,
advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, accounts receivable and similar items
made or incurred in the ordinary course of business as presently conducted), or
capital contribution by that Person to any other Person, including all
Indebtedness of any other Person to that Person arising from a sale of property
by that Person other than in the ordinary course of its business and (d) any
Guaranty Obligation incurred by that Person in respect of Indebtedness of any
other Person.
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Issue" means, with respect to any Letter of Credit, to issue
(including any deemed issuance pursuant to Section 2.4(m)), extend the expiry
of, renew or increase the maximum face amount (including by deleting or reducing
any scheduled decrease in such maximum face amount) of, such Letter of Credit.
The terms "Issued" and "Issuance" shall have a corresponding meaning.
22
"Issuer" means each Lender or Affiliate of a Lender that (a) is listed
on the signature pages hereof as an "Issuer" or (b) hereafter becomes an Issuer
with the approval of the Administrative Agent and the Borrower by agreeing
pursuant to an agreement with and in form and substance satisfactory to the
Administrative Agent and the Borrower to be bound by the terms hereof applicable
to Issuers.
"Landlord Waiver" means a letter in form and substance reasonably
acceptable to the Administrative Agent and executed by a landlord in respect of
Inventory of a Loan Party located at any leased premises of a Loan Party
pursuant to which such landlord, among other things, waives or subordinates on
terms and conditions reasonably acceptable to the Administrative Agent any Lien
such landlord may have in respect of such Inventory.
"Leases" means, with respect to any Person, all of those leasehold
estates in real property of such Person, as lessee, as such may be amended,
supplemented or otherwise modified from time to time.
"Lender" means the Swing Loan Lender and each other financial
institution or other entity that (a) is listed on the signature pages hereof as
a "Lender" or (b) from time to time becomes a party hereto by execution of an
Assignment and Acceptance.
"Letter of Credit" means any letter of credit Issued pursuant to
Section 2.4(d).
"Letter of Credit Obligations" means, at any time, the Dollar
Equivalent of the aggregate of all liabilities at such time of the Borrower to
all Issuers with respect to Letters of Credit, whether or not any such liability
is contingent, and includes the sum of (a) the Reimbursement Obligations at such
time and (b) the Letter of Credit Undrawn Amounts at such time; in each case,
the Dollar Equivalent of Letter of Credit Obligations denominated in an
Alternative Currency shall be determined on each day on which a Borrowing Base
Certificate is delivered pursuant to Section 6.12.
"Letter of Credit Reimbursement Agreement" has the meaning specified
in Section 2.4(e).
"Letter of Credit Request" has the meaning specified in Section
2.4(c).
"Letter of Credit Sub-Limit" means $150,000,000.
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Leverage Ratio" means, with respect to any Person as of any date, the
ratio of (a) the sum, for the four Fiscal Quarter period ending on such date (or
if such date is on or about June 30, 2003 or September 30, 2003, the period
beginning on the Closing Date and ending on the last day of the Fiscal Quarter
then ending), of (i) the average daily outstanding principal amount of the Loans
and Reimbursement Obligations during such period and (ii) average monthly
(computed by reference to the last Business Day of each month) outstanding
amount of Financial Covenant Debt (other than the Loans and Reimbursement
Obligations) of such Person and its Subsidiaries on a consolidated basis during
such period to (b) EBITDAR for such Person for the four Fiscal Quarter period
ending on such date.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or
23
other security agreement or preferential arrangement of any kind or nature
whatsoever intended to assure payment of any Indebtedness or other obligation,
including any conditional sale or other title retention agreement, the interest
of a lessor under a Capital Lease, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement that has been authorized by the applicable debtor under the UCC or
comparable law of any jurisdiction naming the owner of the asset to which such
Lien relates as debtor.
"Loan" means any loan made by any Lender pursuant to this Agreement.
"Loan Documents" means, collectively, this Agreement, the Notes (if
any), the Fee Letter, the Guaranty, the Intercreditor Agreement, each Letter of
Credit Reimbursement Agreement, the Collateral Documents and each certificate,
agreement or document executed by a Loan Party and delivered to the
Administrative Agent or any Lender in connection with or pursuant to any of the
foregoing.
"Loan Party" means the Borrower, Group, each Subsidiary Guarantor and
each other Subsidiary of Group that executes and delivers a Loan Document.
"Margin Reduction Event" shall mean the refinancing or repurchase,
prior to the initial Second Lien Note Amortization Date, of all amounts
outstanding in respect of the Second Lien Notes with the proceeds of the
issuance of all or a portion of the Take-Out Securities and the release of all
Liens in favor of the Second Lien Collateral Agent or the Second Lien
Noteholders.
"Material Adverse Change" means a material adverse change in any of
(a) the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Loan Parties, taken as a whole, or Group and its
Subsidiaries, taken as a whole (it being understood that the commencement,
continuation and prosecution of the Cases and the confirmation and
implementation of the Plan of Reorganization do not constitute such a change),
(b) the ability of the Loan Parties to perform their respective obligations
under the Loan Documents or (c) the ability of the Administrative Agent or the
Lenders to enforce the Loan Documents.
"Material Adverse Effect" means an effect that results in or causes,
or could reasonably be expected to result in or cause, a Material Adverse
Change.
"Material Leased Property" means all real estate leasehold properties
of any Warnaco Entity 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 the Warnaco
Entities, taken as a whole, or in any material geographic region where business
is conducted at any time by a Warnaco Entity.
"Material License" means the license agreement relating to the Xxxxxx
Xxxxx trademark with respect to jeans, expiring at the end of its renewal term
on December 31, 2044, and the license agreements relating to the Speedo
trademark, granted to the Warnaco Entities in perpetuity.
"Material Owned 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
Closing Date, or if later, the date of acquisition thereof or (b) that the
Administrative Agent reasonably determines is material to the business,
condition (financial or otherwise) operations, performance or properties of the
Warnaco Entities, taken as a whole.
24
"Maximum Credit" means, at any time, (a) the lesser of (i) the
Commitments in effect at such time and (ii) the Borrowing Base at such time,
minus (b) the aggregate amount of any Availability Reserve in effect at such
time.
"Mortgagee's Title Insurance Policy" has the meaning specified in the
definition of Mortgage Supporting Documents.
"Mortgage Supporting Documents" means, with respect to a Mortgage for
a parcel of Real Property, each of the following:
(a) (i) a mortgagee's title policy (or policies) or marked-up
unconditional binder (or binders) for such insurance (or other evidence
reasonably acceptable to the Administrative Agent proving ownership
thereof) ("Mortgagee's Title Insurance Policy"), dated a date reasonably
satisfactory to the Administrative Agent, and shall (A) be in an amount not
less than the appraised value (determined by reference to the Initial
Appraisals) of such parcel of Real Property, (B) be issued at ordinary
rates, (C) insure that the Lien granted pursuant to the Mortgage insured
thereby creates a valid first Lien on such parcel of Real Property free and
clear of all defects and encumbrances, except for Customary Permitted Liens
and for such defects and encumbrances as may be approved by the
Administrative Agent, (D) name the Administrative Agent for the benefit of
the Secured Parties as the insured thereunder, (E) be in the form of ALTA
Loan Policy - 1992 (or such local equivalent thereof as is reasonably
satisfactory to the Administrative Agent), (F) contain a comprehensive
lender's endorsement (including, but not limited to, a revolving credit
endorsement and a floating rate endorsement), (G) be issued by Chicago
Title Insurance Company, First American Title Insurance Company, Lawyers
Title Insurance Corporation or any other title company reasonably
satisfactory to the Administrative Agent (including any such title
companies acting as co-insurers or reinsurers) and (H) be otherwise in form
and substance reasonably satisfactory to the Administrative Agent and (ii)
a copy of all documents referred to, or listed as exceptions to title, in
such title policy (or policies) in each case in form and substance
reasonably satisfactory to the Administrative Agent;
(b) maps or plats of a current as-built survey of such parcel of Real
Property certified to and received by (in a manner reasonably satisfactory
to each of them) the Administrative Agent and the title insurance company
issuing the Mortgagee's Title Insurance Policy for such Mortgage, dated a
date reasonably satisfactory to the Administrative Agent and such title
insurance company, by an independent professional licensed land surveyor
reasonably satisfactory to the Administrative Agent and such title
insurance company, which maps or plats and the surveys on which they are
based shall be made in form and substance reasonably satisfactory to the
Administrative Agent;
(c) an opinion of counsel in each state in which any such Mortgage is
to be recorded in form and substance and from counsel reasonably
satisfactory to the Administrative Agent; and
(d) such other agreements, documents and instruments in form and
substance reasonably satisfactory to the Administrative Agent as the
Administrative Agent deems necessary or appropriate to create, register or
otherwise perfect, maintain, evidence the existence, substance, form or
validity of, or enforce a valid and enforceable first priority lien on such
parcel of Real Property in favor of the Administrative Agent for the
benefit of the Secured Parties (or in favor of such other trustee as may be
required or desired under local
25
law) subject only to (A) Liens permitted under Section 8.2 and (B) such
other Liens as the Administrative Agent may reasonably approve.
"Mortgages" means the mortgages, deeds of trust or other real estate
security documents made or required herein to be made by a Loan Party, each in
form and substance reasonably satisfactory to the Administrative Agent.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which Group, any of its Subsidiaries or any ERISA
Affiliate has any obligation or liability, contingent or otherwise.
"Net Cash Proceeds" means proceeds received by Group or any of its
Subsidiaries after the Closing Date in cash or Cash Equivalents from any (a)
Asset Sale other than an Asset Sale permitted under clauses (a), (c), (d), (e),
(g) and (h) of Section 8.4, net of (i) the reasonable cash costs of sale,
assignment or other disposition, (ii) taxes paid or payable as a result thereof
and (iii) any amount required to be paid or prepaid on Indebtedness (other than
the Obligations) secured by a perfected Lien on the assets subject to such Asset
Sale; provided, however, that the evidence of each of (i), (ii) and (iii) are
provided to the Administrative Agent in form and substance satisfactory to it;
(b) Property Loss Event, (c) Debt Issuance other than a Debt Issuance permitted
under clauses (a) through (n) of Section 8.1 (excluding clause (c) (subject to
Section 2.9(b)(ii) and clause (i)), or (d) issuance of Take-Out Securities
(subject to Section 2.9(b)(ii)), in the case of clauses (c) and (d), net of
brokers' and advisors' fees (including attorney's fees and underwriter's
discounts and commissions) and other costs incurred in connection with such
transaction; provided, however, that in the case of clause (c) and (d), evidence
of such costs is provided to the Administrative Agent in form and substance
reasonably satisfactory to it.
"Non-Cash Interest Expense" means, with respect to any Person for any
period, the sum of the following amounts to the extent included in the
definition of Interest Expense: (a) the amount of debt discount and debt
issuance costs amortized, (b) charges relating to write-ups or write-downs in
the book or carrying value of existing Financial Covenant Debt, (c) interest
payable in evidences of Indebtedness or by addition to the principal of the
related Indebtedness and (d) other non-cash interest.
"Non-Funding Lender" has the meaning specified in Section 2.2(d).
"Non-U.S. Agent" means each Agent that is not a United States person
as defined in Section 7701(a)(30) of the Code.
"Non-U.S. Lender" means each Lender or each Issuer that is not a
United States person as defined in Section 7701(a)(30) of the Code.
"Note" means a promissory note of the Borrower payable to the order of
any Lender in a principal amount equal to the amount of such Lender's Commitment
evidencing the aggregate Indebtedness of the Borrower to such Lender resulting
from the Revolving Loans owing to such Lender under the Facility.
"Notice of Borrowing" has the meaning specified in Section 2.2(a).
"Notice of Conversion or Continuation" has the meaning specified in
Section 2.11(b).
"NPL" means the National Priorities List under CERCLA.
26
"Obligations" means the Loans, the Letter of Credit Obligations and
all other amounts, obligations, covenants and duties owing by the Borrower to
the Administrative Agent, any Lender, any Issuer, an Affiliate of any of them or
any Indemnitee, of every type and description (whether by reason of an extension
of credit, opening or amendment of a letter of credit or payment of any draft
drawn or other payment thereunder, loan, guaranty, indemnification, foreign
exchange or currency swap transaction, interest rate hedging transaction or
otherwise), present or future, arising under this Agreement, or any other Loan
Document, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and however acquired and whether or not evidenced by any note, guaranty or other
instrument or for the payment of money, and includes all letter of credit, cash
management and other fees, interest, charges, expenses, fees, attorneys' fees
and disbursements and other sums chargeable to the Borrower under this
Agreement, any other Loan Document, and all obligations of the Borrower to cash
collateralize Letter of Credit Obligations.
"Orderly Liquidation Value Rate" means the Dollar Equivalent of the
orderly liquidation value (net of costs and expenses incurred in connection with
liquidation) of Eligible Finished Inventory and Eligible Other Inventory,
divided by the aggregate value of Eligible Finished Inventory and Eligible Other
Inventory in each case, determined by reference to the most recent Appraisal
received by the Lenders.
"Outstandings" means, at any particular time, the sum of (a) the
principal amount of the Revolving Loans outstanding at such time, (b) the Letter
of Credit Obligations outstanding at such time and (c) the principal amount of
Swing Loans outstanding at such time.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Permit" means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Acquisition" means any Proposed Acquisition subject to the
satisfaction of each of the following conditions:
(a) the Administrative Agent shall receive at least 10 Business Days'
prior written notice of such Proposed Acquisition, which notice shall
include, without limitation, a reasonably detailed description of such
Proposed Acquisition;
(b) such Proposed Acquisition shall have been approved by the
applicable board of directors of the Person constituting or owning the
Proposed Acquisition Target;
(c) no additional Indebtedness or other liabilities shall be incurred,
assumed or otherwise be reflected on a consolidated balance sheet of Group
and the Proposed Acquisition Target after giving effect to such Proposed
Acquisition, except (i) Loans made hereunder, (ii) ordinary course trade
payables, contingent obligations and accrued expenses and (iii)
Indebtedness of the Proposed Acquisition Target (or any such Indebtedness
assumed by a Warnaco Entity in connection with such Proposed Acquisition)
permitted under Section 8.1.
(d) the Dollar Equivalent of the aggregate Permitted Acquisition
Consideration for such Proposed Acquisition and all other Permitted
Acquisitions shall not exceed $15,000,000; provided, however, that no more
than $5,000,000 of such consideration shall be payable in the form of cash
or assumed Indebtedness (to the extent such Indebtedness is otherwise
permitted under Section 8.1), and; provided further, however, that the cash
portion of such consideration
27
may be increased by an additional $5,000,000 to the extent such additional
cash is paid from Net Cash Proceeds of a Reinvestment Event;
(e) at or prior to the closing of such Proposed Acquisition, the
Warnaco Entity making such Proposed Acquisition and the Proposed
Acquisition Target shall have executed such documents and taken such
actions as may be required under Section 7.11, Section 7.12 and Section
7.13;
(f) the Borrower shall have delivered to the Administrative Agent, in
form and substance satisfactory to the Administrative Agent and the
Requisite Lenders and sufficiently in advance of such Permitted
Acquisition, such other financial information, financial analysis,
documentation or other information relating to such Proposed Acquisition as
the Administrative Agent shall reasonably request;
(g) on or prior to the date of such Proposed Acquisition, the
Administrative Agent shall have received copies of the acquisition
agreement authorizing assignment of the rights and obligations thereunder
of any Warnaco Entity to the Administrative Agent as security for the
Secured Obligations, related Contractual Obligations and instruments and
all opinions, certificates, lien search results and other documents
reasonably requested by the Administrative Agent; and
(h) at the time of such Proposed Acquisition and after giving effect
thereto, (i) no Default or Event of Default shall have occurred and be
continuing, (ii) all representations and warranties contained in Article IV
and in the other Loan Documents shall be true and correct in all material
respects, and (iii) Group shall be in compliance with all financial
covenants contained in Article V for the most recent four Fiscal Quarter
period for which Financial Statements have been delivered pursuant to
Section 6.1 on a Pro Forma Basis after giving effect to such Proposed
Acquisition.
"Permitted Acquisition Consideration" means, with respect to any
Proposed Acquisition, as at the date of the consummation of such Proposed
Acquisition, all consideration therefor, including, without duplication, (a) the
Stock and Stock Equivalents to be transferred by any Loan Party or any
Subsidiary thereof in connection therewith, (b) any cash and fair market value
of other property (excluding property described in clause (a) above) given as
consideration therefor (which, in the case of a trademark license, shall include
only any up-front payments not credited towards future royalties), (c) any
Indebtedness incurred, assumed or acquired by any Loan Party or any Subsidiary
thereof in connection with such Proposed Acquisition, (d) all net additional
purchase price amounts, including in the form of earnouts, Guaranty Obligations
and other contingent obligations, (e) all consideration paid or to be paid by
any Loan Party or any Subsidiary thereof in respect of covenants not to compete,
employment, consulting and similar agreements, and other affiliated contracts in
connection with such Proposed Acquisition, in each case not in the ordinary
course of business or consistent with the past practice of the Proposed
Acquisition Target, (f) all other consideration given by any Loan Party or any
Subsidiary thereof in connection with such Proposed Acquisition and (g)
out-of-pocket transaction costs for the services and expenses of attorneys,
accountants and other consultants incurred in effecting such Proposed
Acquisition, and other similar transaction costs so incurred.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity or a Governmental
Authority.
28
"Plan of Reorganization" has the meaning specified in the recitals to
this Agreement.
"Pledge and Security Agreement" means an agreement, in substantially
the form of Exhibit I, executed by the Borrower and each Guarantor.
"Pledged Debt Instruments" has the meaning specified in the Pledge and
Security Agreement.
"Pledged Stock" has the meaning specified in the Pledge and Security
Agreement.
"Pro Forma Basis" means, with respect to any determination for any
period, that such determination shall be made giving pro forma effect to each
acquisition consummated during such period, together with all transactions
relating thereto consummated during such period (including any incurrence,
assumption, refinancing or repayment of Indebtedness), as if such acquisition
and related transactions had been consummated on the first day of such period,
in each case based on historical results accounted for in accordance with GAAP
and, to the extent applicable, reasonable assumptions that are specified in the
relevant Compliance Certificate, Financial Statement or other document provided
to the Administrative Agent or any Lender in connection herewith in accordance
with Regulation S-X of the Securities Act of 1933.
"Projections" means those financial projections dated October 1, 2002
covering the fiscal years ending in 2002 through 2005 inclusive, to be delivered
to the Lenders by Group.
"Property Loss Event" means any loss of or damage to property of Group
or any Subsidiary thereof that results in the receipt by such Person of proceeds
of insurance in excess of $1,000,000 or any taking of property of Group or any
Subsidiary thereof that results in the receipt by such Person of a compensation
payment in respect thereof in excess of $1,000,000.
"Proposed Acquisition" means the proposed acquisition by the Borrower
or any of its Subsidiaries of all or substantially all of the assets or Stock of
any Proposed Acquisition Target, or the merger of any Proposed Acquisition
Target with or into the Borrower or any Subsidiary of the Borrower (and, in the
case of a merger with the Borrower, with the Borrower being the surviving
corporation).
"Proposed Acquisition Target" means any Person, any trademark
(including any trademark license in respect of which the licensee makes an
up-front payment not credited against future royalties), or any assets
constituting a business, division, branch or other unit of operation of any
Person, in each case, subject to a Proposed Acquisition.
"Protective Advances" means all expenses, disbursements and advances
incurred by the Administrative Agent pursuant to the Loan Documents after the
occurrence and during the continuance of an Event of Default that the
Administrative Agent, in its sole discretion, exercised reasonably, deems
necessary or desirable to preserve or protect the Collateral or any portion
thereof or to enhance the likelihood, or maximize the amount, of repayment of
the Obligations.
"Ratable Portion" or "ratably" means, with respect to any Lender, the
percentage obtained by dividing (a) the Commitment of such Lender by (b) the
aggregate Commitments of all Lenders (or, at any time after the Termination
Date, the percentage obtained by dividing the aggregate outstanding principal
balance of the Outstandings owing to such Lender by the aggregate outstanding
principal balance of the Outstandings owing to all Lenders)
29
"Real Property" means all of those plots, pieces or parcels of land
now owned, leased or hereafter acquired or leased by Group or any of its
Subsidiaries (the "Land"), together with the right, title and interest of any
Warnaco Entity, if any, in and to the streets, the land lying in the bed of any
streets, roads or avenues, opened or proposed, in front of, the air space and
development rights pertaining to the Land and the right to use such air space
and development rights, all rights of way, privileges, liberties, tenements,
hereditaments and appurtenances belonging or in any way appertaining thereto,
all fixtures, all easements now or hereafter benefiting the Land and all
royalties and rights appertaining to the use and enjoyment of the Land,
including all alley, vault, drainage, mineral, water, oil and gas rights,
together with all of the buildings and other improvements now or hereafter
erected on the Land, and any fixtures appurtenant thereto.
"Receivable" means any indebtedness and other obligations owed to any
Loan Party as assignee of any Loan Party, or any right of any Loan Party to
payment from or on behalf of, an Account Debtor), whether constituting an
Account, Chattel Paper, Instrument or General Intangible arising in connection
with the sale of goods or the rendering of services by any Loan Party or any
Subsidiary thereof, and includes the obligation to pay any finance charges, fees
and other charges with respect thereto.
"Register" has the meaning specified in Section 11.2(c).
"Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Borrower to any Issuer with respect to amounts
drawn under Letters of Credit.
"Reinvestment Deferred Amount" means, with respect to any Net Cash
Proceeds of any Reinvestment Event, the portion of such Net Cash Proceeds
subject to a Reinvestment Notice.
"Reinvestment Event" means any Asset Sale or Property Loss Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice" means a written notice executed by a Responsible
Officer of Group stating that no Event of Default has occurred and is continuing
and that the Borrower (directly or indirectly through one of the Warnaco
Entities) intends and expects to use all or a specified portion of the Net Cash
Proceeds of an Asset Sale or Property Loss Event to consummate a Permitted
Acquisition (in the case of an Asset Sale only) or to acquire replacement or
fixed assets useful in its or one of the other Warnaco Entities' businesses or,
in the case of a Property Loss Event, to effect repairs or replacements.
"Reinvestment Prepayment Amount" means, with respect to any Net Cash
Proceeds of any Reinvestment Event, the Reinvestment Deferred Amount for such
Net Cash Proceeds less any amount expended or required to be expended pursuant
to a Contractual Obligation entered into prior to the relevant Reinvestment
Prepayment Date for such Net Cash Proceeds to consummate, to the extent
otherwise permitted hereunder, a Permitted Acquisition (in the case of an Asset
Sale only) or to acquire, to the extent otherwise permitted hereunder,
replacement or fixed assets useful in the business of the Borrower or any of its
Subsidiaries or, in the case of a Property Loss Event, to effect repairs or
replacements.
"Reinvestment Prepayment Date" means, with respect to any Net Cash
Proceeds of any Reinvestment Event, the earlier of (a) the date occurring 180
days after such Reinvestment Event and (b) the date that is five Business Days
after the date on which the Borrower shall have notified the Administrative
Agent of the Borrower's determination not to consummate a Permitted Acquisition
(in the case of an Asset Sale only) or to acquire replacement or fixed assets
useful in the Borrower's or a
30
Subsidiary's business (or, in the case of a Property Loss Event, not to effect
repairs) with all or any portion of the relevant Reinvestment Deferred Amount
for such Net Cash Proceeds.
"Related Document" means, each Second Lien Note Document, the Rights
Plan (as defined in the Plan of Reorganization), and the Registration Rights
Agreement (as defined in the Plan of Reorganization) entered into by a Warnaco
Entity in connection with the Plan of Reorganization and, following execution
thereof, each Take-Out Securities Document which relates to Take-Out Securities
constituting equity.
"Related Security" means, with respect to any Receivable:
(a) all of each Loan Party's interest in any goods (including returned
goods), and documentation of title evidencing the shipment or storage of
any goods (including returned goods), relating to any sale giving rise to
such Receivable,
(b) all Instruments and Chattel Paper that may evidence such
Receivable,
(c) all other Liens and property subject thereto from time to time
purporting to secure payment of such Receivable, whether pursuant to the
Sales Contract related to such Receivable or otherwise, together with all
UCC financing statements or similar filings relating thereto, and
(d) all of each Loan Party's rights, interests and claims under the
Sales Contracts and all guaranties, indemnities and other agreements
(including the related Sales Contract) or arrangements of whatever
character from time to time supporting or securing payment of such
Receivable or otherwise relating to such Receivable, whether pursuant to
the Sales Contract related to such Receivable or otherwise.
"Release" means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the indoor or
outdoor environment or into or out of any property owned by such Person,
including the movement of Contaminants through or in the air, soil, surface
water, ground water or property.
"Remedial Action" means all actions required to (a) clean up, remove,
treat or in any other way address any Contaminant in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release so that a Contaminant does not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment or (c)
perform pre-remedial studies and investigations and post-remedial monitoring and
care.
"Requirement of Law" means, with respect to any Person, the common law
and all federal, state, local and foreign laws, rules and regulations, orders,
judgments, decrees and other legal requirements or determinations of any
Governmental Authority or arbitrator, applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Requisite Lenders" means, collectively, Lenders having more than
fifty percent (50%) of the aggregate outstanding amount of the Commitments or,
after the Termination Date, the aggregate Outstandings. A Non-Funding Lender
shall not be included in the calculation of "Requisite Lenders."
31
"Responsible Officer" means, with respect to any Person, any of the
principal executive officers, managing members or general partners of such
Person, but in any event, with respect to financial matters, the chief financial
officer, treasurer or controller of such Person.
"Restricted Account" has the meaning specified in the Pledge and
Security Agreement.
"Restricted Account Letter" has the meaning specified in the Pledge
and Security Agreement.
"Restricted Payment" means (a) any dividend, distribution or any other
payment whether direct or indirect, on account of any Stock or Stock Equivalent
of Group or any of its Subsidiaries now or hereafter outstanding and (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Stock or Stock Equivalent of
Group or any of its Subsidiaries now or hereafter outstanding.
"Revolving Loan" has the meaning specified in Section 2.1.
"Sale and Leaseback Transaction" means, with respect to any Person,
any direct or indirect arrangement pursuant to which assets of such Person are
sold or transferred by such Person or a Subsidiary of such Person and are
thereafter leased back from the purchaser thereof by such Person or one of its
Subsidiaries; provided, however, any sale and leaseback of assets that were
purchased in connection with a proposed lease financing transaction by such
Person within 45 days of such sale and leaseback transaction shall not
constitute a "Sale and Leaseback Transaction".
"Sales Contract" means, with respect to any Receivable, any and all
sales contracts, purchase orders, instruments, agreements, leases, invoices,
notes or other writings pursuant to which such Receivable arises or that
evidence such Receivable or under which an Account Debtor becomes or is
obligated to make payment in respect of such Receivable.
"Scheduled Termination Date" means the fourth anniversary of the
Closing Date, being February 4, 2007.
"Second Lien Collateral Agent" means Wilmington Trust Company, in its
capacity as collateral agent for the Second Lien Noteholders and each successor
thereto.
"Second Lien Note Amortization Date" has the meaning specified in
Section 8.6(c)(i)
"Second Lien Note Documents" means, collectively, the Second Lien Note
Indenture, the Second Lien Notes, each pledge and security agreement, mortgage,
and other document executed and delivered by a Warnaco Entity granting a Lien on
any of its property to secure payment of the Second Lien Notes and each
certificate, agreement or document executed by a Warnaco Entity and delivered to
the Second Lien Collateral Agent, the Indenture Trustee or any Second Lien
Noteholder in connection with or pursuant to any of the foregoing.
"Second Lien Note Indenture" means the indenture dated as of the date
hereof among the Borrower, as issuer, Group and each Domestic Subsidiary thereof
(other than the Borrower), as guarantors and the Second Lien Note Indenture
Trustee.
"Second Lien Note Indenture Trustee" means Xxxxx Fargo Bank, N.A., in
its capacity as indenture trustee for the Second Lien Noteholders and each
successor thereto.
32
"Second Lien Noteholders" means each holder of a Second Lien Note.
"Second Lien Notes" means the Second Lien Notes issued pursuant to the
Second Lien Note Indenture (including, without limitation, the PIK Notes (as
defined in the Second Lien Note Indenture)).
"Secured Obligations" means, (a) in the case of the Borrower, the
Obligations, (b) in the case of each Guarantor, the obligations of such Loan
Party under the Guaranty and the other Loan Documents to which it is a party,
and (c) in the case of each Loan Party, (i) the obligations of such Loan Party
under any Hedging Contract entered into with any Lender or any Affiliate thereof
after the date hereof, and (ii) any Cash Management Obligations owing by such
Loan Party to any Lender or any Affiliate thereof.
"Secured Parties" means the Lenders (including the Swing Loan Lender),
the Issuers, the Administrative Agent, each of their respective successors and
assigns, and any other holder of any of a Secured Obligation or of any other
obligations under the Loan Documents, including the beneficiaries of each
indemnification obligation undertaken by the Loan Parties and the Administrative
Agent.
"Securities Account" has the meaning given to such term in the UCC.
"Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, but shall not include any evidence of the Obligations.
"Solvent" means, with respect to any Person as of any date of
determination, that, as of such date, (a) the value of the assets of such Person
(both at fair value and present fair saleable value) is greater than the total
amount of liabilities (including contingent and unliquidated liabilities) of
such Person, (b) such Person is able to pay all liabilities of such Person as
such liabilities mature and (c) such Person does not have unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities shall be computed at the amount that, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"Special Purpose Vehicle" means any special purpose funding vehicle
identified in writing as such by any Lender to the Administrative Agent.
"Standby Letter of Credit" means any letter of credit Issued pursuant
to Section 2.4 which is not a Documentary Letter of Credit.
"Standby Letter of Credit Sub-Limit" means $35,000,000.
"Stock" means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity,
whether voting or non-voting.
33
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, trust or estate or other business entity
of which an aggregate of more than 50% of (a) the outstanding Voting Stock, (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 in any case, 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 Guarantor" means each Subsidiary of Group party to or that
becomes party to the Guaranty.
"Super-Majority Lenders" means, collectively, the Lenders having more
than sixty-six and two-thirds percent (66 2/3%) of the aggregate outstanding
amount of the Commitments. A Non-Funding Lender that is a Lender shall not be
included in the calculation of "Super-Majority Lenders."
"Swing Loan" has the meaning specified in Section 2.3.
"Swing Loan Availability" means an aggregate principal amount at any
time outstanding of Swing Loans not to exceed the lesser of (i) $20,000,000 and
(ii) the Swing Loan Lender's Ratable Portion of the Available Credit plus
$10,000,000.
"Swing Loan Lender" means CNAI or any other Lender who becomes the
Administrative Agent or who agrees with the approval of the Administrative Agent
and the Borrower to act as the Swing Loan Lender hereunder.
"Swing Loan Request" has the meaning specified in Section 2.3(b).
"Syndication Agent" has the meaning specified in the preamble to this
Agreement.
