EXHIBIT 10.1
PORTIONS OF THIS EXHIBIT 10.1 MARKED BY AN *** HAVE BEEN OMITTED PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

 

--------------------------------------------------------------------------------

 

EXECUTION VERSION
CREDIT AGREEMENT
Dated as of August 26, 2008
among
Warnaco Inc.,
as Borrower
The Warnaco Group, Inc.,
as a Guarantor
The Lenders and Issuers from Time to Time Party Hereto
Bank of America, N.A.,
as Administrative Agent
Bank of America, N.A.,
as Collateral Agent
Banc of America Securities LLC and Deutsche Bank Securities Inc.,
as Joint Lead Arrangers
Banc of America Securities LLC, Deutsche Bank Securities Inc. and
J.P. Morgan Securities Inc,
as Joint Bookrunners
deutsche bank Securities inc.,
as Sole Syndication Agent
and
HSBC Business Credit (USA) Inc.,
JPMorgan Chase Bank, N.A.
and
RBS Business Capital,
a division of RBS Asset Finance Inc.,
as Co-Documentation Agents
Kaye Scholer LLP
425 Park Avenue
New York, New York 10022

 

 

--------------------------------------------------------------------------------

 

Credit Agreement, dated as of August 26, 2008, 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), Bank
of America, N.A. (“BofA”), as administrative agent for the Revolving Credit
Facility (as defined below) (in such capacity, the “Administrative Agent”) and
as collateral agent for the Lenders and the Issuers (in such capacity, the
“Collateral Agent”), Banc of America Securities LLC (“BAS”) and Deutsche Bank
Securities Inc. (“DBSI”), as joint lead arrangers (in such capacity, the
“Arrangers”), BAS, DBSI and J.P. Morgan Securities Inc., as joint bookrunners
(in such capacity, collectively, the “Joint Bookrunners”), DBSI, as sole
syndication agent for the Lenders and the Issuers (in such capacity, the
“Syndication Agent” and together with the Administrative Agent and the
Collateral Agent, collectively, the “Agents”), and HSBC Business Credit
(USA) Inc., JPMorgan Chase Bank, N.A. and RBS Business Capital, a division of
RBS Asset Finance Inc., 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, the Borrower has requested that the Lenders and the Issuers make
available to the Borrower for the purposes specified in this Agreement (as
defined below) a revolving credit and letter of credit facility;
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):
“Accelerated Borrowing Base Certificate Delivery Date” means any date on which
the Available Credit has been less than 15% of the Aggregate Borrowing Limit for
five consecutive Business Days.
“Accelerated Borrowing Base Certificate Delivery Period” means the period
commencing on an Accelerated Borrowing Base Certificate Delivery Date and ending
on the first day after any 45 consecutive day period, commencing after such
Accelerated Borrowing Base Certificate Delivery Date, during which the Available
Credit equals or exceeds 15% of the Aggregate Borrowing Limit for each day
during such 45 consecutive day period and no Event of Default has occurred or
existed (or ending such earlier time after the commencement of such Accelerated
Borrowing Base Certificate Delivery Date that the Available Credit equals or
exceeds 15% of the Aggregate Borrowing Limit as the Administrative Agent shall
agree in writing in its sole discretion).
“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 90% of the Orderly Liquidation
Value Rate (or, in the case of Eligible Inventory consisting of Documented
Non-Letter of Credit Inventory or Inventory covered by Documentary Letters of
Credit, 85% of the Orderly Liquidation Value Rate).
“Administrative Agent” has the meaning specified in the preamble to this
Agreement.
“Advance Rate” means, for each category of Collateral set forth below, the rate
set forth below (as a percentage of book value) opposite such category of
Collateral:

          Category   Rate  
Eligible Receivables
    85 %
Eligible Inventory (other than Documented Non-Letter of Credit Inventory and
Inventory covered by Documentary Letters of Credit)
    80 %

provided, that (a) if at any time the product of (i) the Adjusted Orderly
Liquidation Value Rate and (ii) the sum of Eligible Inventory (other than
Documented Non-Letter of Credit Inventory and Inventory covered by Documentary
Letters of Credit) of each Loan Party (valued, in each case, at the lower of
cost and market on a first-in, first-out basis) is less than the aggregate
Borrowing Base attributable to such Inventory under clause (a)(ii)(x) of the
definition of Borrowing Base (calculated using the above Advance Rate), then, at
the sole discretion of the Administrative Agent, exercised reasonably, the
effective Advance Rate for Eligible Inventory will be adjusted (until delivery
of the next Appraisal) to a level that would cause such Advance Rate 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, three (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 Affiliate” has the meaning specified in Section 10.9(c).
“Agents” has the meaning specified in the preamble to this Agreement.
“Agreement” means this Credit Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

 

2

--------------------------------------------------------------------------------

 

“Agreement Accounting Principles” means, subject to Section 1.3, GAAP or, if
(x) the Securities and Exchange Commission requires or permits United States
reporting companies to utilize the IFRS in lieu of GAAP for reporting purposes
and (y) Group adopts the IFRS with the agreement of its independent public
accountants, the IFRS, each as in effect from time to time, applied in a manner
consistent with that used in the preparation of the audited annual Financial
Statements referred to in Section 6.1(c); provided that if the adoption by Group
of the IFRS results in a change in any of the calculations required by
Article V, Article VI or Article VIII or in the definition of “Applicable
Margin” or “Permitted Acquisition”, 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 Group and the Borrower or the determination of the “Applicable
Margin” or the calculation of the Fixed Charge Coverage Ratio in the definition
of “Permitted Acquisition” shall be the same after such adoption as if such
adoption had not been made; and provided, further, that the adoption of the IFRS
(to the extent that such adoption would affect a calculation that measures
compliance with any covenant contained in Article V, Article VI or Article VIII
or in the definition of “Applicable Margin” or “Permitted Acquisition”) shall
not be given effect until such provisions are amended to reflect such adoption.
“Aggregate Borrowing Base” means, at any time, the aggregate of the Borrowing
Base and the Borrowing Base (as defined in the Canadian Facility) at such time.
“Aggregate Borrowing Limit” means, at any time, the lesser of (i) the sum of the
Revolving Credit Commitments and Revolving Credit Commitments (as defined in the
Canadian Facility) in effect at such time and (ii) the Aggregate Borrowing Base
at such time.
“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.
“Anniversary Date” means each anniversary of the Closing Date.
“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, as of any date of determination, (a) from and after
the Closing Date but prior to the date 10 Business Days after delivery by Group
to the Administrative Agent of Financial Statements pursuant to Section 6.1(b)
for the Fiscal Quarter ending on or about March 31, 2009, a per annum rate equal
to 1.75% (in the case of Eurodollar Rate Loans) and .75% (in the case of Base
Rate Loans) and (b) from and after the date 10 Business Days after delivery by
Group to the Administrative Agent of Financial Statements pursuant to
Section 6.1(b) for the Fiscal Quarter ending on or about March 31, 2009, 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:

                      Base Rate     Eurodollar   Leverage Ratio   Loans     Rate
Loans  
Greater than 1.75 to 1
    1.00 %     2.00 %
Less than or equal to 1.75 to 1 and greater than 0.50 to 1
    .75 %     1.75 %
Less than or equal to 0.50 to 1
    .50 %     1.50 %

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 10
Business Days after delivery by Group 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 Group 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 10
Business Days after Group delivers to the Administrative Agent such Financial
Statements, shall equal the highest possible Applicable Margin provided for by
this definition.

 

3

--------------------------------------------------------------------------------

 

“Applicable Unused Commitment Fee Rate” means, as of any date of determination,
a per annum rate equal to the rate set forth below opposite the respective Level
(i.e., Level 1 or Level 2, as the case may be) of Average Revolver Usage for the
calendar quarter most recently ended (or, for the first payment of the Unused
Commitment Fee under Section 2.12(a), for the period commencing on the Closing
Date and ending on the last day of the calendar quarter in which the Closing
Date occurred); provided that the Applicable Unused Commitment Fee Rate shall
not change until 5 Business Days after the end of such calendar quarter (or
shorter period).

                  Average       Level   Revolver Usage   Unused Commitment Fee  
Level 1  
Less than 50%
    0.50 % Level 2  
Equal to or greater than 50%
    0.375 %

“Appraisal” means each appraisal that is conducted prior to, on or after the
Closing Date pursuant to Section 6.12(b) for purposes 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.
“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 any 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 (i) any Notice of Borrowing, Letter of Credit
Request, Swing Loan Request, Notice of Conversion or Continuation, and any other
notice, demand, communication, information, document and other material relating
to a request for a new, or a conversion of an existing, Borrowing (other than a
Notice of Borrowing, Swing Loan Request or Notice of Conversion or Continuation
sent by e-mail in accordance with the terms hereof; provided, that (A) the
Borrower shall confirm each such notice by prompt delivery to the Administrative
Agent of a Notice of Borrowing, Swing Loan Request or Notice of Conversion or
Continuation, as applicable, in a manner permitted by Section 11.8 (other than
by electronic mail, Approved Electronic Platform, internet website or other
electronic transmission), but if it differs in any material respect from the
action taken by any Facility Agent or Lender, the records of the applicable
Facility Agents and Lenders shall govern, (B) each Facility Agent and Lender
shall be entitled to rely on such e-mail notice (and regardless of whether any
confirmation is received by the Administrative Agent) and (C) no Facility Agent
or Lender shall have any liability for any loss suffered by the Borrower or any
other Loan Party as a result of a Facility Agent or any Lender acting upon such
e-mailed instructions), (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.

 

4

--------------------------------------------------------------------------------

 

“Approved Electronic Platform” has the meaning specified in Section 10.9.
“Approved Fund” means any Fund that is advised or managed by (a) an Agent or a
Lender, (b) an Affiliate of any Agent or any Lender or (c) an entity or
Affiliate of an entity that administers or manages a Lender.
“Arrangers” has the meaning specified in the preamble to this Agreement.
“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.
“Availability Reserves” means, as of three (3) Business Days after the date of
written notice of any determination thereof to the Borrower by the
Administrative Agent (except that no such advance notice shall be required with
respect to any amounts established on or prior to the Closing Date so long as
the Administrative Agent notifies the Borrower of such amounts on or prior to
the Closing Date, which amounts shall be in effect as of the Closing Date), such
amounts as the Administrative Agent may from time to time establish against the
Revolving Credit Facility, in the Administrative Agent’s sole discretion
exercised reasonably, in order to (a) preserve the value of the Collateral or
the Collateral 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, to the extent that the Administrative Agent is not aware of same on
the Closing Date, arising on or prior to 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, the sum of the Available U.S. Credit at
such time and the Dollar Equivalent of the Available Canadian Credit (as defined
in the Canadian Facility) at such time; provided that in no event shall the
Dollar Equivalent of the amount of Available Canadian Credit included in the
determination of “Available Credit” at any time exceed 25% of the Available
Credit at such time.
“Available U.S. Credit” means, at any time, (a) the lesser of (i) the Revolving
Credit Commitments in effect at such time and (ii) the Borrowing Base at such
time minus (b) the sum of (i) the aggregate Revolving Credit Outstandings at
such time and (ii) the aggregate amount of any Availability Reserve in effect at
such time.

 

5

--------------------------------------------------------------------------------

 

“Average Revolver Usage” means, for any period, an amount equal to (i) the
quotient of (x) the sum of the Revolving Credit Outstandings (excluding the
amount of any outstanding Swing Loans) for each day during such period, divided
by (y) the number of days in such period, divided by (ii) the quotient of
(x) the sum of the Revolving Credit Commitments of the Lenders for each day
during such period, divided by (y) the number of days in such period, all as
determined by the Administrative Agent.
“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 Collateral Agent’s Lien with
respect thereto.
“Bankruptcy Code” means title 11, United States Code, as amended from time to
time.
“BAS” has the meaning specified in the preamble to this Agreement.
“Base Rate” means, for any day, the greater of (a) the rate of interest in
effect for such day as publicly announced from time to time by BofA in
Charlotte, North Carolina as its “prime rate” (the “prime rate” being a rate set
by BofA based upon various factors including BofA’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate) or (b) the Federal Funds Rate in effect for such day, plus 0.50% per
annum, provided, that, in the Administrative Agent’s sole discretion, such
amount is subject to change at any time without notice to the Borrower (it being
understood and agreed that no change shall be made under this proviso except as
a result of a change in the above “prime rate” or Federal Funds Rate). With
respect to any determination of any interest rate which is based on the Base
Rate, any change in the prime rate announced by BofA shall take effect at the
opening of business on the day specified in the public announcement of such
change, and any change in the Federal Funds Rate shall take effect as of the
date of such change.
“Base Rate Loan” means any 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.
“BofA” has the meaning specified in the preamble to this Agreement.
“Borrower” has the meaning specified in the preamble to this Agreement.
“Borrowing” means a Revolving Credit Borrowing.

 

6

--------------------------------------------------------------------------------

 

“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),
(ii) the sum of (x) the product of the Advance Rate then in effect for Eligible
Inventory and the value of the Eligible Inventory (other than Documented
Non-Letter of Credit Inventory and Inventory covered by Documentary Letters of
Credit) of each Loan Party (valued, in each case, at the lower of cost and
market on a first-in, first-out basis) and (y) subject to the proviso in the
last sentence of the definition of Eligible Inventory, the product of the
Adjusted Orderly Liquidation Value Rate then in effect and the sum of (1) the
value of the Eligible Inventory consisting of Documented Non-Letter of Credit
Inventory of each Loan Party (valued, in each case, at the lower of cost and
market on a first-in, first-out basis) and (2) the value of the Eligible
Inventory consisting of Inventory covered by Documentary Letters of Credit of
each Loan Party (which value under this clause (2) shall be deemed to be the
aggregate undrawn amount of such Documentary Letters of Credit at such time) and
(iii) the lesser of (x) that amount which is the excess of $35,000,000 over the
Dollar Equivalent of the aggregate amount of cash and Permitted Cash Equivalents
(as defined in the Canadian Facility) held in the Special Cash Collateral
Account (as defined in the Canadian Facility) at such time and (y) the aggregate
amount of cash and Permitted Cash Equivalents held in the Special Cash
Collateral Account at such time (but only so long as such cash, Permitted Cash
Equivalents and account are subject to a valid and perfected first priority Lien
in favor of the Collateral Agent) 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, New York or Charlotte, North Carolina, 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 the Province of Ontario, 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.
“Canadian Borrower” means Warnaco of Canada Company.
“Canadian Facility” means the Credit Agreement, dated as of the date hereof,
among the Canadian Borrower, Group, the lenders and letter of credit issuers
party thereto from time to time, BofA, as administrative agent and as collateral
agent, and the other parties thereto, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
“Canadian Secured Obligations” means the Secured Obligations (as defined in the
Canadian Facility).
“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 Agreement Accounting
Principles, excluding (i) interest capitalized during construction, (ii) amounts
expended on leasehold improvements for which such Person has received a
commitment of reimbursement from the landlord; provided, that if any such amount
is not reimbursed within six months after the expenditure (the “Reimbursement
Expiration Date”), such amount will be counted towards Capital Expenditures as
if such amount had been expended on the Reimbursement Expiration Date,
(iii) amounts credited to, or received by, any Warnaco Entity in connection with
a substantially contemporaneous trade in and (iv) reinvestments of Net Cash
Proceeds in replacement assets pursuant to Section 2.9(c)(i) and
Section 2.9(c)(i) of the Canadian Facility.

 

7

--------------------------------------------------------------------------------

 

“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 Agreement Accounting
Principles.
“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
Agreement Accounting Principles.
“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
or, in the case of a Foreign Subsidiary, securities issued or fully guaranteed
or insured by the federal government of the country under which such Foreign
Subsidiary was formed or any agency thereof or instrumentality thereof or
obligations unconditionally guaranteed by the full faith and credit of such
federal government, (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 Moody’s
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.
“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, automatic clearing house and other cash
management arrangements) provided by any Agent, Lender or any Affiliate of any
Agent or 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.
“Cash on Hand” means an amount equal to the amount of cash and Cash Equivalents
on deposit in the Cash Collateral Accounts less the aggregate amount of accounts
payable and other unpaid expenses of the Warnaco Entities which, in Group’s
reasonable judgment, are in excess of ordinary course accounts payable and
unpaid expenses as certified in a certificate of a Responsible Officer of Group
delivered to the Administrative Agent prior to the repurchase of any Senior
Notes.
“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.

 

8

--------------------------------------------------------------------------------

 

“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 other
Loan Party shall be disposed of pursuant to an Asset Sale permitted by
Section 8.4 or 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) so long as the Senior Note Indenture is in effect or any
Senior Notes are outstanding, any “Change of Control” as defined in the Senior
Note Indenture.
“Chargeback” means a deduction from a Receivable taken by a customer.
“Chattel Paper” has the meaning specified in the Pledge and Security Agreement.
“Closing Date” means the first date on which each of the conditions set forth in
Section 3.1 have been satisfied.
“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.
“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 Agent” has the meaning specified in the preamble to this Agreement.
“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 any 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.

 

9

--------------------------------------------------------------------------------

 

“Commitment” means, with respect to any Lender, such Lender’s Revolving Credit
Commitment and “Commitments” means the aggregate Revolving Credit Commitments of
all Lenders.
“Compliance Certificate” has the meaning specified in Section 6.1(d).
“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 Agreement Accounting Principles; 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 Agreement Accounting Principles) 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 (or 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 Agreement Accounting Principles 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 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.

 

10

--------------------------------------------------------------------------------

 

“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 in any material
respect with the prior written consent of the Administrative Agent (which
consent shall not be unreasonably withheld or delayed) and with a copy of any
such modification (whether material or not) to be delivered to the
Administrative Agent promptly after its effectiveness.
“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 Agreement Accounting Principles;
(b) Liens of landlords arising by statute and liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other like liens imposed by
law or otherwise incurred, in each instance, 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 Agreement
Accounting Principles, 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;
(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.
“DBSI” has the meaning specified in the preamble to this Agreement.
“Default” means any event which with the passing of time or the giving of notice
or both would become an Event of Default.

 

11

--------------------------------------------------------------------------------

 

“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) unless otherwise agreed in writing by the Administrative Agent in its sole
discretion exercised reasonably, 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 a 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 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 Loan Party 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).
“Dilution Reserve” means, effective as of three (3) Business Days following the
date of written notice of any determination thereof to the Borrower by the
Administrative Agent (except that no such advance notice shall be required with
respect to any amounts established on or prior to the Closing Date, which
amounts shall be in effect as of the Closing Date), such amounts as the
Administrative Agent may from time to time establish against the gross amounts
of Eligible Receivables, calculated as an aggregate amount equal to the product
of (x) the gross amount of Eligible Receivables times (y) the percentage (but
not below 0%) equal to that percentage of Dilution reported in the most recent
Borrowing Base Certificate delivered to the Administrative Agent that is in
excess of 5% of Dilution.
“Document” has the meaning specified in Article 9 of the UCC.