"Take-Out Securities Documents" means, collectively, any indenture
governing the issuance of any unsecured notes issued as Take-Out Securities, any
unsecured notes issued as Take-Out Securities, any Constituent Document
governing, or any or shareholders agreement relating to, the issuance of any
equity securities issued as Take-Out Securities, and each other certificate,
agreement or document executed and delivered by a Warnaco Entity to a holder of
a Take-Out Security or a trustee therefor, or otherwise in connection with or
pursuant to any of the foregoing.
"Take-Out Securities" means unsecured debt securities that are issued
by the Borrower or Group (and may be guaranteed by the other Loan Parties) or
any equity securities that are issued by Group, in each case (other than with
respect to Take-Out Securities that are common stock) on terms that are
reasonably acceptable to the Administrative Agent.
"Tax Affiliate" means, with respect to any Person, (a) any Subsidiary
of such Person, and (b) any Affiliate of such Person with which such Person
files or is eligible to file consolidated, combined or unitary United States tax
returns.
"Tax Return" has the meaning specified in Section 4.8(a).
"Taxes" has the meaning specified in Section 2.16(a).
34
"Termination Date" shall mean the earliest of (a) the Scheduled
Termination Date, (b) the date of termination of the Commitments pursuant to
Section 2.5 and (c) the date on which the Obligations become due and payable
pursuant to Section 9.2.
"Title IV Plan" means a pension plan, other than a Multiemployer Plan,
which is covered by Title IV of ERISA to which Group, any of its Subsidiaries or
any ERISA Affiliate has any obligation or liability (contingent or otherwise).
"UCC" has the meaning specified in the Pledge and Security Agreement.
"Unfunded Pension Liability" means, with respect to Group at any time,
the sum of (a) the amount, if any, by which the present value of all accrued
benefits under each Title IV Plan (other than any Title IV Plan subject to
Section 4063 of ERISA) exceeds the fair market value of all assets of such Title
IV Plan allocable to such benefits in accordance with Title IV of ERISA, as
determined as of the most recent valuation date for such Title IV Plan using the
actuarial assumptions in effect under such Title IV Plan, and (b) the aggregate
amount of withdrawal liability that could be assessed under Section 4063 with
respect to each Title IV Plan subject to such Section, separately calculated for
each such Title IV Plan as of its most recent valuation date, (c) for a period
of five years following a transaction reasonably likely to be covered by Section
4069 of ERISA, the liabilities (whether or not accrued) that could be avoided by
Group, any of its Subsidiaries or any ERISA Affiliate as a result of such
transaction and (d) with respect to each Foreign Plan, the amount, if any, by
which the present value of all benefit obligations under such plan exceed the
fair market value of assets attributable to such plan (determined for the most
recent valuation date for such plan using the actuarial assumptions in effect
for such plan set forth in the actuarial valuation report).
"Unused Commitment Fee" has the meaning specified in Section 2.12(a).
"Updated Appraisal" means each appraisal (other than the Initial
Appraisals) that is conducted after the Closing Date pursuant to Section 6.12(b)
for purpose of determining the Borrowing Base, in form and substance acceptable
to the Administrative Agent and performed by an appraiser that is satisfactory
to the Administrative Agent.
"U.S. Lender" means each Lender, each Issuer or each Agent that is a
United States person as defined in Section 7701(a)(30) of the Code.
"Voting Stock" means Stock of any Person having ordinary power to vote
in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Warnaco Entity" means Group or any Subsidiary thereof.
"Warnaco Operations" means Warnaco Operations Corporation, a Delaware
corporation and a Wholly Owned Subsidiary of Group.
"Wholly Owned Subsidiary" means any Subsidiary of Group, all of the
Stock of which (other than director's qualifying shares or such other de minimus
portion thereof to the extent required by law) is owned by Group, either
directly or indirectly through one or more Wholly Owned Subsidiaries.
35
"Withdrawal Liability" means, with respect to the Borrower at any
time, the aggregate liability incurred (whether or not assessed) with respect to
all Multiemployer Plans pursuant to Section 4201 of ERISA or for increases in
contributions required to be made pursuant to Section 4243 of ERISA.
Section 1.2 Computation of Time Periods. In this Agreement, 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" and the word "through" means "to and including."
Section 1.3 Accounting Terms and Principles.
(a) Except as set forth below, all accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
(b) If any change in the accounting principles used in the preparation
of the most recent Financial Statements referred to in Section 6.1 is hereafter
required or permitted by the rules, regulations, pronouncements and opinions of
the Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or any successors thereto) and such change is adopted by the
Borrower with the agreement of its independent public accountants and results in
a change in any of the calculations required by Article V or Article VI or in
the definitions of "Applicable Margin" had such accounting change not occurred,
the parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such change with the desired result that
the criteria for evaluating compliance with such covenants by the Borrower or
the determination of the "Applicable Margin" shall be the same after such change
as if such change had not been made; provided, however, that no change in GAAP
that would affect a calculation that measures compliance with any covenant
contained in Article V or Article VI or in the definitions of "Applicable
Margin" shall be given effect until such provisions are amended to reflect such
changes in GAAP.
(c) For purposes of making all financial calculations to determine
compliance with Article V all components of such calculations shall be adjusted
to include or exclude, as the case may be, without duplication, such components
of such calculations attributable to any business or assets that have been
acquired or disposed of by any Warnaco Entity after the first day of the
applicable period of determination and prior to the end of such period, as
determined in good faith by Group on a Pro Forma Basis.
Section 1.4 Conversion of Foreign Currencies.
(a) Financial Covenant Debt. Financial Covenant Debt denominated in
any currency other than Dollars shall be calculated using the Dollar Equivalent
thereof as of the date of the Financial Statements on which such Financial
Covenant Debt is reflected.
(b) Dollar Equivalents. The Administrative Agent shall determine the
Dollar Equivalent of any amount as required hereby, and a determination thereof
by the Administrative Agent shall be conclusive absent manifest error. The
Administrative Agent may, but shall not be obligated to, rely on any
determination made by any Loan Party in any document delivered to the
Administrative Agent. The Administrative Agent may determine or redetermine the
Dollar Equivalent of any amount on any date either in its own discretion or upon
the request of any Lender or Issuer.
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(c) Rounding-Off. The Administrative Agent may set up appropriate
rounding off mechanisms or otherwise round-off amounts hereunder to the nearest
higher or lower amount in whole Dollar or cent to ensure amounts owing by any
party hereunder or that otherwise need to be calculated or converted hereunder
are expressed in whole Dollars or in whole cents, as may be necessary or
appropriate.
Section 1.5 Certain Terms.
(a) The words "herein," "hereof" and "hereunder" and similar words
refer to this Agreement as a whole, and not to any particular Article, Section,
subsection or clause in this Agreement.
(b) References in this Agreement to an Exhibit, Schedule, Article,
Section, subsection or clause refer to the appropriate Exhibit or Schedule to,
or Article, Section, subsection or clause in this Agreement.
(c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. If the prior written consent of the
Requisite Lenders is required hereunder for an amendment, restatement,
supplement or other modification to any such agreement and such consent is not
obtained, references in this Agreement to such agreement shall be to such
agreement as so amended, restated, supplemented or modified.
(d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference is
operative.
(e) The term "including" when used in any Loan Document means
"including without limitation", except when used in the computation of time
periods.
(f) The terms "Lender," "Issuer" and "Agent" include their respective
successors.
(g) Upon the appointment of any successor Agent pursuant to Section
10.6, references to CNAI in Section 10.3 and to Citibank in the definitions of
Base Rate, Eurodollar Rate, Dollar Equivalent shall be deemed to refer to the
financial institution then acting as the Administrative Agent or one of its
Affiliates if it so designates.
(h) Terms not otherwise defined herein and defined in the UCC are used
herein with the meanings specified in the UCC.
ARTICLE II
THE FACILITIES
Section 2.1 The Commitments. On the terms and subject to the
conditions contained in this Agreement, each Lender severally agrees to make
loans in Dollars (each a "Revolving Loan") to the Borrower from time to time on
any Business Day during the period from the date hereof until the Termination
Date in an aggregate amount not to exceed at any time outstanding for all such
loans by such Lender such Lender's Commitment; provided, however, that at no
time shall any Lender be obligated to make a Loan (i) in excess of such Lender's
Ratable Portion of the Available Credit and (ii) to the extent that the
aggregate Outstandings, after giving effect to such Revolving Loan, would exceed
the Maximum Credit in effect at such time. Within the limits of each Lender's
Commitment, amounts of Revolving Loans repaid may be reborrowed under this
Section 2.1.
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Section 2.2 Borrowing Procedures.
(a) Each Borrowing shall be made on notice given by the Borrower to
the Administrative Agent not later than 11:00 A.M. (New York City time) (i) one
Business Day, in the case of a Borrowing of Base Rate Loans and (ii) three
Business Days, in the case of a Borrowing of Eurodollar Rate Loans, prior to the
date of the proposed Borrowing. Each such notice shall be in substantially the
form of Exhibit C (a "Notice of Borrowing"), specifying (A) the date of such
proposed Borrowing, (B) the aggregate amount of such proposed Borrowing, (C)
whether any portion of such Borrowing will be of Base Rate Loans or Eurodollar
Rate Loans, (D) the initial Interest Period or Periods for any such Eurodollar
Rate Loans, and (E) the Available Credit (after giving effect to the proposed
Borrowing). Revolving Loans shall be made as Base Rate Loans unless (subject to
Section 2.14) the Notice of Borrowing specifies that all or a portion thereof
shall be Eurodollar Rate Loans.
(b) The Administrative Agent shall give to each Lender prompt notice
of the Administrative Agent's receipt of a Notice of Borrowing and, if
Eurodollar Rate Loans are properly requested in such Notice of Borrowing, the
applicable interest rate determined pursuant to Section 2.14(a). Each Lender
shall, before 11:00 A.M. (New York City time) on the date of the proposed
Borrowing, make available to the Administrative Agent at its address referred to
in Section 11.8 in immediately available funds, such Lender's Ratable Portion of
such proposed Borrowing. After the Administrative Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in Section 3.1 and
Section 3.2, the Administrative Agent will make such funds available to the
Borrower.
(c) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any proposed Borrowing that such Lender will not
make available to the Administrative Agent such Lender's Ratable Portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.2 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such Ratable Portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate for the
first Business Day and thereafter at the interest rate applicable at the time to
the Loans comprising such Borrowing. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Loan as part of such Borrowing for purposes of this
Agreement. If the Borrower shall repay to the Administrative Agent such
corresponding amount, such payment shall not relieve such Lender of any
obligation it may have hereunder to the Borrower.
(d) The failure of any Lender to make the Loan or any payment required
by it on the date specified (a "Non-Funding Lender"), including any payment in
respect of its participation in Swing Loans and Letter of Credit Obligations,
shall not relieve any other Lender of its obligations to make such Loan or
payment on such date but no such other Lender shall be responsible for the
failure of any Non-Funding Lender to make a Loan or payment required under this
Agreement.
Section 2.3 Swing Loans.
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(a) On the terms and subject to the conditions contained in this
Agreement, the Swing Loan Lender may in its sole discretion make loans in
Dollars (each a "Swing Loan") otherwise available to the Borrower under the
Facility from time to time on any Business Day during the period from the date
hereof until the Termination Date in an aggregate amount at any time outstanding
at any time not to exceed the Swing Loan Availability; provided, however, that
the Swing Loan Lender shall not make any Swing Loan to the extent that, after
giving effect to such Swing Loan, the aggregate Outstandings would exceed the
Maximum Credit. The Swing Loan Lender shall be entitled to rely on the most
recent Borrowing Base Certificate delivered to the Administrative Agent. Each
Swing Loan shall be a Base Rate Loan and must be repaid in full within one
Business Day of any demand by the Swing Loan Lender therefor and shall in any
event mature and become due and payable on the Termination Date. Within the
limits set forth in the first sentence of this Section 2.3(a), amounts of Swing
Loans repaid may be reborrowed under this Section 2.3(a).
(b) In order to request a Swing Loan, the Borrower shall telecopy (or
forward by electronic mail or similar means) to the Administrative Agent a duly
completed request, in substantially the form of Exhibit C, setting forth the
date, the requested amount and date of the Swing Loan (a "Swing Loan Request"),
to be received by the Administrative Agent not later than 1:00 P.M. (New York
City time) on the day of the proposed borrowing. The Administrative Agent shall
promptly notify the Swing Loan Lender of the details of the requested Swing
Loan. Subject to the terms of this Agreement, the Swing Loan Lender shall make a
Swing Loan available to the Administrative Agent which will make such amounts
available to the Borrower on the date of the relevant Swing Loan Request. The
Swing Loan Lender shall not make any Swing Loan in the period commencing on the
first Business Day after it receives written notice from the Administrative
Agent or any Lender that one or more of the conditions precedent contained in
Section 3.2 shall not on such date be satisfied, and ending when such conditions
are satisfied. The Swing Loan Lender shall not otherwise be required to
determine that, or take notice whether, the conditions precedent set forth in
Section 3.2 hereof have been satisfied in connection with the making of any
Swing Loan.
(c) The Swing Loan Lender shall notify the Administrative Agent in
writing (which may be by telecopy or electronic mail) weekly, by no later than
10:00 A.M. (New York City time) on the first Business Day of each week, of the
aggregate principal amount of its Swing Loans then outstanding.
(d) The Swing Loan Lender may demand at any time that each Lender pay
to the Administrative Agent, for the account of the Swing Loan Lender, in the
manner provided in clause (e) below, such Lender's Ratable Portion of all or a
portion of the outstanding Swing Loans, which demand shall be made through the
Administrative Agent, shall be in writing and shall specify the outstanding
principal amount of Swing Loans demanded to be paid.
(e) The Administrative Agent shall forward each notice referred to in
clause (c) above and each demand referred to in clause (d) above to each Lender
on the day such notice or such demand is received by the Administrative Agent
(except that any such notice or demand received by the Administrative Agent
after 2:00 P.M. (New York City time) on any Business Day or any such demand
received on a day that is not a Business Day shall not be required to be
forwarded to the Lenders by the Administrative Agent until the next succeeding
Business Day), together with a statement prepared by the Administrative Agent
specifying the amount of each Lender's Ratable Portion of the aggregate
principal amount of the Swing Loans stated to be outstanding in such notice or
demanded to be paid pursuant to such demand, and, notwithstanding whether or not
the conditions precedent set forth in Section 3.2 shall have been satisfied
(which conditions precedent the Lenders hereby irrevocably waive), each Lender
shall, before 11:00 A.M. (New York City time) on the Business Day next
succeeding the date of such Lender's receipt of such written statement, make
39
available to the Administrative Agent, in immediately available funds, for the
account of the Swing Loan Lender, the amount specified in such statement. Upon
such payment by a Lender, such Lender shall, except as provided in clause (g)
below, be deemed to have made a Revolving Loan to the Borrower. The
Administrative Agent shall use such funds to repay the Swing Loans to the Swing
Loan Lender. To the extent that any Lender fails to make such payment available
to the Administrative Agent for the account of the Swing Loan Lender, the
Borrower shall repay such Swing Loan on demand.
(f) Upon the occurrence of a Default under Section 9.1(e), each Lender
shall acquire, without recourse or warranty, an undivided participation in each
Swing Loan otherwise required to be repaid by such Lender pursuant to clause (e)
above, which participation shall be in a principal amount equal to such Lender's
Ratable Portion of such Swing Loan, by paying to the Swing Loan Lender on the
date on which such Lender would otherwise have been required to make a payment
in respect of such Swing Loan pursuant to clause (e) above, in immediately
available funds, an amount equal to such Lender's Ratable Portion of such Swing
Loan. If all or part of such amount is not in fact made available by such Lender
to the Swing Loan Lender on such date, the Swing Loan Lender shall be entitled
to recover any such unpaid amount on demand from such Lender together with
interest accrued from such date at the Federal Funds Rate for the first Business
Day after such payment was due and thereafter at the rate of interest then
applicable to Base Rate Loans.
(g) From and after the date on which any Lender (i) is deemed to have
made a Revolving Loan pursuant to clause (e) above with respect to any Swing
Loan or (ii) purchases an undivided participation interest in a Swing Loan
pursuant to clause (f) above, the Swing Loan Lender shall promptly distribute to
such Lender such Lender's Ratable Portion of all payments of principal of and
interest received by the Swing Loan Lender on account of such Swing Loan other
than those received from a Lender pursuant to clause (e) or (f) above.
Section 2.4 Letters of Credit.
(a) On the terms and subject to the conditions contained in this
Agreement, each Issuer agrees to Issue one or more Letters of Credit at the
request of the Borrower for the account of the Borrower from time to time during
the period commencing on the Closing Date and ending on the earlier of the
Termination Date and 30 days prior to the Scheduled Termination Date; provided,
however, that no Issuer shall be under any obligation to Issue any Letter of
Credit if:
(i) any order, judgment or decree of any Governmental Authority
or arbitrator shall purport by its terms to enjoin or restrain such Issuer
from issuing such Letter of Credit or any Requirement of Law applicable to
such Issuer or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over such Issuer
shall prohibit, or request that such Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuer with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuer is not
otherwise compensated) not in effect on the date of this Agreement or
result in any unreimbursed loss, cost or expense which was not applicable,
in effect or known to such Issuer as of the date of this Agreement and
which such Issuer in good xxxxx xxxxx material to it;
(ii) such Issuer shall have received written notice from the
Administrative Agent, any Lender or the Borrower, on or prior to the
requested date of issuance of such Letter of Credit, that one or more of
the applicable conditions contained in Section 3.1 and Section 3.2 is not
then satisfied;
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(iii) after giving effect to the issuance of such Letter of
Credit, the aggregate Outstandings would exceed the Maximum Credit at such
time;
(iv) after giving effect to the issuance of such Letter of
Credit, the aggregate amount of Letter of Credit Obligations then
outstanding would exceed the Letter of Credit Sub-Limit or, in the case of
a Standby Letter of Credit, after giving effect to the issuance of such
Letter of Credit, the aggregate amount of Letter of Credit Obligations with
respect to Standby Letters of Credit then outstanding would exceed the
Standby Letter of Credit Sub-Limit; or
(v) any fees due and payable in connection with a requested
issuance have not been paid; or
(vi) such Letter of Credit is not denominated in Dollars or in an
Alternative Currency.
None of the Lenders (other than the Issuers in their capacity as such) shall
have any obligation to Issue any Letter of Credit.
(b) In no event shall the expiration date of any Letter of Credit (i)
be more than one year after the date of issuance thereof, or (ii) be less than
five days prior to the Scheduled Termination Date.
(c) In connection with the issuance of each Letter of Credit, the
Borrower shall give the relevant Issuer and the Administrative Agent at least
two Business Days' (or such shorter period as agreed by the Issuer) prior
written notice, in substantially the form of Exhibit D (or in such other written
or electronic form as is acceptable to the Issuer), of the requested issuance of
such Letter of Credit (a "Letter of Credit Request"). Such notice shall be
irrevocable and shall (i) specify (A) the Issuer of such Letter of Credit, the
stated amount of the Letter of Credit requested, which stated amount (or, if
such Letter of Credit is to be denominated in an Alternative Currency, the
Dollar Equivalent of such stated amount) shall not be less than $5,000, (B) the
date of issuance of such requested Letter of Credit (which day shall be a
Business Day), (C) the date on which such Letter of Credit is to expire (which
date shall be a Business Day), and (D) the Person for whose benefit the
requested Letter of Credit is to be Issued and (ii) certify that, after issuance
of the requested Letter of Credit, (A) the aggregate amount of the Letter of
Credit Obligations then outstanding will not exceed the Letter of Credit
Sub-Limit, (B) the aggregate amount of Letter of Credit Obligations in respect
of Standby Letters of Credit then outstanding will not exceed the Standby Letter
of Credit Sub-Limit and (C) the sum of the aggregate amount of the Letter of
Credit Obligations then outstanding and the aggregate amount of the Loans then
outstanding will not exceed the Maximum Credit then in effect. Such notice, to
be effective, must be received by the relevant Issuer and the Administrative
Agent not later than 11:00 A.M. (New York City time) on the second (2nd)
Business Day (or such shorter period as agreed by the Issuer) prior to the
requested issuance of such Letter of Credit.
(d) Subject to the satisfaction of the conditions set forth in this
clause (d) the relevant Issuer shall, on the requested date, Issue a Letter of
Credit on behalf of the Borrower in accordance with such Issuer's usual and
customary business practices. No Issuer shall Issue any Letter of Credit in the
period commencing on the first Business Day after it receives written notice
from the Administrative Agent or any Lender that one or more of the conditions
precedent contained in Section 3.2 shall not on such date be satisfied, and
ending when such conditions are satisfied. The relevant Issuer shall not
otherwise be required to determine that, or take notice whether, the conditions
41
precedent set forth in Section 3.2 have been satisfied in connection with the
issuance of any Letter of Credit.
(e) If requested by the relevant Issuer, prior to the issuance of each
Letter of Credit by such Issuer, and as a condition of such issuance and of the
participation of each Lender in the Letter of Credit Obligations arising with
respect thereto, the Borrower shall have delivered to such Issuer a letter of
credit reimbursement agreement, in such form as the Issuer may employ in its
ordinary course of business for its own account (a "Letter of Credit
Reimbursement Agreement"), signed by the Borrower, and such other documents or
items as may be required pursuant to the terms thereof. In the event of any
conflict between the terms of any Letter of Credit Reimbursement Agreement and
this Agreement, the terms of this Agreement shall govern.
(f) Each Issuer shall:
(i) give the Administrative Agent written notice (or telephonic
notice confirmed promptly thereafter in writing, which may be by
telecopier) of the issuance or renewal of a Letter of Credit Issued by it,
of all drawings under a Letter of Credit Issued by it and the payment (or
the failure to pay when due) by the Borrower of any Reimbursement
Obligation when due (which notice the Administrative Agent shall promptly
transmit by telecopy, electronic mail or similar transmission to each
Lender);
(ii) upon the request of any Lender, furnish to such Lender
copies of any Letter of Credit Reimbursement Agreement to which such Issuer
is a party and such other documentation as may reasonably be requested by
such Lender; and
(iii) no later than 10 Business Days following the last day of
each calendar month, provide to the Administrative Agent (and the
Administrative Agent shall provide a copy to each Lender requesting the
same) and the Borrower separate schedules for Documentary and Standby
Letters of Credit Issued by it, in form reasonably satisfactory to the
Administrative Agent, setting forth the aggregate Letter of Credit
Obligations outstanding at the end of each month and any information
requested by the Borrower or the Administrative Agent relating thereto.
(g) Immediately upon the issuance by an Issuer of a Letter of Credit
in accordance with the terms and conditions of this Agreement, such Issuer shall
be deemed to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Ratable Portion of the Commitments, in such
Letter of Credit and the obligations of the Borrower with respect thereto
(including all Letter of Credit Obligations with respect thereto) and any
security therefor and guaranty pertaining thereto.
(h) The Borrower agrees to pay to the Issuer of a Letter of Credit the
amount of all Reimbursement Obligations owing to such Issuer under a Letter of
Credit when such amounts are due and payable, irrespective of any claim,
set-off, defense or other right that the Borrower may have at any time against
such Issuer or any other Person. In the event that any Issuer makes any payment
under any Letter of Credit and the Borrower shall not have repaid such amount to
such Issuer pursuant to this clause (h) or such payment is rescinded or set
aside for any reason, such Reimbursement Obligation shall bear interest computed
from the date on which such Reimbursement Obligation arose to the date of
repayment in full at the rate of interest applicable to Revolving Loans bearing
interest at a rate based on the Base Rate during such period, and such Issuer
shall promptly notify the Administrative Agent, which shall promptly notify each
Lender of the failure to repay such
42
Reimbursement Obligation, and each Lender shall promptly and unconditionally pay
to the Administrative Agent for the account of such Issuer the amount of such
Lender's Ratable Portion of such payment in Dollars (or the Dollar Equivalent
thereof if such payment was made in an Alternative Currency) and in immediately
available funds. If the Administrative Agent so notifies such Lender prior to
11:00 A.M. (New York City time) on any Business Day, such Lender shall make
available to the Administrative Agent for the account of such Issuer its Ratable
Portion of the amount of such payment on such Business Day in immediately
available funds. Upon such payment by a Lender, such Lender shall (except during
the continuance of a Default or Event of Default) notwithstanding whether or not
the conditions precedent set forth in Section 3.2 shall have been satisfied
(which conditions precedent the Lenders hereby irrevocably waive) be deemed to
have made a Revolving Loan to the Borrower in the principal amount of such
payment. Whenever any Issuer receives from the Borrower a payment of a
Reimbursement Obligation as to which the Administrative Agent has received for
the account of such Issuer any payment from a Lender pursuant to this clause
(h), such Issuer shall pay to the Administrative Agent and the Administrative
Agent shall promptly pay to each Lender, in immediately available funds, an
amount equal to such Lender's Ratable Portion of the amount of such payment
adjusted, if necessary, to reflect the respective amounts the Lenders have paid
in respect of such Reimbursement Obligation.
(i) If and to the extent such Lender shall not have so made its
Ratable Portion of the amount of the payment required by clause (h) above
available to the Administrative Agent for the account of such Issuer, such
Lender agrees to pay to the Administrative Agent for the account of such Issuer
forthwith on demand any such unpaid amount together with interest thereon, for
the first Business Day after payment was first due at the Federal Funds Rate
and, thereafter, until such amount is repaid to the Administrative Agent for the
account of such Issuer, at a rate per annum equal to the rate applicable to Base
Rate Loans under the Facility. The failure of any Lender to make available to
the Administrative Agent for the account of such Issuer its Ratable Portion of
any such payment shall not relieve any other Lender of its obligation hereunder
to make available to the Administrative Agent for the account of such Issuer its
Ratable Portion of any payment on the date such payment is to be made, but no
Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent for the account of the Issuer such other
Lender's Ratable Portion of any such payment.
(j) The Borrower's obligation to pay each Reimbursement Obligation and
the obligations of the Lenders to make payments to the Administrative Agent for
the account of the Issuers with respect to Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
including the occurrence of any Default or Event of Default, and irrespective
of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from
all or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, set off, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower, any Subsidiary or other Affiliate thereof or any other
Person may at any time have against the beneficiary under any Letter of
Credit, the Issuer, the Administrative Agent or any Lender or any other
Person, whether in connection with this Agreement, any other Loan Document
or any other related or unrelated agreement or transaction;
43
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuer under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuer, the Lenders, the Administrative Agent or any other Person or any
other event or circumstance whatsoever, whether or not similar to any of
the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
Any action taken or omitted to be taken by the relevant Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not put such Issuer under any
resulting liability to the Borrower or any Lender. In determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof, the Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit (x) the Issuer may rely exclusively on the documents presented
to it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (y) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuer.
(k) Letters of Credit may be Issued in favor of a beneficiary that is
a creditor of a Subsidiary of Group provided that the account party with respect
to such Letter of Credit is the Borrower.
(l) The amount of Commitments utilized by Letters of Credit
denominated in an Alternative Currency shall be measured by a determination of
the Dollar Equivalent of such Letters of Credit on each day on which a Borrowing
Base Certificate is delivered. The applicable Issuers shall notify the
Administrative Agent and the Borrower of the aggregate Dollar Equivalent of such
utilization in respect of the Letters of Credit Issued by it.
(m) Schedule 2.4 (Existing Letters of Credit) contains a schedule of
certain letters of credit Issued prior to the Closing Date by The Bank of Nova
Scotia for the account of the Borrower pursuant to the DIP Credit Agreement. On
the Closing Date (i) such letters of credit, to the extent outstanding, shall be
automatically and without further action by the parties thereto deemed to be
Letters of Credit Issued pursuant to this Section 2.4 for the account of the
Borrower and subject to the provisions hereof, and for this purpose the fees
specified in Section 2.12 shall be payable (in substitution for any fees set
forth in the applicable letter of credit reimbursement agreements or
applications relating to such letters of credit) as if such letters of credit
had been Issued on the Closing Date, (ii) the Issuers of such Letters of Credit
shall be deemed to be "Issuers" hereunder solely for the purpose of maintaining
such letters of credit, for purposes of Section 2.16(f) relating to the
obligation to provide the appropriate forms, certificates and statements to the
Borrower and the Administrative
44
Agent and updated as required by Section 2.16(f) and for purposes of Section
11.2(c), relating to the entries to be made in the Register, (iii) the Dollar
Equivalent of the face amount of such letters of credit shall be included in the
calculation of Letter of Credit Obligations and (iv) all liabilities of the
Borrower with respect to such letters of credit shall constitute Obligations.
Section 2.5 Reduction and Termination of the Commitments.
(a) The Borrower may, upon at least five Business Days' prior notice
to the Administrative Agent, terminate in whole or reduce in part ratably the
unused portions of the Commitments; provided, however, that each partial
reduction shall be in the aggregate amount of not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and the requirements of
Section 2.9(d) shall have been satisfied.
(b) The then current Commitments shall be reduced on each date on
which a prepayment of Loans (or cash collateralization in respect of Letters of
Credits) is (i) made pursuant to Section 2.9(a) (or would be required to be made
had the outstanding Revolving Loans and Swing Loans equaled the Commitments then
in effect), in each case in the amount of such prepayment (or deemed prepayment)
or (ii) made pursuant to Section 2.9(b)(i) (in which case such reduction shall
take effect on the Reinvestment Prepayment Date to the extent of the
Reinvestment Prepayment Amount), and, in each case, the Commitment of each
Lender shall be reduced by its Ratable Portion of such amount); provided,
however, (x) during any Fiscal Year the Commitments shall not be reduced by the
first $5,000,000 in Net Cash Proceeds received in connection with any Asset
Sale, (y) the aggregate amount of such Net Cash Proceeds that do not result in a
Commitment reduction pursuant to the foregoing subclause (x) shall not exceed
$15,000,000, and (z) Net Cash Proceeds that would otherwise result in a
Commitment reduction under this clause (b) shall not cause such Commitment
reduction to take effect until such Net Cash Proceeds aggregate $1,000,000 or
more.
Section 2.6 Repayment of Loans. The Borrower promises to repay the
entire unpaid principal amount of the Loans and all accrued but unpaid interest
thereon on the Termination Date.
Section 2.7 Evidence of Debt.
(a) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing Indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(b) The Administrative Agent shall establish and maintain a Register
pursuant to Section 11.2(c) and accounts therein in accordance with its usual
practice in which it will record (i) the amount of each Loan made and, if a
Eurodollar Rate Loan, the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable by the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof, if applicable.
(c) The entries made in the accounts maintained pursuant to clauses
(a) and (b) of this Section 2.7 shall, to the extent permitted by applicable
law, be prima facie evidence of the existence and amounts of the obligations
recorded therein; provided, however, that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms.
45
(d) Notwithstanding any other provision of the Agreement, in the event
that any Lender requests that the Borrower execute and deliver a promissory note
or notes payable to such Lender in order to evidence the Indebtedness owing to
such Lender by the Borrower hereunder, the Borrower will promptly execute and
deliver a Note or Notes to such Lender evidencing any Loans of such Lender,
substantially in the form of Exhibit B (Form of Note).