 

12

--------------------------------------------------------------------------------

 

“Documentary Letter of Credit Inventory Conditions” means, with respect to any
Inventory covered by a Documentary Letter of Credit, that such Inventory (a) is
subject to a negotiable Document showing the Collateral Agent (or, with the
consent of the Administrative Agent, the applicable Loan Party) as consignee,
which Document is in the possession of the Collateral Agent or such other Person
as the Administrative Agent shall approve; (b) is insured in a manner reasonably
satisfactory to the Administrative Agent; (c) is owned by the applicable Loan
Party (that is, title has passed to such Loan Party); (d) is not sold by a
vendor that has a right to reclaim, divert shipment of, repossess, stop
delivery, claim any reservation of title or otherwise assert Lien rights against
the Inventory; (e) is not subject to any import restrictions or requirements
that the applicable Loan Party, in the Administrative Agent’s good faith
judgment, is unable to comply with; (f) is shipped by a common carrier that is
not controlled by the vendor; and (g) is subject to a valid and perfected first
priority Lien in favor of the Collateral Agent under 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.
“Documented Non-Letter of Credit Inventory” means Inventory of a Loan Party
(i) that is not covered by a Documentary Letter of Credit, (ii) that is in
transit from a vendor from outside the United States of America, (iii) that is
subject to a valid and perfected first priority Lien in favor of the Collateral
Agent under the UCC and (iv) as to which such other conditions (including,
without limitation, receipt of documentation) as the Administrative Agent shall
request, in its sole discretion exercised reasonably, have been satisfied.
“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
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 or Assumption Agreement 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.
“Earnout Obligations” means earn-outs and deferred compensation incurred in
connection with any Permitted Acquisition or Investment permitted under
Section 8.3(l) consummated after the Closing Date under non-compete agreements,
consulting agreements, earn-out agreements and similar deferred compensation
arrangements (including such as may be contained in the purchase agreement or
related documents for such Permitted Acquisition). The unpaid amount of Earnout
Obligations to be determined at any time with respect to any such Permitted
Acquisition shall be calculated on the basis of the maximum determinable amount
payable with respect to such Permitted Acquisition, or such lesser amount
thereof agreed to by the Administrative Agent in its sole discretion.

 

13

--------------------------------------------------------------------------------

 

“EBITDA” 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) loss from extraordinary items, (iv) loss from the
sale, exchange or other disposition of capital assets, (v) depreciation,
depletion and amortization of intangibles or financing or acquisition costs,
(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 and non-cash charges for employee
stock compensation, and (vii) any restructuring charges not to exceed
$20,000,000 in the aggregate in any Fiscal Year 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 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.
“Eligibility Reserve” 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 (except that no such advance notice shall be required with
respect to amounts established on or prior to the Closing Date, which amounts
shall be in effect as of the Closing Date), 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 or Eligible
Inventory, to reflect (a) risks or contingencies 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, (b) Cash Management Obligations owing to any
of the Facility Agents that constitute Secured Obligations and (c) (i) at any
time that Available Credit is less than $50,000,000 or during an Event of
Default, upon the written request of any Lender that is (or whose Affiliate is)
party to a Hedging Contract, the aggregate obligations of the Borrower or any
other Loan Party under such Hedging Contract calculated on a mark to market
basis or (ii) at any time that any such Hedging Contract has been terminated,
the amount due and owing pursuant to such Hedging Contract.
“Eligible Assignee” means (a) a Lender or an Affiliate or Approved Fund of any
Lender or Agent, (b) a commercial bank having total assets whose Dollar
Equivalent exceeds $5,000,000,000, (c) a finance company or insurance company,
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 or
insurance company, reasonably acceptable to the Administrative Agent), (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 or (e) any other
financial institution or Fund, in each case reasonably acceptable to the
Administrative Agent and each Issuer, 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, any other financial institution or
Fund, reasonably acceptable to the Administrative Agent and each Issuer).

 

14

--------------------------------------------------------------------------------

 

“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 Collateral Agent as beneficiary for the benefit
of the Secured Parties or in respect of which the issuer has consented to the
assignment to the Collateral Agent of the proceeds thereof.
“Eligible Inventory" means the Inventory of a Loan Party (other than any
Inventory which has been consigned by such Loan Party) consisting of finished
goods:
(a) which is owned solely by such Loan Party,
(b) with respect to which the Collateral 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 such Loan Party pursuant to a trademark owned by a Loan
Party or a license granted to a Loan Party) the Collateral 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 three (3) Business Days
prior notice.
No Inventory of a Loan Party shall be Eligible 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 (other than goods in transit
from one location of a Loan Party to another location of a Loan Party and
Documented Non-Letter of Credit Inventory) or goods located outside of the
continental United States (other than Documented Non-Letter of Credit Inventory)
or (iv) goods located, stored, used or held at the premises of a third party
unless (A) the Collateral 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 Inventory located at the premises at
5305 Rivergrade Road, Irwindale, California, a maximum of $250,000) or otherwise
satisfactory to the Administrative Agent shall have been established with
respect thereto. Notwithstanding the foregoing, Eligible Inventory shall at any
time be deemed to include Eligible Inventory of a Loan Party covered by
Documentary Letters of Credit in an amount equal to the aggregate undrawn amount
of such Documentary Letters of Credit at such time; provided, however, that if
the Available Credit shall be less than 25% of the Aggregate Borrowing Limit for
5 consecutive Business Days and until Available Credit shall thereafter be at
least 25% of the Aggregate Borrowing Limit for 45 consecutive days, the
Administrative Agent may, in its sole discretion and upon not less than 3
Business Days prior written notice to the Borrower, exclude from the calculation
of the Borrowing Base any such Inventory which does not satisfy the Documentary
Letter of Credit Inventory Conditions.

 

15

--------------------------------------------------------------------------------

 

“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,
(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 that is freely assignable by the Loan Party (including without
any consent of the related Account Debtor),
(j) for which the Collateral 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),
(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,

 

16

--------------------------------------------------------------------------------

 

(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,
(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), and
(s) that is not owed by the government of the United States of America, Canada
or any other foreign country or sovereign state, or of any state, province,
municipality or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof, except if such
Receivable is owed to a Loan Party by the government of the United States or any
department, agency, public corporation or other instrumentality thereof to the
extent the amount thereof, together with the amount of all such other
Receivables of the Loan Parties, does not exceed $1,000,000 in the aggregate;
provided, however, that such Receivables in excess of $1,000,000 shall not be
excluded if the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C.
§ 3727 et seq.), and any other steps necessary to perfect the Collateral Agent’s
Liens therein have been complied with to the Administrative Agent’s reasonable
satisfaction with respect to such Receivables;
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 and 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. § 9601
et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C. §
5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as
amended (7 U.S.C. § 136 et seq.); the Resource Conservation and Recovery Act, as
amended (42 U.S.C. § 6901 et seq.); the Toxic Substance Control Act, as amended
(15 U.S.C. § 2601 et seq.); the Clean Air Act, as amended (42 U.S.C. § 7401 et
seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C. § 1251 et
seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. § 651 et
seq.); the Safe Drinking Water Act, as amended (42 U.S.C. § 300f et seq.); and
each of 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. Ann. § 13:1K-6 et seq.).

 

17

--------------------------------------------------------------------------------

 

“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 and whether arising under any
Environmental Law, Permit, order or agreement with any Governmental Authority or
other Person, in each case relating to any environmental, health or safety
condition or to any Release or threatened Release and resulting 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.
“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.
“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 or Assumption Agreement 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.

 

18

--------------------------------------------------------------------------------

 

“Eurodollar Rate” means, with respect to any Interest Period for any Eurodollar
Rate Loan, the per annum rate of interest (rounded upward, if necessary, to the
nearest 1/8th of 1%), determined by the Administrative Agent at approximately
11:00 a.m. (London time) two Business Days prior to commencement of such
Interest Period, for a term comparable to such Interest Period, equal to (a) the
British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or other commercially available source designated by the Administrative Agent);
or (b) if BBA LIBOR is not available for any reason, the interest rate at which
Dollar deposits in the approximate amount of the Eurodollar Rate Loan would be
offered by BofA’s London branch to major banks in the London interbank
Eurodollar market. If the Federal Reserve Board imposes a Eurodollar Reserve
Percentage with respect to eurocurrency or LIBOR deposits, then the Eurodollar
Rate shall be the foregoing rate, divided by 1 minus the Eurodollar Reserve
Percentage.
“Eurodollar Rate Loan” means any Revolving Loan that, for an Interest Period,
bears interest based on the Eurodollar Rate.
“Eurodollar Reserve Percentage” means the reserve percentage (expressed as a
decimal, rounded upward to the nearest 1/8th of 1%) applicable to member banks
under regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as “Eurocurrency liabilities”).
“Event of Default” has the meaning specified in Section 9.1.
“Existing Credit Agreement” means that certain Amended and Restated Credit
Agreement, dated as of January 31, 2006, among the Borrower, Group, the
financial institutions from time to time party thereto as lenders, the financial
institutions from time to time party thereto as letter of credit issuers,
Citicorp North America, Inc., as administrative agent and collateral agent,
JPMorgan Chase Bank, N.A., as syndication agent, and BofA, The CIT
Group/Commercial Services, Inc., and Wachovia Capital Finance Corporation
(Central) f/k/a Congress Financial Corporation (Central), as co-documentation
agents, as amended, supplemented or otherwise modified from time to time prior
to the date hereof.
“Existing Rollover Letter of Credit” has the meaning specified in
Section 2.4(a).
“Extended Term Receivable” means a 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 Agents” means, collectively, the Administrative Agent and the
Collateral Agent.
“Facility Increase” has the meaning specified in Section 2.18(a).
“Facility Increase Effective Date” has the meaning specified in Section 2.18(c).
“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.

 

19

--------------------------------------------------------------------------------

 

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/8th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to BofA on such day on
such transactions as determined by BofA.
“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any successor thereto.
“Fee Letters” means (i) the fee letter dated the Closing Date, addressed to the
Borrower, from BofA and BAS and accepted by the Borrower on the Closing Date
with respect to certain fees to be paid on the Closing Date and otherwise from
time to time to one or more of BofA, the Facility Agents and BAS, as applicable,
and (ii) the fee letter dated the Closing Date, addressed to the Borrower, from
Deutsche Bank Trust Company Americas and Deutsche Bank Securities Inc. and
accepted by the Borrower on the Closing Date with respect to certain fees to be
paid on the Closing Date to Deutsche Bank Trust Company Americas and Deutsche
Bank Securities Inc.
“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,”
non-contingent obligations of the type specified in clause (c) of such
definition and Guaranty Obligations of any of the foregoing.
“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) EBITDA 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 for such period (but only to the extent such cash
consideration is funded from proceeds of Loans, as defined herein or in the
Canadian Facility) minus the total income tax liability actually payable by such
Person and its Subsidiaries in respect of such period to (b) the Fixed Charges
of such Person for such period.

 

20

--------------------------------------------------------------------------------

 

“Fixed Charges” means, with respect to any Person for any period, the sum,
determined on a consolidated basis in accordance with Agreement Accounting
Principles, 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
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.
“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 to this Agreement.
“Guarantor” means Group and each Domestic Subsidiary of Group other than the
Borrower.
“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

 

21

--------------------------------------------------------------------------------

 

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 arrangements designed to alter the risks of
any Person arising from fluctuations in interest rates, currency values or
commodity prices.
“IFRS” means the International Financial Reporting Standards set by the
International Accounting Standards Board as in effect from time to time.
“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 other 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.
“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.

 

22

--------------------------------------------------------------------------------

 

“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 Agreement Accounting Principles 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
Agreement Accounting Principles plus (ii) any interest income of such Person and
its Subsidiaries for such period determined on a consolidated basis in
conformity with Agreement Accounting Principles.
“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 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:
(i) 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;
(ii) 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;
(iii) the Borrower may not select any Interest Period that ends after the
Revolving Loan Maturity Date;
(iv) the Borrower may not select any Interest Period in respect of Loans having
an aggregate principal amount of less than $10,000,000; and
(v) there shall be outstanding at any one time no more than ten (10) Interest
Periods in the aggregate for all Loans.
“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.

 

23

--------------------------------------------------------------------------------

 

“Investment Grade Debt Securities” means any bond, debenture, note or other
evidence of indebtedness which is rated at least BBB- (stable) by Standard &
Poor’s Rating Services and Baa3 (stable) by Moody’s Investors Services, Inc.
“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, 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.
“Issuer” means each Agent, Lender or Affiliate of such Agent or 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.
“Italian Debt Facility” means the Italian Debt Facility (as defined in
Schedule 8.1 (Existing Indebtedness)).
“Joint Bookrunners” has the meaning specified in the preamble to this Agreement.
“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 or an Assumption Agreement.
“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.

 

24

--------------------------------------------------------------------------------

 

“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, at any time, $150,000,000 less the Dollar
Equivalent of the Letter of Credit Obligations (as defined in the Canadian
Facility) at such time.
“Letter of Credit Undrawn Amounts” means, at any time, the aggregate undrawn
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) consolidated Financial Covenant Debt of such Person and its Subsidiaries
outstanding as of such date minus the aggregate amount of cash and Cash
Equivalents held by such Person and its Subsidiaries to the extent that such
cash and Cash Equivalents are held in a Deposit Account or a Securities Account
over which the Collateral Agent has a perfected Lien for the benefit of the
Secured Parties to (b) EBITDA for such Person for the last four Fiscal Quarter
period ending on or before 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 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 Fee Letters, the
Guaranty, each Letter of Credit Reimbursement Agreement, the Collateral
Documents and each certificate, agreement or document executed by a Loan Party
and delivered to any Facility 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
Domestic Subsidiary of Group that executes and delivers a Loan Document.
“Loan Party Canadian Facility Guaranty” means the Guaranty, dated as of the date
hereof, by the Loan Parties with respect to the guarantee of the payment of the
Canadian Secured Obligations, as the same may be amended, restated, supplemented
or otherwise modified from time to time.
“Material Adverse Change” means a material adverse change in any of (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Loan Parties, taken as a whole, or Group and its Subsidiaries,
taken as a whole, (b) the ability of the Loan Parties to perform their
respective obligations under the Loan Documents or (c) the ability of the
Administrative Agent, the Collateral 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.

 

25

--------------------------------------------------------------------------------

 

“Material Leased Property” means all real estate leasehold properties of any
Warnaco Entity other than those with respect to which the aggregate rental
payments under the term of the lease in any year are less than $2,000,000.
“Material License” means the license agreements relating to the Calvin Klein
trademark with respect to jeans (expiring at the end of its renewal term on
December 31, 2044 or December 31, 2046) and underwear, 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 having a fair market value in excess of $2,000,000 as of the Closing Date,
or if later, the date of acquisition thereof.
“Maximum Credit” means, at any time, (a) the lesser of (i) the Revolving Credit
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 Material Owned 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 references to the applicable Appraisals or, if no such Appraisals
are available, by other means reasonably acceptable to the Administrative Agent)
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
perfected Lien on such parcel of Real Property having at least the priorities
described in Section 4.20 of this Agreement and the Collateral Documents, 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 Collateral Agent for the benefit of the Secured Parties as
the insured thereunder, (E) be in the form of ALTA Loan Policy — 2006 (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, Stewart Title Company 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;

 

26

--------------------------------------------------------------------------------

 

(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 Lien on such parcel of Real Property in favor of the
Collateral Agent for the benefit of the Secured Parties (or in favor of such
other trustee as may be required or desired under local law) having the
priorities described in Section 4.20 of this Agreement and the Collateral
Documents and 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 any Loan Party after the Closing
Date in cash or Cash Equivalents from any (a) Asset Sale (other than an Asset
Sale permitted under clauses (a), (c) and (h) of Section 8.4) of Receivables or
Inventory 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 and, if such Asset
Sale includes assets in addition to Receivables and Inventory, only such portion
of the amounts in clauses (i), (ii) and (iii) reasonably allocable to
Receivables and Inventory sold may be deducted under such clauses (i), (ii) and
(iii); or (b) Property Loss Event with respect to Inventory.
“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.

 

27

--------------------------------------------------------------------------------

 

“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.
“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.
“Obligations” means the Loans, the Letter of Credit Obligations and all other
amounts and obligations owing by the Borrower to any Facility 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 or any other Loan Document,
and all obligations of the Borrower to cash collateralize Letter of Credit
Obligations.
“Orderly Liquidation Value Rate” means (i) with respect to Eligible Inventory
(other than Documented Non-Letter of Credit Inventory and Inventory covered by
Documentary Letters of Credit), the Dollar Equivalent of the orderly liquidation
value (net of costs and expenses incurred in connection with liquidation) of
such Eligible Inventory, divided by the aggregate value of such Eligible
Inventory, in each case, determined by reference to the most recent Appraisal
received by the Administrative Agent and (ii) with respect to Eligible Inventory
consisting of Documented Non-Letter of Credit Inventory or Inventory covered by
Documentary Letters of Credit, the Dollar Equivalent of the orderly liquidation
value (net of costs and expenses incurred in connection with liquidation) of
such Eligible Inventory, divided by the aggregate value of such Eligible
Inventory, in each case, determined by reference to the most recent Appraisal
received by the Administrative Agent. The Orderly Liquidation Value Rate with
respect to Eligible Inventory (other than Documented Non-Letter of Credit
Inventory and Inventory covered by Documentary Letters of Credit) shall
initially be 85.9% and the Orderly Liquidation Value Rate with respect to
Eligible Inventory consisting of Documented Non-Letter of Credit Inventory or
Inventory covered by Documentary Letters of Credit shall initially be 61.0%.
“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
L. No. 107-56, 115 Stat. 272 (2001).
“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.

 

28

--------------------------------------------------------------------------------

 

“Permitted Acquisition” means any Proposed Acquisition subject to the
satisfaction of each of the following conditions:
(i) 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;
(ii) such Proposed Acquisition shall have been approved by the applicable board
of directors of the Person constituting or owning the Proposed Acquisition
Target;
(iii) 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;
(iv) both (x) after giving pro forma effect to such Proposed Acquisition and to
any Facility Increase to be effective on the date of the consummation of such
Proposed Acquisition Available Credit is at least 20% of the Aggregate Borrowing
Limit at such time and (y) prior to the consummation of such Proposed
Acquisition, Group has delivered to the Administrative Agent a certificate
executed by a Responsible Officer of Group certifying the satisfaction of such
requirement with respect to such Proposed Acquisition and setting forth in
reasonable detail the calculation of such Available Credit;
(v) 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 and Section 7.13;
(vi) the Borrower shall (i) have delivered to the Administrative Agent, upon the
request of the Administrative Agent, promptly upon its becoming available, the
acquisition agreement (including all schedules), all financial information,
financial analysis, projections and similar documentation relating to the
proposed acquisition, and (ii) use its reasonable commercial efforts to provide
such additional documentation or other information relating to such Proposed
Acquisition that the Administrative Agent shall reasonably request, including,
without limitation, financial projections on a Pro Forma Basis after giving
effect to the Proposed Acquisition;
(vii) 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 that
is a Loan Party to the Collateral 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;
(viii) 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 and
(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
immediately prior to the consummation of such Proposed Acquisition, Group has
delivered to the Administrative Agent a certificate executed by a Responsible
Officer of Group certifying the satisfaction of the requirements under this
clause (viii) with respect to such Proposed Acquisition); and

 

29

--------------------------------------------------------------------------------

 

(ix) with respect to any Proposed Acquisition by any Foreign Subsidiary (whether
by acquisition of assets or Stock or the merger of any Proposed Acquisition
Target with or into a Foreign Subsidiary or otherwise), at the time of such
Proposed Acquisition and after giving effect thereto, the Fixed Charge Coverage
Ratio for Group shall be at least 1.1 to 1.0 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 (and prior to the consummation of such Proposed
Acquisition, Group has delivered to the Administrative Agent a certificate
executed by a Responsible Officer of Group certifying the satisfaction of the
requirements under this clause (ix) with respect to such Proposed Acquisition
and setting forth in reasonable detail the calculation of such Fixed Charge
Coverage Ratio).
“Permitted Cash Equivalents” means time deposits of, or certificates of deposit
issued by, BofA that, in each instance, are acceptable to the Administrative
Agent.
“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.
“Pledge and Security Agreement” means a pledge and security 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 Agreement
Accounting Principles 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 August 2008 covering the
fiscal years ending in 2008 through 2013 inclusive, delivered to the Lenders by
Group prior to the Closing Date.
“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 $2,000,000 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 $2,000,000.
“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).

 

30

--------------------------------------------------------------------------------

 

“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 (other than in the expression “equally and ratably”)
“ratably” means, with respect to any Lender, the percentage obtained by dividing
(i) the Revolving Credit Commitment of such Lender by (ii) the aggregate
Revolving Credit Commitments of all Lenders (or, at any time after the Revolving
Credit Termination Date, the percentage obtained by dividing the aggregate
outstanding principal balance of the Revolving Credit Outstandings owing to such
Lender by the aggregate outstanding principal balance of the Revolving Credit
Outstandings owing to all Lenders).
“Real Property” means all of those plots, pieces or parcels of land now owned or
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
from or on behalf of, 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.

 

31

--------------------------------------------------------------------------------

 

“Reinvestment Notice” means a written notice executed by a Responsible Officer
of the Borrower 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 its Subsidiaries’ 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 Subsidiary’s business (or, in the case of a Property Loss Event,
not to effect repairs or replacements) with all or any portion of the relevant
Reinvestment Deferred Amount for such Net Cash Proceeds.
“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 or leased by such Person,
including the movement of Contaminants through or in the air, soil, surface
water, ground water or property.

 

32

--------------------------------------------------------------------------------

 

“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 and civil law
and all federal, state, provincial, 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, (a) on and prior to the Revolving
Credit Termination Date, Lenders having more than fifty percent (50%) of the
aggregate outstanding amount of the Revolving Credit Commitments and (b) after
the Revolving Credit Termination Date, Lenders having more than fifty percent
(50%) of the aggregate Revolving Credit Outstandings. A Non-Funding Lender shall
not be included in the calculation of “Requisite Lenders”.
“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 Credit Borrowing” means a borrowing consisting of Revolving Loans
made on the same day by the Lenders ratably according to their respective
Revolving Credit Commitments.
“Revolving Credit Commitment” means, with respect to each Lender, the commitment
of such Lender to make Revolving Loans and to acquire interests in other
Revolving Credit 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 “Revolving Credit Commitment,” as amended to
reflect each Assignment and Acceptance or Assumption Agreement executed by such
Lender and as such amount may be adjusted pursuant to this Agreement.
“Revolving Credit Facility” means the Revolving Credit Commitments and the
provisions herein related to the Revolving Loans, Swing Loans and Letters of
Credit.
“Revolving Credit Facility Register” has the meaning specified in
Section 11.2(c).

 

33

--------------------------------------------------------------------------------

 

“Revolving Credit 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 the Swing Loans outstanding at such time.
“Revolving Credit Termination Date” shall mean the earliest of (a) the Revolving
Loan Maturity Date, (b) the date of termination of the Commitments pursuant to
Section 2.5 and (c) the date on which any of the Obligations become due and
payable pursuant to Section 9.2.
“Revolving Loan” has the meaning specified in Section 2.1.
“Revolving Loan Maturity Date” means the fifth anniversary of the Closing Date.
“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.
“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 Agent, Lender or any Affiliate of any
thereof, (ii) any Cash Management Obligations owing by such Loan Party to any
Agent, Lender or any Affiliate of any thereof and (iii) the obligations of such
Loan Party under the Loan Party Canadian Facility Guaranty.
“Secured Parties” means the Lenders (including the Swing Loan Lender), the
Issuers, the Administrative Agent, the Collateral Agent, each of their
respective successors and assigns, and any other holder of any Secured
Obligation or of any other obligations under the Loan Documents, including the
beneficiaries of each indemnification obligation undertaken by any of the Loan
Parties and the Facility Agents.
“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.
“Senior Note Documents” means, collectively, the Senior Note Indenture, the
Senior Notes and each certificate, agreement or document executed by a Warnaco
Entity and delivered to the Senior Note Indenture Trustee or any Senior
Noteholder in connection with or pursuant to any of the foregoing.

 

34

--------------------------------------------------------------------------------

 

“Senior Note Indenture” means the indenture, dated as of June 12, 2003, among
the Borrower, as issuer, Group and each Domestic Subsidiary thereof (other than
the Borrower), as guarantors, and the Senior Note Indenture Trustee.
“Senior Note Indenture Trustee” means Wells Fargo Bank Minnesota, National
Association, in its capacity as indenture trustee for the Senior Noteholders and
each successor thereto.
“Senior Noteholders” means each holder of a Senior Note.
“Senior Notes” means the 8-7/8% senior notes due 2013 issued by the Borrower
pursuant to the Senior Note Indenture.
“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 Cash Collateral Account” means an account maintained with BofA or an
affiliate thereof for the purpose of providing cash collateral as part of the
Borrowing Base, which account shall be subject to a control agreement in form
and substance reasonably satisfactory to the Facility Agents and shall be a
segregated account holding only cash of the Borrower deposited into such account
in accordance with Section 2.19, investments of such cash in Permitted Cash
Equivalents and investment income derived from such investments.
“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.
“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.
“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.
“Subordinated Indebtedness” means Indebtedness of a Loan Party that satisfies
all of the following requirements: (i) interest on such Indebtedness is not
payable in cash prior to the date that is six months after the Revolving Loan
Maturity Date, (ii) such Indebtedness does not mature and does not require any
scheduled or mandatory prepayments prior to the date that is six months after
the Revolving Loan Maturity Date, (iii) such Indebtedness is not secured and is
not guaranteed by any Warnaco Entity that is not guaranteeing the Obligations
and (iv) such Indebtedness (and any guarantee thereof) is subordinated to the
Secured Obligations on terms reasonably satisfactory to the Administrative
Agent.

 

35

--------------------------------------------------------------------------------

 

“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 Domestic 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 Revolving Credit 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 $25,000,000.
“Swing Loan Lender” means BofA or any other Person 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.
“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).
“Test Period” means, if a Trigger Event shall occur, each period of four
consecutive Fiscal Quarters (taken as one accounting period) ending on each of
(x) the last day of the Fiscal Quarter most recently ended prior to the
occurrence of such Trigger Event for which Financial Statements for Group and
its Subsidiaries have been delivered to the Administrative Agent pursuant to
Section 6.1(b) or Section 6.1(c) and (y) the last day of each Fiscal Quarter
after the Fiscal Quarter referred to in clause (x) ending prior to or during the
Trigger Event Compliance Period for such Trigger Event.
“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).
“Trigger Amount” means, at any time, (i) prior to the first Anniversary Date,
the greater of (x) 10% of the Aggregate Borrowing Base at such time and (y)
$30,000,000, (ii) on or after the first Anniversary Date and prior to the second
Anniversary Date, the greater of (x) 12.5% of the Aggregate Borrowing Base at
such time and (y) $35,000,000 and (iii) on or after the second Anniversary Date,
the greater of (x) 15% of the Aggregate Borrowing Base at such time and (y)
$40,000,000.

 

36

--------------------------------------------------------------------------------

 

“Trigger Event” means for any reason Available Credit is less than the Trigger
Amount at any time.
“Trigger Event Compliance Period” means the period commencing on the occurrence
of a Trigger Event and continuing until such time as Available Credit is greater
than the Trigger Amount for forty-five (45) consecutive calendar days.
“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).
“U.S. Lender” means each Lender, each Issuer and 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.
“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.
“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.

 

37

--------------------------------------------------------------------------------

 

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 Agreement Accounting Principles and
all accounting determinations required to be made pursuant hereto shall, unless
expressly otherwise provided herein, be made in conformity with Agreement
Accounting Principles.
(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 the International Accounting Standards Board, in the case
of the IFRS) (or any successors thereto) and such change is adopted by the
Borrower or Group with the agreement of its independent public accountants and
results in a change in any of the calculations required by Article V, Article VI
or Article VIII or in the definition of “Applicable Margin” or “Permitted
Acquisition”, 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 Group
and the Borrower or the determination of the “Applicable Margin” or the
calculation of the Fixed Charge Coverage Ratio in the definition of “Permitted
Acquisition” shall be the same after such change as if such change had not been
made; provided, however, that no change in Agreement Accounting Principles that
would affect a calculation that measures compliance with any covenant contained
in Article V, Article VI or Article VIII or in the definition of “Applicable
Margin” or “Permitted Acquisition” shall be given effect until such provisions
are amended to reflect such changes in Agreement Accounting Principles.
(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 applicable Lender or Issuer.

 

38

--------------------------------------------------------------------------------

 

(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 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 Facility Agent pursuant to
Section 10.6, references to BofA in Section 10.3 to the extent applicable to
such Facility Agent and to BofA in the definitions of Base Rate, Eurodollar
Rate, Federal Funds Rate, Dollar Equivalent, Permitted Cash Equivalents and
Special Cash Collateral Account to the extent applicable to such Facility Agent
shall be deemed to refer to the financial institution then acting as such
Facility 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 REVOLVING CREDIT FACILITY
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 Closing Date until the Revolving Credit
Termination Date in an aggregate principal 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
Revolving Loan (i) in excess of such Lender’s Ratable Portion of the Available
U.S. Credit or (ii) to the extent that the aggregate Revolving Credit
Outstandings, after giving effect to such Revolving Loan, would exceed the
Maximum Credit in effect at such time. Within the limits of the Revolving Credit
Commitment of each Lender, amounts of Revolving Loans repaid may be reborrowed
under this Section 2.1.

 

39

--------------------------------------------------------------------------------

 

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
(3) 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 writing in
substantially the form of Exhibit B (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 U.S. 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. Each Revolving
Credit Borrowing shall be in an aggregate amount of not less than $1,000,000 or
an integral multiple of $250,000 in excess thereof.
(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 (i) on the
Closing Date, upon fulfillment of the applicable conditions set forth in
Section 3.1 and (ii) at any time (including the Closing Date), upon fulfillment
of the applicable conditions set forth Section 3.2, the Administrative Agent
will make such funds available to the Borrower.
(c) Unless the Administrative Agent shall have received notice from any 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 corresponding 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.

 

40

--------------------------------------------------------------------------------

 

(d) The failure of any Lender to make the Loans 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.
(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 Revolving Credit
Facility from time to time on any Business Day during the period from the
Closing Date until the Revolving Credit 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 Revolving
Credit 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
Revolving Credit Termination Date. Within the limits set forth in the first
sentence of this Section 2.3(a), amounts of Swing Loans prepaid or 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.

 

41

--------------------------------------------------------------------------------

 

(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 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 Revolving Credit
Termination Date and 30 days prior to the Revolving Loan Maturity 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 faith deems material to it;

 

42

--------------------------------------------------------------------------------

 

(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;
(iii) after giving effect to the issuance of such Letter of Credit, the
aggregate Revolving Credit 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 Sublimit;
(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. It is acknowledged and agreed
by each party to this Agreement that each of the letters of credit issued by
BofA or The Bank of Nova Scotia under the Existing Credit Agreement prior to the
Closing Date and which remain outstanding on the Closing Date and are set forth
on Schedule 2.4 (each such letter of credit, an “Existing Rollover Letter of
Credit”) shall, from and after the Closing Date, constitute a Letter of Credit
for all purposes of this Agreement and shall, for purposes of this Agreement
(including, without limitation, Sections 2.4(g) and 2.12(b)), be deemed issued
on the Closing Date. The stated amount of each Existing Rollover Letter of
Credit and the expiry date therefor as of the Closing Date is set forth on
Schedule 2.4.
(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 Revolving Loan Maturity 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 may be agreed by such 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 (or such
lesser amount as may be agreed to by such Issuer), (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 and (B) the sum of
the aggregate principal or undrawn amount of the then-outstanding (I) Letter of
Credit Obligations, (II) Revolving Loans and (III) Swing Loans, 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 relevant Issuer) prior to the requested issuance
of such Letter of Credit.

 

43

--------------------------------------------------------------------------------

 

(d) Subject to the satisfaction of the conditions set forth in this Section 2.4,
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 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, 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 Revolving Credit
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.

 

44

--------------------------------------------------------------------------------

 

(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 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, if
such payment was made in an Alternative Currency, an amount in Dollars equal to
the Dollar Equivalent thereof) 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 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 Revolving Credit 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;

 

45

--------------------------------------------------------------------------------

 

(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;
(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 Revolving Credit Commitments utilized by Letters of Credit
denominated in an Alternative Currency shall be measured by a determination by
the applicable Issuer 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.

 

46

--------------------------------------------------------------------------------

 

Section 2.5 Reduction and Termination of the Commitments. 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 respective
Revolving Credit Commitments of the Lenders; 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, in the case of any
reduction of the Revolving Credit Commitments, the requirements of
Section 2.9(e) shall have been satisfied. The Borrower may not terminate the
Revolving Credit Commitments in their entirety pursuant to this Section 2.5
unless, concurrently with such termination, the Revolving Credit Commitments
under and as defined in the Canadian Facility are terminated.
Section 2.6 Repayment of Loans. The Borrower promises to repay the entire unpaid
principal amount of the Revolving Loans and the Swing Loans and all accrued but
unpaid interest thereon on the Revolving Credit Termination Date or earlier, if
otherwise required by the terms hereof.
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 applicable 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.
Section 2.8 Optional Prepayments. The Borrower may prepay the outstanding
principal amount of the Revolving Loans and Swing Loans in whole or in part at
any time; provided, however, that if any prepayment 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 amount owing pursuant to Section
2.14(e).
Section 2.9 Mandatory Prepayments.
(a) [Intentionally Omitted].
(b) Subject to clause (c) below, upon receipt by any Loan Party of Net Cash
Proceeds (but only if at the time of such receipt the Available Credit is less
than 25% of the Aggregate Borrowing Limit at such time), 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 (d) below) in
an amount equal to 100% of such Net Cash Proceeds as set forth in clause (d)
below.

 

47

--------------------------------------------------------------------------------

 

(c) Notwithstanding clause (b) above, as long as no Event of Default shall have
occurred or be continuing on the date Net Cash Proceeds are received by any Loan
Party, the Borrower shall not be required to so apply an amount equal to Net
Cash Proceeds arising from 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 Loan
Party and, pending application of such proceeds, the Borrower has either
(i) paid an amount equal to such Net Cash Proceeds to the Administrative Agent
to be held by the Administrative Agent in a Cash Collateral Account designated
by the Administrative Agent or (ii) applied an amount equal to such Net Cash
Proceeds in repayment of the Revolving Loans and the Administrative Agent shall
have established an Availability Reserve in the amount of such repayment, which
reserve shall abate on the Reinvestment Prepayment Date applicable to such Net
Cash Proceeds or earlier to the extent that Revolving 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 perfected Lien in favor of the
Collateral Agent, for the benefit of the Secured Parties, in each case, having
the priority described in Section 4.20 of this Agreement and the Collateral
Documents (but, in the case of a Permitted Acquisition, only to the extent
required by clause (v) 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 (c) become operative, the Administrative Agent may, or
shall at the direction of the Requisite Lenders, apply all amounts in the Cash
Collateral Account referred to above to the Obligations.
(d) Subject to the provisions of clause (c) above and Section 2.13(h) (Payments
and Computations), any prepayments made by the Borrower required to be applied
in accordance with this clause (d) shall be applied, first, to repay the
outstanding principal balance of the Swing Loans until the Swing Loans shall
have been repaid in full; second, to repay the outstanding principal balance of
the Revolving Loans until the Revolving Loans shall have been repaid in full;
and third, to provide cash collateral for any Letter of Credit Obligations in
the manner set forth in Section 9.3 until all the Letter of Credit Obligations
have been fully cash collateralized in the manner set forth therein.
(e) If at any time the aggregate principal amount of Revolving Credit
Outstandings exceed the Maximum Credit at such time, the Borrower shall, as soon
as possible, but in any event within one Business Day, prepay first the Swing
Loans 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.
(f) 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 the Swing Loans have been repaid in
full; second, to repay the outstanding principal amount of the Revolving Loans
until the Revolving Loans have been repaid in full; third, to any other
Obligation in respect of the Revolving Credit Facility then due and payable and
then, to cash collateralize all outstanding Letter of Credit Obligations in the
manner set forth in Section 9.3. The Facility Agents agree so to apply such
funds and the Borrower consents to such application. Notwithstanding the first
sentence in this clause (f), at any time there is no Event of Default that is
continuing, there are no Loans outstanding and no other Obligations in respect
of the Revolving Credit Facility are then due and payable each Facility Agent
shall cause any funds in any Cash Collateral Account maintained by it to be paid
at the written direction of the Borrower for any other purpose.

 

48

--------------------------------------------------------------------------------

 

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 and (B) the
Applicable Margin for such Loans; 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 and (B) the
Applicable Margin in effect from time to time during such Interest Period.
(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 each Swing 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 Swing Loan and (B) if not previously paid in full, at maturity
(whether by acceleration or otherwise) of such Swing Loan;
(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.

 

49

--------------------------------------------------------------------------------

 

Section 2.11 Conversion/Continuation Option.
(a) The Borrower may elect (i) on any Business Day 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 $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 (3) 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 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
Revolving Credit Commitment of such Lender exceeds such Lender’s Ratable Portion
of the Revolving Credit Outstandings (excluding the amount of any outstanding
Swing Loans) from the Closing Date until the Revolving Credit 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 Revolving Credit Termination Date.

 

50

--------------------------------------------------------------------------------

 

(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 (the “Issuing Fee”) equal to 0.125% per
annum 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 Revolving Credit 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 Revolving Loans that are Eurodollar Rate Loans 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 Revolving Credit 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,
extension, amendment, transfer or other action of or with respect to 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, extension, amendment, transfer, other action or drawing,
as the case may be.
(c) Additional Fees. The Borrower has agreed to pay additional fees under the
Fee Letters, the amount, payees and dates of payment of which are embodied in
the Fee Letters.
Section 2.13 Payments and Computations.
(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 extent
payable to the Lenders) to the Lenders, in accordance with the application of
payments set forth in clauses (g) and (h) 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 (365/366 days in the case of interest
on Base Rate Loans to the extent that such interest is determined based upon
BofA’s “prime rate” and not the Federal Funds Rate), 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) [Intentionally Omitted].

 

51

--------------------------------------------------------------------------------

 

(d) Each payment by the 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 any Revolving Loans shall
be applied first to repay such Loans outstanding as Base Rate Loans and then to
repay such Loans outstanding as Eurodollar Rate Loans with those Eurodollar Rate
Loans which have earlier expiring Interest Periods being repaid prior to those
which have later expiring Interest Periods.
(f) Unless the Administrative Agent shall have received notice from the Borrower
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 relevant 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 relevant Lender
shall repay to the Administrative Agent 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 clause (h) of this Section 2.13 (and except as
otherwise provided in Section 2.9 or elsewhere in this Agreement), 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; and, unless provided otherwise herein, 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.