Section 2.8 Optional Prepayments. The Borrower may repay the
outstanding principal amount of the Loans in whole or in part at any time;
provided, however, that if any repayment of any Eurodollar Rate Loan is made by
the Borrower other than on the last day of an Interest Period for such Loan, the
Borrower shall also pay any amounts owing pursuant to Section 2.14(e) at the
time of such prepayment.
Section 2.9 Mandatory Prepayments.
(a) Subject to clause (b) below, upon receipt by any Warnaco Entity of
Net Cash Proceeds, the Borrower shall within one Business Day after such receipt
prepay the Loans (or provide cash collateral in respect of Letters of Credit as
set forth in clause (c) below) in an amount equal to 100% of such Net Cash
Proceeds as set forth in clause (c) below.
(b) Notwithstanding clause (a) above, as long as no Event of Default
shall have occurred or be continuing on the date Net Cash Proceeds are received
by any Warnaco Entity, the Borrower shall not be required to so apply Net Cash
Proceeds arising from:
(i) a Reinvestment Event to the extent that all Net Cash Proceeds
from all Reinvestment Events do not exceed $50,000,000 (in the aggregate
since the Closing Date) and are actually used (or have been contractually
committed to be used) to consummate a Permitted Acquisition or to purchase
replacement or fixed assets (in the case of an Asset Sale) or repair or
replace (in the case of a Property Loss Event) the sold, damaged or taken
property within 180 days of the receipt of such Net Cash Proceeds by a
Warnaco Entity and, pending application of such proceeds, the Borrower has
either (A) paid an amount equal to such Net Cash Proceeds to the
Administrative Agent to be held in a Cash Collateral Account designated by
the Administrative Agent or (B) has applied an amount equal to such Net
Cash Proceeds in repayment of the Loans and the Administrative Agent has
established an Availability Reserve in the amount of such repayment which
reserve shall xxxxx on the Reinvestment Prepayment Date applicable to such
Net Cash Proceeds or earlier to the extent Loans up to the amount of such
Net Cash Proceeds are used as set forth in the Reinvestment Notice with
respect thereto; provided, however, that to the extent any asset subject to
such Asset Sale or Property Loss Event constituted Collateral, any
replacement, fixed or alternative assets acquired with Net Cash Proceeds
shall, upon acquisition thereof by a Warnaco Entity, be subject to a first
priority perfected Lien in favor of the Administrative Agent for the
benefit of the Secured Parties (but only, in the case of a Permitted
Acquisition, to the extent required by clause (e) of the definition
thereof); provided further, however, in the event an Event of Default has
occurred and is continuing after the provisions in this clause (i) become
operative, the Administrative Agent may, or shall at the direction of the
Requisite Lenders, have the right to apply all amounts in the Cash
Collateral Account referred to above to the Obligations and to terminate
the Availability Reserve referred to above, and to effect an immediate
reduction of the Commitments of the Lenders (in accordance with their
respective Ratable Portions) in an amount equal to the amount of such Cash
Collateral plus the amount of such Availability Reserve;
46
(ii) an issuance of Take-Out Securities to the extent the Net
Cash Proceeds thereof are applied to permanently repay or repurchase the
Second Lien Notes (plus any interest owed under the Second Lien Notes and
any cash costs associated with the issuance of any Take-Out Securities
(including underwriting fees, attorneys' fees, advisors' fees, investment
bank fees and taxes)) in an amount equal to the Dollar Equivalent of such
Net Cash Proceeds.
(c) Subject to Section 2.13(h), any prepayments made by the Borrower
required to be applied in accordance with this clause (c) shall be applied as
follows: first, to repay the outstanding principal balance of the Swing Loans
until such Swing Loans shall have been repaid in full; second, to repay the
outstanding principal balance of the Revolving Loans until such Revolving Loans
shall have been repaid in full; and then, to provide cash collateral for any
Letter of Credit Obligations in the manner set forth in Section 9.3 until all
such Letter of Credit Obligations have been fully cash collateralized in the
manner set forth therein.
(d) If at any time, the aggregate principal amount of Outstandings
exceed the Maximum Credit at such time, the Borrower shall, as soon as possible,
but in any event within one Business Day, prepay the Swing Loans first and then
the Revolving Loans then outstanding in an amount equal to such excess. If any
such excess remains after repayment in full of the aggregate outstanding Swing
Loans and the Revolving Loans, the Borrower shall provide cash collateral for
the Letter of Credit Obligations in the manner set forth in Section 9.3 to the
extent required to eliminate such excess.
(e) Except in the case where Section 2.13(h) shall be applicable, all
available funds in each Cash Collateral Account (other than an amount equal to
any proceeds arising from a Reinvestment Event that are held in the Cash
Collateral Account pending application of such proceeds as specified in a
Reinvestment Notice) shall be applied on a daily basis: first to repay the
outstanding principal amount of the Swing Loans until such Swing Loans have been
repaid in full; second, to repay the outstanding principal amount of the
Revolving Loans until such Revolving Loans have been repaid in full; and then to
any other Obligation then due and payable. The Administrative Agent agrees so to
apply such funds and the Borrower consents to such application. If, following
such application, there is no Event of Default that is continuing and there are
no Loans outstanding and no other Obligations are then due and payable (and all
outstanding Letter of Credit Obligations have been cash collateralized in the
manner set forth in Section 9.3), then the Administrative Agent shall cause any
remaining funds in the Cash Collateral Account to be paid at the written
direction of the Borrower.
Section 2.10 Interest.
(a) Rate of Interest. All Loans and the outstanding amount of all
other Obligations shall bear interest, in the case of Loans, on the unpaid
principal amount thereof from the date such Loans are made and, in the case of
such other Obligations, from the date such other Obligations are due and payable
until, in all cases, paid in full, except as otherwise provided in Section
2.10(c), as follows:
(i) if a Base Rate Loan or such other Obligation, at a rate per
annum equal to the sum of (A) the Base Rate as in effect from time to time,
plus (B) the Applicable Margin; and
(ii) if a Eurodollar Rate Loan, at a rate per annum equal to the
sum of (A) the Eurodollar Rate determined for the applicable Interest
Period, plus (B) the Applicable Margin in effect from time to time during
such Interest Period.
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(b) Interest Payments. Interest accrued:
(i) on each Base Rate Loan shall be payable in arrears (A) on the
first Business Day of each calendar quarter, commencing on the first such
day following the making of such Base Rate Loan, and (B) if not previously
paid in full, at maturity (whether by acceleration or otherwise) of such
Base Rate Loan;
(ii) on Swing Loans shall be payable in arrears on the first
Business Day of the immediately succeeding calendar quarter;
(iii) on each Eurodollar Rate Loan shall be payable in arrears
(A) on the last day of each Interest Period applicable to such Loan and if
such Interest Period has a duration of more than three months, on each day
during such Interest Period which occurs every three months from the first
day of such Interest Period, (B) upon the payment or prepayment thereof in
full or in part, and (C) if not previously paid in full, at maturity
(whether by acceleration or otherwise) of such Eurodollar Rate Loan; and
(iv) on the amount of all other Obligations shall be payable on
demand after the time such Obligation becomes due and payable (whether by
acceleration or otherwise).
(c) Default Interest. Notwithstanding the rates of interest specified
in Section 2.10(a) or elsewhere herein, effective immediately upon the
occurrence of an Event of Default, and for as long thereafter as such Event of
Default shall be continuing, the principal balance of all Loans and the amount
of all other Obligations shall bear interest at a rate which is two percent per
annum in excess of the rate of interest applicable to such Loans or such other
Obligations from time to time. Default interest under this clause (c) shall be
payable on demand by the Administrative Agent or the Requisite Lenders.
Section 2.11 Conversion/Continuation Option.
(a) The Borrower may elect (i) at any time to convert Base Rate Loans
(other than Swing Loans) or any portion thereof to Eurodollar Rate Loans, or
(ii) at the end of any applicable Interest Period, to convert Eurodollar Rate
Loans or any portion thereof into Base Rate Loans or to continue such Eurodollar
Rate Loans or any portion thereof for an additional Interest Period; provided,
however, that the aggregate amount of the Eurodollar Loans for each Interest
Period must be in the amount of at least $10,000,000 or an integral multiple of
$1,000,000 in excess thereof. Each conversion or continuation shall be allocated
among the Loans of each Lender in accordance with such Lender's Ratable Portion.
(b) Each such election shall be in substantially the form of Exhibit F
hereto (a "Notice of Conversion or Continuation") and shall be made by giving
the Administrative Agent at least three Business Days' prior written notice
specifying (i) the amount and type of Loan being converted or continued, (ii) in
the case of a conversion to or a continuation of Eurodollar Rate Loans, the
applicable Interest Period, and (iii) in the case of a conversion, the date of
conversion (which date shall be a Business Day and, if a conversion from
Eurodollar Rate Loans, shall also be the last day of the applicable Interest
Period). The Administrative Agent shall promptly notify each Lender of its
receipt of a Notice of Conversion or Continuation and of the options selected
therein.
(c) Notwithstanding the foregoing, no conversion in whole or in part
of Base Rate Loans to Eurodollar Rate Loans, and no continuation in whole or in
part of Eurodollar Rate Loans
48
upon the expiration of any applicable Interest Period, shall be permitted at any
time at which (A) a Default or an Event of Default shall have occurred and be
continuing or (B) the continuation of, or conversion into, would violate any of
the provisions of Section 2.14.
(d) If, within the time period required under the terms of this
Section 2.11, the Administrative Agent does not receive a Notice of Conversion
or Continuation from the Borrower containing a permitted election to continue
any Loan that is a Eurodollar Rate Loan for an additional Interest Period or to
convert any such Loan, then, upon the expiration of the applicable Interest
Period, such Loan will be automatically converted to a Base Rate Loan.
(e) Each Notice of Conversion or Continuation shall be irrevocable.
Section 2.12 Fees.
(a) Unused Commitment Fee. The Borrower agrees to pay to each Lender a
commitment fee (the "Unused Commitment Fee") on the average amount by which the
Commitments of such Lender exceeds such Lender's Ratable Portion of the
Outstandings (excluding the amount of any outstanding Swing Loans) from the date
hereof until the Termination Date at the Applicable Unused Commitment Fee Rate,
payable in arrears on the first Business Day of each calendar quarter,
commencing on the first such day following the Closing Date and on the
Termination Date.
(b) Letter of Credit Fees. The Borrower agrees to pay the following
amounts with respect to Letters of Credit Issued by any Issuer:
(i) to each Issuer of a Letter of Credit, with respect to each
Letter of Credit Issued by such Issuer, an issuance fee equal to an amount
to be agreed by such Issuer and the Borrower but in any event not greater
than 0.25% per annum (the "Issuing Fee") of the maximum amount available
from time to time to be drawn under such Letter of Credit, payable in
arrears (A) on the first Business Day of each calendar quarter, commencing
on the first such day following the issuance of such Letter of Credit and
(B) on the Termination Date;
(ii) to the Administrative Agent for the ratable benefit of the
Lenders, with respect to each Letter of Credit, a fee accruing at a rate
per annum equal to the Applicable Margin for Loans that are Eurodollar Rate
Loans less an amount equal to the Issuing Fee paid by the Borrower in
respect of such Letter of Credit, of the maximum amount available from time
to time to be drawn under such Letter of Credit, payable in arrears on the
first Business Day of each calendar quarter, commencing on the first such
day following the issuance of such Letter of Credit and on the Termination
Date; provided, however, that during the continuance of an Event of
Default, such fee shall be increased by two percent per annum and shall be
payable on demand; and
(iii) to the Issuer of any Letter of Credit, with respect to the
issuance, amendment or transfer of each Letter of Credit and each drawing
made thereunder, documentary and processing charges in accordance with such
Issuer's standard schedule for such charges in effect at the time of
issuance, amendment, transfer or drawing, as the case may be.
(c) Additional Fees. The Borrower has agreed to pay to the Agents and
the Arrangers additional fees, the amount and dates of payment of which are
embodied in the Fee Letter.
Section 2.13 Payments and Computations.
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(a) The Borrower shall make each payment hereunder (including fees and
expenses) not later than 11:00 A.M. (New York City time) on the day when due, in
Dollars, to the Administrative Agent at its address referred to in Section 11.8
in immediately available funds without set-off or counterclaim. The
Administrative Agent will promptly thereafter cause to be distributed
immediately available funds relating to the payment of principal or interest or
fees to the Lenders, in accordance with the application of payments set forth in
clauses (f) and (g) of this Section 2.13, as applicable, for the account of
their respective Applicable Lending Offices; provided, however, that amounts
payable pursuant to Section 2.14(c), Section 2.14(e), Section 2.15 or Section
2.16 shall be paid only to the affected Lender or Lenders and amounts payable
with respect to Swing Loans shall be paid only to the Swing Loan Lender.
Payments received by the Administrative Agent after 11:00 A.M. (New York City
time) shall be deemed to be received on the next succeeding Business Day.
(b) All computations of interest and of fees shall be made by the
Administrative Agent 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 interest and fees are payable. Each
determination by the Administrative Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(c) If and to the extent any payment owed to the Administrative Agent
or any Lender is not made when due, each Loan Party hereby authorizes the
Administrative Agent and such Lender, to setoff and charge any amount so due
against any deposit account maintained by such Loan Party with the
Administrative Agent or such Lender, whether or not the deposit therein is then
due.
(d) Each payment by a Borrower of any Loan, Reimbursement Obligation
(including interest or fees in respect thereof) and each reimbursement of
various costs, expenses or other Obligation shall be made in the currency in
which such Loan was made, such Letter of Credit Issued or such cost, expense or
other Obligation was incurred; provided, however, that (i) the Letter of Credit
Reimbursement Agreement for a Letter of Credit may specify another currency for
the Reimbursement Obligation in respect of such Letter of Credit and (ii) other
than for payments in respect of a Loan or Reimbursement Obligation, Loan
Documents duly executed by the Administrative Agent or any Hedging Contract may
specify other currencies of payment for Obligations created by or directly
related to such Loan Document or Hedging Contract.
(e) Whenever any payment hereunder 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 fees, as the case may be; provided,
however, that if such extension would cause payment of interest on or principal
of any Eurodollar Rate Loan to be made in the next calendar month, such payment
shall be made on the immediately preceding Business Day. All repayments of
Revolving Loans shall be applied first to repay such Loans outstanding as Base
Rate Loans and then to repay Revolving Loans outstanding as Eurodollar Rate
Loans with those Eurodollar Rate Loans which have earlier expiring Eurodollar
Interest Periods being repaid prior to those which have later expiring
Eurodollar Interest Periods.
(f) Unless the Administrative Agent shall have received notice from
the Borrower to the Lenders prior to the date on which any payment is due
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
50
forthwith on demand such amount distributed to such Lender together with
interest thereon at the Federal Funds Rate, for the first Business Day, and,
thereafter, at the rate applicable to Base Rate Loans, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent.
(g) Subject to the provisions of clauses (h) of this Section 2.13 (and
except as otherwise provided in Section 2.9), all payments and any other amounts
received by the Administrative Agent from or for the benefit of the Borrower or
any other Loan Party shall be applied first, to pay principal of and interest on
any portion of the Loans which the Administrative Agent may have advanced
pursuant to the express provisions of this Agreement on behalf of any Lender,
for which the Administrative Agent has not then been reimbursed by such Lender
or the Borrower; second, to pay all other Obligations then due and payable; and
then, as the Borrower so designates. Payments in respect of Swing Loans received
by the Administrative Agent shall be distributed to the Swing Loan Lender;
payments in respect of Revolving Loans received by the Administrative Agent
shall be distributed to each Lender in accordance with such Lender's Ratable
Portion of such Revolving Loans; and all payments of fees and all other payments
in respect of any other Obligation shall be allocated among such of the Lenders
and the Issuers as are entitled thereto, and, if to the Lenders, in proportion
to their respective Ratable Portions.
(h) The Borrower hereby irrevocably waives the right to direct the
application of any and all payments in respect of the Secured Obligations and
any proceeds of Collateral after the occurrence and during the continuance of an
Event of Default, and agrees that the Administrative Agent shall, upon the
termination of the Commitments or the acceleration of the Obligations pursuant
to Section 9.2, apply all funds on deposit in any Cash Collateral Account
(including all proceeds arising from a Reinvestment Event that are held in the
Cash Collateral Account pending application of such proceeds as specified in a
Reinvestment Notice) and all other proceeds of Collateral in the following
order:
(i) first, to pay interest on and then principal of any portion
of the Revolving Loans which the Administrative Agent may have advanced on
behalf of any Lender for which the Administrative Agent has not then been
reimbursed by such Lender or the Borrower;
(ii) second, to pay interest on and then principal of any Swing
Loan;
(iii) third, to pay Secured Obligations in respect of any expense
reimbursements (including indemnities) or Cash Management Obligations then
due the Agents;
(iv) fourth, to pay Secured Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuers;
(v) fifth, to pay Secured Obligations in respect of any fees then
due to the Administrative Agent, the Lenders and the Issuers;
(vi) sixth, to pay interest then due and payable in respect of
the Loans and Reimbursement Obligations;
(vii) seventh, to pay or prepay principal payments on the Loans
and Reimbursement Obligations and to provide cash collateral for
outstanding Letter of Credit Undrawn Amounts in the manner described in
Section 9.3, ratably to the aggregate principal
51
amount of such Loans, Reimbursement Obligations and Letter of Credit
Undrawn Amounts; and
(viii) eighth, to the ratable payment of all other Secured
Obligations;
(ix) ninth, to the Second Lien Note Collateral Agent for
application pursuant to the terms of the Intercreditor Agreement;
provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any of the Obligations described in any of the
foregoing clauses first through eighth, the available funds being applied with
respect to any such Obligation (unless otherwise specified in such clause) shall
be allocated to the payment of such Obligations ratably, based on the proportion
of the Administrative Agent's and each Lender's or Issuer's interest in the
aggregate outstanding Obligations described in such clauses; provided, however,
that payments that would otherwise be allocated to the Lenders shall be
allocated first to repay Protective Advances and Swing Loans pro rata and then
to the Lenders. The order of priority set forth in clauses first through eighth
of this Section 2.13(h) may at any time and from time to time be changed by the
agreement of the Requisite Lenders without necessity of notice to or consent of
or approval by the Borrower, any Secured Party that is not a Lender or an
Issuer, or any other Person. The order of priority set forth in clauses first
through fifth of this Section 2.13(h) may be changed only with the prior written
consent of the Administrative Agent in addition to the Requisite Lenders.
(i) At the option of the Administrative Agent, principal on the Swing
Loans, Reimbursement Obligations, interest, fees, expenses and other sums due
and payable in respect of the Loans and Protective Advances may be paid from the
proceeds of Swing Loans or Revolving Loans. The Borrower hereby authorizes the
Swing Loan Lender to make such Swing Loans pursuant to Section 2.3(a) and the
Lenders to make Revolving Loans pursuant to Section 2.2(a) from time to time in
the amounts of any and all principal payable with respect to the Swing Loans,
Reimbursement Obligations, interest, fees, expenses and other sums payable in
respect of the Loans and Protective Advances, and further authorizes the
Administrative Agent to give the Lenders notice of any Borrowing with respect to
such Swing Loans and Loans and to distribute the proceeds of such Swing Loans
and Loans to pay such amounts. The Borrower agrees that all such Swing Loans and
Loans so made shall be deemed to have been requested by it (irrespective of the
satisfaction of the conditions in Section 3.2 which conditions the Lenders
irrevocably waive) and directs that all proceeds thereof shall be used to pay
such amounts.
Section 2.14 Special Provisions Governing Eurodollar Rate Loans.
(a) Determination of Interest Rate. The Eurodollar Rate for each
Interest Period for Eurodollar Rate Loans shall be determined by the
Administrative Agent pursuant to the procedures set forth in the definition of
"Eurodollar Rate." The Administrative Agent's determination shall be presumed to
be correct, absent manifest error, and shall be binding on the Borrower.
(b) Interest Rate Unascertainable, Inadequate or Unfair. In the event
that: (i) the Administrative Agent determines that adequate and fair means do
not exist for ascertaining the applicable interest rates by reference to which
the Eurodollar Rate then being determined is to be fixed; or (ii) the Requisite
Lenders notify the Administrative Agent that the Eurodollar Rate for any
Interest Period will not adequately reflect the cost to the Lenders of making or
maintaining such Loans for such Interest Period, the Administrative Agent shall
forthwith so notify the Borrower and the Lenders, whereupon each Eurodollar Loan
will automatically, on the last day of the current Interest Period for such
Loan, convert into a Base Rate Loan and the obligations of the Lenders to make
52
Eurodollar Rate Loans or to convert Base Rate Loans into Eurodollar Rate Loans
shall be suspended until the Administrative Agent shall notify the Borrower that
the Requisite Lenders have determined that the circumstances causing such
suspension no longer exist.
(c) Increased Costs. If at any time any Lender shall determine that
the introduction of or any change in or in the interpretation of any law, treaty
or governmental rule, regulation or order (other than any change by way of
imposition or increase of reserve requirements included in determining the
Eurodollar Rate or with respect to taxes (payment with respect to which shall be
governed by Section 2.16)) or the compliance by such Lender with any guideline,
request or directive 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 such Lender of agreeing to make or making, funding or maintaining any
Eurodollar Rate Loans, then the Borrower shall from time to time, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to the Borrower and the
Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
(d) Illegality. Notwithstanding any other provision of this Agreement,
if any Lender determines that the introduction of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement shall make it unlawful, or any central bank or
other Governmental Authority shall assert that it is unlawful, for any Lender or
its Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to
fund or maintain Eurodollar Rate Loans, then, on notice thereof and demand
therefor by such Lender to the Borrower through the Administrative Agent, (i)
the obligation of such Lender to make or to continue Eurodollar Rate Loans and
to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended, and
each such Lender shall make a Base Rate Loan as part of any requested Borrowing
of Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loans are then
outstanding, the Borrower shall immediately convert each such Loan into a Base
Rate Loan. If at any time after a Lender gives notice under this Section 2.14(d)
such Lender determines that it may lawfully make Eurodollar Rate Loans, such
Lender shall promptly give notice of that determination to the Borrower and the
Administrative Agent, and the Administrative Agent shall promptly transmit the
notice to each other Lender. The Borrower's right to request, and such Lender's
obligation, if any, to make Eurodollar Rate Loans shall thereupon be restored.
(e) Breakage Costs. In addition to all amounts required to be paid by
the Borrower pursuant to Section 2.10, the Borrower shall compensate each
Lender, upon demand, for all losses, expenses and liabilities (including any
loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain such
Lender's Eurodollar Rate Loans to the Borrower but excluding any loss of the
Applicable Margin on the relevant Loans) which that Lender may sustain (i) if
for any reason a proposed Borrowing, conversion into or continuation of
Eurodollar Rate Loans does not occur on a date specified therefor in a Notice of
Borrowing or a Notice of Conversion or Continuation given by a Borrower or in a
telephonic request by it for borrowing or conversion or continuation or a
successive Interest Period does not commence after notice therefor is given
pursuant to Section 2.11, (ii) if for any reason any Eurodollar Rate Loan is
prepaid (including mandatorily pursuant to Section 2.9) on a date which is not
the last day of the applicable Interest Period, (iii) as a consequence of a
required conversion of a Eurodollar Rate Loan to a Base Rate Loan as a result of
any of the events indicated in Section 2.14(d), or (iv) as a consequence of any
failure by a Borrower to repay Eurodollar Rate Loans when required by the terms
hereof. The Lender making demand for such compensation shall deliver to the
Borrower concurrently with such
53
demand a written statement as to such losses, expenses and liabilities, and this
statement shall be conclusive as to the amount of compensation due to that
Lender, absent manifest error.
Section 2.15 Capital Adequacy. If at any time any Lender determines
that (a) the adoption of or any change in or in the interpretation of any law,
treaty or governmental rule, regulation or order after the date of this
Agreement regarding capital adequacy, (b) compliance with any such law, treaty,
rule, regulation, or order, or (c) compliance with any guideline or request or
directive from any central bank or other Governmental Authority regarding
capital adequacy (whether or not having the force of law) shall have the effect
of reducing the rate of return on such Lender's (or any corporation controlling
such Lender's) capital as a consequence of its obligations hereunder or under or
in respect of any Letter of Credit to a level below that which such Lender or
such corporation could have achieved but for such adoption, change, compliance
or interpretation, then, upon demand from time to time by such Lender (with a
copy of such demand to the Administrative Agent), the Borrower shall pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender for such reduction. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error.
Section 2.16 Taxes.
(a) Except as otherwise provided in this Section 2.16, any and all
payments by any Loan Party under any Loan Document 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 (i) in the case of each Lender, each Issuer and the
Administrative Agent (A) taxes measured by its capital, net income, or franchise
or similar taxes imposed on it, by the jurisdiction (or any political
subdivision thereof) under the laws of which such Lender, such Issuer or the
Administrative Agent (as the case may be) is organized or carries on business,
(B) any United States withholding taxes payable with respect to payments under
the Loan Documents under laws (including any statute, treaty or regulation) in
effect on the Closing Date (or, in the case of (x) an Eligible Assignee, the
date of the Assignment and Acceptance, (y) a successor Agent, the date of the
appointment of such Agent, and (z) a successor Issuer, the date such Issuer
becomes an Issuer) applicable to such Lender, such Issuer or the Administrative
Agent, as the case may be, but not excluding any United States withholding tax
payable with respect to interest arising under any Loan Document as a result of
any change in such laws occurring after the Closing Date (or the date of such
Assignment and Acceptance or the date of such appointment of such Agent or the
date such Issuer becomes an Issuer) (notwithstanding the foregoing, in the event
that Section 1.6011-4T of the U.S. Treasury Regulations is revised such that the
Facility would not be a "reportable transaction," as defined in such
regulations, whether or not the phrase "with respect to interest arising under
any Loan Document" were included in this subclause (B), then such phrase shall
be deemed deleted from this subclause (B), as of the effective date of such
revision, and shall thereafter be of no further force and effect), (C) any other
United States federal taxes (other than any United States withholding tax
payable with respect to interest arising under any Loan Document)
(notwithstanding the foregoing, in the event that Section 1.6011-4T of the U.S.
Treasury Regulations is revised such that the Facility would not be a
"reportable transaction," as defined in such regulations, whether or not this
subclause (C) were included in this clause (a)(i), then subclause (C) shall be
deemed deleted from this clause (a)(i), as of the effective date of such
revision, and shall thereafter be of no further force and effect), and (D) all
liabilities, penalties and interest with respect to any of the foregoing, and
(ii) in the case of each Lender and each Issuer, taxes measured by its capital,
net income, franchise and similar taxes imposed on it, by the jurisdiction in
which such Lender's or Issuer's Applicable Lending Office is located or carries
on business (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). Except
as otherwise
54
provided in this Section 2.16, if any Taxes shall be required by law to be
deducted from or in respect of any sum payable under any Loan Document to any
Lender, any Issuer or the Administrative Agent (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.16) such Lender, such Issuer or the Administrative 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 applicable Loan Party shall make such deductions,
(iii) the Loan Parties shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law, and (iv) the
Loan Parties shall deliver to the Administrative Agent evidence of such payment.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies imposed by any state, county, city or other political subdivision
within the United States (but not United States federal taxes, payment with
respect to which shall be governed by clause (a) above) or by any applicable
foreign jurisdiction, and all liabilities with respect thereto, which arise from
any payment made under any Loan Document or from the execution, delivery or
registration of, or otherwise with respect to, any Loan Document (collectively,
"Other Taxes").
(c) The Borrower will indemnify each Lender, each Issuer and the
Administrative Agent for the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.16) paid by such Lender, such Issuer or the Administrative Agent (as
the case may be) and any liability (including for penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date such Lender, such Issuer or the Administrative
Agent (as the case may be) makes written demand therefor setting forth in
reasonable detail the basis and calculations of such amounts.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Borrower will furnish to the Administrative Agent, at its address
referred to in Section 11.8, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under the Guaranty, the agreements and obligations of
the Loan Parties contained in this Section 2.16 shall survive the payment in
full of the Secured Obligations.
(f) Prior to the Closing Date in the case of each Non-U.S. Lender that
is a signatory hereto, and on the date of the Assignment and Acceptance pursuant
to which it becomes a Lender or on the date a successor Issuer becomes an Issuer
in the case of each other Non-U.S. Lender, and on the date it becomes a
successor Agent, in the case of a Non-U.S. Agent, and from time to time
thereafter if requested by the Borrower or the Administrative Agent, each
Non-U.S. Lender and each Non-U.S. Agent that is entitled at such time to an
exemption from United States withholding tax, or that is subject to such tax at
a reduced rate under an applicable tax treaty, shall provide the Administrative
Agent and the Borrower with two original completed copies of: (i) Form W-8ECI
(claiming exemption from withholding tax because the income is effectively
connected with a U.S. trade or business) (or any successor form); (ii) Form
W-8BEN (claiming exemption from, or a reduction of, withholding tax under an
income tax treaty) (or any successor form); (iii) in the case of a Non-U.S.
Lender claiming exemption under Sections 871(h) or 881(c) of the Code, a Form
W-8BEN (claiming exemption from withholding tax under the portfolio interest
exemption) (or any successor form); or (iv) other applicable form, certificate
or document prescribed by the IRS certifying as to such Non-U.S. Agent's, such
Non-U.S. Lender's or such Non-U.S. Lender's Applicable Lending Office's
entitlement to such exemption from United States withholding tax or reduced rate
with respect to all
55
payments to be made to such Non-U.S. Lender or Non-U.S. Agent under the Loan
Documents. Each U.S. Lender (other than a U.S. Lender that is treated as an
exempt recipient based on the indicators described in Treasury Regulation
Section 1.6049-4(c)(1)(ii)) shall deliver at the time(s) and in the manner(s)
described above with respect to the other Internal Revenue Service forms, to the
Borrower and the Administrative Agent (as applicable), a properly completed and
duly executed IRS Form W-9 or any successor form, certifying that such person is
exempt from United States backup withholding tax on payments made hereunder
under the Loan Documents. Unless the Borrower and the Administrative Agent have
received forms, documents or other evidence satisfactory to them indicating that
payments under any Loan Document to or for an Issuer, an Agent or a Lender (as
the case may be) are not subject to United States withholding tax or are subject
to such tax at a rate reduced by an applicable tax treaty, the Borrower or the
Administrative Agent shall withhold taxes from such payments at the applicable
statutory rate.
(g) For any period with respect to which an Agent, Lender or Issuer
has failed to provide the Borrower with the appropriate forms required under
Section 2.16(f) such Agent, such Lender or such Issuer shall not be entitled to
indemnification or increased amounts under Section 2.16(a) or (c) with respect
to Taxes imposed by the United States by reason of such failure.
(h) Any Lender or Issuer claiming any additional amounts payable
pursuant to this Section 2.16 shall use its reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
which would be payable or may thereafter accrue and would not, in the sole
determination of such Lender or Issuer, be otherwise disadvantageous to such
Lender or Issuer.