 

52

--------------------------------------------------------------------------------

 

(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 upon the termination of the Commitments or the
acceleration of any of the Obligations pursuant to Section 9.2, the Facility
Agents shall apply all payments made to or received by any Facility Agent, any
Lender or any Issuer constituting proceeds of Collateral (including all funds on
deposit in the Special Cash Collateral Account or 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 payments made to or received by any Facility
Agent, any Lender or any Issuer with respect to any Secured Obligations in the
following order:
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;
second, to pay interest on and then principal of any Swing Loan;
third, to pay Secured Obligations in respect of any expense reimbursements
(including indemnities) or Cash Management Obligations then due to the Facility
Agents;
fourth, to pay Secured Obligations in respect of any expense reimbursements
(including indemnities) then due to the Lenders and the Issuers;
fifth, to pay Secured Obligations in respect of any fees then due to the
Facility Agents, the Lenders and the Issuers;
sixth, to pay interest then due and payable in respect of the Loans and
Reimbursement Obligations;
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;
eighth, to pay or prepay principal amounts on Secured Obligations in respect of
Hedging Contracts and Cash Management Obligations, ratably (based on the
proportional amounts thereof) to the aggregate principal amount of such Hedging
Contracts and Cash Management Obligations;
ninth, to the ratable (based on the proportional amounts thereof) payment of all
other Secured Obligations (other than Secured Obligations under the Loan Party
Canadian Facility Guaranty);
tenth, to the payment of all Secured Obligations under the Loan Party Canadian
Facility Guaranty; and
eleventh; as directed by the Borrower;
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 ninth, 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 applicable Agent’s and each applicable Lender’s or Issuer’s interest in
the aggregate outstanding Obligations described in such clause; and 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 ninth
of this Section 2.13(h) may at any time and from time to time be changed by the
agreement of the Requisite Lenders and each adversely affected Lender 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. The order of priority set forth in clause
tenth of this Section 2.13(h) may be changed only with the prior written consent
of the Requisite Lenders and the administrative agent under the Canadian
Facility.

 

53

--------------------------------------------------------------------------------

 

(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 Revolving 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 Revolving 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 Revolving Loans and to distribute the
proceeds of such Swing Loans and Revolving Loans to pay such amounts. The
Borrower agrees that all such Swing Loans and Revolving 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 Loans
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 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 Administrative Agent (in the case of clause (i)
above) or the Requisite Lenders (in the case of clause (ii) above) has or have
determined that the circumstances causing such suspension no longer exist.
(c) Increased Costs. If at any time any Lender shall determine that due to 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.

 

54

--------------------------------------------------------------------------------

 

(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 (with a copy of such demand to the Administrative Agent), 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 such 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 the 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 the Borrower to
repay Eurodollar Rate Loans when required by the terms hereof. The Lender making
demand for such compensation shall deliver to the Borrower and the
Administrative Agent concurrently with such 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 or other
Person 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 or other Person 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.

 

55

--------------------------------------------------------------------------------

 

Section 2.16 Taxes.
(a) Except as otherwise provided in this Section 2.16, any and all payments by
any Loan Party under each 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 each Agent (A) taxes
imposed on or measured by its net income or net profits and franchise taxes
imposed on such Person by the United States of America, and similar taxes
imposed by the jurisdiction (or any political subdivision thereof) under the
laws of which such Lender, such Issuer or such Agent (as the case may be) is
organized, in which its principal office is located, or in which it is otherwise
doing business, or, in the case of any Lender, in which its Applicable Lending
Office is located, (B) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which any Loan
Party is located, (C) 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 (w) an Eligible
Assignee which became a party to this Agreement after the Closing Date, the date
of the Assignment and Acceptance or Assumption Agreement pursuant to which such
Eligible Assignee became a party to this Agreement, (x) a successor Agent, the
date of the appointment of such Agent, (y) a successor Issuer, the date such
Issuer becomes an Issuer and (z) the designation of a new Applicable Lending
Office) applicable to such Lender, such Issuer or such Agent, as the case may
be, but not excluding any United States withholding taxes payable as a result of
any change in such laws occurring after the Closing Date (or the date of such
Assignment and Acceptance or Assumption Agreement or the date of such
appointment of such Agent or the date such Issuer becomes an Issuer, as
appropriate) and (D) all liabilities, penalties and interest with respect to any
of the foregoing, (ii) in the case of each Agent, each Lender and each Issuer,
taxes imposed on or measured by its net income or net profits, franchise and
similar taxes imposed on it as a result of a present or former connection
between such Agent, such Lender or such Issuer (as the case may be) and the
jurisdiction of the Governmental Authority imposing such tax or taxing authority
thereof or therein and (iii) in the case of each Agent, each Lender and each
Issuer, taxes imposed as a result of the gross negligence or willful misconduct
of such Agent, such Lender or such Issuer (as the case may be) (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as “Taxes”). Except as otherwise
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 any 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 such Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the 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) within 30 days after payment, 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”).

 

56

--------------------------------------------------------------------------------

 

(c) Each Loan Party will, jointly and severally, indemnify each Lender, each
Issuer and each Agent for the full amount of Taxes and Other Taxes (including
any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under
this Section 2.16) paid by such Lender, such Issuer or such 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 such 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) (i) Each Non-U.S. Lender or Non-U.S. Agent that is entitled to an exemption
from U.S. withholding tax, or that is subject to such tax at a reduced rate
under an applicable tax treaty, shall (v) on or prior to the Closing Date in the
case of each Non-U.S. Lender or Non-U.S. Agent that is a signatory hereto,
(w) on or prior to the date of the Assignment and Acceptance or Assumption
Agreement pursuant to which such Non-U.S. Lender becomes a Lender, the date a
successor Issuer becomes an Issuer or the date a successor Agent becomes an
Agent hereunder, (x) on or prior to the date on which any such form or
certification expires or becomes obsolete, (y) after the occurrence of any event
requiring a change in the most recent form or certification previously delivered
by it to the Borrower and the Administrative Agent, and (z) from time to time if
requested by the Borrower or the Administrative Agent, provide the
Administrative Agent and the Borrower with two completed originals of each of
the following, as applicable:
(A) Form W-8ECI (claiming exemption from U.S. withholding tax because the income
is effectively connected with a U.S. trade or business) or any successor form;
(B) Form W-8BEN (claiming exemption from, or a reduction of, U.S. withholding
tax under an income tax treaty) or any successor form;
(C) Form W-8IMY (claiming exemption from, or a reduction of, U.S. withholding
tax for foreign intermediaries, foreign flow-through entities or U.S. branches
of certain foreign banks or foreign insurance companies) or any successor form;
(D) in the case of a Non-U.S. Lender or Non-U.S. Agent claiming exemption under
Sections 871(h) or 881(c) of the Code, a Form W-8BEN (claiming exemption from
U.S. withholding tax under the portfolio interest exemption) or any successor
form and a certificate establishing such Non-U.S. Lender or Non-U.S. Agent’s
entitlement to such exemption including, without limitation, certification that
the Non-U.S. Lender or Non-U.S. Agent is not a bank receiving payments under
this Agreement on an extension of credit made pursuant to a loan agreement
entered into in the ordinary course of its trade or business; and/or

 

57

--------------------------------------------------------------------------------

 

(E) any other applicable form, certificate or document prescribed by the IRS
certifying as to such Non-U.S. Lender’s or Non-U.S. Agent’s entitlement to such
exemption from U.S. withholding tax or reduced rate with respect to all payments
to be made to such Non-U.S. Lender or Non-U.S. Agent under the Loan Documents.
(ii) Each U.S. Lender shall (v) on or prior to the Closing Date in the case of
each U.S. Lender that is a signatory hereto, (w) on or prior to the date of the
Assignment and Acceptance or Assumption Agreement pursuant to which such U.S.
Lender becomes a Lender, on or prior to the date a successor Issuer becomes an
Issuer or on or prior to the date a successor Agent becomes a Agent hereunder,
(x) on or prior to the date on which any such form or certification expires or
becomes obsolete, (y) after the occurrence of any event requiring a change in
the most recent form or certification previously delivered by it to the Borrower
and the Administrative Agent, and (z) from time to time if requested by the
Borrower or the Administrative Agent, provide the Administrative Agent and the
Borrower with two completed originals of Form W-9 (certifying that such U.S.
Lender is entitled to an exemption from U.S. backup withholding tax) or any
successor form. Solely for purposes of this Section 2.16(f), a U.S. Lender shall
not include a Lender, an Issuer or an Agent that may be treated as an exempt
recipient based on the indicators described in Treasury Regulation section
1.6049-4(c)(1)(ii) except to the extent that such Person is required to deliver
a withholding form under Treasury Regulation section 1.1441-1 to establish its
withholding status.
(g) Unless the Borrower and the Administrative Agent have received forms,
documents and/or other evidence satisfactory to them indicating that payments
under any Loan Document to or for a U.S. Lender, Non-U.S. Lender or Non-U.S.
Agent are not subject to U.S. withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty, the Loan Parties and the
Administrative Agent shall withhold amounts required to be withheld by
Requirements of Law from such payments at the applicable statutory rate. 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 except to the extent withholding is
required as a result of a change in law occurring after the applicable time
described in paragraph (f), in which case the Borrower shall be required to
gross-up or indemnify for such amounts resulting solely from such change in law.
(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 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.

 

58

--------------------------------------------------------------------------------

 

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) except with respect to clause (a)(iii) above, Lenders holding
at least 75% of the sum of the Revolving Credit Commitments are not subject to
such increased costs or illegality, payment or proceedings (any such Lender, an
“Affected Lender”), the Borrower may, at its sole cost and expense, 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, each Issuer 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 (for a purchase price equal to the principal balance of all
Loans held by such Affected Lender and all accrued and unpaid interest with
respect thereto through the date of sale) 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. Notwithstanding the above, the
Borrower may not exercise the substitution right under this Section 2.17 during
the continuance of an Event of Default.

 

59

--------------------------------------------------------------------------------

 

Section 2.18 Facility Increase.
(a) The Borrower may (no more frequently than three times after the Closing Date
(in minimum increments of $50,000,000) during the term of the Revolving Credit
Facility) request the Lenders or other Eligible Assignees acceptable to the
Administrative Agent in its reasonable discretion to provide additional
Commitments (a “Facility Increase”) up to an aggregate amount during the term of
the Revolving Credit Facility not in excess of $200,000,000; provided, however,
that (i) the Borrower shall have given the Administrative Agent at least
60 days’ written notice of its intention to effect the Facility Increase and the
desired amount of such Facility Increase, (ii) there shall exist no Default or
Event of Default as of the Facility Increase Effective Date (as defined below)
or after giving effect to the Facility Increase to occur on that date and the
other conditions precedent to a Borrowing set forth in Section 3.2 are satisfied
as of the Facility Increase Effective Date, (iii) an opinion of counsel to the
Loan Parties in form and substance and from counsel reasonably satisfactory to
the Administrative Agent and addressed to the Facility Agents, 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, (iv) the Administrative Agent shall have received such
other documents, agreements, certificates and writings with respect to the
Facility Increase as the Administrative Agent shall reasonably request
(including, without limitation, resolutions of the Borrower authorizing the
borrowings under the Facility Increase and such amendments, modifications and/or
supplements to the Collateral Documents as are necessary or, in the reasonable
opinion of the Administrative Agent, desirable to ensure that the borrowings
under the Facility Increase are secured by, and entitled to the benefits of, the
Collateral Documents), (v) the Borrower shall have paid to the Administrative
Agent a fee to be determined (but in any event reasonably acceptable to Group)
and (vi) the Borrower shall have paid to the Lenders providing the Facility
Increase a fee 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 and is acceptable to the Administrative Agent in its
reasonable discretion; provided, however, that (i) the additional Revolving
Credit Commitment of each Lender or Eligible Assignee is $5,000,000 or an
incremental multiple of $1,000,000 in excess thereof, (ii) 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, (iii) the Borrower shall offer the proposed Facility
Increase to each Lender (other than a Non-Funding Lender) prior to offering any
portion of such Facility Increase to an Eligible Assignee and if the Borrower
has not received commitments from the Lenders in an aggregate amount at least
equal to the amount of the proposed Facility Increase, then the Borrower may
request commitments for such Facility Increase from Eligible Assignees in an
aggregate amount equal to such deficiency, (iv) the fees to be paid to any
Eligible Assignee shall be no greater than those paid (or which were offered) to
the then existing Lenders providing (or which were requested to provide) any
portion of the proposed Facility Increase, (v) the Loans made pursuant to such
Facility Increase shall have the same terms (including, without limitation,
maturity date, Applicable Margin and Collateral) as the other Loans (including,
without limitation, terms for the other Loans that are amended to reflect any
otherwise better terms for the Loans made pursuant to such Facility Increase)
and (vi) such Facility Increase shall be subject to the successful syndication
of the entire amount of such proposed Facility Increase.
(c) On the effective date provided for in the Assumption Agreements providing
for a Facility Increase (each a “Facility Increase Effective Date”), the
Revolving Credit Commitments will be increased by the additional amount
committed to by each Lender or Eligible Assignee on the Facility Increase
Effective Date.

 

60

--------------------------------------------------------------------------------

 

(d) In the event there are Lenders or Eligible Assignees that have committed to
a Facility Increase in excess of the maximum amount requested (or permitted),
then the Arrangers (with the consent of the Borrower which shall not be
unreasonably withheld) shall have the right to allocate such commitments as
among the committing Lenders or committing Eligible Assignees, as the case may
be.
(e) On each Facility Increase Effective Date, the Administrative Agent will
effect a settlement of all outstanding Loans among the Lenders (including,
without limitation, those Eligible Assignees that become Lenders on such
Facility Increase Effective Date) that will reflect the adjustments to the
Commitments of such Lenders. Any interest, fees and other payments accrued to
the Facility Increase Effective Date with respect to any Loans of a Lender
transferred by such Lender in accordance with such settlement shall be for the
account of the transferring Lender. Any interest, fees and other payments
accrued on and after the Facility Increase Effective Date with respect to the
interests and obligations acquired by a Lender hereunder as a result of such
settlement shall be for the account of the acquiring Lender. On each Facility
Increase Effective Date, the Administrative Agent shall notify the Lenders
(including, without limitation, those Eligible Assignees that become Lenders on
such Facility Increase Effective Date) and the Borrower of the occurrence of the
Facility Increase to be effected on such Facility Increase Effective Date, the
amount of Loans held by each Lender as a result thereof and the amount of the
Commitment of each Lender as a result thereof.
Section 2.19 Special Cash Collateral Account. The Borrower may from time to time
deposit into the Special Cash Collateral Account cash of the Borrower to be
included in the calculation of the Borrowing Base; provided that (i) such
deposit shall be made upon not less than 2 Business Days’ prior written notice
to the Facility Agents and (ii) such deposit shall be made on the same day (or
within one Business Day thereafter) as the day of the delivery of the Borrowing
Base Certificate required by Section 6.12(a) (Borrowing Base Determination) (but
in any event no more frequently than once per week). The Borrower may not make
any such deposit if a Default or an Event of Default shall have occurred and is
continuing unless the making of such deposit shall cure such Default or Event of
Default. Funds on deposit in the Special Cash Collateral Account may be invested
in Permitted Cash Equivalents at the direction of the Collateral Agent and,
except during the continuance of an Event of Default (unless otherwise agreed to
by the Administrative Agent in its sole discretion), the Collateral Agent agrees
with the Borrower to make or cause to be made such investments in Permitted Cash
Equivalents as requested by the Borrower; provided, however, that the Collateral
Agent shall not have any responsibility for, or bear any risk of loss of, any
such requested investment or income thereon and the Collateral Agent shall have
no obligation to make or cause to be made any such investment absent a request
by the Borrower for a specific investment in Permitted Cash Equivalents. The
Borrower may request the Collateral Agent to withdraw monies from the Special
Cash Collateral Account and deliver such withdrawn amounts to the Borrower by
written notice to the Facility Agents delivered together with (but no more
frequently than once per week) the delivery of the Borrowing Base Certificate
required by Section 6.12(a) (Borrowing Base Determination); provided, that no
withdrawal shall be permitted at the request of the Borrower if a Default or an
Event of Default shall have occurred and is continuing (other than a withdrawal
of monies by the Collateral Agent, at the request of the Borrower, to be applied
directly to the immediate payment of the Loans and if paid in full then to the
cash collateralization of Letter of Credit Obligations, and not to be delivered
to the Borrower) or, after giving effect to such withdrawal, the aggregate
principal amount of the Revolving Credit Outstandings will exceed the Maximum
Credit. The parties hereto acknowledge and agree that the Special Cash
Collateral Account is not a Cash Collateral Account and that all funds and
Permitted Cash Equivalents in the Special Cash Collateral Account are collateral
security for the payment of the Secured Obligations. The Administrative Agent
may, in its sole discretion, from time to time apply funds and Permitted Cash
Equivalents then held in the Special Cash Collateral Account to the payment of
Secured Obligations which are past due.

 

61

--------------------------------------------------------------------------------

 

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) the Fee Letters, duly executed and delivered by the Borrower;
(iii) [Intentionally Omitted];
(iv) the Guaranty, duly executed by each Guarantor;
(v) 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 Collateral Agent
(for the benefit of the Secured Parties) shall have a valid and perfected
security interest in the Collateral having the priority described in
Section 4.20 of this Agreement and the Collateral Documents, including (x) such
documents duly executed by each Loan Party as the Administrative Agent may
request with respect to the perfection of the Collateral Agent’s security
interests in the Collateral (including financing statements under the UCC,
patent, trademark and copyright security agreements suitable for filing with the
United States Patent and Trademark Office or the United States 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), (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, and (z) copies of United States Patent and
Trademark Office and United States Copyright Office searches as of a recent date
with respect to any intellectual property of any Loan Party registered with
either such office or for which an application for registration has been
submitted to either such office, which searches shall not indicate any Liens on
any such intellectual property, except for those that shall be terminated on the
Closing Date or are otherwise permitted hereunder;

 

62

--------------------------------------------------------------------------------

 

(B) all certificates, instruments and other documents representing all Pledged
Stock being pledged pursuant to the Pledge and Security Agreement and undated
stock powers for such certificates, instruments and other documents executed in
blank;
(C) all instruments representing Pledged Debt Instruments being pledged pursuant
to the Pledge and Security Agreement duly endorsed in favor of the Collateral
Agent or in blank; and
(D) evidence reasonably satisfactory to the Administrative Agent of payment or
arrangements for payment by the Borrower of all applicable recording taxes,
fees, charges, costs and expenses required for the recording of the Collateral
Documents necessary to perfect the Liens created by the Pledge and Security
Agreement;
(vi) [Intentionally Omitted];
(vii) a Borrowing Base Certificate dated on or about the Closing Date;
(viii) a favorable opinion of Skadden, Arps, Slate, Meagher & Flom, 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, including
opinions as to the enforceability of the Loan Documents, compliance with all
laws and regulations (including Regulation U of the Board of Governors of the
Federal Reserve System), the perfection of all security interests purported to
be granted pursuant to the Collateral Documents and no conflicts with material
agreements;
(ix) (i) (A) 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 (or local equivalent, if applicable) of its
jurisdiction of organization and (B) a certificate of the Secretary or an
Assistant Secretary of each Loan Party certifying (1) the by-laws (or equivalent
Constituent Document) of such Loan Party as in effect on the date of such
certification, (2) 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 other Loan Documents to which such Loan
Party is a party and (3) that there have been no changes in the articles or
certificate of incorporation (or equivalent Constituent Document) of such Loan
Party from the articles or certificate of incorporation (or equivalent
Constituent Document) of such Loan Party delivered pursuant to clause (A) above;
(ii) a certificate of the Secretary or an Assistant Secretary of each Loan Party
certifying the names and true signatures of each officer of such Loan Party who
has been authorized to execute and deliver this Agreement and any Loan Document
or other document required hereunder to be executed and delivered by or on
behalf of such Loan Party; and

 

63

--------------------------------------------------------------------------------

 

(iii) a good standing certificate from the applicable Governmental Authority of
(A) each Loan Party’s jurisdiction of incorporation, organization or formation
and (B) each jurisdiction in which it is qualified as a foreign corporation or
other entity to do business and which, if it were not so qualified in such
jurisdiction, could reasonably be expected to have a Material Adverse Effect,
each dated a recent date prior to the Closing Date;
(x) a certificate of the chief financial 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 hereby;
(xi) a certificate of a Responsible Officer of Group to the effect that the
conditions set forth in Section 3.1(g) and Section 3.2 have been satisfied;
(xii) 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 Collateral 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;
(xiii) all other Collateral Documents and other Loan Documents and related
certificates, instruments, documents and agreements required, pursuant to the
Pledge and Security Agreement or this Agreement, to be delivered on the Closing
Date (including, without limitation, Blocked Account Letters, Restricted Account
Letters, Control Account Agreements, Landlord Waivers and Bailee Letters), duly
executed by the parties thereto; and
(xiv) such other certificates, documents, agreements and information respecting
any Loan Party or the Collateral as the Administrative Agent or any Lender,
through the Administrative Agent, may reasonably request.
(b) Termination of Existing Credit Agreement. Group and its Subsidiaries shall
have (i) repaid in full all Indebtedness and other obligations under or with
respect to the Existing Credit Agreement and any related documents (or in the
case of any such Indebtedness that is a guaranty, terminated such guaranty),
(ii) terminated any commitments to lend or make other extensions of credit
thereunder, (iii) delivered to the Administrative Agent a payoff letter with
respect to the Existing Credit Agreement and all documents or instruments
necessary to release all Liens securing the Indebtedness and other obligations
of Group and its Subsidiaries under or with respect to the Existing Credit
Agreement or any related documents (such payoff letter, documents and
instruments to be in form and substance satisfactory to the Administrative
Agent), and (iv) made arrangements reasonably satisfactory to the Administrative
Agent with respect to the cancellation of any letters of credit outstanding
under the Existing Credit Agreement (other than the Existing Rollover Letters of
Credit) or the issuance of Letters of Credit to support the obligations of the
Borrower with respect thereto.
(c) Financial Statements. The Lenders shall have received and be satisfied with
(i) unaudited consolidated and consolidating (by business unit) income statement
and balance sheet and audited consolidated financial statements of Group and its
Subsidiaries for each fiscal quarter ending on or after January 1, 2008 for
which such financial statements are available in final form (but in any event
the financial statements of Group and its Subsidiaries for each such fiscal
quarter through and including the fiscal quarter ending July 5, 2008) and
(ii) 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 Revolving Loan Maturity Date prepared
by Group’s management.

 

64

--------------------------------------------------------------------------------

 

(d) Availability. As of the Closing Date, Available Credit shall be not less
than $50,000,000 (after giving effect to the Borrowings, issuances of Letters of
Credit and financial accommodations under the Canadian Facility, in each
instance, requested or deemed requested to be made on the Closing Date).
(e) Consents, Etc. Each Warnaco Entity shall have received all material 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 other Loan 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 owned by
each of them in the manner and for the purpose contemplated by the Loan
Documents or the transactions contemplated thereby (other than certain
non-discretionary consents, authorizations, filings, registrations and other
similar actions or approvals which by their nature may only be made after the
Closing Date and which will be made as soon as practical after the Closing
Date).
(f) Fees and Expenses Paid. There shall have been paid 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 Letters).
(g) No Material Adverse Effect. There shall have been no event, circumstance or
change since December 29, 2007 that has had, either individually or in the
aggregate, a Material Adverse Effect. There shall be no actions, suits,
investigations, litigation or proceedings pending or threatened in any court or
before any arbitrator or Governmental Authority and no judgments, orders,
injunctions or other restraints that (i) could reasonably be expected to have a
Material Adverse Effect or (ii) can reasonably be expected to materially and
adversely affect the Revolving Credit Facility or the transactions contemplated
thereby.
(h) Audit and Other Due Diligence. The Administrative Agent shall have conducted
a field examination and ordered an appraisal of each Loan Party’s Inventory and
the Administrative Agent and the Lenders shall have had an opportunity, if they
so choose, to examine the books of account and other records and files of the
Loan Parties and to make copies thereof, and to conduct a pre-closing audit,
which shall include, without limitation, verification of Receivables and the
Borrowing Base of the Borrower and each other Loan Party, and to conduct such
other due diligence with respect to the Loan Parties and the Collateral as the
Administrative Agent and the Lenders require, and the results of such field
examination, appraisal, examination, audit and other due diligence shall have
been reasonably satisfactory to the Administrative Agent and the Lenders in all
respects.
(i) Canadian Facility. The Canadian Facility shall have been executed by all the
parties thereto.

 

65

--------------------------------------------------------------------------------

 

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
(i) any Revolving Loan, the Administrative Agent shall have received a duly
executed Notice of Borrowing, (ii) any Swing Loan, the Administrative Agent
shall have received a duly executed Swing Loan Request and (iii) any Letter of
Credit, the Administrative Agent and the Issuer shall have received a duly
executed Letter of Credit Request, in each case, 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
(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 Revolving Credit 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.
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.

 

66

--------------------------------------------------------------------------------

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers, the Administrative Agent and the Collateral
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, the Administrative Agent
and the Collateral 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 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 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, limited liability company
or partnership, as the case may be, action, including the consent of
shareholders, partners and members where required;
(iii) do not and will not (A) contravene such Warnaco Entity’s or any of 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 pursuant to the
Loan Documents; and

 

67

--------------------------------------------------------------------------------

 

(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 will have been
upon delivery thereof hereunder, duly executed and delivered by each Warnaco
Entity party thereto.
(c) This Agreement is, and the other Loan 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.
(d) For so long as the Senior Note Indenture is in effect or any Senior Notes
are outstanding, each Borrowing, Issuance of a Letter of Credit and financial
accommodation made under the Canadian Facility and each delivery by the Borrower
of a Borrowing Base Certificate constitutes a representation and warranty by
each of Group and the Borrower that, as of the date of such Borrowing, Issuance,
financial accommodation or delivery, as the case maybe (both before and after
giving effect to such Borrowing, Issuance or financial accommodation, if
applicable), the financial accommodations provided to the Borrower hereunder,
both by themselves and together with the financial accommodations provided to
the Canadian Borrower under the Canadian Facility and the guaranty by the Loan
Parties under the Loan Party Canadian Facility Guaranty, do not violate the debt
incurrence restrictions set forth in the Senior Note Indenture or any other
Senior Note Document. Without limitation of the foregoing, each of Group and the
Borrower represents and warrants that (i) each Borrowing (including each
Borrowing under a Facility Increase), the Obligations with respect to each
Letter of Credit and the guaranty by the Loan Parties of the Canadian Secured
Obligations pursuant to the Loan Party Canadian Facility Guaranty is Permitted
Debt (as defined in the Senior Note Indenture) and is permitted under
Section 4.09 of the Senior Note Indenture, (ii) as of the Closing Date there are
in existence no Credit Facilities (as defined in the Senior Note Indenture)
other than this Agreement, the Canadian Facility and the Italian Debt Facility
and (iii) as of the Closing Date each Credit Facility (as defined in the Senior
Note Indenture) other than this Agreement and the Canadian Facility is permitted
under Section 4.09 of the Senior Note Indenture (other than under clause
(b) thereof).
Section 4.3 Ownership of Group, Borrower; Subsidiaries.
(a) 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 Collateral Agent for the benefit of the Secured Parties created under the
Loan 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.

 

68

--------------------------------------------------------------------------------

 

(b) Set forth on Schedule 4.3 (Ownership of Warnaco Entities) is a complete and
accurate list of all Subsidiaries of Group on the Closing Date, 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 Closing Date 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 Closing
Date. 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 or the Loan Documents (as defined in the Canadian Facility). 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. 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) (x) The consolidated balance sheet of Group and its Subsidiaries as at
December 29, 2007, 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, (y) the unaudited consolidating
balance sheets of Group and its Subsidiaries as at December 29, 2007, and the
related consolidated statements of income, retained earnings and cash flows of
Group and its Subsidiaries for the Fiscal Year then ended, and (z) the unaudited
consolidated and consolidating balance sheets of Group and its Subsidiaries as
at July 5, 2008, and the related consolidated statements of income, retained
earnings and cash flows of Group and its Subsidiaries for the Fiscal Quarter
then ended and for the period commencing at the end of the previous Fiscal Year
and ending with the end of such Fiscal Quarter, copies of all of which have been
furnished to each Lender, fairly present, subject, in the case of said interim
financial statements under clause (z), 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, results of the
operations of Group and its Subsidiaries for the period ended on such dates, all
in conformity with Agreement Accounting Principles.
(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 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.
Section 4.5 Material Adverse Change. Since December 29, 2007, 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.

 

69

--------------------------------------------------------------------------------

 

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, and (c) 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, suits, investigations, litigation or
proceedings pending or threatened in any court or before any arbitrator or
Governmental Authority that in the aggregate could 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 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 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 Agreement
Accounting Principles. 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
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, Warnaco Swimwear,
Inc. 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 or the
consummation of the financing, 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.

 

70

--------------------------------------------------------------------------------

 

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 or other similar 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.
(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. No Warnaco Entity is an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company,” as such terms are defined in the Investment
Company Act of 1940, as amended.
Section 4.13 Use of Proceeds. The proceeds of the Revolving 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: (i) to refinance
all amounts owing under the Existing Credit Agreement and to pay fees and
expenses in connection with entering into the Loan Documents, (ii) to provide
working capital from time to time for the Warnaco Entities and (iii) for other
general and corporate purposes of the Warnaco Entities permitted hereunder.
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 Collateral 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.

 

71

--------------------------------------------------------------------------------

 

(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.
(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 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 not been, 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.

 

72

--------------------------------------------------------------------------------

 

(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 or operated 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.
(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 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.

 

73

--------------------------------------------------------------------------------

 

(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 or province, 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. 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.
(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 Perfection of Security Interests in the Collateral. The Collateral
Documents create valid Liens on the Collateral purported to be covered thereby,
which Liens are perfected Liens and prior to all other Liens (other than
Customary Permitted Liens having priority over such Liens).
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 Facility Agents that:
Section 5.1 Minimum Fixed Charge Coverage Ratio. If a Trigger Event shall occur,
Group shall maintain a Fixed Charge Coverage Ratio, for each Test Period with
respect thereto, of at least 1.1 to 1.0.
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 Facility Agents 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
Agreement Accounting Principles;

 

74

--------------------------------------------------------------------------------

 

(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 and consolidating balance sheets of Group and its Subsidiaries as
of the end of such Fiscal Quarter and consolidated and consolidating 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, duly certified (subject to
year-end audit adjustments) by a Responsible Officer of Group as having been
prepared in accordance with Agreement Accounting Principles and certifying
compliance with the terms of this Agreement and setting forth in reasonable
detail the calculations necessary to demonstrate compliance with Article V (it
being understood and agreed that if such certification is delivered with respect
to a Fiscal Quarter for which Section 5.1 is not being tested for a fiscal
period ending on the last day of such Fiscal Quarter due to no Trigger Event
having occurred, such certification shall still provide the calculations for
such Section 5.1 as if a Trigger Event had occurred and such Fiscal Quarter were
the last Fiscal Quarter of a Test Period, but the certification shall not then
be required to indicate whether or not Group was in compliance with such
Section 5.1 as at the end of such Fiscal Quarter);
(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 reasonably 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 Agreement Accounting Principles 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 (it being understood and agreed that if
such certificate is delivered with respect to a Fiscal Year for which
Section 5.1 is not being tested for a fiscal period ending on the last day of
such Fiscal Year due to no Trigger Event having occurred, such certificate shall
still provide the calculations for such Section 5.1 as if a Trigger Event had
occurred and such Fiscal Year were a Test Period, but the certificate shall not
then be required to indicate whether or not Group was in compliance with such
Section 5.1 as at the end of such Fiscal Year) and (ii) financial information
regarding Group and its Subsidiaries consisting of consolidating balance sheets
of Group and its Subsidiaries as of the end of such Fiscal Year and related
consolidating statements of income and consolidated cash flows of Group and its
Subsidiaries for such Fiscal Year, all prepared in conformity with Agreement
Accounting Principles and certified by a Responsible Officer of Group as fairly
presenting the financial position of Group and its Subsidiaries as at the end of
such Fiscal Year and the results of their operations and cash flows for such
Fiscal Year;

 

75

--------------------------------------------------------------------------------

 

(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 (it being
understood and agreed that if such certificate is delivered with respect to a
Fiscal Quarter or Fiscal Year for which Section 5.1 is not being tested for a
fiscal period ending on the last day of such Fiscal Quarter or Fiscal Year due
to no Trigger Event having occurred, such certificate shall still provide the
calculations for such Section 5.1 as if a Trigger Event had occurred and such
Fiscal Quarter were the last Fiscal Quarter of a Test Period or such Fiscal Year
were a Test Period, as the case may be, but the certificate shall not then be
required to indicate whether or not Group was in compliance with such
Section 5.1 as at the end of such Fiscal Quarter or Fiscal Year), (ii) showing
in reasonable detail the calculations necessary to determine the Applicable
Margin, (iii) stating that no Default or Event of Default has occurred and is
continuing and no Default or Event of Default (as defined in the Canadian
Facility) 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 and (iv) stating that the amount of
the Available Credit at any time during the period covered by such certificate
did not fall to an amount which would give rise to an Accelerated Borrowing Base
Certificate Delivery Date and that the amount of the Available Credit at any
time during the period covered by such certificate did not fall to an amount
which would give rise to a Trigger Event, or, if the Available Credit fell to
any such amount, the first date on which each such event occurred;
(e) Business Plan. Not later than 45 days after the end of each Fiscal Year
(beginning with the end of Fiscal Year 2008), 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
Revolving Loan Maturity 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 Revolving Loan Maturity 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, 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;
(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;
(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; and

 

76

--------------------------------------------------------------------------------

 

(h) Trigger Event and Accelerated Borrowing Base Certificate Delivery Date.
Promptly after the occurrence of a Trigger Event and/or Accelerated Borrowing
Base Certificate Delivery Date, a written notice of a Responsible Officer of
Group stating that a Trigger Event and/or Accelerated Borrowing Base Certificate
Delivery Date has occurred and describing in reasonable detail such occurrence,
including the date of such occurrence.
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 any other event which has
had a Material Adverse Effect or of the existence of any Default or Event of
Default under and as defined in the Canadian Facility, 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 to the Loan Parties, 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 Senior 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 Senior 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.
Section 6.8 Tax Returns. Upon the request of the Administrative Agent or any
Lender, through the Administrative Agent, Group will provide copies of all
federal, state and 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).

 

77

--------------------------------------------------------------------------------

 

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 and the Collateral Agent) 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
Collateral 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 Facility Agents.
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 any 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. Until the Revolving Credit
Termination Date:
(a) The Borrower shall deliver to the Administrative Agent as soon as available,
but in any event within 15 days after the end of each calendar month, as of the
end of such calendar month, and at such other times as may be reasonably
requested by the Administrative Agent (but not more than one per week), a
Borrowing Base Certificate executed by a Responsible Officer of Group; provided,
that during each Accelerated Borrowing Base Certificate Delivery Period or
during the existence of an Event of Default, the Borrower shall deliver to the
Administrative Agent a Borrowing Base Certificate not less than once each week,
as of the Business Day immediately prior to the day of delivery and executed by
a Responsible Officer of Group. Concurrently with the delivery of any Borrowing
Base Certificate to the Administrative Agent, the Borrower shall deliver to the
Administrative Agent a certification in reasonable detail setting forth the
Available Credit as of the date of such Borrowing Base Certificate.

 

78

--------------------------------------------------------------------------------

 

(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 two field audits in each calendar year (and additional
field audits (not to exceed, in the case of clause (B) below, two additional
field audits in such calendar year) if (A) an Event of Default has occurred and
is continuing at the time of the appointment of the appraiser or (B) Available
Credit has been less than 15% of the aggregate of the Revolving Credit
Commitments and Revolving Credit Commitments (as defined in the Canadian
Facility) for 5 or more consecutive Business Days at the time of the appointment
of the appraiser) with respect to Inventory owned by any Loan Party and
(ii) Group shall conduct, 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 reasonably 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 Administrative Agent to conduct and conclude
(i) field audits with respect to Inventory owned by any Loan Party not more
frequently than two times in any calendar year (and such additional times in any
calendar year (not to exceed, in the case of clause (B) below, two additional
field audits in such calendar year) if (A) an Event of Default has occurred and
is continuing at the time of the appointment of the appraiser or (B) Available
Credit has been less than 15% of the aggregate of the Revolving Credit
Commitments and Revolving Credit Commitments (as defined in the Canadian
Facility) for 5 or more consecutive Business Days at the time of the appointment
of the appraiser) 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 twice during each calendar year and may in
any event be conducted if an Event of Default has occurred and is continuing at
the time of the appointment of the appraiser or if Available Credit is less than
15% of the aggregate of the Revolving Credit Commitments and Revolving Credit
Commitments (as defined in the Canadian Facility) in effect at the time of the
appointment of the appraiser), in each case at the sole expense of the Group and
the Borrower.
(e) Not less than once each month, 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 Lenders
or any Affiliates of any Agent or Lender (or such other Persons as the
Administrative Agent may reasonably consent to) that constitute Secured
Obligations as of such date;

 

79

--------------------------------------------------------------------------------

 

(f) In connection with the consummation of a Permitted Acquisition, no Eligible
Receivables or Eligible Inventory of any Proposed Acquisition Target acquired in
connection with such Permitted Acquisition may be included in the Borrowing Base
to the extent provided for in this Agreement unless and until the Administrative
Agent shall have received the results of the appraisals, field audits, test
verifications and other evaluations of such Collateral as it may reasonably
request of the type specified in clauses (b), (c) and (d) above, at the sole
cost and expense of Group and the Borrower.
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 Communications and Amendments with respect to Canadian Facility.
Group and the Borrower shall cause the Canadian Borrower to provide the
Administrative Agent with copies of (i) all certificates (including, without
limitation, borrowing base certificates), statements, notices and other
communications provided by it or any of its Affiliates under or with respect to
the Canadian Facility concurrently with the sending thereof to any other Person
party to the Canadian Facility and (ii) all amendments, waivers and consents to
or with respect to the Canadian Facility or any related documents promptly upon
the Canadian Borrower’s receipt thereof.
Section 6.15 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 the Administrative Agent or any Lender, through the
Administrative Agent, may from time to time reasonably request.
ARTICLE VII
AFFIRMATIVE COVENANTS
As long as any of the Obligations or Commitments remain outstanding, unless the
Requisite Lenders otherwise consent in writing, each of Group and the Borrower
agree with the Lenders and the Facility Agents 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 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 (or
equivalent governing body) 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.