(i) If any Lender or any Issuer changes its residence, place of
business or Applicable Lending Office or takes any other similar action, and the
effect of such change or action, as of the date thereof, would be to increase
the additional amounts that the Loan Parties are obligated to pay under this
Section 2.16, the Loan Parties shall not be obligated to pay the amount of such
increase.
(j) If any Agent or Lender determines in its sole discretion that it
has actually received any refund of tax in connection with any deduction or
withholding or payment of any additional amount by the Loan Parties pursuant to
this Section 2.16, such Person shall reimburse the Borrower in an amount equal
to such refund, after tax, and net of all expenses incurred by the such Person
in connection with such refund. The Borrower shall return such amount to the
applicable Person in the event that such Person is required to repay such refund
of tax. Nothing contained in this paragraph shall interfere with the right of
each of the Agents and the Lenders to arrange its tax affairs in whatever manner
it thinks fit, nor to disclose any information or any computations relating to
its tax affairs or to do anything that would prejudice its ability to benefit
from other credits, relief, remissions or repayments to which it may be
entitled.
Section 2.17 Substitution of Lenders. In the event that (a) (i) any
Lender makes a claim under Section 2.14(c) or Section 2.15, or (ii) it becomes
illegal for any Lender to continue to fund or make any Eurodollar Rate Loan and
such Lender notifies the Borrower pursuant to Section 2.14(d), or (iii) the
Borrower is required to make any payment pursuant to Section 2.16 that is
attributable to any Lender, or (iv) any Lender is a Non-Funding Lender, (b) in
the case of clause (a)(i) above, as a consequence of increased costs in respect
of which such claim is made, the effective rate of interest payable to such
Lender under this Agreement with respect to its Loans materially exceeds the
effective average annual rate of interest payable to the Requisite Lenders under
this Agreement and (c) Lenders holding at least 75% of the Commitments are not
subject to such increased costs or illegality, payment or proceedings (any such
Lender, an "Affected Lender"), the Borrower may
56
substitute another financial institution for such Affected Lender hereunder,
upon reasonable prior written notice (which written notice must be given within
90 days following the occurrence of any of the events described in clauses
(a)(i), (ii), (iii) or (iv) by the Borrower to the Administrative Agent and the
Affected Lender that the Borrower intends to make such substitution, which
substitute financial institution must be an Eligible Assignee and, if not a
Lender, reasonably acceptable to the Administrative Agent; provided, however,
that if more than one Lender claims increased costs, illegality or right to
payment arising from the same act or condition and such claims are received by
the Borrower within 30 days of each other then the Borrower may substitute all,
but not (except to the extent the Borrower has already substituted one of such
Affected Lenders before the Borrower's receipt of the other Affected Lenders'
claims) less than all, Lenders making such claims. In the event that the
proposed substitute financial institution or other entity is reasonably
acceptable to the Administrative Agent and the written notice was properly
issued under this Section 2.17, the Affected Lender shall sell and the
substitute financial institution or other entity shall purchase, pursuant to an
Assignment and Acceptance, all rights and claims of such Affected Lender under
the Loan Documents and the substitute financial institution or other entity
shall assume and the Affected Lender shall be relieved of its Commitments and
all other prior unperformed obligations of the Affected Lender under the Loan
Documents (other than in respect of any damages (other than exemplary or
punitive damages, to the extent permitted by applicable law) in respect of any
such unperformed obligations) and such sale and purchase shall be recorded in
the Register maintained by the Administrative Agent. Upon the effectiveness of
such sale, purchase and assumption (which, in any event shall be conditioned
upon the payment in full by the Borrower to the Affected Lender in cash of all
fees, unreimbursed costs and expenses and indemnities accrued and unpaid through
such effective date), the substitute financial institution or other entity shall
become a "Lender" hereunder for all purposes of this Agreement having a
Commitment in the amount of such Affected Lender's Commitment assumed by it and
such Commitments of the Affected Lender shall be terminated, provided that all
indemnities under the Loan Documents shall continue in favor of such Affected
Lender.
Section 2.18 Facility Increase.
(a) The Borrower may (no more frequently than once during the term of
the Facility) request the Lenders or other Eligible Assignees to provide
additional Commitments up to an aggregate amount not in excess of $50,000,000 (a
"Facility Increase"); provided, however, that (i) the Borrower shall have given
the Administrative Agent at least 60 days notice of its intention to effect the
Facility Increase and the desired amount of such Facility Increase, (ii) the
conditions precedent to a Borrowing set forth in Section 3.2 are satisfied as of
the Facility Increase Effective Date (as defined below), (iii) an opinion of
counsel to the Loan Parties in form and substance and from counsel satisfactory
to the Administrative Agent and addressed to the Administrative Agent, the
Issuers and the Lenders dated the Facility Increase Effective Date and
addressing such matters as the Administrative Agent may reasonably request shall
be delivered to the Administrative Agent and (iv) the Borrower shall have paid
to the Agents a fee to be determined (but in any event reasonably acceptable to
Group) and to the Lenders providing the Facility Increase fees required in order
to clear the market in an amount to be determined.
(b) The Borrower shall have the right to offer such increase to (x)
the Lenders, and each Lender will have the right, but not the obligation, to
commit to all or a portion of the proposed Facility Increase or (y) any
institution that would be an Eligible Assignee; provided, however, that the
minimum additional Commitment of each Eligible Assignee equals or exceeds
$5,000,000 and such Lender or Eligible Assignee executes an Assumption Agreement
pursuant to which such Lender or Eligible Assignee agrees to commit to all or a
portion of such Facility Increase and, in the case of an Eligible Assignee, to
be bound by the terms of this Agreement as a Lender.
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(c) On the effective date provided for in the Assumption Agreements
providing for a Facility Increase (each a "Facility Increase Effective Date"),
the Commitments will be increased by the additional amount committed to by each
Lender or Eligible Assignee on the Facility Increase Date.
(d) In the event there are Lenders and Eligible Assignees that have
committed to a Facility Increase in excess of the maximum amount requested (or
permitted), then the Agents (with the consent of the Borrower which shall not be
unreasonably withheld) shall have the right to allocate such commitments, first
to Lenders and then to Eligible Assignees.
ARTICLE III
CONDITIONS TO LOANS AND LETTERS OF CREDIT
Section 3.1 Conditions Precedent to Initial Loans and Letters of
Credit. The obligation of each Lender to make the initial Loans requested to be
made by it on or after the Closing Date and the obligation of each Issuer to
Issue the initial Letters of Credit on or after the Closing Date is subject to
the satisfaction of all of the following conditions precedent:
(a) Certain Documents. The Administrative Agent shall have received on
the Closing Date each of the following, each dated the Closing Date unless
otherwise indicated or agreed to by the Administrative Agent, in form and
substance satisfactory to the Administrative Agent and each Lender and each of
their respective counsel, in sufficient copies for each Lender:
(i) this Agreement, duly executed and delivered by the Borrower
and Group;
(ii) for the account of each Lender requesting the same, a Note
of the Borrower conforming to the requirements set forth herein;
(iii) the Guaranty, duly executed by each Guarantor;
(iv) the Pledge and Security Agreement, duly executed by the
Borrower and each Guarantor, together with each of the following:
(A) evidence satisfactory to the Administrative Agent that,
upon the filing and recording of instruments delivered on the Closing
Date, the Administrative Agent (for the benefit of the Secured
Parties) shall have a valid and perfected first priority security
interest in the Collateral, including (x) such documents duly executed
by each Loan Party as the Administrative Agent may request with
respect to the perfection of its security interests in the Collateral
(including financing statements under the UCC, patent, trademark and
copyright security agreements suitable for filing with the Patent and
Trademark Office or the Copyright Office, as the case may be, and
other applicable documents under the laws of any jurisdiction with
respect to the perfection of Liens created by the Pledge and Security
Agreement) and (y) copies of UCC search reports as of a recent date
listing all effective financing statements that name any Loan Party as
debtor, together with copies of such financing statements, none of
which shall cover the Collateral, except for those that shall be
terminated on the Closing Date or are otherwise permitted hereunder;
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(B) all certificates, instruments and other documents
representing all Pledged Stock being pledged pursuant to such Pledge
and Security Agreement and stock powers for such certificates,
instruments and other documents executed in blank;
(C) all instruments representing Pledged Debt Instruments
being pledged pursuant to such Pledge and Security Agreement duly
endorsed in favor of the Administrative Agent or in blank;
(D) all Blocked Account Letters, duly executed by the
corresponding Blocked Account Bank and Loan Party, and all Restricted
Account Letters, duly executed by the corresponding Loan Party, in
each case that, in the reasonable judgment of the Administrative
Agent, shall be required for the Loan Parties to comply with Section
4.7 of the Pledge and Security Agreement; and
(E) Control Account Agreements duly executed by the
appropriate Loan Party and (1) all securities intermediaries with
respect to all Securities Accounts and securities entitlements of the
Borrower and each Guarantor and (2) all futures commission agents and
clearing houses with respect to all commodities contracts and
commodities accounts held by the Borrower and each Guarantor;
(v) Mortgages for all of the Material Owned Real Properties of
the Loan Parties identified on Schedule 4.19 (Real Property) (except as may
be agreed to by the Administrative Agent), together with all Mortgage
Supporting Documents relating thereto;
(vi) a Borrowing Base Certificate dated as of the Closing Date;
(vii) a favorable opinion of (A) Skadden, Arps, Slate, Xxxxxxx &
Xxxx, LLP, counsel to the Loan Parties, in substantially the form of
Exhibit G (Form of Opinion of Counsel for the Loan Parties), and addressing
such other related matters as any Lender through the Administrative Agent
may reasonably request and (B) counsel to the Administrative Agent as to
the enforceability of this Agreement and the other Loan Documents to be
executed on the Closing Date;
(viii) the Intercreditor Agreement duly executed by the Second
Lien Collateral Agent, the Second Lien Note Indenture Trustee, the
Administrative Agent and the Loan Parties;
(ix) a copy of the articles or certificate of incorporation (or
equivalent Constituent Document) of each Loan Party, certified as of a
recent date by the Secretary of State of the state of organization of such
Loan Party, together with certificates of such official attesting to the
good standing of each such Loan Party;
(x) a certificate of the Secretary or an Assistant Secretary of
each Loan Party certifying (A) the names and true signatures of each
officer of such Loan Party that has executed and delivered any Loan
Document or other document required hereunder to be executed and delivered
by or on behalf of such Loan Party, (B) the by-laws (or equivalent
Constituent Document) of such Loan Party as in effect on the date of such
certification, (C) the resolutions of such Loan Party's Board of Directors
(or equivalent governing body) approving and authorizing the execution,
delivery and performance of this Agreement and the
59
other Loan Documents to which it is a party and (D) that there have been no
changes in the certificate of incorporation (or equivalent Constituent
Document) of such Loan Party from the certificate of incorporation (or
equivalent Constituent Document) delivered pursuant to clause (ix) above;
(xi) a certificate of a Responsible Officer of Group, stating
that the Borrower is Solvent and that the Borrower and the Subsidiary
Guarantors (taken as a whole) are Solvent, in each case, after giving
effect to the initial Loans and Letters of Credit, the application of the
proceeds thereof in accordance with Section 7.9, the payment of all
estimated legal, accounting and other fees related hereto and thereto and
the consummation of the other transactions contemplated in the Plan of
Reorganization;
(xii) a certificate of a Responsible Officer of Group to the
effect that (A) the conditions set forth in Section 3.2 have been satisfied
and (B) no litigation shall have been commenced against any Loan Party or
any of its Subsidiaries that would have a Material Adverse Effect;
(xiii) a copy of the Disclosure Statement, certified by a
Responsible Officer of Group (A) to be a true, complete and correct copy of
such document, (B) to have been duly authorized by Group's Board of
Directors and to have been duly executed by Group and filed with the
Bankruptcy Court and (C) not to have been amended from the form so
certified, or rescinded;
(xiv) a copy of the Confirmation Order (including the Plan of
Reorganization attached to the Confirmation Order) approving and
authorizing the transactions contemplated by this Agreement, the other Loan
Documents, the Related Documents and the Plan of Reorganization and
otherwise not inconsistent with the provisions hereof and thereof,
certified by a Responsible Officer of Group (A) to be true, correct and
complete copies of such documents and (B) that no appeal or motion for
rehearing has been filed in connection with such Confirmation Order;
(xv) a copy of each Related Document as in effect as of the
Closing Date certified as being complete and correct by a Responsible
Officer of Group;
(xvi) evidence satisfactory to the Administrative Agent that the
insurance policies required by Section 7.5 and any Collateral Document are
in full force and effect, together with, unless otherwise agreed by the
Administrative Agent, endorsements naming the Administrative Agent, on
behalf of the Secured Parties, as an additional insured or loss payee under
all insurance policies to be maintained with respect to the properties of
each Loan Party; and
(xvii) such other certificates, documents, agreements and
information respecting any Loan Party as any Lender through the
Administrative Agent may reasonably request.
(b) Confirmation of Plan of Reorganization. (i) The Bankruptcy Court
shall have entered an order (the "Confirmation Order") confirming the Plan of
Reorganization and approving and authorizing the transactions contemplated
hereby; (ii) the terms and conditions of the Plan of Reorganization shall not
have been substantially modified without the approval of the Requisite Lenders
from the Plan of Reorganization attached as Exhibit A to the Disclosure
Statement; (iii) all conditions precedent to the effectiveness of the Plan of
Reorganization shall have been satisfied (or
60
waived with the prior written consent of the Agents) and the Effective Date
shall have occurred (other than the extension of credit under this Agreement);
(iv) unless otherwise agreed by the Agents in their sole discretion, ten days
shall have passed since the entry of the Confirmation Order and the Confirmation
Order shall have become a Final Order; (v) the Agents shall be satisfied that,
except as otherwise consented to by them, the Bankruptcy Court's retention of
jurisdiction under the Confirmation Order will not govern the enforcement of the
Loan Documents; and (vi) the transactions set forth in the Plan of
Reorganization shall have been consummated in accordance with all applicable
Requirements of Law and otherwise to the satisfaction of the Agents (including
the nomination of a board of directors and senior management of Group acceptable
to the Agents).
(c) Related Documents.
(i) The Agents shall be satisfied that the Related Documents: (A)
have been duly executed and delivered, (B) have been approved by all
corporate action of the Warnaco Entities and each of the other parties
thereto, and (C) are in full force and effect, and, that there shall not
have occurred and be continuing any material breach or default under any
Related Document;
(ii) The Lenders shall be satisfied with the terms and conditions
of the Second Lien Notes and other Related Documents and shall further be
satisfied that the terms of the Second Lien Notes and other Related
Documents have not been amended, waived or modified without the approval of
the Agents (other than non-material amendments, waivers and modifications
to such terms that do not, in the aggregate, adversely affect the interests
of the Administrative Agent and the Lenders); and
(iii) All conditions precedent to the effectiveness of the Second
Lien Note Indenture shall have been satisfied or waived.
(d) Existing Indebtedness. The Agents shall be satisfied in their
reasonable judgment that (i) all Indebtedness and related obligations (including
all accrued and unpaid interest thereon) of each Foreign Subsidiary and all
Liens granted by such Foreign Subsidiary in connection with any such
Indebtedness shall have been repaid in full except as set forth on Schedules 8.1
and 8.2, (ii) there shall not occur as a result of the consummation of the Plan
of Reorganization and the funding of the Facility, a default (or any event which
with the giving of notice or lapse of time or both would be a default) under any
Warnaco Entity's debt instruments or other material agreements, (iii) all
obligations under the DIP Credit Agreement shall have been repaid in full,
except those letters of credit set forth on Schedule 2.4 (Existing Letters of
Credit) and (iv) the DIP Credit Agreement, all Loan Documents (as defined
therein) and all Liens (as defined therein) shall have been terminated on terms
satisfactory to the Administrative Agent.
(e) Cash Management. The Administrative Agent shall have received
evidence that, as of the Closing Date, the procedures with respect to cash
management required by the Collateral Documents have been established and are
currently being maintained by each Loan Party, together with copies of all
executed lockbox agreements, Blocked Account Letters, and Restricted Account
Letters executed by such Loan Party in connection therewith.
(f) Field Examination; Initial Appraisals. The Agents shall be
satisfied with the results of a field examination of the Loan Parties conducted
by CNAI's internal auditors no more than 60 days prior to the Closing Date and
shall have received appraisals (the "Initial Appraisals") of all Inventory and
Accounts of the Loan Parties, each in form and substance satisfactory to the
Agents.
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(g) Financial Statements. The Lenders shall have received and be
satisfied with (i) a pro forma estimated balance sheet of Group and its
Subsidiaries at the Closing Date giving effect to the Plan of Reorganization and
the transactions contemplated thereby, (ii) unaudited consolidating (by business
unit) income statement and balance sheet and audited consolidated financial
statements of Group and its Subsidiaries for the fiscal period ending January 5,
2002, and (iii) Group's projections which shall include a financial forecast on
a monthly basis for the first twelve months after the Closing Date and on an
quarterly basis thereafter through the year of the Termination Date prepared by
Group's management.
(h) Availability. As of the Closing Date, Available Credit shall be
not less than $75,000,000 (after giving effect to the Borrowings and issuances
of Letters of Credit requested to be made on the Closing Date).
(i) Consents, Etc. Each Warnaco Entity shall have received all
consents and authorizations required pursuant to any material Contractual
Obligation with any other Person and shall have obtained all Permits of, and
effected all notices to and filings with, any Governmental Authority, in each
case, as may be necessary to allow each of the Warnaco Entities lawfully (i) to
execute, deliver and perform, in all material respects, their respective
obligations hereunder and under the Loan Documents, the Plan of Reorganization
and the Related Documents to which each of them, respectively, is, or shall be,
a party and each other agreement or instrument to be executed and delivered by
each of them, respectively, pursuant thereto or in connection therewith, and
(ii) to create and perfect the Liens on the Collateral to be owned by each of
them in the manner and for the purpose contemplated by the Loan Documents or the
transactions contemplated thereby or by the Plan of Reorganization.
(j) Fees and Expenses Paid. There shall have been paid to the
Administrative Agent, for the account of the Administrative Agent, the
Arrangers, and the Lenders, as applicable, all fees and expenses (including
reasonable fees and expenses of counsel) due and payable on or before the
Closing Date (including all such fees described in the Fee Letter).
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit.
The obligation of each Lender on any date (including the Closing Date) to make
any Loan and of each Issuer on any date (including the Closing Date) to Issue
any Letter of Credit is subject to the satisfaction of all of the following
conditions precedent:
(a) Request for Borrowing or Issuance of Letter of Credit. With
respect to any Loan, the Administrative Agent shall have received a duly
executed Notice of Borrowing, or in the case of Swing Loans, a duly executed
Swing Loan Request, and with respect to any Letter of Credit, the Administrative
Agent and the Issuer shall have received a duly executed Letter of Credit
Request, dated on or before such date.
(b) Representations and Warranties; No Defaults. The following
statements shall be true on the date of such Loan or issuance of such Letter of
Credit, both before and after giving effect thereto and, in the case of any
Loan, to the application of the proceeds therefrom:
(i) The representations and warranties set forth in Article IV
and in the other Loan Documents shall be true and correct on and as of the
Closing Date and shall be true and correct in all material respects on and
as of any such date after the Closing Date with the same effect as though
made on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all
material respects as of such earlier date; and
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(ii) no Default or Event of Default has occurred and is
continuing.
(c) Borrowing Base. The Borrower shall have delivered the Borrowing
Base Certificate required to be delivered by Section 6.12. After giving effect
to the Loans or the Letters of Credit requested to be made or Issued on any such
date and the use of proceeds thereof, the Outstandings shall not exceed the
Maximum Credit at such time.
(d) No Legal Impediments. The making of the Loans or the issuance of
such Letter of Credit on such date does not violate any Requirement of Law on
the date of or immediately following such Loan or issuance of such Letter of
Credit and is not enjoined, temporarily, preliminarily or permanently.
(e) Additional Matters. The Administrative Agent shall have received
such additional documents, information and materials as any Lender, through the
Administrative Agent, may reasonably request in order to confirm the (i)
accuracy of the representations and warranties of the Loan Parties in the Loan
Documents, (ii) timely compliance by the Loan Parties with the terms, covenants
and agreements set forth in the Loan Documents, and (iii) absence of any Default
under the Loan Documents.
Each submission by the Borrower to the Administrative Agent of a Notice of
Borrowing or a Swing Loan Request and the acceptance by the Borrower of the
proceeds of each Loan requested therein, and each submission by the Borrower to
an Issuer of a Letter of Credit Request and the issuance of each Letter of
Credit requested therein, shall be deemed to constitute a representation and
warranty by the Borrower as to the matters specified in Section 3.2(b) on the
date of the making of such Loan or the issuance of such Letter of Credit.
Section 3.3 Determinations of Initial Borrowing Conditions. For
purposes of determining compliance with the conditions specified in Section 3.1,
each Lender shall be deemed to have consented to, approved, accepted or be
satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders unless
an officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
prior to the initial Borrowing, borrowing of Swing Loans or Issuance or deemed
Issuance hereunder specifying its objection thereto and such Lender shall not
have made available to the Administrative Agent such Lender's Ratable Portion of
such Borrowing or Swing Loans.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers and the Administrative Agent to
enter into this Agreement, Group represents and warrants as to each Warnaco
Entity, and the Borrower represents and warrants as to itself and as to each of
its Subsidiaries, to the Lenders, the Issuers and the Administrative Agent that,
on and as of the Closing Date, after giving effect to the making of the Loans
and other financial accommodations on the Closing Date and on and as of each
date as required by Section 3.2(b)(i):
Section 4.1 Corporate Existence; Compliance with Law. Each Warnaco
Entity (a) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization; (b) is duly qualified as a foreign
entity and in good standing under the laws of each jurisdiction where such
qualification is necessary, except where the failure to be so qualified or in
63
good standing would not, in the aggregate, have a Material Adverse Effect; (c)
has all requisite power and authority and the legal right to own, pledge,
mortgage and operate its properties, to lease the property it operates under
lease and to conduct its business as now or currently proposed to be conducted;
(d) is in compliance with its Constituent Documents; (e) is in compliance with
all applicable Requirements of Law, except where the failure to be in compliance
would not in the aggregate, have a Material Adverse Effect; and (f) has all
necessary licenses, permits, consents or approvals from or by, has made all
necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for licenses, permits, consents,
approvals or filings which can be obtained or made by the taking of ministerial
action to secure the grant or transfer thereof or the failure to obtain or make
would not, in the aggregate, have a Material Adverse Effect.
Section 4.2 Corporate Power; Authorization; Enforceable Obligations.
(a) The execution, delivery and performance by each Warnaco Entity of
the Loan Documents and Related Documents to which it is a party and the
consummation of the transactions contemplated thereby, including the obtaining
of the Loans and the creation and perfection of the Liens on the Collateral as
security therefor:
(i) are within such Warnaco Entity's corporate, limited liability
company, partnership or other powers;
(ii) have been or, at the time of delivery thereof pursuant to
Article III will have been, duly authorized by all necessary corporate
action, including the consent of shareholders, partners and members where
required;
(iii) do not and will not (A) contravene such Warnaco Entity's or
its Subsidiaries respective Constituent Documents, (B) violate any other
Requirement of Law applicable to such Warnaco Entity (including Regulations
T, U and X of the Federal Reserve Board), or any order or decree of any
Governmental Authority or arbitrator applicable to such Warnaco Entity, (C)
conflict with or result in the breach of, or constitute a default under, or
result in or permit the termination or acceleration of, any Contractual
Obligation of such Warnaco Entity or any of its Subsidiaries, or (D) result
in the creation or imposition of any Lien upon any of the property of such
Warnaco Entity or any of its Subsidiaries, other than those in favor of the
Secured Parties and the Second Lien Noteholders pursuant to the Loan
Documents and the Second Lien Documents, respectively; and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental Authority
or any other Person, other than those listed on Schedule 4.2 (Consents) and
which have been or will be, prior to the Closing Date, obtained or made
(without the imposition of any conditions that are not reasonably
acceptable to the Agents), copies of which have been or will be delivered
to the Administrative Agent pursuant to Section 3.1, and each of which on
the Closing Date will be in full force and effect and, with respect to the
Collateral, filings required to perfect the Liens created by the Collateral
Documents.
(b) This Agreement has been, and each of the other Loan Documents and
Related Documents will have been upon delivery thereof hereunder, duly executed
and delivered by each Warnaco Entity party thereto.
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(c) This Agreement is, and the other Loan Documents and Related
Documents will be, when delivered hereunder, the legal, valid and binding
obligation of each Warnaco Entity party thereto, enforceable against such
Warnaco Entity in accordance with its terms.
Section 4.3 Ownership of Group, Borrower; Subsidiaries.
(a) As of the Effective Date, to the best knowledge of Group, Schedule
4.3 (Ownership of Warnaco Entities) sets forth all Persons owning 5% or more of
the outstanding capital stock of Group.
(b) The authorized capital stock of the Borrower consists of 100,000
shares of common stock, $1.00 par value per share, of which 100,000 shares are
issued and outstanding. All of the outstanding capital stock of the Borrower has
been validly issued, is fully paid and non-assessable and is owned beneficially
and of record by Group, free and clear of all Liens other than the Lien in favor
of the Secured Parties created under the Loan Documents and the Second Lien Note
Documents. No Stock of the Borrower is subject to any option, warrant, right of
conversion or purchase or any similar right. There are no agreements or
understandings to which the Borrower is a party with respect to the voting, sale
or transfer of any shares of Stock of the Borrower or any agreement restricting
the transfer or hypothecation of any such shares.
(c) Set forth on Schedule 4.3 (Ownership of Warnaco Entities) 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 Stock or Stock
Equivalents authorized, and the number outstanding, on the date hereof and the
percentage of each such class of its Stock or Stock Equivalents 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. All of the outstanding Stock or Stock Equivalents in
each Subsidiary of Group has been validly issued, is fully paid and
non-assessable and is owned by a Warnaco Entity (except as described on Schedule
4.3 (Ownership of Warnaco Entities)) free and clear of all Liens, except those
created under the Loan Documents and the Second Lien Note Documents. No Stock of
any Warnaco Entity is subject to any outstanding option, warrant, right of
conversion or purchase or any similar right. No Warnaco Entity is a party to, or
has knowledge of, any agreement restricting the transfer or hypothecation of any
Stock of any such Subsidiary, other than the Loan Documents and the Second Lien
Note Documents. Group does not own or hold, directly or indirectly, any Stock of
any Person other than the Subsidiaries set forth on Schedule 4.3 (Ownership of
Warnaco Entities) and the Investments permitted by Section 8.3.
Section 4.4 Financial Statements.
(a) The consolidated balance sheet of Group and its Subsidiaries as at
January 5, 2002, and the related consolidated statements of income, retained
earnings and cash flows of Group and its Subsidiaries for the fiscal year then
ended, certified by Deloitte & Touche LLP, and the unaudited consolidating
balance sheets of Group and its Subsidiaries as at January 5, 2002 and October
5, 2002, and the related consolidated statements of income, retained earnings
and cash flows of Group and its Subsidiaries for the Fiscal Year or Fiscal
Quarter then ended, copies of which have been furnished to each Lender, fairly
present, subject, in the case of said consolidating balance sheets as at January
5, 2002 and said consolidated balance sheets as at October 5, 2002, and said
consolidating or consolidated statements of income, retained earnings and cash
flows for the Fiscal Year or Fiscal Quarter then ended, to the absence of
footnote disclosure and normal recurring year-end audit adjustments, the
consolidated and consolidating, as the case may be, financial condition of Group
and its Subsidiaries as at such dates and the consolidated and consolidating, as
the case may be,
65
results of the operations of Group and its Subsidiaries for the period ended on
such dates, all in conformity with GAAP.
(b) Neither Group nor any of its Subsidiaries has any material
obligation, contingent liability or liability for taxes, long-term leases or
unusual forward or long-term commitment which is not reflected in the Financial
Statements referred to in clause(a) above, in the notes thereto or in the
Disclosure Statement or permitted by this Agreement.
(c) The Projections have been prepared by Group in light of the past
operations of its business, and reflect projections for the fiscal periods
covered thereby. The Projections are based upon estimates and assumptions stated
therein, all of which Group believes to be reasonable and fair in light of
current conditions and current facts known to Group and, as of the Closing Date,
reflect Group's good faith and reasonable estimates of the future financial
performance of Group and its Subsidiaries and of the other information projected
therein for the periods set forth therein.
(d) The unaudited consolidated and consolidating balance sheet of
Group and its Subsidiaries, a copy of which has been delivered to each Lender
pursuant to Section 3.1(g), has been prepared as at the Effective Date, reflects
as of such date, on a Pro Forma Basis, the consolidated and consolidating
financial condition of Group and its Subsidiaries, and the assumptions expressed
therein were reasonable based on the information available to Group at the time
so furnished and on the Closing Date.
Section 4.5 Material Adverse Change. Since January 5, 2002, there has
been no Material Adverse Change and there have been no events or developments
that in the aggregate have had a Material Adverse Effect.
Section 4.6 Solvency.
Both before and after giving effect to (a) the Loans and Letter of
Credit Obligations to be made or extended on the Closing Date or such other date
as Loans and Letter of Credit Obligations requested hereunder are made or
extended, (b) the disbursement of the proceeds of such Loans pursuant to the
instructions of the Borrower, (c) the consummation of the other transactions
contemplated by the Plan of Reorganization and (d) the payment and accrual of
all transaction costs in connection with the foregoing, the Borrower is Solvent
and the Borrower and the Subsidiary Guarantors, taken as a whole, are Solvent.
Section 4.7 Litigation. There are no pending or, to the knowledge of
Group or the Borrower, threatened actions, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator or
Governmental Authority that in the aggregate could not reasonably be expected to
have a Material Adverse Effect. The performance of any action by any Loan Party
required or contemplated by any of the Loan Documents, Related Documents or
otherwise by the Plan of Reorganization is not and could not reasonably be
expected to be restrained or enjoined (either temporarily, preliminarily or
permanently).
Section 4.8 Taxes.
(a) All federal, and material state, local and foreign income,
franchise and other tax returns, reports and statements (collectively, the "Tax
Returns") required to be filed by Group or any of its Tax Affiliates have been
filed with the appropriate Governmental Authorities in all jurisdictions in
which such Tax Returns are required to be filed, all such Tax Returns are true
and correct in all material respects, and all taxes, charges and other
impositions reflected therein or which
66
are material and otherwise due and payable have been paid prior to the date on
which any fine, penalty, interest, late charge or loss may be added thereto for
non-payment thereof except where contested in good faith and by appropriate
proceedings if adequate reserves therefor have been established on the books of
Group or such Tax Affiliate in conformity with GAAP. Proper and accurate amounts
have been withheld by Group and each of its Tax Affiliates from their respective
employees for all periods in full and complete compliance with the tax, social
security and unemployment withholding provisions of applicable Requirements of
Law and such withholdings have been timely paid to the respective Governmental
Authorities.
(b) None of Group or any of its Tax Affiliates has (i) executed or
filed with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect of extending, the period for the filing
of any material Tax Return or the assessment or collection of any material taxes
or other charges relating thereto; (ii) any obligation under any tax sharing
agreement or arrangement other than that to which the Administrative Agent has a
copy prior to the date hereof; or (iii) been a member of an affiliated, combined
or unitary group other than the group of which Group (or its Tax Affiliate) is
the common parent other than, prior to the acquisition by Group thereof,
Authentic Fitness Corporation and its Subsidiaries and Designer Holdings Limited
and its Subsidiaries.
(c) 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".
Section 4.9 Full Disclosure. The written information prepared or
furnished by or on behalf of any Warnaco Entity in connection with this
Agreement, the consummation of the financing, the Disclosure Statement, any
Related Document or otherwise in connection with the Plan of Reorganization,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained therein
or herein not misleading. All facts known to Group or the Borrower which are
material to an understanding of the financial condition, business, properties or
prospects of Group and its Subsidiaries taken as one enterprise have been
disclosed to the Lenders.
Section 4.10 Margin Regulations. No Warnaco Entity is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U of the Federal Reserve Board), and no
proceeds of any Borrowing will be used to purchase or carry any margin stock or
to extend credit to others for the purpose of purchasing or carrying any margin
stock in contravention of Regulation T, U or X of the Federal Reserve Board.
Section 4.11 No Burdensome Restrictions; No Defaults.
(a) No Warnaco Entity (i) is a party to any Contractual Obligation the
compliance with which would have a Material Adverse Effect or the performance of
which by any thereof, either unconditionally or upon the happening of an event,
would result in the creation of a Lien (other than a Lien permitted under
Section 8.2) on the property or assets of any thereof or (ii) is subject to any
charter or corporate restriction that would have a Material Adverse Effect.
(b) No Warnaco Entity is in default under or with respect to any
Contractual Obligation owed by it and, to the knowledge of Group and the
Borrower, no other party is in default under or with respect to any Contractual
Obligation owed to any Warnaco Entity, other than, in either case, those
defaults which in the aggregate would not have a Material Adverse Effect.
67
(c) No Default or Event of Default has occurred and is continuing.
(d) To the best knowledge of Group and the Borrower, there is no
Requirement of Law applicable to any Warnaco Entity the compliance with which by
such Warnaco Entity would have a Material Adverse Effect.
Section 4.12 Investment Company Act; Public Utility Holding Company
Act. No Warnaco Entity is (a) 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 or (b)
a "holding company," or an "affiliate" or a "holding company" or a "subsidiary
company" of a "holding company," as each such term is defined and used in the
Public Utility Holding Company Act of 1935, as amended.
Section 4.13 Use of Proceeds. The proceeds of the Loans and the
Letters of Credit are being used by the Borrower (and, to the extent distributed
by the Borrower, each other Warnaco Entity) solely as follows: (a) to fund costs
and expenses of the consummation of the Plan of Reorganization, (b) to provide
working capital from time to time for the Warnaco Entities and (c) for other
general and corporate purposes of the Warnaco Entities.
Section 4.14 Insurance. All policies of insurance of any kind or
nature of any Warnaco Entity, including policies of life, fire, theft, product
liability, public liability, property damage, other casualty, employee fidelity,
workers' compensation and employee health and welfare insurance, are in full
force and effect and are of a nature and provide such coverage as is sufficient
and as is customarily carried by businesses of the size and character of such
Person. No Warnaco Entity has been refused insurance for any material coverage
which it had applied or, prior to the date hereof, had any policy of insurance
terminated (other than at its request). Each insurance policy maintained by each
Loan Party includes endorsements naming the Administrative Agent, on behalf of
the Secured Parties, as an additional insured or loss payee thereunder.
Section 4.15 Labor Matters.
(a) There are no strikes, work stoppages, slowdowns or lockouts
pending or threatened against or involving any Warnaco Entity, other than those
which in the aggregate would not have a Material Adverse Effect.
(b) There are no unfair labor practices, grievances or complaints
pending, or, to Group's knowledge, threatened against or involving any Warnaco
Entity, nor are there any arbitrations or grievances threatened involving any
Warnaco Entity, other than those which, in the aggregate, if resolved adversely
to such Warnaco Entity, would not have a Material Adverse Effect.
(c) Except as set forth on Schedule 4.15 (Labor Matters), as of the
Closing Date, there is no collective bargaining agreement covering any employee
of any Warnaco Entity.
(d) Schedule 4.15 (Labor Matters) sets forth, as of the Closing Date,
all material consulting agreements, executive employment agreements, executive
compensation plans, deferred compensation agreements, employee stock purchase
and stock option plans and severance plans of any Warnaco Entity.
Section 4.16 ERISA.
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(a) Schedule 4.16 (ERISA Matters) separately identifies as of the date
hereof all Title IV Plans, all Multiemployer Plans and all of the employee
benefit plans within the meaning of Section 3(3) of ERISA to which any Warnaco
Entity has any obligation or liability, contingent or otherwise.
(b) Each employee benefit plan of each Warnaco Entity which is
intended to qualify under Section 401 of the Code does so qualify, and any trust
created thereunder is exempt from tax under the provisions of Section 501 of the
Code, except where such failures in the aggregate would not have a Material
Adverse Effect.
(c) Each Title IV Plan is in compliance in all material respects with
applicable provisions of ERISA, the Code and other Requirements of Law except
for non-compliances that in the aggregate would not have a Material Adverse
Effect.
(d) There has been no, nor is there reasonably expected to occur, any
ERISA Event which would have a Material Adverse Effect
(e) Other than as set forth on Schedule 4.16 (ERISA Matters), there
are no Unfunded Pension Liabilities.
(f) Other than as set forth on Schedule 4.16 (ERISA Matters), no
Warnaco Entity or any ERISA Affiliate thereof would have any Withdrawal
Liability as a result of a complete withdrawal as of the date hereof from any
Multiemployer Plan.
Section 4.17 Environmental Matters.
(a) The operations and properties of each Warnaco Entity comply,
except to the extent non-compliance would not have a Material Adverse Effect,
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 Warnaco Entity 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.
(b) None of the properties currently or formerly owned or operated by
any Warnaco Entity is, to the knowledge of Group or the Borrower 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 Contaminants are being or have been treated, stored or
disposed on any property currently owned or operated by any Warnaco Entity or,
to the best of its knowledge, on any property formerly owned or operated by any
Warnaco Entity 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 Warnaco Entity that in any case
could reasonably be expected to have a Material Adverse Effect; and Contaminants
have not been released, discharged or disposed of on any property currently or,
to the best knowledge of Group and the Borrower, formerly owned or operated by
any Warnaco Entity that in any case could reasonably be expected to have a
Material Adverse Effect.
69
(c) No Warnaco Entity 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 Contaminants 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 Contaminants generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or operated by
any Warnaco Entity have been disposed of in a manner not reasonably expected to
result in material liability to any Warnaco Entity.
Section 4.18 Intellectual Property; Material License.
(a) The Warnaco Entities own or license or otherwise have the right to
use all Intellectual Property and other intellectual property rights that are
necessary for the operations of their respective businesses, without, to the
best of Group's knowledge, infringing upon or conflict with the rights of any
other Person with respect thereto, including all trade names associated with any
private label brands of any Warnaco Entity. To Group's knowledge, no
Intellectual Property now employed by any Warnaco Entity infringes upon or
conflicts with any rights owned by any other Person, and no claims or litigation
regarding any of the foregoing are pending or threatened, where such
infringements, conflicts, claims or litigation would have, in the aggregate, a
Material Adverse Effect.
(b) Each Material License in effect as of December 17, 2002 is in full
force and effect as of the Closing Date.
Section 4.19 Title; Real Property.
(a) Each Warnaco Entity has good and marketable title to all Material
Owned Real Property and good title to all personal property purported to be
owned by it, including those reflected on the most recent Financial Statements
delivered by Group, and none of such properties and assets is subject to any
Lien, except Liens permitted under Section 8.2. Each Warnaco Entity has received
all deeds, assignments, waivers, consents, non-disturbance and recognition or
similar agreements, bills of sale and other documents, and have duly effected
all recordings, filings and other actions necessary to establish, protect and
perfect such Warnaco Entity's right, title and interest in and to all such
Material Owned Real Property.
(b) Set forth on Schedule 4.19 (Real Property) hereto is a complete
and accurate list of all Material Owned Real Property and all Material Leased
Property, showing as of the Closing Date, the street address, county or other
relevant jurisdiction, state, and record owner.
(c) As of the Closing Date, no portion of any Material Owned Real
Property or any Material Leased Property has suffered any material damage by
fire or other casualty loss which has not heretofore been completely repaired
and restored to its original condition. No portion of any Real Property owned or
leased by any Warnaco Entity is located in a special flood hazard area as
designated by any federal Governmental Authority (unless flood insurance has
been obtained).
(d) All Permits required to have been issued or appropriate to enable
all real property owned or leased by any Warnaco Entity to be lawfully occupied
and used for all of the purposes for which they are currently occupied and used
have been lawfully issued and are in full force and effect, other than those
which, in the aggregate, would not have a Material Adverse Effect.
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(e) No Warnaco Entity has received any notice, or has any knowledge,
of any pending, threatened or contemplated condemnation proceeding affecting any
Real Property owned or leased by any Warnaco Entity or any part thereof, except
those which, in the aggregate, would not have a Material Adverse Effect.
Section 4.20 Related Documents. None of the Related Documents has been
amended or modified in any respect and no provision therein has been waived,
except in each case to the extent permitted by Section 8.12 or Section 8.13, and
each of the representations and warranties therein are true and correct in all
material respects and no default or event that, with the giving of notice or
lapse of time or both, would be a default thereunder.
Section 4.21 Confirmation Order. The Confirmation Order and the
transactions contemplated hereby and thereby, are in full force and effect and
has not been vacated, reversed, modified, amended or stayed without the prior
written consent of the Administrative Agent and the Requisite Lenders.
ARTICLE V
FINANCIAL COVENANTS
As long as any of the Obligations or the Commitments remain
outstanding, unless the Requisite Lenders otherwise consent in writing, Group
and the Borrower agree with the Lenders and the Administrative Agent that:
Section 5.1 Maximum Leverage Ratio
Group shall maintain a Leverage Ratio, as determined as of the last
day of each Fiscal Quarter set forth below, of not more than the maximum ratio
set forth below opposite such Fiscal Quarter:
--------------------------------------------------------
FISCAL QUARTER ENDING ON MAXIMUM LEVERAGE
OR ABOUT RATIO
--------------------------------------------------------
June 30, 2003 2.75 to 1
--------------------------------------------------------
September 30, 2003 2.75 to 1
--------------------------------------------------------
December 31, 2003 2.75 to 1
--------------------------------------------------------
March 31, 2004 2.50 to 1
--------------------------------------------------------
June 30, 2004 2.50 to 1
--------------------------------------------------------
September 30, 2004 2.50 to 1
--------------------------------------------------------
December 31, 2004 2.50 to 1
--------------------------------------------------------
March 31, 2005 2.25 to 1
--------------------------------------------------------
June 30, 2005 2.25 to 1
--------------------------------------------------------
September 30, 2005 2.25 to 1
--------------------------------------------------------
December 31, 2005 2.25 to 1
--------------------------------------------------------
March 31, 2006 2.25 to 1
--------------------------------------------------------
June 30, 2006 2.25 to 1
--------------------------------------------------------
September 30, 2006 2.25 to 1
--------------------------------------------------------
December 31, 2006 and each 2.25 to 1
--------------------------------------------------------
71
--------------------------------------------------------
FISCAL QUARTER ENDING ON MAXIMUM LEVERAGE
OR ABOUT RATIO
--------------------------------------------------------
Fiscal Quarter ending thereafter
--------------------------------------------------------
Section 5.2 Minimum Fixed Charge Coverage Ratio
Group shall maintain a Fixed Charge Coverage Ratio, as determined as
of the last day of each Fiscal Quarter set forth below, for the four Fiscal
Quarters ending on such day of at least the minimum ratio set forth below
opposite such Fiscal Quarter:
------------------------------------------------------------
FISCAL QUARTER ENDING ON MINIMUM FIXED CHARGE
OR ABOUT COVERAGE RATIO
------------------------------------------------------------
June 30, 2003 1.75 to 1
------------------------------------------------------------
September 30, 2003 1.75 to 1
------------------------------------------------------------
December 31, 2003 1.75 to 1
------------------------------------------------------------
March 31, 2004 1.15 to 1
------------------------------------------------------------
June 30, 2004 1.15 to 1
------------------------------------------------------------
September 30, 2004 1.15 to 1
------------------------------------------------------------
December 31, 2004 1.15 to 1
------------------------------------------------------------
March 31, 2005 1.25 to 1
------------------------------------------------------------
June 30, 2005 1.25 to 1
------------------------------------------------------------
September 30, 2005 1.30 to 1
------------------------------------------------------------
December 31, 2005 1.30 to 1
------------------------------------------------------------
March 31, 2006 1.30 to 1
------------------------------------------------------------
June 30, 2006 1.30 to 1
------------------------------------------------------------
September 30, 2006 1.40 to 1
------------------------------------------------------------
December 31, 2006 and each Fiscal 1.40 to 1
Quarter ending thereafter
------------------------------------------------------------
Notwithstanding the foregoing table, if, on March 31, 2004, the payment of any
portion of the principal amount of the Second Lien Notes is deferred pursuant to
Section 8.6(c), then the minimum Fixed Charge Coverage Ratio required to be
satisfied as of the last day of each Fiscal Quarter in Fiscal Year 2004 shall be
1.25 to 1.
Section 5.3 Capital Expenditures. Group will not permit Capital
Expenditures by the Borrower and its Subsidiaries to be made or incurred during
each of the Fiscal Years set forth below to be in excess of the maximum amount
set forth below for such Fiscal Year:
------------------------------------------
FISCAL YEAR MAXIMUM CAPITAL
ON OR ABOUT EXPENDITURES
------------------------------------------
December 31, 2003 $25,000,000
------------------------------------------
December 31, 2004 $25,800,000
------------------------------------------
December 31, 2005 $24,200,000
------------------------------------------
72
------------------------------------------
FISCAL YEAR MAXIMUM CAPITAL
ON OR ABOUT EXPENDITURES
------------------------------------------
December 31, 2006 $24,200,000
------------------------------------------
provided, however, that (a) to the extent that actual Capital Expenditures for
any such Fiscal Year shall be less than the maximum amount set forth above for
such Fiscal Year (without giving effect to the carryover permitted by this
proviso), the amount of such shortfall (not to exceed 50% of the available
amount for such Fiscal Year) shall be, in addition, available for Capital
Expenditures in the next succeeding Fiscal Year, (b) Capital Expenditures shall
not include any amounts credited to, or received by, any Warnaco Entity in
connection with a substantially contemporaneous trade in or Capital Expenditures
constituting a reinvestment of Net Cash Proceeds in replacement assets pursuant
to Section 2.9(b)(i) and (c) in the event of a sale of the Stock or the assets
by a Warnaco Entity constituting a business division of the Warnaco Entities,
each maximum Capital Expenditure level set forth above for the Fiscal Year
ending after such sale shall be reduced by an amount equal to the Capital
Expenditure allocable to such business division, as listed on Schedule 5.3
(Capital Expenditure Adjustments) with respect to such period (or, if such sale
occurs during such period, such portion of such period occurring after such
sale), provided that the foregoing formula and timing of the application of the
reduction in maximum Capital Expenditure levels may be adjusted in the
reasonable discretion of the Administrative Agent to take into consideration the
terms of such sale.
ARTICLE VI
REPORTING COVENANTS
As long as any of the Obligations or Commitments remain outstanding,
unless the Requisite Lenders otherwise consent in writing, Group and the
Borrower agree with the Lenders and the Administrative Agent that:
Section 6.1 Financial Statements. Group shall furnish to the
Administrative Agent (with a copy for each Lender requesting same) the
following:
(a) Monthly Reports. As soon as available and in any event within 40
days after the end of each of the first two months in each Fiscal Quarter,
consolidated balance sheets of Group and its Subsidiaries as of the end of such
month and consolidated statements of income and cash flow statements of Group
and its Subsidiaries for the period commencing at the end of the previous month
and ending with the end of such month, setting forth in each case in comparative
form the corresponding figures for the corresponding period of the preceding
Fiscal Year and the corresponding figures for the corresponding period set forth
in the Projections and duly certified (subject to year-end audit adjustments) by
a Responsible Officer of Group as having been prepared in accordance with GAAP;
(b) Quarterly Reports. 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 (e)
below (or, with respect to such financial statements for the Fiscal Quarters
ended on or about June 30, 2003, September 30, 2003 and December 31, 2003,
compared to the monthly financial
73
statements set forth in the Projections), duly certified (subject to year-end
audit adjustments) by a Responsible 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 Article V;
(c) Annual Consolidated Reports. As soon as available and in any event
within 95 days after the end of each Fiscal Year of Group, (i) a copy of the
annual audit report for such year for Group and its Subsidiaries, containing the
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
(without qualification as to the scope of the audit) of Deloitte & Touche LLP or
by other independent public accountants acceptable to the Administrative Agent
stating that (x) such financial statements fairly present the consolidated
financial position of Group and its Subsidiaries as at the dates indicated and
the results of their operations and cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except for
changes with which such independent certified public accountants shall concur
and which shall have been disclosed in the notes to the financial statements)
and (y) to the extent permitted by accounting rules and guidelines, the
examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards, and a certificate of a Responsible 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 Article V and (ii)
financial information regarding each Business Unit consisting of consolidating
balance sheets of such business unit as of the end of such year and related
statements of income and cash flows of such business unit for such Fiscal Year,
all prepared in conformity with GAAP and certified by a Responsible Officer of
Group as fairly presenting the financial position of such business unit as at
the dates indicated;
(d) Compliance Certificate. Together with each delivery of any
financial statement pursuant to clauses (b) and (c) of this Section 6.1, a
certificate of a Responsible Officer of Group substantially in the form of
Exhibit H hereto (each, a "Compliance Certificate") (i) showing in reasonable
detail the calculations used in demonstrating compliance with each of the
financial covenants contained in Article V which is tested on a quarterly basis,
(ii) showing in reasonable detail the calculations necessary to determine the
Applicable Margin, and (iii) stating that no Default or Event of Default has
occurred and is continuing or, if a Default or an Event of Default has occurred
and is continuing, stating the nature thereof and the action which Group
proposes to take with respect thereto;
(e) Business Plan. Not later than 45 days after the end of each Fiscal
Year (beginning with the end of Fiscal Year 2003), and containing substantially
the types of financial information contained in the Projections, (i) the annual
business plan of Group for the next succeeding Fiscal Year approved by the Board
of Directors of Group with updates thereof provided to the Lenders prior to each
July 31, (ii) schedules of all letters of credit, (iii) forecasts (including
availability forecasts) prepared by management of Group for each fiscal month in
each of the succeeding Fiscal Years through the Fiscal Year in which the
Termination Date is scheduled to occur, and (iv) forecasts prepared by
management of Group for each of the succeeding Fiscal Years through the Fiscal
Year in which the Termination Date is scheduled to occur, including, in each
instance described in clause (ii) and clause (iii) above, (A) a projected
year-end consolidated balance sheet and income statement and statement of cash
flows and (B) a statement of all of the material assumptions on which such
forecasts are based and in each case prepared by management of Group and
satisfactory in form to the Administrative Agent;
74
(f) Intercompany Loan Balances. Together with each delivery of any
financial statement pursuant to clause (b) and clause (c) of this Section 6.1, a
summary of the outstanding balance of all intercompany Indebtedness of any
Subsidiary to any Loan Party as of the last day of the Fiscal Quarter or Fiscal
Year covered by such financial statement, certified by a Responsible Officer of
Group; provided that such balances between Loan Parties shall only be required
to be delivered annually, as early as practicable; and
(g) Corporate Chart. Together with each delivery of any Financial
Statement pursuant to clause (c) above, a certificate of a Responsible Officer
of Group certifying that the Corporate Chart attached thereto or the last
Corporate Chart delivered pursuant to this clause (g) is true, correct, complete
and current as of the date of such Financial Statement.
Section 6.2 Default Notices. As soon as practicable, and in any event
within two Business Days after a Responsible Officer of any Loan Party has
actual knowledge of the existence of any Default, Event of Default or other
event which has had a Material Adverse Effect, Group shall give the
Administrative Agent notice specifying the nature of such Default or Event of
Default or other event, including the anticipated effect thereof, which notice,
if given by telephone, shall be promptly confirmed in writing on the next
Business Day.
Section 6.3 Litigation. Promptly after the commencement thereof, Group
shall give the Administrative Agent written notice of the commencement of all
actions, suits and proceedings before any domestic or foreign Governmental
Authority or arbitrator, affecting any Warnaco Entity, which in the reasonable
judgment of Group, if adversely determined, would be reasonable likely to have a
Material Adverse Effect.
Section 6.4 Asset Sales. No later than 10 days prior to any Asset Sale
anticipated to generate in excess of $15,000,000 (or its Dollar Equivalent) in
Net Cash Proceeds, Group shall send the Administrative Agent a notice (a)
describing such Asset Sale or the nature and material terms and conditions of
such transaction and (b) stating the estimated Net Cash Proceeds anticipated to
be received by Group or any of its Subsidiaries.
Section 6.5 Notices under Second Lien Note Documents. Promptly after
the sending or filing thereof, the Borrower shall send the Administrative Agent
copies of all material notices, certificates or reports delivered pursuant to,
or in connection with, any Second Lien Note Document.
Section 6.6 SEC Filings; Press Releases. Promptly after the sending or
filing thereof, Group shall send the Administrative Agent copies of (a) all
reports which any Warnaco Entity sends to its security holders generally, (b)
all reports and registration statements which any Warnaco Entity files with the
Securities and Exchange Commission or any national securities exchange, (c) all
press releases, (d) all other statements concerning material changes or
developments in the business of any Warnaco Entity made available by any Warnaco
Entity to the public and (e) all notices of investigation or proceedings
received from the Securities and Exchange Commission or any national securities
exchange.
Section 6.7 Labor Relations. Promptly after becoming aware of the
same, Group shall give the Administrative Agent written notice of (a) any
material labor dispute to which any Warnaco Entity is or may become a party,
including any strikes, lockouts or other disputes relating to any of such
Person's plants and other facilities, and (b) any Worker Adjustment and
Retraining Notification Act or related liability incurred with respect to the
closing of any plant or other facility of any such Person.
75
Section 6.8 Tax Returns. Upon the request of any Lender, through the
Administrative Agent, Group will provide copies of all federal, state, local tax
returns and reports (other than foreign tax returns and reports) filed by any
Warnaco Entity in respect of taxes measured by income (excluding sales, use and
like taxes).
Section 6.9 Insurance. As soon as is practicable and in any event
within 90 days after the end of each Fiscal Year, Group will furnish the
Administrative Agent (in sufficient copies for each of the Lenders) with (a) a
report in form and substance satisfactory to the Administrative Agent and the
Lenders outlining all material insurance coverage maintained as of the date of
such report by the Warnaco Entities and the duration of such coverage and (b) an
insurance broker's statement that all premiums then due and payable with respect
to such coverage have been paid and that all such insurance names the
Administrative Agent on behalf of the Secured Parties as additional insured or
loss payee, as appropriate, and provides that no cancellation, material addition
in amount or material change in coverage shall be effective until after 30 days'
written notice thereof to the Administrative Agent.
Section 6.10 ERISA Matters. Group shall furnish the Administrative
Agent (with a copy for each Lender requesting same):
(a) promptly and in any event within 30 days after any Warnaco Entity
or any ERISA Affiliate knows or has reason to know that any ERISA Event has
occurred written notice describing such event;
(b) promptly and in any event within 10 days after Warnaco Entity or
any ERISA Affiliate knows or has reason to know that a request for a minimum
funding waiver under Section 412 of the Code has been filed with respect to any
Title IV Plan or Multiemployer Plan, a written statement of a Responsible
Officer of Group describing such ERISA Event or waiver request and the action,
if any, which such Warnaco Entity and the ERISA Affiliates propose to take with
respect thereto and a copy of any notice filed with the PBGC or the IRS
pertaining thereto; and
(c) simultaneously with the date that any Warnaco Entity or any ERISA
Affiliate files a notice of intent to terminate any Title IV Plan, if such
termination would require material additional contributions in order to be
considered a standard termination within the meaning of Section 4041(b) of
ERISA, a copy of each notice.
Section 6.11 Environmental Matters. Group shall provide promptly after
the assertion or occurrence thereof, notice of any Environmental Action against
or of any noncompliance by any Warnaco Entity 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.
Section 6.12 Borrowing Base Determination.
(a) Not less than once each week, the Borrower shall deliver to the
Administrative Agent a Borrowing Base Certificate, as of the Business Day
immediately prior to the day of delivery and executed by a Responsible Officer
of Group.
(b) Group and the Borrower agree (i) that the Administrative Agent, on
behalf of the Lenders, may appoint an independent or an internal third party
appraiser to conduct and conclude quarterly field audits with respect to
Inventory owned by any Loan Party and (ii) Group shall conduct,
76
or shall cause to be conducted, and upon request of the Administrative Agent,
and present to the Administrative Agent for approval, such appraisals and
reviews as the Administrative Agent shall reasonably request, all upon notice
and at such times during normal business hours and as often as may be reasonably
requested, in each case at the expense of Group and for the purpose of
determining the Borrowing Base. Group and the Borrower shall furnish to the
Administrative Agent any information which the Administrative Agent may
reasonably request regarding the determination and calculation of the Borrowing
Base including correct and complete copies of any invoices, underlying
agreements, instruments or other documents and the identity of all Account
Debtors in respect of Accounts referred to therein. Group and the Borrower
further agree to use their reasonable best efforts to assist each appraiser
appointed by the Administrative Agent to conduct and conclude such field audits.
(c) The Administrative Agent may, at the sole cost and expense of
Group and the Borrower, make test verifications of the Accounts in any manner
and through any medium that the Administrative Agent considers advisable, and
Group and the Borrower shall furnish all such assistance and information as the
Administrative Agent may require in connection therewith.
(d) Each of Group and the Borrower shall, and shall cause each of its
respective Subsidiaries to, use its reasonable best efforts to assist an
independent third party appraiser appointed by the Agents to conduct and
conclude (i) field audits with respect to Inventory owned by any Loan Party not
more frequently than four times in any 12 month-period and (ii) Appraisals, as
reasonably requested by the Administrative Agent (which, in the case of
Inventory and Receivables shall be conducted not less frequently than once
during each 12 month-period), in each case at the sole expense of the Group and
the Borrower.
(e) Not less than once each week, the Borrower shall deliver to the
Administrative Agent a certificate, as of the day immediately prior to the day
of delivery and executed by a Responsible Officer of Group, that sets forth the
aggregate amount of Cash Management Obligations owing to the Agents (or such
other Persons as the Agents may reasonably consent to) that constitute Secured
Obligations as of such date;
Section 6.13 Material Licenses. Promptly after any Loan Party becoming
aware of the same, the Borrower shall give the Administrative Agent written
notice of any cancellation, termination or loss of any Material License.
Section 6.14 Other Information. Group and the Borrower shall provide
the Administrative Agent or any Lender with such other information respecting
the business, properties, condition, financial or otherwise, or operations of
any Warnaco Entity as any Lender through the Administrative Agent may from time
to time reasonably request.
ARTICLE VII
AFFIRMATIVE COVENANTS
As long as the Obligations or the Commitments remain outstanding,
unless the Requisite Lenders otherwise consent in writing, each of Group and the
Borrower agree with the Lenders and the Administrative Agent that:
Section 7.1 Preservation of Corporate Existence, Etc. Each of Group
and the Borrower shall, and shall cause each of its respective Subsidiaries to,
preserve and maintain its legal existence, rights (charter and statutory) and
franchises, except as permitted by Section 8.3, Section 8.4
77
and Section 8.7; provided, however, no Warnaco Entity shall be required to
preserve any right, permit, license, approval, privilege or franchise if the
Board of Directors of such Warnaco Entity shall determine that the preservation
thereof is no longer desirable in the conduct of the business of such Warnaco
Entity and that the loss thereof is not disadvantageous in any material respect
to the Warnaco Entities (taken as whole) or the Secured Parties.
Section 7.2 Compliance with Laws, Etc. Each of Group and the Borrower
shall, and shall cause each of its respective Subsidiaries to, comply with all
applicable Requirements of Law, Contractual Obligations and Permits, except
where the failure so to comply would not, in the aggregate, have a Material
Adverse Effect.
Section 7.3 Conduct of Business. Each of Group and the Borrower shall,
and shall cause each of its respective Subsidiaries to, (a) conduct its business
in the ordinary course and (b) use its reasonable efforts, in the ordinary
course and consistent with past practice, to preserve its business and the
goodwill and business of the customers, advertisers, suppliers and others having
business relations with any Warnaco Entity, except in each case where the
failure to comply with the covenants in each of clauses (a) and (b) above would
not, in the aggregate, have a Material Adverse Effect.
Section 7.4 Payment of Taxes, Etc. Each of Group and the Borrower
shall, and shall cause each of its respective Subsidiaries to, pay and discharge
before the same shall become delinquent, all lawful governmental claims, federal
and material state, local and non-U.S. taxes, assessments, charges and levies,
except where contested in good faith, by proper proceedings and adequate
reserves therefor have been established on the books of the appropriate Warnaco
Entity in conformity with GAAP, unless and until any Liens resulting from such
contested items attach to its property and become enforceable against its other
creditors.
Section 7.5 Maintenance of Insurance. Each of Group and the Borrower
shall (i) maintain, and cause to be maintained for each of its respective
Subsidiaries, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which such Warnaco Entity operates, and such other
insurance as may be reasonably requested by the Requisite Lenders, and, in any
event, all insurance required by any Loan Document, and (ii) cause all such
insurance to name the Administrative Agent on behalf of the Secured Parties as
additional insured or loss payee, as appropriate, and to provide that no
cancellation, material addition in amount or material change in coverage shall
be effective until after 30 days' written notice thereof to the Administrative
Agent.
Section 7.6 Access. Each of Group and the Borrower shall, and shall
cause each of its respective Subsidiaries to, from time to time permit the
Administrative Agent and the Lenders, or any agents or representatives thereof,
within two Business Days after written notification of the same to the Borrower
(except that during the continuance of an Event of Default, no such notice shall
be required) to (a) examine and make copies of and abstracts from the records
and books of account of any Warnaco Entity, (b) visit the properties of any
Warnaco Entity, (c) discuss the affairs, finances and accounts of such any
Warnaco Entity with any of their respective officers or directors, and (d)
communicate directly with any Warnaco Entity's independent certified public
accountants (with Group having the right to have a representative present at all
such communications). Each of Group and the Borrower shall, and shall cause each
of its respective Subsidiaries to, authorize its independent certified public
accountants to disclose to the Administrative Agent or any Lender any and all
financial statements and other information of any kind, as the Administrative
Agent or any Lender reasonably requests from any Warnaco Entity and which such
accountants may have with respect to the business,
78
financial condition, results of operations or other affairs of such Warnaco
Entity or any of its Subsidiaries.