 

80

--------------------------------------------------------------------------------

 

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 Agreement Accounting Principles, 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 Collateral 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 Facility Agents.
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 each Facility 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 any Warnaco Entity with any of
their respective officers or directors, and (d) communicate directly with any
Warnaco Entity’s independent certified public accountants (or its equivalent in
foreign jurisdictions) (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 (or its equivalent in foreign jurisdictions) to
disclose to any Facility Agent or any Lender any and all financial statements
and other information of any kind, as such Facility Agent or Lender reasonably
requests from any Warnaco Entity and which such accountants may have with
respect to the business, 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
Agreement Accounting Principles 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.

 

81

--------------------------------------------------------------------------------

 

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 determines 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 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 applicable Facility Agents 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 Facility Agents 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) guaranties, as primary obligor and not as surety, the full and
punctual payment when due of the Obligations;

 

82

--------------------------------------------------------------------------------

 

(b) deliver to the Facility Agents 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 Collateral Agent, for the
benefit of the Secured Parties, a valid, perfected and enforceable security
interest having the priority described in Section 4.20 of this Agreement and the
Collateral Documents in all personal property interests and other assets
(including the Stock and Stock Equivalents and other debt Securities, but, in
the case of Real Property, limited to Material Owned Real Property) of each Loan
Party; provided, however, that in no event shall any Warnaco Entity be required
to pledge in excess of 65% of the outstanding Voting Stock of any Foreign
Subsidiary that is a direct Subsidiary of a Loan Party, 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 or equivalent
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
(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
Administrative Agent.
Section 7.12 [Intentionally Omitted].
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 Liabilities
and Costs.

 

83

--------------------------------------------------------------------------------

 

(c) To the extent not previously delivered to the Collateral Agent or 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 Collateral Agent and the Administrative Agent, promptly and
in any event not later than 45 days after receipt of such request (or such later
date agreed to by the Administrative Agent in its sole discretion), a Mortgage
in favor of the Collateral Agent, for the benefit of the Secured Parties, on the
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 Senior Notes. The Borrower shall, on or before the date 45 days
prior to the scheduled maturity of the Senior Notes, repurchase (in accordance
with Section 8.6(b)) or refinance (in accordance with Section 8.1(f)) all of the
Senior Notes or cause the Legal Defeasance (as defined in the Senior Note
Indenture) of all of the Senior Notes (in accordance with Article 8 of the
Senior Note Indenture, including satisfaction of the conditions therefor under
Section 8.04 thereof).
Section 7.15 Post Closing Matters. Each of Group and the Borrower shall, and
shall cause each of their respective Subsidiaries to, satisfy the requirements
set forth on Schedule 7.15 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 Commitments remain outstanding, without the
written consent of the Requisite Lenders, each of Group and the Borrower agrees
with the Lenders and the Facility Agents 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 Senior Notes in an aggregate outstanding principal amount not to exceed
$160,890,000;
(c) Indebtedness existing on the Closing Date and disclosed on Schedule 8.1
(Existing Indebtedness);
(d) (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 (g) of this Section 8.1;

 

84

--------------------------------------------------------------------------------

 

(e) 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
$40,000,000 at any time;
(f) Renewals, extensions, refinancings and refundings of Indebtedness permitted
by clauses (b), (c) and (e) of this Section 8.1 and of Indebtedness under the
Canadian Facility; provided, however, that (A) any such renewal, extension,
refinancing or refunding is in an aggregate principal amount not greater than
the principal amount of, and is on terms not materially 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, (B) additionally with respect to any
renewal, extension, refinancing or refunding of the Senior Notes, such renewal,
extension, refinancing or refunding (i) is unsecured and not guaranteed by any
Warnaco Entity that is not guaranteeing the Obligations, and (ii) has no
payments of principal scheduled to be due and payable prior to three years after
the Revolving Loan Maturity Date and (C) additionally with respect to any
renewal, extension, refinancing or refunding of Indebtedness under the Canadian
Facility, such renewal, extension, refinancing or refunding is not directly or
indirectly guaranteed by, or secured by any assets of, any Loan Party;
(g) Indebtedness of the Foreign Subsidiaries of Group not otherwise permitted
under this Section 8.1; provided, however, that the Dollar Equivalent of the
aggregate outstanding principal amount of all such Indebtedness (other than
under the Canadian Facility) shall not exceed $100,000,000 at any time (with
such dollar limitation not to be applicable with respect to the incurrence of
such Indebtedness if (x) at the time of incurrence of such Indebtedness the
Leverage Ratio for Group is less than 3.5 to 1.0 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 incurrence and the
application of the proceeds thereof and (y) prior to the incurrence of such
Indebtedness, Group has delivered to the Administrative Agent a certificate
executed by a Responsible Officer of Group certifying the satisfaction of the
requirements under this parenthetical with respect to such incurrence and
setting forth in reasonable detail the calculation of such Leverage Ratio);
(h) a Sale and Leaseback Transaction permitted pursuant to Section 8.16, to the
extent such transaction would constitute Indebtedness;
(i) 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);
(j) 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;
(k) Indebtedness arising under any performance or surety bond entered into in
the ordinary course of business;
(l) Obligations under Hedging Contracts permitted under Section 8.17;
(m) unsecured Earnout Obligations and Subordinated Indebtedness; and

 

85

--------------------------------------------------------------------------------

 

(n) other Indebtedness the aggregate Dollar Equivalent of the principal amount
of which shall not exceed $50,000,000 at any time (of which not greater than the
aggregate Dollar Equivalent of $20,000,000 may be secured by Liens 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 Foreign Subsidiary of Group securing the Indebtedness
permitted under Section 8.1(g), which Liens for the avoidance of doubt shall not
secure any Indebtedness under this Agreement;
(c) Liens existing on the Closing Date and disclosed on Schedule 8.2 (Existing
Liens);
(d) Customary Permitted Liens;
(e) 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(e) and limited in
each case to the property purchased with the proceeds of such purchase money
Indebtedness or subject to such Capital Lease;
(f) any Lien securing the renewal, extension, refinancing or refunding of any
Indebtedness secured by any Lien permitted by clause (c) or (e) of this
Section 8.2 as long as such Lien does not cover any assets not subject to the
Lien securing the Indebtedness being renewed, extended, refinanced or refunded;
(g) Liens in favor of lessors securing operating leases or, to the extent such
transactions create a Lien thereunder, sale and leaseback transactions, in each
case to the extent such operating leases or sale and leaseback transactions are
permitted hereunder;
(h) 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 Agreement
Accounting Principles, with respect to such judgment or award and; provided,
further, that any such judgment shall not give rise to an Event of Default;
(i) 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;
(j) Liens securing Indebtedness incurred under Section 8.1(j); 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

 

86

--------------------------------------------------------------------------------

 

(k) other Liens (not covering any Inventory, Accounts or other Receivables of
any Loan Party or proceeds of any of the foregoing) not otherwise permitted
under this Section 8.2, securing obligations in an amount not to exceed
$20,000,000 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) (i) Investments by any Warnaco Entity in any Warnaco Entity in an amount not
exceeding the amount outstanding on the Closing Date 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 $10,000,000, 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), and (y) the repayment of Indebtedness owed by such
Warnaco Entity to any Loan Party 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 Collateral 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; provided, further, that in the case of investments made
as capital contributions pursuant to subclause (ii)(C)(1) such Investment shall
be permitted only to the extent that substantially concurrently with such
Investment the Borrower shall have complied with the requirements of
Section 7.11(b) (Additional Personal Property Collateral and Guaranties);
(b) Investments in (i) cash and Cash Equivalents; provided that such cash and
Cash Equivalents held by a Loan Party are held in a Blocked Account, a
Restricted Account, a Control Account or otherwise in compliance with
Section 4.7 of the Pledge and Security Agreement, and (ii) Investment Grade Debt
Securities; provided that Investment Grade Debt Securities held by a Loan Party
are held in a Securities Account or otherwise in compliance with Section 4.4 of
the Pledge and Security Agreement;
(c) Investments existing on the Closing Date and described on Schedule 8.3
(Existing Investments);
(d) Investments in payment intangibles, chattel paper (each as defined in the
UCC) and Accounts, notes receivable (including but not limited to those notes
receivable held by the Borrower or its Subsidiaries pursuant to clause (b) of
Section 8.4) and similar items arising or acquired in the ordinary course of
business consistent with the past practice of the Borrower and its Subsidiaries;
(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 $2,000,000 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
Sarbanes-Oxley 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 $3,000,000 in the aggregate at any one time
outstanding;

 

87

--------------------------------------------------------------------------------

 

(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 Collateral Agent within three (3) Business Days’ of the
receipt thereof by any Loan Party as additional Collateral pursuant to the
Pledge and Security Agreement;
(h) Guaranty Obligations permitted by Section 8.1;
(i) Investments by the Borrower or any Subsidiary in Permitted Acquisitions;
(j) [Intentionally Omitted];
(k) other Investments in an aggregate amount invested not to exceed the Dollar
Equivalent of $5,000,000 at any time; and
(l) other Investments so long as (i) no Default or Event of Default shall have
occurred and be continuing at the time such Investment is made or after giving
effect thereto, (ii) the Fixed Charge Coverage Ratio for Group shall be at least
1.1 to 1.0 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 the making of such Investment (as if such Investment had
been made on the first day of such period), (iii) after giving pro forma effect
to such Investment Available Credit is at least 25% of the Aggregate Borrowing
Limit at such time and (iv) prior to the making of such Investment, Group has
delivered to the Administrative Agent a certificate executed by a Responsible
Officer of Group certifying the satisfaction of the requirements under this
clause (l) with respect to such Investment and setting forth in reasonable
detail the calculation of such Fixed Charge Coverage Ratio and Available Credit.
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 (including, without limitation, a
Subsidiary’s Stock) 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 75% of the
purchase price for such asset shall be paid in cash and the remaining amount
paid in notes receivable (provided that in the case of an Asset Sale consummated
when no Loan or Loans or unreimbursed amounts in respect of drawn Letters of
Credit are outstanding (Loan, Loans and Letters of Credit being used in this
proviso as defined in each of this Agreement and the Canadian Facility), 50% of
the purchase price for such asset may be paid in cash and the remaining amount
paid in notes receivable) (which notes receivable shall be in form and substance
reasonably satisfactory to the Administrative Agent), (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

 

88

--------------------------------------------------------------------------------

 

and is continuing at the time of such sale or would result from such sale, and
(v) if the net cash proceeds received for all assets sold by the Loan Parties
during any calendar year pursuant to this clause (b) shall exceed $10,000,000 in
the aggregate, then (1) the Borrower shall prepay the Loans (first the Swing
Loans until paid in full and then the Revolving Loans) promptly upon receipt of
such net cash proceeds in the amount of all net cash proceeds received from time
to time (including in respect of any note receivable) with respect to the sale
that resulted in such excess occurring and all subsequent sales of assets by any
Loan Party pursuant to this clause (b) during such calendar year and (2) with
respect to the sale that resulted in such excess occurring and each subsequent
sale of assets by any Loan Party pursuant to this clause (b) during such
calendar year which results in net cash proceeds in excess of $500,000, the
Borrower shall deliver to the Administrative Agent, no later than the date of
such sale, a Borrowing Base Certificate as of the Business Day immediately
preceding the date of such sale executed by a Responsible Officer of Group
giving pro forma effect to such sale, which Borrowing Base Certificate shall
show that the aggregate principal amount of Revolving Credit Outstandings does
not exceed the Maximum Credit at such time(for purposes of this clause (v), net
cash proceeds of an asset sale means proceeds of such asset sale received from
time to time (including a payment on a note receivable) in cash or Cash
Equivalents net of (x) the reasonable cash costs of sale, (y) taxes paid or
payable as a result thereof and (z) 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);
(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) (other than pursuant to
the next proviso of this subclause (ii)) shall not exceed $20,000,000 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
provided further that the Loan Parties may transfer the Calvin Klein Underwear
trademark and/or rights to use such trademark to one or more Warnaco Entities
that are not Loan Parties so long as (A) each such transfer shall be on
arm’s-length terms and the price paid to the transferring Loan Parties shall be
no less than the Fair Market Value of such trademark at the time of such
transfer, (B) each such transfer is for cash, Cash Equivalents and/or a note
(such note to be on arm’s-length terms at a market interest rate and otherwise
reasonably acceptable to the Administrative Agent and pledged to the Collateral
Agent for the benefit of the Secured Parties), (C) no Default or Event of
Default has occurred and is continuing at the time of such transfer or would
result from such transfer and (D) the transferee of such trademark shall have
entered into an agreement on terms reasonably satisfactory to the Administrative
Agent pursuant to which such transferee agrees that the Collateral Agent may
dispose of Inventory utilizing such trademark without restriction or royalty
payment to the transferee, and (iii) any Warnaco Entity that is not a Loan Party
to any other Warnaco Entity;
(d) the licensing or sublicensing of trademarks and trade names by any Warnaco
Entity; provided that (i) if the licensing or sublicensing is by a Loan Party,
if the applicable trademark or trade name has generated sales in excess of
$20,000,000 in the prior fiscal year, such license or sublicense (x) shall not
have an initial term in excess of 7 years and (y) shall not have aggregate
up-front payments and minimum guaranteed royalties in excess of $7,500,000 or,
together with the aggregate up-front payments and minimum guaranteed royalties
for all other such licenses and sublicenses, in an aggregate amount in excess of
$25,000,000 and (ii) any such licensing or sublicensing to a Person other than a
Loan Party shall take place on an arm’s-length basis;

 

89

--------------------------------------------------------------------------------

 

(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;
(i) any Asset Sale in connection with a Sale and Leaseback Transaction permitted
pursuant to Section 8.16(b); and
(j) the sale of any asset listed on Schedule 8.4.
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;
(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; and
(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
(d) other dividends and distributions on the Stock of Group and the Borrower and
other redemptions, repurchases or other acquisitions of the Stock of Group and
the Borrower, in each instance under this clause (d), so long as (i) the Fixed
Charge Coverage Ratio for Group shall be at least 1.1 to 1.0 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 the making
of such Restricted Payment (as if such Restricted Payment had been made on the
first day of such period), (ii) at the time such Restricted Payment is made and
after giving effect thereto Available Credit is at least 25% of the Aggregate
Borrowing Limit at such time and (iii) prior to the making of such Restricted
Payment, Group has delivered to the Administrative Agent a certificate executed
by a Responsible Officer of Group certifying the satisfaction of the
requirements under this clause (d) with respect to such Restricted Payment and
setting forth in reasonable detail the calculation of such Fixed Charge Coverage
Ratio and Available Credit;

 

90

--------------------------------------------------------------------------------

 

provided, however, that the Restricted Payments described in subclause (c)(i)
and clause (d) 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 (as in effect on the Closing Date).
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;
provided that this Section 8.6(a) shall not apply to intercompany Indebtedness
disclosed on Schedule 8.1 (Existing Indebtedness).
(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 and prepay the Canadian Secured Obligations in
accordance with the terms of the Canadian Facility, (ii) make regularly
scheduled or otherwise required repayments or redemptions of Indebtedness,
(iii) make permitted repayments of any Indebtedness permitted by Section 8.1
hereof solely to the extent that such Indebtedness is “revolving”, (iv) prepay
any intercompany Indebtedness payable to the Borrower or any of its Subsidiaries
by the Borrower or any of its Subsidiaries, (v) repurchase the Senior Notes in
the open market using then available Cash On Hand in an aggregate amount not to
exceed $10,000,000, (vi) renew, extend, refinance and refund Indebtedness, as
long as such renewal, extension, refinancing or refunding is permitted under
Section 8.1(f), and defease all of the Senior Notes on the terms set forth in
Section 7.14 and (vii) prepay, redeem, purchase, defease or otherwise satisfy
prior to the scheduled maturity thereof any Indebtedness of any Warnaco Entity
so long as (A) no Default or Event of Default shall have occurred and be
continuing at the time of any such prepayment, redemption, purchase, defeasance
or satisfaction or after giving effect thereto, (B) the Fixed Charge Coverage
Ratio for Group shall be at least 1.1 to 1.0 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 prepayment,
redemption, purchase, defeasance or satisfaction (as if such prepayment,
redemption, purchase, defeasance or satisfaction had been made on the first day
of such period), (C) at the time of such prepayment, redemption, purchase,
defeasance or satisfaction and after giving effect thereto Available Credit is
at least 25% of the Aggregate Borrowing Limit at such time and (D) prior to such
prepayment, redemption, purchase, defeasance or satisfaction, Group has
delivered to the Administrative Agent a certificate executed by a Responsible
Officer of Group certifying the satisfaction of the requirements under this
clause (vii) with respect to such prepayment, redemption, purchase, defeasance
or satisfaction and setting forth in reasonable detail the calculation of such
Fixed Charge Coverage Ratio and Available Credit.

 

91

--------------------------------------------------------------------------------

 

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 and, if the
Borrower is a party to any such merger or consolidation, the Borrower is the
surviving entity of such merger or consolidation;
(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 if a Domestic Subsidiary is formed, such 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) 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 any Investment permitted under
Section 8.3, including any 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, engage as its primary business in any material line
of business substantially different from those lines of business conducted by
Group and its Subsidiaries on the date hereof or any business reasonably related
or ancillary thereto.
(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, national securities exchanges and its shareholders
and debt holders, (iv) maintaining its legal existence, holding directors and
shareholders meetings, preparing corporate records and other corporate
activities required to maintain its separate corporate structure, including the
ability to incur fees, costs and expenses relating to such maintenance,
(v) issuing Stock, (vi) performing its obligations and activities incidental
thereto under the Loan Documents and under the Loan Documents (as defined in the
Canadian Facility), (vii) making Restricted Payments and Investments to the
extent permitted by this Agreement, (viii) entering into unsecured guaranties of
Indebtedness and other obligations of its Subsidiaries to the extent permitted
by Section 8.1(d) and (ix) activities incidental to the foregoing.

 

92

--------------------------------------------------------------------------------

 

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; 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 Senior Note Documents, the
Canadian Facility, the documents governing any Indebtedness permitted under
Section 8.1(g), any agreements governing any purchase money Indebtedness or
Capital Lease Obligations permitted by Section 8.1(e) or any renewal, extension,
refinancing or refunding of any such Indebtedness or Capital Lease Obligations
permitted under Section 8.1(f) (in which case, any prohibition or limitation
shall only be effective against the assets financed thereby) or any agreement
governing any renewal, extension, refinancing or refunding of the Senior Notes
or the Canadian Facility permitted under Section 8.1(f) (in which case, any
prohibition or limitation shall not be materially more restrictive than the
corresponding prohibition or limitation in the Senior Note Indenture or the
Canadian Facility, as applicable, as in effect on the date hereof), (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 Secured 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 Facility Agents or the Secured Parties
under the Loan Documents or in the Collateral.
Section 8.12 Modification of Certain Documents and Certain Debt. Neither Group
nor the Borrower shall, nor shall they permit any of their respective
Subsidiaries to, alter, rescind, terminate, amend, supplement, waive or
otherwise modify any provision of any document governing Indebtedness permitted
pursuant to Section 8.1(b) or Section 8.1(g), except for modifications to the
terms of such Indebtedness (or any indenture or 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. Neither Group nor
the Borrower shall permit the Canadian Borrower to amend, supplement, waive or
otherwise modify (or to consent to any amendment, supplement, waiver or
modification of) the Canadian Facility so as to (i) increase the aggregate
Commitments under and as defined in the Canadian Facility to an amount greater
than $50,000,000 or (ii) increase any borrowing base advance rate percentage
thereunder above the maximum borrowing base advance rate percentage therefor as
in effect on the date of execution of the Canadian Facility.

 

93

--------------------------------------------------------------------------------

 

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 Senior Note Documents (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 Facility Agents 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
Agreement Accounting Principles, 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 Sale and Leasebacks Transactions.
(a) [Intentionally Omitted].
(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 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.

 

94

--------------------------------------------------------------------------------

 

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) fail to pay interest or fees under any Loan Document when due
and such payment default shall continue for three (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, Section 7.14, 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
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
$25,000,000 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, in the case of the Canadian Facility under this clause
(ii), if the effect of such event or condition is (x) to accelerate the maturity
of the Indebtedness owing thereunder or (y) the declaration of an “Event of
Default” under and as defined therein); 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 Senior Notes, a provision requiring a prepayment or
repurchase in the event of the receipt by a Warnaco Entity of proceeds of a debt
issuance, equity issuance or an Asset Sale), prior to the stated maturity
thereof; or

 

95

--------------------------------------------------------------------------------

 

(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 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 Lien having the priority described in Section 4.20 of this Agreement
and the Collateral Documents, 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 $20,000,000 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 $20,000,000
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 $15,000,000 in the aggregate; or
(l) the declaration of an “Event of Default” under and as defined in the
Canadian Facility.
Section 9.2 Remedies. During the continuance of any Event of Default,
(i) the Administrative Agent may, and at the request of the Requisite Lenders,
shall, 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
Revolving Loan and each Issuer to Issue any Letter of Credit shall immediately
terminate; and
(ii) the Administrative Agent shall at the request, or may with the consent, of
the Requisite Lenders, by notice to the Borrower, declare the Revolving Loans,
all interest thereon and all other amounts and Obligations payable under this
Agreement to be forthwith due and payable, whereupon all such 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;

 

96

--------------------------------------------------------------------------------

 

provided, however, that upon the occurrence of any 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 Issuer to Issue 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; and provided, further,
that in addition to the remedies set forth above, the Facility Agents and the
Lenders shall be entitled to exercise all of their respective rights and
remedies under the Loan Documents, including, without limitation, in the case of
the Collateral Agent, all rights and remedies with respect to the Collateral
provided under the Collateral Documents and in the case of all Agents, any other
remedies provided by applicable law.
Section 9.3 Actions in Respect of Letters of Credit. Upon the Revolving Credit
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 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 FACILITY AGENTS
Section 10.1 Authorization and Action.
(a) (i) Each Lender and each Issuer hereby appoints BofA as the Administrative
Agent hereunder and under the other Loan Documents 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.
(ii) The Administrative Agent, each Lender and each Issuer hereby appoints BofA
as the Collateral Agent hereunder and under the other Loan Documents and the
Administrative Agent, each Lender and each Issuer authorizes the Collateral
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
Collateral Agent under such agreements and to exercise such powers as are
reasonably incidental thereto. Without limiting the foregoing, the
Administrative Agent, each Lender and each Issuer hereby authorizes the
Collateral Agent to execute and deliver, and to perform its obligations under,
each of the Loan Documents to which the Collateral Agent is a party, to exercise
all rights, powers and remedies that the Collateral Agent may have under such
Loan Documents and, in the case of the Collateral Documents, to act as agent for
the Administrative Agent, the Lenders, each Issuer and the other Secured Parties
under such Collateral Documents.

 

97

--------------------------------------------------------------------------------

 

(b) As to any matters not expressly provided for by this Agreement and the other
Loan Documents (including enforcement or collection), no Facility Agent shall 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 no Facility Agent shall be required to take any action which
(i) such Facility Agent in good faith believes exposes it to personal liability
unless such Facility Agent receives an indemnification satisfactory to it from
the Lenders and the Issuers with respect to such action or (ii) is contrary to
this Agreement, any other Loan Document or applicable Requirements of Law. Each
Facility Agent agrees to give to each other Facility Agent, each Lender and each
Issuer, to the extent required hereunder, 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, (i) the Administrative Agent is acting solely on behalf of the
Lenders and the Issuers and (ii) the Collateral Agent is acting solely on behalf
of the Administrative Agent, the Lenders and the Issuers, except, in the case of
the Administrative Agent, to the limited extent provided in Section 2.7(b) and
Section 11.2(c), and each of their respective duties are entirely administrative
in nature. No Facility Agent assumes, 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 agent, fiduciary or trustee of or for any
other Agent, Lender, Issuer or holder of any other Obligation. Any Facility
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. None of the Facility Agents, any of their
respective Affiliates, or any of their respective directors, officers, agents or
employees 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 any of the other
Loan Documents, except for its, his, her or their own gross negligence or
willful misconduct. Without limiting the foregoing, the Administrative Agent and
the Collateral Agent: (a) may rely on the Register to the extent set forth in
Section 11.2(c); (b) 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; (c) makes no warranty or representation to any other
Agent, any Lender or any Issuer and shall not be responsible to any other Agent,
any Lender or any 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; (d) 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; (e) shall not be
responsible to any other Agent, any Lender or any 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 (f) 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.

 

98

--------------------------------------------------------------------------------

 

Section 10.3 The Agents Individually. With respect to its Ratable Portion, BofA
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 each
Facility Agent in its individual capacity as a Lender or as one of the Requisite
Lenders, as the case may be. BofA 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 a Facility Agent
hereunder or under the other Loan Documents.
Section 10.4 Lender Credit Decision. Each Lender and each Issuer acknowledges
that it shall, independently and without reliance upon any Facility Agent or any
other Lender or Issuer, 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 issuance of
the Letters of Credit. Each Lender and each Issuer also acknowledges that it
will, independently and without reliance upon any Facility Agent or any other
Lender or Issuer 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 each of the
Facility Agents and each of its respective Affiliates and each of their
respective directors, officers, employees, agents and advisors (to the extent
not reimbursed by a Loan Party and without limiting its obligation to do so)
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 reasonable fees and disbursements
of legal counsel) of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against, any Facility Agent or any of its Affiliates,
directors, officers, employees, agents or advisors in any way relating to or
arising out of this Agreement, any of the other Loan Documents or any action
taken or omitted by any Facility Agent under this Agreement or any of 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 such Facility
Agent’s or such Affiliate’s gross negligence or willful misconduct. Without
limiting the foregoing, each Lender agrees to reimburse each Facility Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable fees and disbursements of legal counsel) incurred by such
Facility 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 or any of the other Loan
Documents, to the extent that such Facility Agent is not reimbursed for such
expenses by a Loan Party.

 

99

--------------------------------------------------------------------------------

 

Section 10.6 Successor Agents.
(a) Administrative Agent. The Administrative Agent may resign at any time by
giving written notice thereof to the other Facility Agents, the Lenders, the
Issuers and the Borrower and shall, immediately upon giving such notice, be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. Upon any such resignation by the Administrative Agent, the
Requisite Lenders shall have the right to appoint a successor Administrative
Agent, provided that such successor shall be a 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 and shall 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 and the Issuers, appoint a successor Administrative Agent, selected
from among the Lenders. Such appointment shall be subject to the prior written
approval of the Borrower (which approval may not be unreasonably withheld or
delayed 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. At any time after the discharge
of a retiring Administrative Agent from its duties and obligations under this
Agreement and prior to any Person accepting its appointment as a successor
Administrative Agent, the Requisite Lenders shall assume and perform all of the
duties of such retiring Administrative Agent hereunder until such time, if any,
as a successor Administrative Agent shall become the Administrative Agent
hereunder. After its 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 any of the other Loan Documents.
(b) Collateral Agent. The Collateral Agent may resign at any time by giving
written notice thereof to the Administrative Agent, the Lenders, the Issuers and
the Borrower. Upon any such resignation, the Administrative Agent shall have the
right to appoint a successor Collateral Agent. If no successor Collateral Agent
shall have been so appointed by the Administrative Agent and shall have accepted
such appointment, within 30 days after the retiring Collateral Agent’s giving of
notice of resignation, then the retiring Collateral Agent may, on behalf of the
Secured Parties, appoint a successor Collateral Agent. Such appointment shall be
subject to the prior written approval of the Borrower (which approval may not be
unreasonably withheld or delayed and shall not be required upon the occurrence
and during the continuance of an Event of Default). Upon the acceptance of any
appointment as the Collateral Agent by a successor Collateral Agent, such
successor Collateral Agent shall succeed to, and become vested with, all the
rights, powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents. Promptly after any retiring
Collateral Agent’s resignation hereunder as Collateral Agent, the retiring
Collateral Agent shall take such action as may be reasonably necessary to assign
to the successor Collateral Agent its rights as Collateral Agent under the Loan
Documents and to protect and maintain the Liens held by the Collateral Agent for
the benefit of the Secured Parties (including delivery of any Collateral in its
possession to the successor Collateral Agent). If no Person has accepted
appointment as a successor Collateral Agent within 30 days after the retiring
Collateral Agent’s giving of notice of resignation, the retiring Collateral
Agent’s resignation shall nevertheless thereupon become effective, and the
Administrative Agent shall assume and perform all of the duties of the retiring
Collateral Agent hereunder until such time, if any, as the Administrative Agent
shall appoint a successor Collateral Agent as provided for above. After its
resignation, the retiring Collateral 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
Collateral Agent under this Agreement or any of the other Loan Documents.

 

100

--------------------------------------------------------------------------------

 

Section 10.7 Concerning the Collateral and the Collateral Documents.
(a) (i) 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 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, the Issuers and the other
applicable Secured Parties. Without limiting the generality of the foregoing,
the Administrative Agent shall have the sole and exclusive right and authority
to act as the disbursing and collecting agent for the Lenders and the Issuers
with respect to all payments and collections arising in connection with the
Revolving Credit Facility; provided, however, that notwithstanding anything to
the contrary herein, the Administrative Agent shall have the right to manage,
supervise and otherwise deal with the Collateral included in the Borrowing Base,
including the right to make Protective Advances in an aggregate amount not to
exceed the lesser of $25,000,000 and 10% of the Available U.S. Credit.
(ii) The Administrative Agent, each Lender and each Issuer agrees that any
action taken by the Collateral Agent or the Requisite Lenders (or, where
required by the express terms of this 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 Collateral 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 Administrative Agent,
the Lenders, the Issuers and the other Secured Parties. Without limiting the
generality of the foregoing, the Collateral 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 with the Collateral Documents; provided, that the
Collateral Agent shall pay such amounts to the Administrative Agent for
application in accordance with the provisions of this Agreement and the other
Loan Documents, (ii) execute and deliver each Collateral Document and accept
delivery of each such agreement delivered by Group or any of its Subsidiaries,
(iii) act as collateral agent for the Administrative Agent, 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 Collateral Agent hereby appoints,
authorizes and directs the Administrative Agent and each Lender and Issuer to
act as collateral sub-agent for the Collateral Agent, 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,
the Administrative Agent, such Lender or such Issuer, (iv) manage, supervise and
otherwise deal with the Collateral, (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 Collateral Agent,
the Lenders, the Issuers and the other Secured Parties with respect to the
Collateral under the Loan Documents relating thereto, applicable Requirements of
Law or otherwise.

 

101

--------------------------------------------------------------------------------

 

(b) At the request of the Borrower, the Collateral Agent shall, and each of the
Administrative Agent, the Lenders and the Issuers hereby authorizes and directs
the Collateral Agent (without any further notice to or consent of any such
Person) to, promptly release (or, in the case of clause (ii) below, release or
subordinate as required by the holders of any Lien specified thereunder) any
Lien held by the Collateral Agent for the benefit of the Secured Parties against
any of the following:
(i) all of the Collateral and all Loan Parties, upon receipt of a written notice
from the Administrative Agent that the Commitments and the Commitments (as
defined in the Canadian Facility) have been terminated and all Loans, all
Reimbursement Obligations and all other Secured Obligations and Canadian Secured
Obligations that the Administrative Agent has been notified in writing are then
due and payable have been paid in full (and, in respect of contingent Letter of
Credit Obligations (as defined in each of this Agreement and the Canadian
Facility), 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(or,
in the case of Letter of Credit Obligations (as defined in the Canadian
Facility), satisfactory to the administrative agent and applicable letter of
credit issuers under the Canadian Facility));
(ii) any part of the Collateral that is subject to a Lien permitted by
Sections 8.2(c), (e) or (f); 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 to a Loan Party) 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 Administrative Agent, the Lenders and the Issuers hereby
authorizes and directs the Collateral Agent to execute and deliver or file such
termination and partial release statements and do such other things as are
necessary to release (or subordinate) Liens to be released (or subordinated)
pursuant to this Section 10.7 promptly upon the effectiveness of any such
release (or subordination). 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 Collateral 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 Facility Agents, the Lenders and the Issuers
(collectively, “Related Obligations”) solely on the condition and understanding,
as among the Facility Agents 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 Facility Agents 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 each Facility 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 any of the Facility Agents and the Requisite
Lenders, each of whom shall be entitled to act at its sole

 

102

--------------------------------------------------------------------------------

 

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 Facility Agents, 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 other 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 Agents, the Lenders, the Issuers and Group and the Borrower
agree, and Group shall cause each other Loan Party to agree, that the
Administrative Agent and the Collateral 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 IntraLinks™ or a
substantially similar electronic platform chosen by the Facility Agents to be
their electronic transmission system (the “Approved Electronic Platform”).
(b) Although the Approved Electronic Platform and its primary web portal are
secured with generally-applicable security procedures and policies implemented
or modified by the Facility Agents from time to time (including, as of the
Closing Date, 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 Facility Agents, 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 PLATFORM AND THE APPROVED ELECTRONIC COMMUNICATIONS
ARE PROVIDED “AS IS” AND “AS AVAILABLE”. NONE OF THE FACILITY AGENTS OR ANY OF
THEIR 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 OR
THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY DISCLAIMS LIABILITY FOR
ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM 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 ANY OF THE AGENT
AFFILIATES IN CONNECTION WITH THE APPROVED ELECTRONIC PLATFORM OR THE APPROVED
ELECTRONIC COMMUNICATIONS.

 

103

--------------------------------------------------------------------------------

 

(d) Each of the Lenders, the Issuers, Group and the Borrower agrees, and Group
shall cause each other Loan Party to agree, that each Facility Agent may, but
(except as may be required by applicable law) shall not be obligated to, store
the Approved Electronic Communications on the Approved Electronic Platform in
accordance with such Agent’s generally-applicable document retention procedures
and policies.
Section 10.10 Syndication Agent; Co-Documentation Agents; Arrangers; Joint
Bookrunners. Neither the Syndication Agent, the Co-Documentation Agents, the
Joint Bookrunners nor the Arrangers shall have any obligations or duties
whatsoever in such capacity under this Agreement or any other Loan Document and
shall incur no liability hereunder or thereunder in such capacity. Without
limiting the foregoing, none of the Syndication Agent, the Co-Documentation
Agents, the Joint Bookrunners nor the Arrangers shall have or be deemed to have
any fiduciary relationship with any Lender or Issuer. Each Lender and Issuer
acknowledges and agrees that it has not relied, and will not rely, on any of the
Arrangers, the Joint Bookrunners, the Syndication Agent, the Co-Documentation
Agents or any of the other Lenders or Issuers in deciding whether to enter into
this Agreement or in taking or not taking action hereunder.
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 (x) in the case of
any such waiver or consent, signed by the Requisite Lenders (or by the
Administrative Agent with the consent of the Requisite Lenders) and (y) in the
case of any other amendment, by the Requisite Lenders (or by the Administrative
Agent with the consent of the Requisite Lenders) and the Borrower, 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:
(i) 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 (and, in the case of clause tenth of such Section, the administrative
agent under the Canadian Facility) required under the terms of such section to
have consented thereto;
(ii) 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 the Administrative Agent and the Super-Majority Lenders;
(iii) no amendment, waiver or consent shall be effective to increase any Advance
Rate above the applicable maximum set forth in the definition thereof, unless in
writing and signed by each Lender;
(iv) no amendment, waiver or consent with respect to the terms and conditions of
the Collateral Documents shall be effective, unless in writing and signed by the
Collateral Agent;

 

104

--------------------------------------------------------------------------------

 

(v) except to the extent any such amendment, waiver or consent would result in
an increase of the aggregate Revolving Credit Commitments (it being understood
that any Facility Increase does not constitute such an increase in Revolving
Credit Commitments), no amendment, waiver or consent shall be effective with
respect to the terms and provisions under Article II and any other provisions
related solely to Revolving Credit Borrowings (including any conditions to such
Borrowings or the Facility Increase and increases to interest rates and fees)
and payment procedures under the Revolving Credit Facility, unless in writing
and signed by the Administrative Agent and the Requisite Lenders;
(vi) [Intentionally Omitted]; and
(vii) 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:
(A) 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;
(B) increase the Commitment of such Lender or subject such Lender to any
additional obligation;
(C) 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 Commitment;
(D) reduce the principal amount of any Loan or Reimbursement Obligation (other
than by the payment or prepayment thereof) owing to such Lender;
(E) 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);
(F) change the aggregate Ratable Portions of the Lenders which shall be required
for the Lenders or any of them to take any action hereunder;
(G) 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
(H) amend Section 11.7 or this Section 11.1 or the definition of the terms
“Requisite Lenders,” “Ratable Portion” or “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

 

105

--------------------------------------------------------------------------------

 

provided, further, that:
(i) any modification of the application of payments to the Loans pursuant to
Section 2.9 or the reduction of the Revolving Credit Commitments pursuant to
Section 2.5 shall require the consent of the Requisite Lenders;
(ii) no amendment, waiver or consent shall, unless in writing and signed by any
Special Purpose Vehicle that has been granted an option pursuant to
Section 11.2(f), affect the grant or nature of such option or the right or
duties of such Special Purpose Vehicle hereunder;
(iii) no amendment, waiver or consent shall, unless in writing and signed by the
applicable Facility Agent in addition to the Lenders required above to take such
action, affect the rights or duties of such Facility Agent under this Agreement
or any of the other Loan Documents; and
(iv) no amendment, waiver or consent shall, unless in writing and signed by the
Swing Loan Lender in addition to the Lenders required above to take such action,
affect the rights or duties of the Swing Loan Lender under this Agreement or any
of the other Loan Documents; and
provided, further, that (i) the Administrative Agent may, with the consent of
the Borrower, amend, modify or supplement this Agreement or any other Loan
Document to cure any ambiguity, omission, defect or inconsistency, so long as
such amendment, modification or supplement does not adversely affect the rights
of any Lender or any Issuer, (ii) Schedule I (Commitments) may be amended from
time to time by the Administrative Agent alone to reflect assignments of
Commitments in accordance herewith and any increase in the Commitment of any
Lender or any new Commitment of any Lender made in accordance herewith
(including, without limitation, in accordance with clause (B) above or with
respect to a Facility Increase) (with the Administrative Agent agreeing to remit
to the Borrower a copy of any such amended Schedule I; provided, however, that
the failure of the Administrative Agent to so remit such copy shall not affect
any such assignment or any such increase in or new Commitment and shall not
create any liability against the Administrative Agent), (iii) any Loan Documents
may be amended from time to time by the Administrative Agent, the Collateral
Agent and the relevant Loan Party alone (i.e. without any Lender consent or
approval) to add a Subsidiary of Group as a Subsidiary Guarantor or as a grantor
under a Collateral Document or to subject to the Lien of any applicable Loan
Document assets or property not then subject to the Lien of such Loan Document
and (iv) no amendment, waiver or consent shall, unless in writing and signed by
the administrative agent under the Canadian Facility (so long as the Canadian
Facility is in effect) in addition to the other Persons required above to take
such action, (x) release, remove or eliminate any of the obligations of the Loan
Parties under the Loan Party Canadian Facility Guaranty from the definition of
Secured Obligations or otherwise from the obligations secured by the Collateral
Documents, (y) change or delete the definition of Loan Party Canadian Facility
Guaranty or (z) amend this Section 11.1 in a manner such that any such
amendment, waiver or consent or any amendment, waiver or consent under clause
(a)(i) above (as to clause tenth of Section 2.13(h)) would no longer require the
written approval of the administrative agent under the Canadian Facility.
(b) The Administrative Agent may, but shall have no obligation to, with the
written concurrence of any applicable Lender, execute amendments, modifications,
waivers or consents on behalf of such 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.