Section 7.7 Keeping of Books. Each of Group and the Borrower shall,
and shall cause each of its respective Subsidiaries to, keep proper books of
record and account, in which full and correct entries shall be made in
conformity with GAAP of all financial transactions and the assets and business
of such Warnaco Entity.
Section 7.8 Maintenance of Properties, Etc. Each of Group and the
Borrower shall, and shall cause each of its respective Subsidiaries to, maintain
and preserve (a) all of its properties which are necessary in the conduct of its
business in good working order and condition, (b) all rights, permits, licenses,
approvals and privileges (including all Permits) which are used or useful or
necessary in the conduct of its business, and (c) all Intellectual Property with
respect to the business of the Warnaco Entities; except where the failure to so
maintain and preserve would not in the aggregate have a Material Adverse Effect.
Section 7.9 Application of Proceeds. The Borrower (and, to the extent
distributed by the Borrower, each other Warnaco Entity) shall use the proceeds
of the Loans as provided in Section 4.13.
Section 7.10 Environmental.
(a) Each of Group and Borrower shall comply, and shall cause each of
its respective 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 Contaminants from any of its properties, in accordance with and
to the extent required by all applicable Environmental Laws, to the extent the
failure to do any of the foregoing would have a Material Adverse Effect;
provided, however, that no Warnaco Entity 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.
(b) At the request of the Administrative Agent after receipt of a
notice of the type specified in Section 6.11, Group will provide to the
Administrative Agent and each Lender within 60 days after such request, at the
expense of Group and the Borrower, an environmental assessment report for the
applicable property described in such notice, prepared by an environmental
consulting firm reasonably acceptable to the Administrative Agent, indicating
the presence of Contaminants 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 Contaminants that could reasonably be expected to
give rise to a material liability on such properties; without limiting the
generality of the foregoing, if the Administrative Agent determine at any time
that a material risk exists that any such report will not be provided within the
time referred to above, the Administrative Agent may retain an environmental
consulting firm to prepare such report at the expense of Group and the Borrower,
and Group and the Borrower each hereby grants and agrees to cause any other
Warnaco Entity that owns any property described in such request to grant at the
time of such request to the Administrative Agent, 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
79
respective Subsidiaries to, cooperate in all reasonable respects with the
preparation of such assessment.
Section 7.11 Additional Personal Property Collateral and Guaranties.
To the extent not delivered to the Administrative Agent on or before
the Closing Date (including in respect of after-acquired property and Persons
that become Subsidiaries of any Loan Party after the Closing Date), each of
Group and the Borrower agrees promptly to do, or cause each of its respective
Subsidiaries to do, each of the following, unless otherwise agreed by the
Administrative Agent:
(a) deliver to the Administrative Agent such duly-executed supplements
and amendments to the Guaranty, in each case in form and substance reasonably
satisfactory to the Administrative Agent and as the Administrative Agent deems
necessary or advisable in order to ensure that each Domestic Subsidiary of Group
(other than the Borrower, Warnaco Operations and each Domestic Subsidiary set
forth on Schedule 8.7(a) (Scheduled Dissolutions)) guaranties, as primary
obligor and not as surety, the full and punctual payment when due of the
Obligations or any part thereof; provided, however, that if on the 5th Business
Day after the Closing Date (or such later date as consented to by the
Administrative Agent), any Domestic Subsidiary set forth on Schedule 8.7 (a)
(Scheduled Dissolutions), has not been dissolved and the terms of Section 8.7(d)
complied with, such Domestic Subsidiary shall immediately comply with this
Section 7.11;
(b) deliver to the Administrative Agent such duly-executed joinder and
amendments to the Pledge and Security Agreement and, if applicable, other
Collateral Documents, in each case in form and substance reasonably satisfactory
to the Administrative Agent and as the Administrative Agent deems necessary or
advisable in order to effectively grant to the Administrative Agent, for the
benefit of the Secured Parties, a valid, perfected and enforceable
first-priority security interest in all personal property interests and other
assets (including the Stock and Stock Equivalents and other debt Securities) of
each Loan Party; provided, however, that in no event shall any Warnaco Entity be
required to pledge (i) the outstanding Voting Stock of any Domestic Subsidiary
set forth on Schedule 8.7(a) (Scheduled Dissolutions); provided, however, that
if on the 5th Business Day after the Closing Date (or such later date as
consented to by the Administrative Agent), any Domestic Subsidiary set forth on
Schedule 8.7(a) (Scheduled Dissolutions), has not been dissolved and the terms
of Section 8.7(d) complied with, the Stock and Stock Equivalents of such
Domestic Subsidiary shall immediately be pledged to the Administrative Agent
under the Pledge and Security Agreement, or (ii) in excess of 65% of the
outstanding Voting Stock of any Non-U.S. Person that is a direct Subsidiary of
Group or of any Domestic Subsidiary, unless (x) the Borrower and the
Administrative Agent otherwise agree; (y) such Voting Stock has been granted as
security in respect of other Indebtedness of a Warnaco Entity having
substantially similar tax consequences to the Loan Parties under Section 956 of
the Code, or (z) such pledge or grant can be made without resulting in any
material adverse tax consequences for the Warnaco Entities, taken as a whole
(including any Person that becomes a Loan Party as a result of such pledge or
grant);
(c) to take such other actions necessary or advisable to ensure the
validity or continuing validity of the guaranties required to be given pursuant
to clause (a) above or to create, maintain or perfect the security interest
required to be granted pursuant to clause (b) above, including the filing of UCC
financing statements in such jurisdictions as may be required by the Collateral
Documents or by law or as may be reasonably requested by the Administrative
Agent; and
80
(d) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Agent.
Section 7.12 Landlord Waivers and Bailee's Letters.
Each of Group and the Borrower shall use its reasonable efforts to,
and shall cause each of its respective Domestic Subsidiaries to use its
reasonable efforts to, within 30 days after the Closing Date (or such later date
as shall be acceptable to the Administrative Agent in its sole discretion),
deliver such Landlord Waivers and Bailee's Letters as the Administrative Agent
shall request in its sole discretion exercised reasonably.
Section 7.13 Real Property.
(a) Each of Group and the Borrower shall, and shall cause each of its
respective Subsidiaries to, (i) provide the Administrative Agent with a copy of
each notice of default under any Lease with respect to any Material Leased
Property received by any Warnaco Entity immediately upon receipt thereof and
deliver to the Administrative Agent a copy of each notice of default sent by any
Warnaco Entity under any Lease with respect to any Material Leased Property
simultaneously with its delivery of such notice under such Lease and (ii) notify
the Administrative Agent at least 14 days prior to the date any Warnaco Entity
takes possession of, or becomes liable under, any new Lease with respect to any
Material Leased Property, whichever is earlier.
(b) At least 15 Business Days prior to acquiring any Material Owned
Real Property, each of Group and the Borrower shall, and shall cause each of its
respective Subsidiaries to, provide the Administrative Agent written notice
thereof and, upon written request of the Administrative Agent, each of Group and
the Borrower shall, and shall cause each of its respective Subsidiaries to
provide Phase I environmental reports on such Material Owned Real Property
showing no condition that could give rise to material Environmental Costs and
Liabilities.
(c) To the extent not previously delivered to the Administrative
Agent, upon written request of the Administrative Agent, each of Group and the
Borrower shall, and shall cause each other Loan Party to, execute and deliver to
the Administrative Agent, for the benefit of the Secured Parties, promptly and
in any event not later than 45 days after receipt of such notice (or, if such
notice is given by the Administrative Agent prior to the acquisition of such
Material Owned Real Property, immediately upon such acquisition), a Mortgage on
such Material Owned Real Property of such Loan Party, together with (i) if
requested by the Administrative Agent and such Material Owned Real Property is
located in the United States, all Mortgage Supporting Documents relating thereto
or (ii) otherwise, documents similar to Mortgage Supporting Documents deemed by
the Administrative Agent to be appropriate in the applicable jurisdiction to
obtain the equivalent in such jurisdiction of a first-priority mortgage on such
Material Owned Real Property; provided, however, that in no event shall any
Warnaco Entity that is not a Loan Party be required to enter into a Mortgage in
respect of Material Owned Real Property, unless (x) the Borrower and the
Administrative Agent otherwise agree, (y) such Mortgage has been provided as
security in respect of other Indebtedness of a Warnaco Entity having
substantially similar tax consequences under Section 956 of the Code or (z) such
pledge or grant can be made without resulting in any material adverse tax
consequences for the Warnaco Entities, taken as a whole (including any Person
that becomes a Loan Party as a result of providing such Mortgage).
Section 7.14 Post Closing Matters. Each of Group and the Borrower
shall, and shall cause each of its applicable Subsidiaries to, satisfy the
requirements set forth on Schedule 7.14
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(Post Closing Matters) on or before the date set forth opposite such requirement
or such later date as consented to by the Administrative Agent.
ARTICLE VIII
NEGATIVE COVENANTS
As long as any of the Obligations or the Commitments remain
outstanding, without the written consent of the Requisite Lenders, each of Group
and the Borrower agrees with the Lenders and the Administrative Agent that:
Section 8.1 Indebtedness. Each of Group and the Borrower will not, and
will not permit any of its respective Subsidiaries to, directly or indirectly
create, incur, assume or otherwise become or remain directly or indirectly
liable with respect to any Indebtedness, except:
(a) the Secured Obligations (other than in respect of Hedging
Contracts);
(b) the Second Lien Notes; provided that the amount of Indebtedness
permitted to be outstanding in respect the Second Lien Notes shall be reduced by
the Net Cash Proceeds of any issuance of Take-Out Securities;
(c) the Take-Out Securities (to the extent they constitute
Indebtedness) in an aggregate outstanding principal amount not to exceed
$250,000,000;
(d) Indebtedness existing on the Closing Date and disclosed on
Schedule 8.1 (Existing Indebtedness);
(e) (i) Guaranty Obligations incurred by a Loan Party in respect of
Indebtedness of another Loan Party otherwise permitted by this Section 8.1, (ii)
Guaranty Obligations incurred by any Foreign Subsidiary in respect of the
Indebtedness of a Foreign Subsidiary otherwise permitted by this Section 8.1 and
(iii) unsecured Guaranty Obligations incurred by a Loan Party in respect of the
Indebtedness of a Foreign Subsidiary permitted by clause (h) of this Section
8.1;
(f) Capital Lease Obligations and purchase money Indebtedness incurred
by a Warnaco Entity to finance the acquisition or construction of fixed assets
in an aggregate outstanding principal amount not to exceed the Dollar Equivalent
of $20,000,000 at any time; provided, however, that the Capital Expenditure
related thereto is otherwise permitted by Section 5.3;
(g) Renewals, extensions, refinancings and refundings of Indebtedness
permitted by clauses (d) and (f) of this Section 8.1; provided, however, that
any such renewal, extension, refinancing or refunding is in an aggregate
principal amount not greater than the principal amount of, and is on terms no
less favorable to the Warnaco Entity obligated thereunder (subject to market
rates), including as to weighted average maturity and final maturity, than the
Indebtedness being renewed, extended, refinanced or refunded;
(h) Indebtedness of the Foreign Subsidiaries of Group not otherwise
permitted under this Section 8.1; provided, however, that (x) such Indebtedness
shall be owing to Persons that are Lenders under the Facility (or their
Affiliates) and shall be on terms reasonably acceptable to the Administrative
Agent, and (y) the Dollar Equivalent of the aggregate outstanding principal
amount of all such Indebtedness shall not exceed $25,000,000 at any time;
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(i) a Sale and Leaseback Transaction permitted pursuant to Section
8.16, to the extent such transaction would constitute Indebtedness;
(j) Indebtedness arising from intercompany loans from any Warnaco
Entity to any other Warnaco Entity, provided, that such Investment is permitted
to be made by such Warnaco Entity under Section 8.3(a);
(k) Indebtedness incurred for the sole purpose of financing the
payment of insurance premiums in the ordinary course of business, in an
aggregate amount not to exceed $15,000,000 at any one time outstanding;
(l) Indebtedness arising under any performance or surety bond entered
into in the ordinary course of business;
(m) Obligations under Hedging Contracts permitted under Section 8.17;
and
(n) other Indebtedness the aggregate Dollar Equivalent of the
principal amount of which shall not exceed $5,000,000 at any time.
Section 8.2 Liens, Etc. Each of Group and the Borrower will not, and
will not permit any of its respective Subsidiaries to, create or suffer to
exist, any Lien upon or with respect to any of its properties or assets, whether
now owned or hereafter acquired, or assign any right to receive income, except
for:
(a) Liens created pursuant to the Loan Documents;
(b) Liens granted by a Loan Party securing the Second Lien Notes;
(c) Liens granted by a Foreign Subsidiary of Group securing the
Indebtedness permitted under Section 8.1(h);
(d) Liens existing on the date of this Agreement and disclosed on
Schedule 8.2 (Existing Liens);
(e) Customary Permitted Liens;
(f) purchase money Liens granted by a Warnaco Entity (including the
interest of a lessor under a Capital Lease and purchase money Liens to which any
property is subject at the time of such Warnaco Entity's acquisition thereof or
promptly thereafter) securing Indebtedness permitted under Section 8.1(f) and
limited in each case to the property purchased with the proceeds of such
purchase money Indebtedness or subject to such Capital Lease;
(g) any Lien securing the renewal, extension, refinancing or refunding
of any Indebtedness secured by any Lien permitted by clause (d) or (f) of this
Section 8.2 as long as such Lien does not cover any assets not subject to the
Lien securing indebtedness being renewed, extended, refinanced or refunded;
(h) Liens in favor of lessors securing operating leases or, to the
extent such transactions create a Lien hereunder, sale and leaseback
transactions, in each case to the extent such operating leases or sale and
leaseback transactions are permitted hereunder;
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(i) Liens not otherwise permitted under this Section 8.2, other than
in favor of the PBGC, arising out of judgments or awards in respect of which the
applicable Warnaco Entity 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
any such judgment shall not give rise to an Event of Default;
(j) 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 pursuant to facilities provided to a Foreign Subsidiary and in
respect of which all inventory and goods are located outside the United States;
(k) Liens securing Indebtedness incurred under Section 8.1(k);
provided that such Liens shall only encumber Insurance Assets that relate
directly to the Indebtedness such assets secure and that have an aggregate value
not in excess of $15,000,000; and
(l) other Liens not otherwise permitted under this Section 8.2,
securing obligations in an amount not to exceed $5,000,000 in an aggregate
amount outstanding at any time.
Section 8.3 Investments. Each of Group and the Borrower will not, and
will not permit any of its respective Subsidiaries to, directly or indirectly
make or maintain any Investment except:
(a) Investments (i) by any Warnaco Entity in any Warnaco Entity in an
amount not exceeding the amount outstanding on the date hereof and as set forth
on Schedule 8.3, and (ii) additional Investments by (A) any Warnaco Entity in a
Loan Party, (B) any Warnaco Entity that is not a Loan Party in any other Warnaco
Entity, and (C) any Loan Party in a Warnaco Entity that is not a Loan Party (1)
to the extent required by applicable law to fulfill statutory capital
requirements in a maximum aggregate amount up to $1,000,000, and (2) solely for
the purposes of funding (x) the operations of such Foreign Subsidiary (including
Standby Letters of Credit Issued for the benefit of such Foreign Subsidiaries),
not to exceed in the aggregate $25,000,000 at any time outstanding under this
subclause (a)(ii)(C)(2)(x), (y) up to $15,000,000 of investments in Lejaby SAS
to fund costs associated with the reorganization of its European operations and
(z) operating expenses of Foreign Subsidiaries in Hong Kong, Central America and
Mexico and (3) to the extent necessary for such entity to pay taxes that are due
and payable; provided, that in each case (other than investments made as capital
contributions pursuant to subclause (ii)(C)(1)) such Investment shall be
evidenced by a promissory note in form and substance satisfactory to the
Administrative Agent, the Administrative Agent shall have a perfected security
interest in such promissory note and no Event of Default shall have occurred and
be continuing at the time such Investment is made or would result therefrom;
(b) Investments in cash and Cash Equivalents held in a Blocked
Account, a Restricted Account, a Control Account, or otherwise in compliance
with Section 4.8 of the Pledge and Security Agreement.
(c) Investments existing on the date hereof and described on Schedule
8.3 (Existing Investments) hereto;
(d) Investments in payment intangibles, chattel paper (each as defined
in the UCC) and Accounts, notes receivable and similar items arising or acquired
in the ordinary course of business consistent with the past practice of the
Borrower and its Subsidiaries;
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(e) Investments consisting of Stock or Stock Equivalents, obligations,
securities or other property received in a bankruptcy proceeding or in
settlement of claims arising in the ordinary course of business;
(f) (i) advances or loans to directors or employees of the Warnaco
Entities that do not exceed $1,000,000 in the aggregate at any one time
outstanding (other than any loans or advances to any director or executive
officer (or equivalent thereof) that would be in violation of Section 402 of the
United States Xxxxxxxx-Xxxxx Act of 2002), and (ii) advances for employee
travel, relocation and other similar and customary expenses incurred in the
ordinary course of business that do not exceed $2,500,000 in the aggregate at
any one time outstanding;
(g) Investments consisting of promissory notes received in connection
with an Asset Sale permitted pursuant to Section 8.4(b); provided that such
promissory notes are pledged to the Administrative Agent within three Business
Days' of their receipt by any Loan Party as additional Collateral pursuant to
the Pledge and Security Agreement;
(h) Guaranty Obligations permitted by Section 8.1; and
(i) other Investments in an aggregate amount invested not to exceed
the Dollar Equivalent of $1,000,000 at any time.
Section 8.4 Sale of Assets. Each of Group and the Borrower will not,
and will not permit any of its respective Subsidiaries to, sell, convey,
transfer, lease or otherwise dispose of, any of its assets or any interest
therein (including the sale or factoring at maturity or collection of any
Accounts) to any Person, or permit or suffer any other Person to acquire any
interest in any of its assets or, in the case of any Subsidiary of Group, issue
or sell any shares of such Subsidiary's Stock or Stock Equivalent (any such
disposition being an "Asset Sale"), except:
(a) the sale or disposition of inventory in the ordinary course of
business;
(b) the sale of any asset or assets by a Warnaco Entity as long as (i)
the purchase price paid to such Warnaco Entity for such asset shall be no less
than the Fair Market Value of such asset at the time of such sale, (ii) no less
than 100% of the purchase price for such asset (or, in the case of an Asset Sale
of all or substantially all the assets described on Schedule 8.4 (Permitted
Asset Sales), the greater of (x) 75% of the purchase price and (y) the value of
the Borrowing Base relating to such assets plus any current liabilities relating
to such assets which are not assumed by the purchaser thereof) shall be paid to
such Warnaco Entity in cash, (iii) 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 as set forth
in subclause (ii) above, (iv) no Default or Event of Default has occurred and is
continuing at the time of such sale or would result from such sale, and (v) the
aggregate purchase price paid to all Warnaco Entities for all assets sold
pursuant to this clause (b) shall not exceed $20,000,000 in the aggregate;
(c) transfers of assets from (i) any Loan Party to any other Loan
Party, (ii) any Loan Party to any Warnaco Entity that is not a Loan Party,
provided that the aggregate Fair Market Value of assets sold, leased,
transferred or otherwise disposed of pursuant to this subclause (ii) shall not
exceed $2,500,000 in the aggregate plus the Fair Market Value of any equipment
and inventory owned on the Closing Date by a Loan Party in connection with its
domestic manufacturing operations that are subsequently transferred to a Foreign
Subsidiary, and (iii) any Warnaco Entity that is not a Loan Party to any other
Warnaco Entity;
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(d) the licensing or sublicensing of trademarks and trade names by any
Warnaco Entity (i) for an initial term not in excess of 7 years and (ii) in
respect of which the aggregate up-front payments and minimum guaranteed
royalties are not in excess of $7,500,000 for any transaction or $25,000,000 in
the aggregate for all such transactions; provided, however, that any such
licensing to a Person other than a Loan Party shall take place on an
arm's-length basis;
(e) the rental by the Warnaco Entities, 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
Capital Leases);
(f) the sale or disposition of machinery and equipment no longer used
or useful in the business of the Warnaco Entities;
(g) any sale of fixed assets not in connection with a Sale and
Leaseback Transaction that were purchased in connection with a proposed lease
financing transaction within 45 days of such Asset Sale, which assets are
subsequently leased back by the Borrower or one of its Subsidiaries;
(h) any Asset Sale permitted by Section 8.7; and
(i) any Asset Sale in connection with a Sale and Leaseback Transaction
permitted pursuant to Section 8.16(b).
Section 8.5 Restricted Payments. Each of Group and the Borrower will
not, and will not permit any of its respective Subsidiaries to, directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted
Payment except for the following:
(a) Restricted Payments by any Subsidiary of the Borrower to the
Borrower or any Subsidiary of the Borrower that owns Stock of such Subsidiary;
(b) dividends and distributions declared and paid on the common Stock
of Group and payable only in common Stock of Group; and
(c) cash dividends on the Stock of the Borrower to Group paid and
declared in any Fiscal Year solely for the purpose of funding the following:
(i) ordinary operating expenses of Group to cover, inter alia,
fees and expenses of directors, directors' and officers' insurance, and
costs associated with regulatory compliance, not in excess of $5,500,000 in
the aggregate in any Fiscal Year;
(ii) payments by Group in respect of foreign, federal, state or
local taxes owing by Group in respect of the Warnaco Entities, but not
greater than the amount that would be payable by the Borrower, on a
consolidated basis, if the Borrower were the taxpayer; and
(iii) Restricted Payments by Group in connection with the Plan of
Reorganization in an aggregate amount not to exceed $500,000;
provided, however, that the Restricted Payments described in subclause (c)(i)
shall not be permitted if either (A) an Event of Default or Default shall have
occurred and be continuing at the date of declaration or payment thereof or
would result therefrom or (B) such Restricted Payment is prohibited under the
terms of any Indebtedness (other than the Obligations) of any Warnaco Entity.
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Section 8.6 Prepayment and Cancellation of Indebtedness.
(a) Neither Group nor the Borrower shall, nor shall they permit any of
their respective Subsidiaries to, cancel any claim or Indebtedness owed to any
of them except in the ordinary course of business consistent with past practice.
(b) Neither Group nor the Borrower shall, nor shall they permit any of
their respective Subsidiaries to, 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 Indebtedness; provided,
however, that any Warnaco Entity may: (i) prepay the Obligations in accordance
with the terms of this Agreement, (ii) make regularly scheduled or otherwise
required repayments or redemptions of Indebtedness (other than the Second Lien
Notes in respect of which payments may only be made subject to clause (c) and
clause (d) below), (iii) prepay any intercompany Indebtedness payable to the
Borrower or any of its Subsidiaries by the Borrower or any of its Subsidiaries,
(iv) refinance in whole or in part the Second Lien Notes with the proceeds of
the issuance of the Take-Out Securities, and (v) renew, extend, refinance and
refund Indebtedness, as long as such renewal, extension, refinancing or
refunding is permitted under Section 8.1(g).
(c) Prior to the Termination Date and the payment in full in cash of
all Secured Obligations, no Warnaco Entity may make any payments of principal in
respect of the Second Lien Notes other than as follows:
(i) On March 31, 2004 and each anniversary thereof (a "Second
Lien Note Amortization Date"), the Borrower may make an amortization
payment of $40,188,000 (or any lesser amount) on the Second Lien Notes;
provided that as of the date of making such payment, the Adjusted Fixed
Charge Coverage Ratio (as defined below) of Group for the most recently
completed Fiscal Year (as evidenced by the financial statements with
respect thereto which have been delivered under Section 6.1(c)) would be
equal to or greater than 1.25:1 after giving effect to such payment.
(ii) To the extent that any portion of an amortization payment on
the Second Lien Notes is not made on the applicable Second Lien Note
Amortization Date due to a restriction imposed by this clause (c), such
payment may be made on any subsequent date (but not more frequently that
once during each Fiscal Quarter); provided that as of the date of making
such payment, the Adjusted Fixed Charge Coverage Ratio of Group for the
most recently completed 12 month period for which financial statements have
been delivered under Section 6.1(a), (b) or (c) would be equal to or
greater than 1.25:1 after giving effect to such payment.
Notwithstanding the foregoing, no amortization payment may be made under clause
(i) or (ii), if, after giving effect thereto, (A) (i) if Commitments are greater
than or equal to $225,000,000, Available Credit is less than or equal to
$75,000,000, or (ii) if Commitments are less than $225,000,000, (x) Maximum
Credit is less than or equal to $150,000,000 or (y) Available Credit is less
than or equal to the greater of $50,000,000 or 30% of the then Maximum Credit or
(B) any Event of Default shall have occurred and be continuing, in each case, as
of the date of such payment. "Adjusted Fixed Charge Coverage Ratio" shall mean
the Fixed Charge Coverage Ratio as of (x) in the case of clause (i) above, the
last day of the most recently completed Fiscal Year and (y) in the case of
clause (ii) above, the last day of the most recently completed month for which
financial statements have been delivered under Section 6.1 (a), (b) or (c);
provided that "Fixed Charges" shall include, as to the Second Lien Notes, only
the following principal payments: (A) the principal amount to be paid on the
date that the
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calculation of Adjusted Fixed Charge Coverage Ratio is being made and (B) the
aggregate amount of principal payments made on the Second Lien Notes during the
365-day period ending on such date.
(d) Prior to the Termination Date and the payment in full in cash of
all Secured Obligations, if the terms of the Second Lien Note Indenture provide
the Borrower with the option to make any payment of interest on the Second Lien
Notes in kind (and not in cash), the Borrower shall elect to make such payment
in kind and shall not make such payment of interest in cash.
Section 8.7 Restriction on Fundamental Changes. Each of Group and the
Borrower will not, and will not permit any of its respective Subsidiaries to,
merge with any Person, consolidate with any Person, dissolve, acquire all or
substantially all of the Stock or Stock Equivalents of any Person, acquire all
or substantially all of the assets constituting a business, division, branch or
other unit of operation or trademark of any Person, enter into any joint venture
or partnership with any Person, or acquire or create any Subsidiary, except
that:
(a) any Warnaco Entity may merge into or consolidate with any Loan
Party; provided, however, that, in the case of any such merger or consolidation,
the Person formed by such merger or consolidation shall be a Loan Party;
(b) any Warnaco Entity that is not a Loan Party may merge into or
consolidate with any other Warnaco Entity that is not a Loan Party; provided,
however, 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;
(c) any Warnaco Entity may form a new Wholly Owned Subsidiary;
provided, however, that, in case of any such formation, the Subsidiary formed
shall be an indirect Wholly Owned Subsidiary of Group, and, in the case of a
Domestic Subsidiary, shall become a Loan Party;
(d) any Warnaco Entity which is inactive or dormant (meaning that on
the date of determination and on a consolidated basis with its Subsidiaries, it
has assets with an aggregate Fair Market Value of less than $100,000) and/or any
Subsidiary that is listed on Schedule 8.7(a) or (b) (Scheduled Dissolutions) may
be dissolved, provided that if such Warnaco Entity is a Loan Party, all assets
distributed upon dissolution shall be distributed to another Loan Party; and
(e) any Warnaco Entity may consummate a Permitted Acquisition;
provided, however, that in each case under this Section 8.7 both before and
immediately after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing or would result therefrom.
Section 8.8 Change in Nature of Business.
(a) Each of Group and the Borrower will not, and will not permit any
of its respective Subsidiaries to, make any material change in the nature or
conduct of its business as carried on at the date hereof.
(b) Group shall not engage in any business or activity other than (i)
holding shares in the Stock of the Borrower, (ii) paying taxes, (iii) preparing
reports to Governmental Authorities and to its shareholders and (iv) holding
directors and shareholders meetings, preparing corporate records and other
corporate activities required to maintain its separate corporate structure.
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Section 8.9 Transactions with Affiliates. Each of Group and the
Borrower will not, and will not permit any of its respective Subsidiaries to,
except as otherwise expressly permitted herein, do any of the following: (a)
make any Investment in an Affiliate of Group which is not a Warnaco Entity; (b)
transfer, sell, lease, assign or otherwise dispose of any asset to any Affiliate
of Group which is not a Warnaco Entity; (c) merge into or consolidate with or
purchase or acquire assets from any Affiliate of Group which is not a Warnaco
Entity; (d) repay any Indebtedness to any Affiliate of Group which is not a
Warnaco Entity, other than payments to an Affiliate that is not a Warnaco
Obligor in respect of the Second Lien Notes otherwise permitted hereunder; or
(e) enter into any other transaction directly or indirectly with or for the
benefit of any Affiliate of Group which is not a Warnaco Entity (including
guaranties and assumptions of obligations of any such Affiliate), except for (i)
transactions in the ordinary course of business on a basis no less favorable to
such Warnaco Entity as would be obtained in a comparable arm's length
transaction with a Person not an Affiliate and (ii) salaries and other employee
compensation to officers or directors of any Warnaco Entity.
Section 8.10 Restrictions on Subsidiary Distributions; No New Negative
Pledge. Other than (x) pursuant to the Loan Documents, the Second Lien Note
Documents, the documents governing any Indebtedness permitted under Section
8.1(h) (without limiting the approval rights of the Administrative Agent under
Section 8.1(h)) and, solely with respect to clause (b) below, the Take-Out
Security Documents, or any agreements governing any purchase money Indebtedness
or Capital Lease Obligations permitted by Section 8.1(f) or Section 8.1(g) (in
which case, any prohibition or limitation shall only be effective against the
assets financed thereby), (y) any 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 or (z) with respect to any
asset that is subject to a contract of sale permitted by Section 8.4 or which
contract acknowledges that a waiver under Section 8.4 is necessary, each of
Group and the Borrower will not, and will not permit any of its respective
Subsidiaries to:
(a) agree to enter into or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of such
Subsidiary to pay dividends or make any other distribution or transfer of funds
or assets or make loans or advances to or other Investments in, or pay any
Indebtedness owed to, any other Warnaco Entity, or
(b) enter into or suffer to exist or become effective any agreement
which prohibits or limits the ability of any Warnaco Entity to create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, to secure the Obligations, including
any agreement which requires other Indebtedness or Contractual Obligation to be
equally and ratably secured with the Secured Obligations.
Section 8.11 Modification of Constituent Documents. Each of Group and
the Borrower will not, and will not permit any of its respective Subsidiaries
to, change its capital structure (including in the terms of its outstanding
Stock) or otherwise amend its Constituent Documents, except for changes and
amendments which do not materially and adversely affect the rights and
privileges of any Warnaco Entity, or the interests of the Administrative Agent
or the Secured Parties under the Loan Documents or in the Collateral.
Section 8.12 Modification of Related Documents and Certain Debt.
Neither Group nor the Borrower shall, nor shall they permit any of
their respective Subsidiaries to, (a) alter, rescind, terminate, amend,
supplement, waive or otherwise modify any provision of any Related Document or
any document governing Indebtedness permitted pursuant to Section 8.1(h), except
for modifications to the terms of other Indebtedness (or any indenture or
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agreement in connection therewith) permitted under Section 8.13 (Modification of
Debt Agreements) and modifications that do not materially adversely affect the
interests of the Secured Parties under the Loan Documents or in the Collateral
or (b) permit any breach or default to exist under any Related Document or take
or fail to take any action thereunder, if to do so could reasonably be expected
to have a Material Adverse Effect.
Section 8.13 Modification of Debt Agreements.
Neither Group nor the Borrower shall, nor shall they permit any of
their respective Subsidiaries to, change or amend the terms of the Second Lien
Note Documents or Take-Out Securities Documents (to the extent the Take-Out
Securities constitute Indebtedness), if any, (or any indenture, agreement or
other material document entered into in connection therewith) if the effect of
such amendment is to (a) increase the interest rate payable in cash on such
Indebtedness, (b) change the dates upon which payments of principal or interest
are due on such Indebtedness other than to extend such dates, (c) change any
default or event of default other than to delete or make less restrictive any
default provision therein, or add any covenant with respect to such Indebtedness
unless a corresponding covenant is added hereunder, (d) change the subordination
provisions, if any, of such Indebtedness, (e) change the redemption or
prepayment provisions of such Indebtedness other than to extend the dates
therefor or to reduce the premiums payable in connection therewith or (f) change
or amend any term (including any covenant) if such change or amendment would
increase the obligations of the obligor or confer additional rights to the
holder of such Indebtedness or Security in a manner materially adverse to any
Warnaco Entity, the Administrative Agent or any Lender.
Section 8.14 Accounting Changes; Fiscal Year. Each of Group and the
Borrower will not, and will not permit any of its respective Subsidiaries to,
change its (a) accounting treatment and reporting practices, except as required
by GAAP, the Financial Accounting Standards Board or any Requirement of Law and
disclosed to the Lenders and the Administrative Agent or (b) Fiscal Year.
Section 8.15 Margin Regulations. Neither Group nor the Borrower shall,
nor shall they permit any of their respective Subsidiaries to, use all or any
portion of the proceeds of any credit extended hereunder to purchase or carry
margin stock (within the meaning of Regulation U of the Federal Reserve Board)
in contravention of Regulation U of the Federal Reserve Board.
Section 8.16 Operating Leases; Sale and Leasebacks Transactions.
(a) Each of Group and the Borrower will not, and will not permit any
of its respective Subsidiaries to, become liable as lessee or guarantor or other
surety with respect to any operating lease entered into after the Closing Date
(but excluding any renewals or extensions of operating leases in existence on
the Closing Date and any leases permitted to be incurred pursuant to clause (b)
below), unless the Dollar Equivalent of the aggregate amount of all rents paid
or accrued under all such operating leases shall not exceed $10,000,000 in any
Fiscal Year.
(b) Each of Group and the Borrower will not, and will not permit any
of its respective Subsidiaries to, enter into any Sale and Leaseback Transaction
if, after giving effect to such Sale and Leaseback Transaction, the Dollar
Equivalent of the aggregate Fair Market Value of all properties covered by Sale
and Leaseback Transactions would exceed $10,000,000.
Section 8.17 No Speculative Transactions. Each of Group and the
Borrower will not, and will not permit any of its respective Subsidiaries to,
engage in any speculative transaction or
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in any transaction involving Hedging Contracts except for the sole purpose of
hedging in the normal course of business and consistent with industry practices.
Section 8.18 Compliance with ERISA. Each of Group and the Borrower
will not, and will not permit any of its respective Subsidiaries to, or cause or
permit any ERISA Affiliate to, cause or permit to occur (a) an event which could
result in the imposition of a Lien under Section 412 of the IRC or Section 302
or 4068 of ERISA or (b) an ERISA Event that would have a Material Adverse
Effect.
Section 8.19 Environmental. Each of Group and the Borrower will not,
and will not permit any of its respective Subsidiaries to, allow a Release of
any Contaminant in violation of any Environmental Law; provided, however, that
no Warnaco Entity shall be deemed in violation of this Section 8.19 if, as the
consequence of all such Releases, the Warnaco Entities would not incur
Environmental Liabilities and Costs in excess of $5,000,000 in the aggregate.
ARTICLE IX
EVENTS OF DEFAULT
Section 9.1 Events of Default. Each of the following events shall be
an Event of Default:
(a) The Borrower shall (i) fail to pay any principal of any Loan or
any Reimbursement Obligation under any Loan Document when the same becomes due
and payable or (ii) shall fail to pay interest or fees under any Loan Document
when due and such payment default shall continue for 3 Business Days; or
(b) any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(c) any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article V, Section 6.1, Section 6.2, Section
6.12, Section 7.1, Section 7.6, Section 7.9, Section 7.11, or Article VIII, or
Section 4.7 of the Pledge and Security Agreement, or (ii) any other term,
covenant or agreement contained in this Agreement or in any other Loan Document
if such failure under this clause (ii) shall remain unremedied for 30 days after
the earlier of the date on which (A) a Responsible Officer of the Group or the
Borrower becomes aware of such failure and (B) written notice thereof shall have
been given to the Borrower by the Administrative Agent or any Lender; or
(d) (i) any Warnaco Entity shall fail to make any payment on any
Indebtedness (other than the Obligations) of any Warnaco Entity (or any Guaranty
Obligation in respect of Indebtedness of any other Person) having a principal
amount of $5,000,000 or more, when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise); or
(ii) any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or (iii) any such Indebtedness shall become or be declared to
be due and payable, or required to be prepaid or repurchased (other than by a
regularly scheduled required prepayment or, in connection with the Second Lien
Notes or Take-Out Securities, a provision requiring a prepayment or repurchase
in the event of the receipt by a Warnaco
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Entity of proceeds of a Debt Issuance, equity issuance or an Asset Sale), prior
to the stated maturity thereof; or
(e) (i) any Warnaco Entity shall generally not pay its debts as such
debts become due, shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors, (ii)
any proceeding shall be instituted by or against any Warnaco Entity 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 Requirement of 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 custodian, receiver, trustee or other similar official
for it or for any substantial part of its property; provided, however, that, in
the case of any such proceedings instituted against a Warnaco Entity (but not
instituted by a Warnaco Entity), either such proceedings shall remain
undismissed or unstayed for a period of 30 days or more or any action sought in
such proceedings shall occur or (iii) any Warnaco Entity shall take any
corporate action to authorize any action set forth in clauses (i) and (ii)
above; or
(f) any provision of any Loan Document after delivery thereof shall
for any reason fail or cease to be valid and binding on, or enforceable against,
any Loan Party party thereto, or any Loan Party shall so state in writing; or
(g) any Collateral Document shall for any reason fail or cease to
create a valid and enforceable Lien on any Collateral purported to be covered
thereby or, except as permitted by the Loan Documents, such Lien shall fail or
cease to be a perfected and first priority Lien, or any Loan Party shall so
state in writing; or
(h) one or more judgments or orders (or other similar process)
involving, in any single case or in the aggregate, an amount in excess of
$5,000,000 in the case of a money judgment, to the extent not covered by
insurance, shall be rendered against one or more Warnaco Entity and shall remain
unpaid 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 30
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) an ERISA Event shall occur and the amount of all liabilities and
deficiencies resulting therefrom, whether or not assessed, exceeds $5,000,000 in
the aggregate; or
(j) there shall occur a Change of Control; or
(k) a Warnaco Entity shall have entered into one or more consent or
settlement decrees or agreements or similar arrangements with a Governmental
Authority or one or more judgments, orders, decrees or similar actions shall
have been entered against a Warnaco Entity based on or arising from the
violation of or pursuant to any Environmental Law, or the generation, storage,
transportation, treatment, disposal or Release of any Contaminant and, in
connection with all the foregoing, the Warnaco Entities are likely to incur
Environmental Liabilities and Costs in excess of $5,000,000 in the aggregate.
Section 9.2 Remedies. During the continuance of any Event of Default,
the Administrative Agent (a) shall at the request, or may with the consent, of
the Requisite Lenders, by notice to the Borrower declare that all or any portion
of the Commitments be terminated, whereupon the obligation of each Lender to
make any Loan and each Issuer to Issue any Letter of Credit shall immediately
terminate and/or (b) shall at the request, or may with the consent, of the
Requisite
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Lenders, by notice to the Borrower, declare the Loans, all interest thereon and
all other amounts and Obligations payable under this Agreement to be forthwith
due and payable, whereupon the Loans, all such interest and all such amounts and
Obligations 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 the Borrower; provided, however, that upon the occurrence of the
Events of Default specified in Section 9.1(e) with respect to any Loan Party,
(x) the Commitments of each Lender to make Loans and the commitments of each
Lender and Issuer to Issue or participate in Letters of Credit shall each
automatically be terminated and (y) the Loans, all such interest and all such
amounts and Obligations 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 the Borrower. The Administrative Agent and the
Lenders shall be entitled to exercise all of their respective rights and
remedies under the Loan Documents, including, without limitation, all rights and
remedies with respect to the Collateral and the Guarantors and/or any other
remedies provided by applicable law.
Section 9.3 Actions in Respect of Letters of Credit. Upon the
Termination Date, or as required by Section 2.9, the Borrower shall pay to the
Administrative Agent in immediately available funds at the Administrative
Agent's office referred to in Section 11.8, for deposit in a Cash Collateral
Account, the amount required to ensure that, after such payment, the aggregate
funds on deposit in the Cash Collateral Accounts equals or exceeds 105% of the
sum of all outstanding Letter of Credit Obligations. The Administrative Agent
may, from time to time after funds are deposited in any Cash Collateral Account,
apply funds then held in such Cash Collateral Account to the payment of any
amounts, in accordance with Section 2.13(h), as shall have become or shall
become due and payable by the Borrower to the Issuers or the Lenders in respect
of the Letter of Credit Obligations. The Administrative Agent shall promptly
give written notice of any such application; provided, however, that the failure
to give such written notice shall not invalidate any such application.
ARTICLE X
THE ADMINISTRATIVE AGENT
Section 10.1 Authorization and Action.
(a) Each Lender and each Issuer hereby appoints CNAI as the
Administrative Agent hereunder and each Lender and each Issuer authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Administrative Agent under such agreements and to exercise such powers as
are reasonably incidental thereto. Without limiting the foregoing, each Lender
and each Issuer hereby authorizes the Administrative Agent to execute and
deliver, and to perform its obligations under, each of the Loan Documents to
which the Administrative Agent is a party and to exercise all rights, powers and
remedies that the Administrative Agent may have under such Loan Documents and,
in the case of the Collateral Documents, to act as agent for the Lenders, Issuer
and other Secured Parties under such Collateral Documents.
(b) As to any matters not expressly provided for by this Agreement and
the other Loan Documents (including enforcement or collection), the
Administrative Agent 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 Requisite Lenders, and such instructions shall be binding upon all Lenders
and each Issuer; provided, however, that the Administrative Agent shall not be
required to take any action which (i) the Administrative Agent in good faith
believes exposes it to personal liability unless the Administrative Agent
receives an indemnification satisfactory to it from the Lenders and the Issuers
with respect to such action or
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(ii) is contrary to this Agreement or applicable law. The Administrative Agent
agrees to give to each Lender and each Issuer prompt notice of each notice given
to it by any Loan Party pursuant to the terms of this Agreement or the other
Loan Documents.
(c) In performing its functions and duties hereunder and under the
other Loan Documents except to the limited extent provided in Section 11.2, the
Administrative Agent is acting solely on behalf of the Lenders and the Issuers
and its duties are entirely administrative in nature. The Administrative Agent
does not assume and shall not be deemed to have assumed any obligation other
than as expressly set forth herein and in the other Loan Documents or any other
relationship as the Administrative Agent, fiduciary or trustee of or for any
Lender, Issuer or holder of any other Obligation. The Administrative Agent may
perform any of its duties under any of the Loan Documents by or through its
agents or employees.
Section 10.2 Agent's Reliance, Etc. Neither the Administrative Agent
nor any of its Affiliates or any of the respective directors, officers, agents
or employees of the Administrative Agent or any such Affiliate shall be liable
for any action taken or omitted to be taken by it, him, her or them under or in
connection with this Agreement or the other Loan Documents, except for its, his,
her or their own gross negligence or willful misconduct. Without limiting the
foregoing, the Administrative Agent (a) may treat the payee of any Note as its
holder until such Note has been assigned in accordance with Section 11.2; (b)
may rely on the Register to the extent set forth in Section 11.2(c); (c) may
consult with legal counsel (including counsel to the Borrower or any other Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (d)
makes no warranty or representation to any Lender or Issuer and shall not be
responsible to any Lender or Issuer for any statements, warranties or
representations made by or on behalf of Group or any of its Subsidiaries in or
in connection with this Agreement or any of the other Loan Documents; (e) shall
not have any duty to ascertain or to inquire either as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or any
of the other Loan Documents or the financial condition of any Loan Party, or the
existence or possible existence of any Default or Event of Default; (f) shall
not be responsible to any Lender or Issuer for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
attachment, perfection or priority of any Lien created or purported to be
created under or in connection with, this Agreement, any of the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto; and (g) shall incur no liability under or in respect of this Agreement
or any of the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy or
electronic mail) or any telephone message believed by it to be genuine and
signed or sent by the proper party or parties.
Section 10.3 The Administrative Agent Individually. With respect to
its Ratable Portion, CNAI shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender. The terms "Lenders" or "Requisite
Lenders" or any similar terms shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity as a
Lender or as one of the Requisite Lenders. CNAI and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of banking, trust
or other business with any Loan Party as if it were not acting as the
Administrative Agent.
Section 10.4 Lender Credit Decision. Each Lender and each Issuer
acknowledges that it shall, independently and without reliance upon the
Administrative Agent or any other Lender conduct its own independent
investigation of the financial condition and affairs of the Borrower and each
other Loan Party in connection with the making and continuance of the Loans and
with the
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issuance of the Letters of Credit. Each Lender and each Issuer also acknowledges
that it will, independently and without reliance upon the Administrative Agent
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and other Loan Documents.
Section 10.5 Indemnification. Each Lender agrees to indemnify the
Administrative Agent and each of its Affiliates, and each of their respective
directors, officers, employees, agents and advisors (to the extent not
reimbursed by a Loan Party), from and against such Lender's aggregate Ratable
Portion of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements (including fees and
disbursements of legal counsel) of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against, the Administrative Agent or any of
its Affiliates, directors, officers, employees, agents and advisors in any way
relating to or arising out of this Agreement, the other Loan Documents or any
action taken or omitted by the Administrative Agent under this Agreement, the
other Loan Documents; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's or such Affiliate's gross negligence or willful
misconduct. Without limiting the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including fees and disbursements of legal counsel)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of its rights or responsibilities under, this Agreement, the
other Loan Documents, to the extent that the Administrative Agent is not
reimbursed for such expenses by a Loan Party.
Section 10.6 Successor Agent. The Administrative Agent may resign at
any time by giving written notice thereof to the Lenders and the Borrower. Upon
any such resignation, the Requisite Lenders shall have the right to appoint a
successor Administrative Agent, provided that such successor shall be United
States person as defined in Section 7701(a)(30) of the Code. If no successor
Administrative Agent shall have been so appointed by the Requisite Lenders, or
if such designated successor Administrative Agent shall not have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, selected from among the
Lenders. In either case, such appointment shall be subject to the prior written
approval of the Borrower (which approval may not be unreasonably withheld and
shall not be required upon the occurrence and during the continuance of an Event
of Default). Upon the acceptance of any appointment as Administrative Agent by a
successor Administrative Agent, such successor Administrative Agent shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents. Prior to any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the retiring Administrative Agent shall take
such action as may be reasonably necessary to assign to the successor
Administrative Agent its rights as Administrative Agent under the Loan
Documents. After such resignation, the retiring Administrative Agent shall
continue to have the benefit of this Article X as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this Agreement
or the other Loan Documents.
Section 10.7 Concerning the Collateral and the Collateral Documents.
(a) Each Lender and each Issuer agrees that any action taken by the
Administrative Agent or the Requisite Lenders (or, where required by the express
terms of this
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Agreement, a greater proportion of the Lenders) in accordance with the
provisions of this Agreement or of the other Loan Documents, and the exercise by
the Administrative Agent or the Requisite Lenders (or, where so required, such
greater proportion) of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders, Issuers and other Secured Parties. Without
limiting the generality of the foregoing, the Administrative Agent shall have
the sole and exclusive right and authority to (i) act as the disbursing and
collecting agent for the Lenders and the Issuers with respect to all payments
and collections arising in connection herewith and with the Collateral
Documents, (ii) execute and deliver each Collateral Document and accept delivery
of each such agreement delivered by the Borrower or any of its Subsidiaries,
(iii) act as collateral agent for the Lenders, the Issuers and the other Secured
Parties for purposes of the perfection of all security interests and Liens
created by such agreements and all other purposes stated therein; provided,
however, that the Administrative Agent hereby appoints, authorizes and directs
each Lender and Issuer to act as collateral sub-agent for the Administrative
Agent, the Lenders and the Issuers for purposes of the perfection of all
security interests and Liens with respect to the Collateral, including any
Deposit Account maintained by a Loan Party with, and cash and Cash Equivalents
held by, such Lender or such Issuer, (iv) manage, supervise and otherwise deal
with the Collateral, including making Protective Advances in an aggregate amount
not to exceed the lesser of $10,000,000 and the aggregate amount of the unused
Commitments, (v) take such action as is necessary or desirable to maintain the
perfection and priority of the security interests and Liens created or purported
to be created by the Collateral Documents and (vi) except as may be otherwise
specifically restricted by the terms hereof or of any other Loan Document,
exercise all remedies given to the Administrative Agent, the Lenders, the
Issuers and the other Secured Parties with respect to the Collateral under the
Loan Documents relating thereto, applicable law or otherwise.
(b) Each of the Lenders and the Issuers hereby consents to the release
and hereby directs, in accordance with the terms hereof, the Administrative
Agent to release (or, in the case of clause (ii) below, release or subordinate)
any Lien held by the Administrative Agent for the benefit of the Lenders and the
Issuers against any of the following:
(i) all of the Collateral and all Loan Parties, upon termination
of the Commitments and payment and satisfaction in full of all Loans, all
Reimbursement Obligations and all other Secured Obligations that the
Administrative Agent has been notified in writing are then due and payable
(and, in respect of contingent Letter of Credit Obligations, with respect
to which cash collateral has been deposited or a back-up letter of credit
has been issued, in either case in the appropriate currency and on terms
satisfactory to the Administrative Agent and the applicable Issuers);
(ii) any assets that are subject to a Lien permitted by Section
8.2 (d),(f) or (g); and
(iii) any part of the Collateral (A) sold or disposed of by a
Loan Party if such sale or disposition is permitted by this Agreement (or
permitted pursuant to a waiver or consent of a transaction otherwise
prohibited by this Agreement) (other than an Asset Sale pursuant to Section
8.4(c)(i)) or (B) that constitutes Stock of a Subsidiary Guarantor if such
Subsidiary Guarantor has been dissolved pursuant to Section 8.7(d).
(c) Each of the Lenders and the Issuers hereby directs, in accordance
with the terms hereof, the Administrative Agent to release any Subsidiary
Guarantor from its obligations under the Guaranty if the Stock of such
Subsidiary Guarantor is being dissolved pursuant to Section 8.7(d) or sold or
disposed of, if such sale or disposition is permitted by this Agreement (or
permitted pursuant to a waiver or consent of a transaction otherwise prohibited
by this Agreement) (other than an Asset Sale
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pursuant to Section 8.4(c)), or, if not pursuant to such sale or disposition, if
such release is consented to by the Lenders required to consent thereto under
Section 11.1.
(d) Each of the Lenders and the Issuers hereby directs the
Administrative Agent to execute and deliver or file such termination and partial
release statements and do such other things as are necessary to release Liens to
be released pursuant to this Section 10.7 promptly upon the effectiveness of any
such release. Unless expressly permitted by a Loan Document (or permitted
pursuant to a waiver of or consent to a transaction otherwise prohibited by this
Agreement), the Administrative Agent shall not release any Lien or any
Subsidiary Guarantor from its obligations under the Guaranty.
Section 10.8 Collateral Matters Relating to Related Obligations. The
provisions of this Agreement and the other Loan Documents relating to the
Collateral shall extend to and be available in respect of any Secured Obligation
arising under any Hedging Contract or Cash Management Obligation or that is
otherwise owed to Persons other than the Administrative Agent, the Lenders and
the Issuers (collectively, "Related Obligations") solely on the condition and
understanding, as among the Administrative Agent and all Secured Parties, that
(a) the Related Obligations shall be entitled to the benefit of the Collateral
to the extent expressly set forth in this Agreement and the other Loan Documents
and to such extent the Administrative Agent shall hold, and have the right and
power to act with respect to, the Guaranty and the Collateral on behalf of and
as agent for the holders of the Related Obligations, but the Administrative
Agent is otherwise acting solely as agent for the Lenders and the Issuers and
shall have no fiduciary duty, duty of loyalty, duty of care, duty of disclosure
or other obligation whatsoever to any holder of Related Obligations, (b) all
matters, acts and omissions relating in any manner to the Guaranty, the
Collateral, or the omission, creation, perfection, priority, abandonment or
release of any Lien, shall be governed solely by the provisions of this
Agreement and the other Loan Documents and no separate Lien, right, power or
remedy shall arise or exist in favor of any Secured Party under any separate
instrument or agreement or in respect of any Related Obligation, (c) each
Secured Party shall be bound by all actions taken or omitted, in accordance with
the provisions of this Agreement and the other Loan Documents, by the
Administrative Agent and the Requisite Lenders, each of whom shall be entitled
to act at its sole discretion and exclusively in its own interest given its own
Commitments and its own interest in the Loans, Letter of Credit Obligations and
other Obligations to it arising under this Agreement or the other Loan
Documents, without any duty or liability to any other Secured Party or as to any
Related Obligation and without regard to whether any Related Obligation remains
outstanding or is deprived of the benefit of the Collateral or becomes unsecured
or is otherwise affected or put in jeopardy thereby, (d) no holder of Related
Obligations and no other Secured Party (except the Administrative Agent, the
Lenders and the Issuers, to the extent set forth in this Agreement) shall have
any right to be notified of, or to direct, require or be heard with respect to,
any action taken or omitted in respect of the Collateral or under this Agreement
or the Loan Documents and (e) no holder of any Related Obligation shall exercise
any right of setoff, banker's lien or similar right except to the extent
provided in Section 11.6 and then only to the extent such right is provided for
under the documents governing such Related Obligation and exercised in
compliance with Section 11.7.
Section 10.9 Posting of Approved Electronic Communications
(a) Each of the Lenders, the Issuers and Group and the Borrower agree,
and Group shall cause each other Loan Party to agree, that the Administrative
Agent may, but shall not be obligated to, make the Approved Electronic
Communications available to the Lenders and Issuers by posting such Approved
Electronic Communications on "e-Disclosure", the Administrative Agent's internet
delivery system that is part of SSB Direct, Global Fixed Income's primary web
portal, or
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successor electronic platform chosen by the Administrative Agent to be its
internet delivery system (the "Approved Electronic Platform").
(b) Although the primary web portal is secured with a dual firewall
and a User ID/Password Authorization System and the Approved Electronic Platform
is secured through a single-user-per-deal authorization method whereby each user
may access the Approved Electronic Platform only on a deal-by-deal basis, each
of the Lenders, the Issuers, Group and the Borrower acknowledges and agrees, and
Group shall cause each other Loan Party to acknowledge and agree, that the
distribution of material through an electronic medium is not necessarily secure
and that there are confidentiality and other risks associated with such
distribution. In consideration for the convenience and other benefits afforded
by such distribution and for the other consideration provided hereunder, the
receipt and sufficiency of which is hereby acknowledged, each of the Lenders,
the Issuers, Group and the Borrower hereby approves, and Group shall cause each
other Loan Party to approve, distribution of the Approved Electronic
Communications through the Approved Electronic Platform and understands and
assumes, and Group shall cause each other Loan Party to understand and assume,
the risks of such distribution.
(c) The Approved Electronic Communications and the Approved Electronic
Platform are provided "as is" and "as available". None of the Administrative
Agent or any of its Affiliates or any of their respective officers, directors,
employees, agents, advisors or representatives (the "Agent Affiliates") warrant
the accuracy, adequacy or completeness of the Approved Electronic Communications
and the Approved Electronic Platform and each expressly disclaims liability for
errors or omissions in the Approved Electronic Communications and the Approved
Electronic Communications. No Warranty of any kind, express, implied or
statutory (including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects) is made by the Agent Affiliates in
connection with the Approved Electronic Communications.
Section 10.10 Syndication Agent; Co-Documentation Agents; Arrangers.
Neither the Syndication Agent, the Co-Documentation Agents nor the Arrangers
shall have any obligations or duties whatsoever in such capacity under this
Agreement, any other Loan Document and shall incur no liability hereunder or
thereunder in such capacity.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Amendments, Waivers, Etc.
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document nor consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Requisite Lenders, and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that (x) no amendment, waiver or consent with respect to the
provisions contained in Section 2.13(h) shall be effective, unless in writing
and signed by each Agent or Lender required under the terms of such section to
have consented thereto, (y) no amendment, waiver or consent under this Agreement
shall be effective to add any category of Collateral to the Borrowing Base
unless in writing and signed by each Agent and the Super-Majority Lenders, and
(z) no amendment, waiver or consent shall, unless in writing and signed by each
Lender affected thereby, in addition to the Requisite Lenders, do any of the
following:
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(i) waive any of the conditions specified in Section 3.1 (subject
to Section 3.3) or Section 3.2 except with respect to a condition based
upon another provision hereof, the waiver of which requires only the
concurrence of the Requisite Lenders;
(ii) increase the Commitments of such Lender or subject such
Lender to any additional obligation;
(iii) increase any Advance Rate above the applicable maximum set
forth in the definition thereof;
(iv) extend the scheduled final maturity of any Loan owing to
such Lender, or waive, reduce, or postpone any scheduled date fixed for,
the payment of principal, interest or fees owing to such Lender (it being
understood that Section 2.9 does not provide for scheduled dates fixed for
payment) or for the reduction of such Lender's Commitments;
(v) reduce the principal amount of any Loan or Reimbursement
Obligation (other than by the payment or prepayment thereof) owing to such
Lender;
(vi) reduce the rate of interest on any Loan or Reimbursement
Obligations owing to such Lender or any fee payable hereunder to such
Lender or waive any such obligation (other than with respect to default
interest);
(vii) change the aggregate Ratable Portions of the Lenders which
shall be required for the Lenders or any of them to take any action
hereunder;
(viii) release all or substantially all of the Collateral or
release any Guarantor from its obligations under the Guaranty except as
provided in Section 10.7 or as expressly provided under the Guaranty; or
(ix) amend Section 11.7 or this Section 11.1 or the definition of
the terms "Requisite Lenders," or "Ratable Portion;" "Super-Majority
Lenders" provided, that in connection with any Facility Increase, this
Section 11.1 and the definition of "Ratable Portion," "Requisite Lenders"
and "Super-Majority Lenders" shall be deemed to be amended in order to
provide the Lenders of such additional loans with voting rights
proportionate to the Commitments of such new Lenders; and
provided, further, no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required above to
take such action, affect the rights or duties of the Administrative Agent under
this Agreement or the other Loan Documents.
(b) The Administrative Agent may, but shall have no obligation to,
with the written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of that Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
(c) In connection with any proposed amendment, modification, waiver or
termination (a "Proposed Change") requiring the consent of all affected Lenders
or of the Super-Majority Lenders, if the consent of Requisite Lenders is
obtained, but the consent of other applicable Lenders whose consent is required
is not obtained (any such Lender whose consent is not obtained as described in
this Section 11.1 being referred to as a "Non-Consenting Lender"), then, as long
as the Lender that is
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acting as the Administrative Agent is not a Non-Consenting Lender, at the
Borrower's request, the Administrative Agent or an Eligible Assignee that is
acceptable to the Administrative Agent shall have the right with the
Administrative Agent's consent and in the Administrative Agent's sole discretion
(but shall have no obligation) to purchase from such Non-Consenting Lender, and
such Non-Consenting Lender agrees that it shall, upon the Administrative Agent's
request, sell and assign to the Lender that is acting as the Administrative
Agent or such Eligible Assignee, all of the Commitments, the Outstandings of
such Non-Consenting Lender for an amount equal to the principal balance of all
Loans held by the Non-Consenting Lender and all accrued interest and fees with
respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment and Acceptance and such sale and
assignment shall be recorded in the Register maintained by the Administrative
Agent.
Section 11.2 Assignments and Participations.
(a) Each Lender may sell, transfer, negotiate or assign to one or more
Eligible Assignees all or a portion of its rights and obligations hereunder
(including all of its rights and obligations with respect to the Revolving
Loans, the Swing Loans and the Letters of Credit); provided, however, that (i)
such assignment shall cover the same percentage of such Lender's Outstandings
and Commitments, (ii) the aggregate amount being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event (if less than the Assignor's
entire interest) be less than $5,000,000 or an integral multiple of $1,000,000
in excess thereof, except, in either case, (A) with the consent of Group and the
Administrative Agent or (B) if such assignment is being made to a Lender or an
Affiliate or Approved Fund of such Lender and (iii) if such Eligible Assignee is
not, prior to the date of such assignment, a Lender or an Affiliate or Approved
Fund of a Lender, such assignment shall be subject to the prior consent of the
Administrative Agent and Group (which consents shall not be unreasonably
withheld or delayed); and provided, further, that, notwithstanding any other
provision of this Section 11.2, the consent of Group shall not be required for
any assignment occurring when any Event of Default shall have occurred and be
continuing.
(b) The parties to each assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note (if the assigning Lender's
Loans are evidenced by a Note) subject to such assignment. Upon such execution,
delivery, acceptance and recording in the Register and the receipt by the
Administrative Agent from the assignee of an assignment fee in the amount of
$3,500 (other than in the case of an assignment by a Lender to an Affiliate of
such Lender) from and after the effective date specified in such Assignment and
Acceptance, (i) the assignee thereunder shall become a party hereto and, to the
extent that rights and obligations under the Loan Documents have been assigned
to such assignee pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender, and if such Lender were an Issuer, of such Issuer
hereunder and thereunder, and (ii) the assignor thereunder shall, to the extent
that rights and obligations under this Agreement have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights (except those
which survive the payment in full of the Obligations) and be released from its
obligations under the Loan Documents, other than those relating to events or
circumstances occurring prior to such assignment (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under the Loan Documents, such Lender shall
cease to be a party hereto).
(c) The Administrative Agent shall maintain at its address referred to
in Section 11.8 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recording of the names and addresses of
the Lenders and the Issuers, the Commitments of and principal amount of the
Loans and Letter of Credit Obligations (specifying the Reimbursement
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Obligations) owing to each Lender and each Issuer from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Loan Parties, the Administrative Agent,
the Lenders and the Issuers shall treat each Person whose name is recorded in
the Register as a Lender or as an Issuer, as the case may be, for all purposes
of this Agreement. The Register shall be available for inspection by the
Borrower and the Administrative Agent at any reasonable time and from time to
time upon reasonable prior notice. No Loan, Letter of Credit Obligation,
Reimbursement Obligation, nor any Assignment and Acceptance, shall be effective
unless it is entered in the Register in due course.
(d) Notwithstanding anything to the contrary contained in clause (b)
above, the Loans (including the Notes evidencing the Loans) and drawn Letters of
Credit are registered obligations and the right, title, and interest of the
Lenders and Issuers, as the case may be, and their assignees in and to such
Loans or drawn Letters of Credit, as the case may be, shall be transferable only
upon notation of such transfer in the Register. A Note shall only evidence the
Lender's or registered assignee's right, title and interest in and to the
related Loan, and in no event is any such Note to be considered a bearer
instrument or obligation. This Section 11.2 shall be construed so that the Loans
and drawn Letters of Credit are at all times maintained in "registered form"
within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and
any related regulations (or any other relevant or successor provisions of the
Code or such regulations). Solely for purposes of this Section 11.2 and for tax
purposes only, the Administrative Agent shall act as the Borrower's agent for
purposes of maintaining the Register and such notations of transfer in the
Register.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall, if
requested by such assignee, execute and deliver to the Administrative Agent, new
Notes to the order of such assignee in an amount equal to the Commitments
assumed by it pursuant to such Assignment and Acceptance and, if the assigning
Lender has surrendered any Note for exchange in connection with the assignment
and has retained Commitments hereunder, new Notes to the order of the assigning
Lender in an amount equal to the Commitments retained by it hereunder. Such new
Notes shall be dated the same date as the surrendered Notes and be in
substantially the form of Exhibit B (Form of Note) hereto, as applicable.
(f) In addition to the other assignment rights provided in this
Section 11.2, each Lender may do each of the following:
(i) grant to a Special Purpose Vehicle the option to make all or
any part of any Loan that such Lender would otherwise be required to make
hereunder and the exercise of such option by any such Special Purpose
Vehicle and the making of Loans pursuant thereto shall satisfy (once and to
the extent that such Loans are made) the obligation of such Lender to make
such Loans thereunder, provided, however, that (x) nothing herein shall
constitute a commitment or an offer to commit by such a Special Purpose
Vehicle to make Loans hereunder and no such Special Purpose Vehicle shall
be liable for any indemnity or other Obligation (other than the making of
Loans for which such Special Purpose Vehicle shall have exercised an
option, and then only in accordance with the relevant option agreement) and
(y) such Lender's obligations under the Loan Documents shall remain
unchanged, such Lender shall remain responsible to the other parties for
the performance of its obligations under the terms of this Agreement and
shall remain the holder of the Obligations for all purposes hereunder; and
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(ii) assign, as collateral or otherwise, any of its rights under
this Agreement, whether now owned or hereafter acquired (including rights
to payments of principal or interest on the Loans), to (A) without notice
to or consent of the Administrative Agent or the Borrower, any Federal
Reserve Bank (pursuant to Regulation A of the Federal Reserve Board) and
(B) without consent of the Administrative Agent or the Borrower, (1) any
holder of, or trustee for the benefit of, the holders of such Lender's
Securities and (2) any Special Purpose Vehicle to which such Lender has
granted an option pursuant to clause (i) above;
provided, however, that no such assignment or grant shall release such Lender
from any of its obligations hereunder except as expressly provided in clause (i)
above and except, in the case of a subsequent foreclosure pursuant to an
assignment as collateral, if such foreclosure is made in compliance with the
other provisions of this Section 11.2 other than this clause (f) or clause (g)
below. Each party hereto acknowledges and agrees that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any such Special Purpose Vehicle, such party shall
not institute against, or join any other Person in instituting against, any
Special Purpose Vehicle that has been granted an option pursuant to this clause
(f) any bankruptcy, reorganization, insolvency or liquidation proceeding (such
agreement shall survive the payment in full of the Obligations). The terms of
the designation of, or assignment to, such Special Purpose Vehicle shall not
restrict such Lender's ability to, or grant such Special Purpose Vehicle the
right to, consent to any amendment or waiver to this Agreement or any other Loan
Document or to the departure by the Borrower from any provision of this
Agreement or any other Loan Document without the consent of such Special Purpose
Vehicle except, as long as the Administrative Agent and the Lenders, Issuers and
other Secured Parties shall continue to, and shall be entitled to continue to,
deal solely and directly with such Lender in connection with such Lender's
obligations under this Agreement, to the extent any such consent would reduce
the principal amount of, or the rate of interest on, any Obligations, amend this
clause (f) or postpone any scheduled date of payment of such principal or
interest. Each Special Purpose Vehicle shall be entitled to the benefits of
Section 2.14(d), Section 2.15, and Section 2.16 as if it were such Lender;
provided, however, that anything herein to the contrary notwithstanding, no
Borrower shall, at any time, be obligated to make under Section 2.14(d), Section
2.15, or Section 2.16 to any such Special Purpose Vehicle and any such Lender
any payment in excess of the amount the Borrower would have been obligated to
pay to such Lender in respect of such interest if such Special Purpose Vehicle
had not been assigned the rights of such Lender hereunder. In addition, each
Lender granting a Special Purpose Vehicle the option to make all or any part of
any Loan that such Lender would otherwise be required to make pursuant to clause
(i) above, (x) shall keep a register, meeting the requirements of Treasury
Regulation Section 5f.103-1(c), of each Special Purpose Vehicle which has funded
all or any part of any Loans that such Lender would otherwise be obligated to
make pursuant to this Agreement, specifying such Special Purpose Vehicle's
entitlement to payments of principal and interest with respect to such Loans and
(y) shall collect (and deliver copies thereof to each of the Administrative
Agent and the Borrower), prior to the time such Special Purpose Vehicle receives
payments with respect to such funded Loans, from each Special Purpose Vehicle
the appropriate forms, certificates and statements described in Section 2.16(f)
(and updated as required by Section 2.16(f)) as if such Special Purpose Vehicle
were a Lender under Section 2.16(f).
(g) Each Lender may sell participations to one or more Persons in or
to all or a portion of its rights and obligations under the Loan Documents
(including all its rights and obligations with respect to the Revolving Loans
and Letters of Credit). The terms of such participation shall not, in any event,
require the participant's consent to any amendments, waivers or other
modifications of any provision of any Loan Documents, the consent to any
departure by any Loan Party therefrom, or to the exercising or refraining from
exercising any powers or rights which such Lender may have
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under or in respect of the Loan Documents (including the right to enforce the
obligations of the Loan Parties), except if any such amendment, waiver or other
modification or consent would (i) reduce the amount, or postpone any date fixed
for, any amount (whether of principal, interest or fees) payable to such
participant under the Loan Documents, to which such participant would otherwise
be entitled under such participation or (ii) result in the release of all or
substantially all of the Collateral other than in accordance with Section 10.7.
In the event of the sale of any participation by any Lender, (A) such Lender's
obligations under the Loan Documents shall remain unchanged, (B) such Lender
shall remain solely responsible to the other parties for the performance of such
obligations, (C) such Lender shall remain the holder of such Obligations for all
purposes of this Agreement, and (D) the Borrower, the Administrative Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Each
participant shall be entitled to the benefits of Section 2.14(d), Section 2.15
and Section 2.16 as if it were a Lender; provided, however, that anything herein
to the contrary notwithstanding, the Borrower shall not, at any time, be
obligated to pay to any participant of any interest of any Lender, under Section
2.14(d), Section 2.15 or Section 2.16, any sum in excess of the sum which the
Borrower would have been obligated to pay to such Lender in respect of such
interest had such participation not been sold. In addition, each originating
Lender selling a participation to a participant under this Section 11.2(g) (i)
shall keep a register, meeting the requirements of Treasury Regulation Section
5f.103-1(c), of each participant, specifying such participant's entitlement to
payments of principal and interest with respect to such participation, and (ii)
shall collect (and deliver copies thereof to each of the Administrative Agent
and the Borrower), prior to the time such participant receives payments with
respect to such participation, from each such participant the appropriate forms,
certificates and statements described in Section 2.16(f) (and updated as
required by Section 2.16(f)) as if such participant were a Lender under Section
2.16(f).
(h) Any Issuer may at any time assign its rights and obligations
hereunder to any other Lender by an instrument in form and substance
satisfactory to the Borrower, the Administrative Agent, such Issuer and such
Lender, subject to the provisions under this Section 11.2 relating to notations
of transfer in the Register.
(i) For purposes of this Section 11.2, with respect to each Letter of
Credit, if an Issuing Lender transfers its rights with respect to the Borrower's
Reimbursement Obligation with respect to a Letter of Credit such Issuing Lender
shall give notice of such transfer to the Administrative Agent for notation in
the Register. If any Issuer ceases to be a Lender hereunder by virtue of any
assignment made pursuant to this Section 11.2, then, as of the effective date of
such cessation, such Issuer's obligations to Issue Letters of Credit pursuant to
Section 2.4 shall terminate and such Issuer shall be an Issuer hereunder only
with respect to outstanding Letters of Credit Issued prior to such date.
Section 11.3 Costs and Expenses.
(a) Group and the Borrower agree, jointly and severally, upon demand
to pay, or reimburse each Agent and each Arranger for, all of such Agent's and
Arranger's reasonable internal and external audit, legal, appraisal, valuation,
filing, document duplication and reproduction and investigation expenses and for
all other reasonable out-of-pocket costs and expenses of every type and nature
(including the reasonable fees, expenses and disbursements of the Arrangers' and
the Agents' counsel, Weil, Gotshal & Xxxxxx LLP, local legal counsel, auditors,
accountants, appraisers, printers, insurance advisers, and other consultants and
agents) incurred by the Arrangers or the Agents in connection with (i) each
Arranger's and each Agent's audit and investigation of the Warnaco Entities in
connection with the preparation, negotiation and execution of the Loan Documents
and the Administrative Agent's periodic audits of the Warnaco Entities, as the
case may be; (ii) the
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preparation, negotiation, execution and interpretation of this Agreement
(including, without limitation, the satisfaction or attempted satisfaction of
any of the conditions set forth in Article III), the Loan Documents and any
proposal letter or commitment letter issued in connection therewith and the
making of the Loans hereunder; (iii) the creation, perfection or protection of
the Liens under the Loan Documents (including, without limitation, any
reasonable fees and expenses for local counsel in various jurisdictions); (iv)
the ongoing administration of this Agreement and the Loans, including
consultation with attorneys in connection therewith and with respect to the
Administrative Agent's rights and responsibilities hereunder and under the other
Loan Documents; (v) the protection, collection or enforcement of any of the
Secured Obligations or the enforcement of any of the Loan Documents; (vi) the
commencement, defense or intervention in any court proceeding relating in any
way to the Secured Obligations, any Warnaco Entity, this Agreement, any of the
other Loan Documents; (vii) the response to, and preparation for, any subpoena
or request for document production with which any Arranger or any Agent is
served or deposition or other proceeding in which any Arranger or any Agent is
called to testify, in each case, relating in any way to the Obligations, any
Warnaco Entity, this Agreement, any of the other Loan Documents; and (viii) any
amendments, consents, waivers, assignments, restatements, or supplements to any
of the Loan Documents and the preparation, negotiation, and execution of the
same.
(b) Group and the Borrower further agree, jointly and severally, to
pay or reimburse each Arranger, each Agent and each of the Lenders and Issuers
upon demand for all out-of-pocket costs and expenses, including, without
limitation, reasonable attorneys' fees (including allocated costs of internal
counsel and costs of settlement), incurred by such Arranger, such Agent, such
Lender or such Issuer (i) in enforcing any Loan Document, or Secured Obligation
or any security therefor or exercising or enforcing any other right or remedy
available by reason of an Event of Default; (ii) in connection with any
refinancing or restructuring of the credit arrangements provided hereunder in
the nature of a "work-out" or in any insolvency or bankruptcy proceeding; (iii)
in commencing, defending or intervening in any litigation or in filing a
petition, complaint, answer, motion or other pleadings in any legal proceeding
relating to the Secured Obligations, any Warnaco Entity and related to or
arising out of the transactions contemplated hereby, or by any of the other Loan
Documents; and (iv) in taking any other action in or with respect to any suit or
proceeding (bankruptcy or otherwise) described in clauses (i) through (iii)
above.
Section 11.4 Indemnities.
(a) Group and the Borrower agree, jointly and severally, to indemnify
and hold harmless each Arranger, each Agent, each Lender and each Issuer and
each of their respective Affiliates, and each of the directors, officers,
employees, agents, representative, attorneys, consultants and advisors of or to
any of the foregoing (including those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article III) (each such Person being an "Indemnitee") from and against any and
all claims, damages, liabilities, obligations, losses, penalties, actions,
judgments, suits, costs, disbursements and expenses of any kind or nature
(including reasonable fees and disbursements of counsel to any such Indemnitee)
which may be imposed on, incurred by or asserted against any such Indemnitee in
connection with or arising out of any investigation, litigation or proceeding,
whether or not any such Indemnitee is a party thereto, whether direct, indirect,
or consequential and whether based on any federal, state or local law or other
statutory regulation, securities or commercial law or regulation, or under
common law or in equity, or on contract, tort or otherwise, in any manner
relating to or arising out of this Agreement, any other Loan Document, any
Secured Obligation, any Letter of Credit, any Related Document, or any act,
event or transaction related or attendant to any thereof, or the use or intended
use of the proceeds of the Loans or Letters of Credit or in connection with any
investigation of any potential matter covered hereby (collectively, the
"Indemnified Matters"); provided, however, that neither Group nor the Borrower
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shall not have any obligation under this Section 11.4 (i) to an Indemnitee with
respect to any Indemnified Matter caused by or resulting from the gross
negligence or willful misconduct of that Indemnitee, as determined by a court of
competent jurisdiction in a final non-appealable judgment or order, and (ii)
with respect to taxes (and amounts relating thereto), the indemnification for
which shall be governed solely and exclusively by Section 2.16. Without limiting
the foregoing, Indemnified Matters include (i) all Environmental Liabilities and
Costs arising from or connected with the past, present or future operations of
any Warnaco Entity involving any property subject to a Collateral Document, or
damage to real or personal property or natural resources or harm or injury
alleged to have resulted from any Release of Contaminants on, upon or into such
property or any contiguous real estate; (ii) any costs or liabilities incurred
in connection with any Remedial Action concerning any Warnaco Entity; (iii) any
costs or liabilities incurred in connection with any Environmental Lien; (iv)
any costs or liabilities incurred in connection with any other matter under any
Environmental Law, including CERCLA and applicable state property transfer laws,
whether, with respect to any of such matters, such Indemnitee is a mortgagee
pursuant to any leasehold mortgage, a mortgagee in possession, the successor in
interest to any Warnaco Entity, or the owner, lessee or operator of any property
of any Warnaco Entity by virtue of foreclosure, except, with respect to those
matters referred to in clauses (i), (ii), (iii) and (iv) above, to the extent
incurred following (A) foreclosure by the Administrative Agent, any Lender or
any Issuer, or the Administrative Agent, any Lender or any Issuer having become
the successor in interest to any Warnaco Entity, and (B) attributable solely to
acts of the Arrangers, the Administrative Agent, the Syndication Agent, such
Lender or such Issuer or any agent on behalf of the Administrative Agent or such
Lender.
(b) Group and the Borrower shall, jointly and severally, indemnify the
each Agent, each Arranger, each Lender and each Issuer for, and hold each Agent,
each Arranger, each Lender and each Issuer harmless from and against, any and
all claims for brokerage commissions, fees and other compensation made against
any Agent, Arranger, Lender or any Issuer for any broker, finder or consultant
with respect to any agreement, arrangement or understanding made by or on behalf
of any Warnaco Entity in connection with the transactions contemplated by this
Agreement.
(c) Group and the Borrower agree, jointly and severally, that any
indemnification or other protection provided to any Indemnitee pursuant to this
Agreement (including pursuant to this Section 11.4) or any other Loan Document
shall (i) survive payment in full of the Secured Obligations and (ii) inure to
the benefit of any Person who was at any time an Indemnitee under this Agreement
or any other Loan Document.
Section 11.5 Limitation of Liability.
(a) Group and the Borrower agree, jointly and severally, that no
Indemnitee shall have any liability (whether direct or indirect, in contract,
tort or otherwise) to any Warnaco Entity or any equity holders or creditors of
any Warnaco Entity for or in connection with the transactions contemplated
hereby and in the other Loan Documents, except to the extent such liability is
found in a final judgment by a court of competent jurisdiction to have resulted
from such Indemnitee's gross negligence or willful misconduct. In no event,
however, shall any Indemnitee be liable on any theory of liability for any
special, indirect, consequential or punitive damages and each of Group and the
Borrower hereby waives, releases and agrees (for itself and on behalf of its
Subsidiaries) not to xxx upon any such claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.
(b) In no event shall any Agent Affiliate have any liability to any
Loan Party, Lender, Issuer or any other Person for damages of any kind,
including direct or indirect, special, incidental or consequential damages,
losses or expenses (whether in tort or contract or otherwise)
105
arising out of any Loan Party or any Agent Affiliate's transmission of Approved
Electronic Communications through the Internet or any use of the Approved
Electronic Platform, except to the extent such liability of any Agent Affiliate
is found in a final non-appealable judgment by a court of competent jurisdiction
to have resulted primarily from such Agent Affiliate's gross negligence or
willful misconduct.
Section 11.6 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, each Lender and each Affiliate of a Lender
is hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other Indebtedness at
any time owing by such Lender or its Affiliates to or for the credit or the
account of a Loan Party against any and all of the Secured Obligations now or
hereafter existing whether or not such Lender shall have made any demand under
this Agreement or any other Loan Document and although such Secured Obligations
may be unmatured. Each Lender agrees promptly to notify the Borrower after any
such set-off and application made by such Lender or its Affiliates; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this Section 11.6
are in addition to the other rights and remedies (including other rights of
set-off) which such Lender may have.
Section 11.7 Sharing of Payments, Etc.
(a) If any Lender (directly or through an Affiliate thereof) shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off or otherwise) on account of the Loans owing to it (including
any interest or fees in respect thereof or amounts due pursuant to Section 11.3
or Section 11.4) or derived from Collateral ( in each case, other than pursuant
to Section 2.14, Section 2.15 or Section 2.16) in excess of its Ratable Portion
of payments obtained by all the Lenders on account of such Obligations, such
Lender (each, a "Purchasing Lender") shall forthwith purchase from the other
Lenders (each, a "Selling Lender") such participations in their Loans or other
Obligations as shall be necessary to cause such Purchasing Lender to share the
excess payment ratably with each of them.
(b) If any Lender shall, after the sharing of payments as set forth in
clause (a) above, hold payments in excess of its Loans, such Lender shall pay
such amounts to the Administrative Agent for application pursuant to Section
2.13(h).
(c) If all or any portion of any payment received by a Purchasing
Lender is thereafter recovered from such Lender, such purchase from each
applicable Selling Lender shall be rescinded and such Lender shall repay to such
Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender's ratable share (according to the
proportion of (i) the amount of such Selling Lender's required repayment to (ii)
the total amount so recovered from such Purchasing Lender) of any interest or
other amount paid or payable by such Purchasing Lender in respect of the total
amount so recovered.
(d) The Borrower agrees that any Purchasing Lender so purchasing a
participation from a Selling Lender pursuant to this Section 11.7 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
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Section 11.8 Notices, Etc.
(a) Notices. All notices, demands, requests and other communications
provided for in this Agreement shall be given in writing, or by any
telecommunication device capable of creating a written record, and addressed to
the party to be notified as follows:
(i) if to Group or the Borrower:
c/o The Warnaco Group Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Financial Officer
Telecopy no: (000) 000-0000
with a copy to the General Counsel of Group
Email: xxxxxxxxxxxx@xxxxxxx.xxx
(ii) if to any Lender, at its Domestic Lending Office specified
opposite its name on Schedule II (Applicable Lending Offices and Addresses
for Notices) or on the signature page of any applicable Assignment and
Acceptance;
(iii) if to any Issuer, at the address set forth under its name
on Schedule II (Applicable Lending Offices and Addresses for Notices); and
(iv) if to the Administrative Agent:
Citicorp North America, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Email: xxxxxx.xxxxxx@xxxxxxxxx.xxx
Telecopy no: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Email: xxxxxx.xxxxx@xxxx.xxx
Telecopy no: (000) 000-0000
or at such other address as shall be notified in writing (i) in the case of
Group, the Borrower and the Administrative Agent, to the other parties and (ii)
in the case of all other parties, to the Borrower and the Administrative Agent.
All such notices and communications shall be effective upon (1) personal
delivery (if delivered by hand, including any overnight courier service), (2)
when deposited in the mails (if sent by mail), (3) if delivered by posting to an
Approved Electronic Platform, an internet website or a similar telecommunication
device requiring a user prior access to such Approved Electronic Platform,
website or other device, when such notice, demand, request, consent and other
communication shall have been made generally available on such Approved
Electronic Platform,
107
Internet website or similar device to the class of Person being notified
(regardless of whether any such Person must accomplish, and whether or not any
such Person shall have accomplished, any action prior to obtaining access to
such items, including registration, disclosure of contact information,
compliance with a standard user agreement or undertaking a duty of
confidentiality) and (4) if delivered by electronic mail or any other
telecommunications device, when transmitted to an electronic mail address (or by
another means of electronic delivery) as provided above; provided, however, that
notices and communications to the Administrative Agent pursuant to Article II or
Article X shall not be effective until received by the Administrative Agent.
(b) Use of Electronic Platform. Notwithstanding clause (a) above
(unless the Administrative Agent requests that the provisions of clause (a)
above be followed) and any other provision in this Agreement or any other Loan
Document providing for the delivery of, any Approved Electronic Communication by
any other means, the Loan Parties shall deliver all Approved Electronic
Communications to the Administrative Agent by transmitting such Approved
Electronic Communications electronically (in a format acceptable to the
Administrative Agent) to xxxxxxxxxxxxxxx@xxxx.xxx or such other electronic mail
address (or similar means of electronic delivery) as the Administrative Agent
may notify the Borrower. Nothing in this clause (b) shall prejudice the right of
the Administrative Agent or any Lender or Issuer to deliver any Approved
Electronic Communication to any Loan Party in any manner prescribed in this
Agreement.
Section 11.9 No Waiver; Remedies. No failure on the part of any
Lender, Issuer or the Administrative Agent 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 11.10 Binding Effect. This Agreement shall become effective
when it shall have been executed by Group, the Borrower and the Administrative
Agent and when the Administrative Agent shall have been notified by each Lender
that such Lender has executed it and thereafter shall be binding upon and inure
to the benefit of Group, the Borrower, the Administrative Agent and each Lender
and their respective successors and assigns, except that neither Group nor the
Borrower shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.
Section 11.11 Governing Law. This Agreement and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
Section 11.12 Submission to Jurisdiction; Service of Process.
(a) Any legal action or proceeding with respect to this Agreement or
any other Loan Document may be brought in the courts of the State of New York or
of the United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Group and the Borrower hereby each
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties hereto
hereby irrevocably waive any objection, including any objection to the laying of
venue or based on the grounds of forum non conveniens, that any of them may now
or hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
(b) Each of Group and the Borrower hereby irrevocably consents to the
service of any and all legal process, summons, notices and documents in any
suit, action or proceeding brought
108
in the United States of America arising out of or in connection with this
Agreement or any of the other Loan Documents by the mailing (by registered or
certified mail, postage prepaid) or delivering of a copy of such process to
Group and the Borrower at its address specified in Section 11.8. Each of Group
and the Borrower 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.
(c) Nothing contained in this Section 11.12 shall affect the right of
the Administrative Agent or any Lender to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against the
Borrower or any other Loan Party in any other jurisdiction.
(d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
Section 11.13 Waiver of Jury Trial. EACH OF THE ADMINISTRATIVE AGENT,
THE LENDERS, THE ISSUERS, GROUP AND THE BORROWER IRREVOCABLY WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT.
Section 11.14 Marshaling; Payments Set Aside. None of the
Administrative Agent, any Lender or any Issuer shall be under any obligation to
marshal any assets in favor of any Loan Party or any other party or against or
in payment of any or all of the Obligations. To the extent that any Loan Party
makes a payment or payments to the Administrative Agent, the Lenders or the
Issuers or any of such Persons receives payment from the proceeds of the
Collateral or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party, then to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, right and remedies therefore, shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.
Section 11.15 Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
Section 11.16 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are attached to the same
document.
Section 11.17 Entire Agreement. This Agreement, together with all of
the other Loan Documents and all certificates and documents delivered hereunder
or thereunder, embodies the entire agreement of the parties and supersedes all
prior agreements and understandings relating to the subject matter hereof.
Delivery of an executed signature page of this Agreement by facsimile
109
transmission shall be as effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all parties
shall be lodged with the Borrower and the Administrative Agent.
Section 11.18 Confidentiality.
(a) Group, the Borrower, the Lenders and the Agents hereby agree that
each of Group, the Borrower, the Lenders and the Agents (and each of their
respective, and their respective Affiliates', employees, officers, directors,
agents and advisors) is, and has been from the commencement of discussions with
respect to the Facility, permitted to disclose to any and all Persons, without
limitation of any kind, the structure and tax aspects (as such terms are used in
Code Sections 6011, 6111 and 6112 and the regulations promulgated thereunder) of
the Facility, and all materials of any kind (including opinions or other tax
analyses) that are or have been provided to Group, the Borrower, such Lender or
such Agent related to such structure and tax aspects. In this regard, each of
Group, the Borrower, the Lenders and the Agents acknowledges and agrees that its
disclosure of the structure or tax aspects of the Facility is not limited in any
way by an express or implied understanding or agreement, oral or written
(whether or not such understanding or agreement is legally binding).
Furthermore, each of Group, the Borrower, the Lenders and the Agents
acknowledges and agrees that it does not know or have reason to know that its
use or disclosure of information relating to the structure or tax aspects of the
Facility is limited in any other manner (such as where the Facility is claimed
to be proprietary or exclusive) for the benefit of any other Person. To the
extent that disclosure of the structure or tax aspects of the Facility by Group,
the Borrower, the Agents or the Lenders is limited by any existing agreement
between Group, the Borrower, the Agents or the Lenders, such limitation is
agreed to be void ab initio and such agreement is hereby amended to permit
disclosure of the structure and tax aspects of the Facility as provided in this
clause (a).
(b) Subject to clause (a) of this Section 11.18, no Agent or any
Lender may disclose to any Person any confidential, proprietary or non-public
information of the Warnaco Entities furnished to the Agents or the Lenders by
Group or the Borrower (such information being referred to collectively herein as
the "Borrower Information"), except that each of the Agents and each of the
Lenders may disclose Borrower Information (i) to its and its Affiliates'
employees, officers, directors, agents and advisors (it being understood that
the Persons to whom such disclosure is made will be informed of the confidential
nature of such Borrower Information and instructed to keep such Borrower
Information confidential on substantially the same terms as provided herein),
(ii) to the extent requested by any regulatory authority, (iii) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (iv) to any other party to this Agreement, (v) if reasonably necessary
in connection with the exercise of any remedies hereunder or under any other
Loan Document or any suit, action or proceeding relating to this Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder,
(vi) subject to an agreement containing provisions substantially the same as
those of this Section 11.18, to any assignee of or participant in, or any
prospective assignee of or participant in, any of its rights or obligations
under this Agreement, (vii) to the extent such Borrower Information (A) is or
becomes generally available to the public on a non-confidential basis other than
as a result of a breach of this Section 11.18 by such Agent or such Lender, or
(B) is or becomes available to such Agent or such Lender on a nonconfidential
basis from a source other than a Warnaco Entity and (viii) with the prior
written consent of Group or the Borrower.
(c) Subject to clause (a) of this Section 11.18, neither Group nor the
Borrower may disclose to any Person the amount or terms of any fees payable to
any Agent, any Arranger or any Lender (such information being collectively
referred to herein as the "Facility Information"), except that Group or the
Borrower may disclose the Facility Information (i) to its and its respective
Affiliates'
110
employees, officers, directors, agents and advisors who have a need to know the
Facility Information in connection with this Agreement and the transactions
contemplated hereby or (ii) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process.
111
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.
WARNACO INC.,
as Borrower
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title:
THE WARNACO GROUP INC.,
as Group
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title:
CITICORP NORTH AMERICA INC.,
as Administrative Agent and a
Lender
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
JPMORGAN CHASE BANK,
as Syndication Agent and a Lender
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
SIGNATURE PAGE TO CREDIT AGREEMENT
000
XXXX XX XXXXXXX, NA,
as a Co-Documentation Agent, an Issuer
and a Lender
By: /s/ Illegible
----------------------------------
Name:
Title:
THE CIT GROUP/COMMERCIAL SERVICES, INC.,
as a Co-Documentation Agent and a
Lender
By: /s/ Xxxx X. XxXxxxx
----------------------------------
Name: Xxxx X. XxXxxxx
Title: Senior Vice President
CONGRESS FINANCIAL CORPORATION (CENTRAL)
as a Co-Documentation Agent and a
Lender
By: /s/ Xxxxxxx Vizgiroa
----------------------------------
Name: Xxxxxxx Vizgiroa
Title: First Vice President
THE BANK OF NOVA SCOTIA,
as an Issuer and a Lender
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
AMSOUTH CAPITAL CORP.,
as a Lender
By: /s/ Xxxx XxXxxxx
----------------------------------
Name: Xxxx XxXxxxx
Title: Attorney-In-Fact
FLEET RETAIL FINANCE INC.,
as a Lender
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Director
Fleet Retail Finance
FOOTHILL CAPITAL CORPORATION,
as a Lender
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
SIGNATURE PAGE TO CREDIT AGREEMENT
113
GMAC COMMERCIAL FINANCE LLC.
as a Lender
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Director
XXXXXXX XXXXX CAPITAL, A DIVISION OF
XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC.,
as a Lender
By: /s/ Xxxx Urobel
----------------------------------
Name: Xxxx Urobel
Title: Vice President
NATIONAL CITY COMMERCIAL FINANCE, INC.,
as a Lender
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
LASALLE BUSINESS CREDIT, LLC,
as a Lender
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
ORIX FINANCIAL SERVICES, INC.,
as a Lender
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
SIGNATURE PAGE TO CREDIT AGREEMENT
114
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
SIEMENS FINANCIAL SERVICES, INC.,
as a Lender
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President-Credit
WHITEHALL BUSINESS CREDIT CORPORATION,
as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Duly Authorized Signatory
SIGNATURE PAGE TO CREDIT AGREEMENT
115
UPS CAPITAL CORPORATION,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
SIGNATURE PAGE TO CREDIT AGREEMENT
116