 

106

--------------------------------------------------------------------------------

 

(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 acting as the Administrative Agent is not a Non-Consenting
Lender and there is no continuing Event of Default, at the Borrower’s request
(and at the Borrower’s sole cost and expense), 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 Revolving
Credit Commitments and Revolving Credit 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 and unpaid interest and fees with respect
thereto through the date of sale; provided, however, that such purchase and sale
shall be recorded in the Register maintained by the Administrative Agent and not
be effective until (x) the Administrative Agent shall have received from such
Eligible Assignee an agreement in form and substance satisfactory to the
Administrative Agent and the Borrower whereby such Eligible Assignee shall agree
to be bound by the terms hereof and (y) such Non-Consenting Lender shall have
received payments of all Loans held by it and all accrued and unpaid interest
and fees with respect thereto through the date of the sale. Each Lender agrees
that, if it becomes a Non-Consenting Lender, it shall execute and deliver to the
Administrative Agent an Assignment and Acceptance to evidence such sale and
purchase; provided, however, that the failure of any Non-Consenting Lender to
execute an Assignment and Acceptance shall not render such sale and purchase
(and the corresponding assignment) invalid and such assignment shall be recorded
in the Register.
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) if any such assignment shall be of the assigning Lender’s Revolving Credit
Outstandings and Revolving Credit Commitment, such assignment shall cover the
same percentage of such Lender’s Revolving Credit Outstandings and Revolving
Credit Commitment;
(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 (I) with the consent of the Borrower and the Administrative Agent or
(II) 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, each Issuer and the
Borrower (which consents shall not be unreasonably withheld or delayed);

 

107

--------------------------------------------------------------------------------

 

and provided, further, that, notwithstanding any other provision of this
Section 11.2, the consent of the Borrower 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 (as
defined in clause (c) below), an Assignment and Acceptance. 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 or by any Agent or their respective Affiliates) 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 Revolving Credit Commitments of and principal amount of the
Revolving Loans, Swing Loans and Letter of Credit Obligations (specifying the
Reimbursement Obligations) owing to each Lender and each Issuer from time to
time (the “Revolving Credit Facility Register” or the “Register”). The entries
in the Revolving Credit Facility 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 Revolving Credit Facility Register as a Lender or as an Issuer,
as the case may be, for all purposes of this Agreement. The Revolving Credit
Facility Register shall be available for inspection by the Borrower and the
Facility Agents at any reasonable time and from time to time upon reasonable
prior notice. No Revolving Loan, Swing Loan, Letter of Credit Obligation,
Reimbursement Obligation, nor any Assignment and Acceptance or Assumption
Agreement, 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 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. 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.

 

108

--------------------------------------------------------------------------------

 

(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
(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, any Issuer or the Borrower, any Federal Reserve Bank
(pursuant to Regulation A of the Federal Reserve Board) and (B) without consent
of the Administrative Agent, any Issuer 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

 

109

--------------------------------------------------------------------------------

 

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, the Borrower shall not, 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 such Lender may have 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(b). In the event of the sale of any participation
by any Lender, (w) such Lender’s obligations under the Loan Documents shall
remain unchanged, (x) such Lender shall remain solely responsible to the other
parties for the performance of such obligations, (y) such Lender shall remain
the holder of such Obligations for all purposes of this Agreement and (z) the
Borrower, the Agents, the Issuers 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 Sections 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 make any payment under
Sections 2.14(d), Section 2.15 and Section 2.16 to the participants in the
rights and obligations of any Lender (together with such Lender) in excess of
the amount the Borrower would have been obligated to pay to such Lender in
respect of such interest had such participation not been sold; and provided,
further, that such participant in the rights and obligations of such Lender
shall have no direct right to enforce any of the terms of this Agreement against
the Borrower, any Agent or the other Lenders.
(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 Issuer transfers its rights with respect to the Borrower’s Reimbursement
Obligation with respect to a Letter of Credit such Issuer shall give notice of
such transfer to the Administrative Agent for notation in the Revolving Credit
Facility 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.

 

110

--------------------------------------------------------------------------------

 

Section 11.3 Costs and Expenses.
(a) Group and the Borrower agree, jointly and severally, upon demand to pay, or
reimburse each Facility Agent and BAS for, all of such Facility Agent’s and
BAS’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 Facility
Agents’ counsel, Kaye Scholer LLP, local legal counsel, auditors, accountants,
appraisers, printers, insurance advisers, and other consultants and agents)
incurred by such Facility Agent or BAS in connection with (i) such Facility
Agent’s or BAS’s audit and investigation of any of the Warnaco Entities in
connection with the preparation, negotiation and execution of the Loan Documents
and the Administrative Agent’s periodic audits of any of the Warnaco Entities,
as the case may be; (ii) the 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 other 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 rights and responsibilities of each Facility
Agent 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 any of the Secured Obligations, any
Warnaco Entity, this Agreement or any of the other Loan Documents; (vii) the
response to, and preparation for, any subpoena or request for document
production with which any Facility Agent or BAS is served or deposition or other
proceeding in which any Facility Agent or BAS is called to testify, in each
case, relating in any way to any of the Obligations, any Warnaco Entity, this
Agreement or 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, any 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 any of the
Secured Obligations, any Warnaco Entity and related to or arising out of any 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 any of clauses (i) through (iii) above.

 

111

--------------------------------------------------------------------------------

 

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 or any act, event or transaction related or attendant to
any thereof, or the use or intended use of the proceeds of any 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 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, (ii) with respect to taxes (and amounts
relating thereto), the indemnification for which shall be governed solely and
exclusively by Section 2.16, and (iii) to an Indemnitee with respect to any
Indemnified Matter that does not involve an act or omission of any Warnaco
Entity or affiliate thereof and is brought by one Indemnitee against another
Indemnitee. 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 any Facility Agent, any Lender or any Issuer, or any Facility
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
Facility Agents, such Lender or such Issuer or any agent on behalf of the
Facility Agents or such Lender.
(b) Group and the Borrower shall, jointly and severally, indemnify 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.

 

112

--------------------------------------------------------------------------------

 

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 sue 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) 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 FORM
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.

 

113

--------------------------------------------------------------------------------

 

(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.
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.
501 7th Avenue
New York, NY 10018
Attention: Chief Financial Officer
Telecopy No: (212) 287-8546
 
       
 
      with a copy to the Assistant General Counsel of Group
Email: ealford@warnaco.com

(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 or Assumption
Agreement;
(iii) if to any Issuer, at the address set forth under its name on Schedule II
(Applicable Lending Offices and Addresses for Notices);

         
 
  (iv)   if to the Administrative Agent:
 
       
 
      Bank of America, N.A.
335 Madison Avenue
New York, New York 10017
Attention: Business Capital-
Account Executive
Email: kevin.w.corcoran@bankofamerica.com
Telecopy No.: (212) 503-7350

 

114

--------------------------------------------------------------------------------

 

              with a copy to:
 
       
 
      Bank of America, N.A.
335 Madison Avenue
New York, New York 10017
Attention: Legal Department
Email: girolamo.m.saccone@bankofamerica.com
Telecopy No.: (212) 503-7350
 
            and
 
       
 
  (v)   if to the Collateral Agent:
 
 
 
      Bank of America, N.A.
335 Madison Avenue
New York, New York 10017
Attention: Business Capital-
Account Executive
Email: kevin.w.corcoran@bankofamerica.com
Telecopy No.: (212) 503-7350
 
            with a copy to:
 
       
 
      Bank of America, N.A.
335 Madison Avenue
New York, New York 10017
Attention: Legal Department
Email: girolamo.m.saccone@bankofamerica.com
Telecopy No.: (212) 503-7350

or at such other address as shall be notified in writing (i) in the case of
Group, the Borrower and the Facility Agents, to the other parties and (ii) in
the case of all other parties, to the Borrower and the Facility Agents. 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,
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.

 

115

--------------------------------------------------------------------------------

 

(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 Facility Agents by transmitting such Approved Electronic Communications
electronically (in a format acceptable to the applicable Facility Agent) to
kevin.w.corcoran@bankofamerica.com or such other electronic mail address (or
similar means of electronic delivery) as such Facility Agent may notify the
Borrower. Nothing in this clause (b) shall prejudice the right of any Facility
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 any Facility 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 Facility Agents 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 Facility Agents 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 internal 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, 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 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 any
Facility 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.

 

116

--------------------------------------------------------------------------------

 

(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 Agents 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 Facility Agent, each of 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 Facility Agents, 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 any Facility 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 [Intentionally Omitted].
Section 11.17 [Intentionally Omitted].
Section 11.18 Entire Agreement. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are attached to the same document.
Delivery of an executed signature page of this Agreement by facsimile
transmission, electronic mail or by posting on the Approved Electronic Platform
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. In the event of any conflict between
the terms of this Agreement and any other Loan Document, the terms of this
Agreement shall govern.

 

117

--------------------------------------------------------------------------------

 

Section 11.19 Confidentiality.
(a) 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 11.19, 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 11.19 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.
(b) 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’ 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.
Section 11.20 Patriot Act Notice. The Agents, the Issuers and the Lenders hereby
notify Group and the Borrower that, pursuant to the requirements of the Patriot
Act, the Agents, the Issuers and the Lenders are required to obtain, verify and
record information that identifies each of Group, the Borrower and the other
Loan Parties, including its legal name, address, tax ID number and other
information that will allow the Agents, the Issuers and the Lenders to identify
it in accordance with the Patriot Act. The Agents, the Issuers and the Lenders
may require information regarding Group’s, the Borrower’s and other Loan
Parties’ management and owners, such as legal name, social security number and
date of birth.

 

118

--------------------------------------------------------------------------------

 

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/ Lawrence R. Rutkowski         Name:   Lawrence R. Rutkowski     
  Title:   Executive Vice President and CFO        The Warnaco Group, Inc., as
Group
      By:   /s/ Lawrence R. Rutkowski         Name:   Lawrence R. Rutkowski     
  Title:   Executive Vice President and CFO        Bank of America, N.A., as
Administrative Agent
and Collateral Agent
      By:   /s/ Kevin W. Corcoran         Name:   Kevin W. Corcoran       
Title:   Vice President   

SIGNATURE PAGE TO CREDIT AGREEMENT

 

 

--------------------------------------------------------------------------------

 

            Issuers

Bank of America, N.A.
      By:   /s/ Kevin W. Corcoran         Name:   Kevin W. Corcoran       
Title:   Vice President        The Bank of Nova Scotia
      By:   /s/ Brian S. Allen         Name:   Brian S. Allen        Title:  
Managing Director   

SIGNATURE PAGE TO CREDIT AGREEMENT

 

 

--------------------------------------------------------------------------------

 

            Lenders

Bank of America, N.A.
      By:   /s/ Kevin W. Corcoran         Name:   Kevin W. Corcoran       
Title:   Vice President        DEUTSCHE BANK TRUST COMPANY AMERICAS
      By:   /s/ Marguerite Sutton         Name:   Marguerite Sutton       
Title:   Director            By:   /s/ Enrique Landaeta         Name:   Enrique
Landaeta        Title:   Vice President   

SIGNATURE PAGE TO CREDIT AGREEMENT

 

 

--------------------------------------------------------------------------------

 

            HSBC BUSINESS CREDIT (usa) INC.
      By:   /s/ Kysha Pierre-Louis         Name:   Kysha Pierre-Louis       
Title:   Vice President        JP MORGAN CHASE BANK, N.A.
      By:   /s/ Tony Yung         Name:   Tony Yung        Title:   Vice
President        RBS BUSINESS CAPITAL, A DIVISION OF RBS
ASSET FINANCE INC.
      By:   /s/ Jennifer Mannila         Name:   Jennifer Mannila       
Title:   Vice President        U.S. BANK NATIONAL ASSOCIATION
      By:   /s/ Jeffrey D. Patton         Name:   Jeffrey D. Patton       
Title:   Asset-Based Loan Officer        TD BANK, N.A.
      By:   /s/ Matthew Leighton         Name:   Matthew Leighton       
Title:   Vice President        BRANCH BANKING AND TRUST COMPANY
      By:   /s/ Roberts A. Bass         Name:   Roberts A. Bass        Title:  
Senior Vice President        CAPITAL ONE LEVERAGE FINANCE CORP.
      By:   /s/ Michael S. Burns         Name:   Michael S. Burns       
Title:   Senior Vice President   

SIGNATURE PAGE TO CREDIT AGREEMENT

 

 

--------------------------------------------------------------------------------

 

            THE BANK OF NOVA SCOTIA
      By:   /s/ Brian S. Allen         Name:   Brian S. Allen        Title:  
Managing Director        UBS LOAN FINANCE LLC
      By:   /s/ David B. Julie         Name:   David B. Julie        Title:  
Associate Director Banking Products Services, US            By:   /s/ Irja R.
Olsa         Name:   Irja R. Olsa        Title:   Associate Director Banking
Products Services, US        UPS CAPITAL CORPORATION
      By:   /s/ John P. Holloway         Name:   John P. Holloway       
Title:   Director of Portfolio Management        INTENSA SANPAOLO S.P.A. NEW
YORK BRANCH
      By:   /s/ Frank Maffei         Name:   Frank Maffei        Title:   Vice
President            By:   /s/ Francesco Di Mario         Name:   Francesco Di
Mario        Title:   FVP, Credit Manager   

SIGNATURE PAGE TO CREDIT AGREEMENT

 

 

--------------------------------------------------------------------------------

 

            ISRAEL DISCOUNT BANK OF NEW YORK
      By:   /s/ Virginia J. Pulverenti         Name:   Virginia J. Pulverenti   
    Title:   Senior Vice President            By:   /s/ Paul P. Neydavood      
  Name:   Paul P. Neydavood        Title:   Assistant Vice President   

SIGNATURE PAGE TO CREDIT AGREEMENT

 

 

--------------------------------------------------------------------------------

 

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
    38  
Section 1.3 Accounting Terms and Principles
    38  
Section 1.4 Conversion of Foreign Currencies
    38  
Section 1.5 Certain Terms
    39  
ARTICLE II THE REVOLVING CREDIT FACILITY
    39  
Section 2.1 The Commitments
    39  
Section 2.2 Borrowing Procedures
    40  
Section 2.3 Swing Loans
    41  
Section 2.4 Letters of Credit
    42  
Section 2.5 Reduction and Termination of the Commitments
    47  
Section 2.6 Repayment of Loans
    47  
Section 2.7 Evidence of Debt
    47  
Section 2.8 Optional Prepayments
    47  
Section 2.9 Mandatory Prepayments
    47  
Section 2.10 Interest
    49  
Section 2.11 Conversion/Continuation Option
    50  
Section 2.12 Fees
    50  
Section 2.13 Payments and Computations
    51  
Section 2.14 Special Provisions Governing Eurodollar Rate Loans
    54  
Section 2.15 Capital Adequacy
    55  
Section 2.16 Taxes
    56  
Section 2.17 Substitution of Lenders
    59  
Section 2.18 Facility Increase
    60  
Section 2.19 Special Cash Collateral Account
    61  
ARTICLE III CONDITIONS TO LOANS AND LETTERS OF CREDIT
    62  
Section 3.1 Conditions Precedent to Initial Loans and Letters of Credit
    62  
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit
    66  
Section 3.3 Determinations of Initial Borrowing Conditions
    66  

 

i

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS
(continued)

              Page    
ARTICLE IV REPRESENTATIONS AND WARRANTIES
    67  
Section 4.1 Corporate Existence; Compliance with Law
    67  
Section 4.2 Corporate Power; Authorization; Enforceable Obligations
    67  
Section 4.3 Ownership of Group, Borrower; Subsidiaries
    68  
Section 4.4 Financial Statements
    69  
Section 4.5 Material Adverse Change
    69  
Section 4.6 Solvency
    70  
Section 4.7 Litigation
    70  
Section 4.8 Taxes
    70  
Section 4.9 Full Disclosure
    70  
Section 4.10 Margin Regulations
    71  
Section 4.11 No Burdensome Restrictions; No Defaults
    71  
Section 4.12 Investment Company Act; Public Utility Holding Company Act
    71  
Section 4.13 Use of Proceeds
    71  
Section 4.14 Insurance
    71  
Section 4.15 Labor Matters
    71  
Section 4.16 ERISA
    72  
Section 4.17 Environmental Matters
    72  
Section 4.18 Intellectual Property; Material License
    73  
Section 4.19 Title; Real Property
    73  
Section 4.20 Perfection of Security Interests in the Collateral
    74  
ARTICLE V FINANCIAL COVENANTS
    74  
Section 5.1 Minimum Fixed Charge Coverage Ratio
    74  
ARTICLE VI REPORTING COVENANTS
    74  
Section 6.1 Financial Statements
    74  
Section 6.2 Default Notices
    77  
Section 6.3 Litigation
    77  
Section 6.4 Asset Sales
    77  
Section 6.5 Notices under Senior Note Documents
    77  
Section 6.6 SEC Filings; Press Releases
    77  
Section 6.7 Labor Relations
    77  

 

ii

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS
(continued)

              Page    
Section 6.8 Tax Returns
    77  
Section 6.9 Insurance
    78  
Section 6.10 ERISA Matters
    78  
Section 6.11 Environmental Matters
    78  
Section 6.12 Borrowing Base Determination
    78  
Section 6.13 Material Licenses
    80  
Section 6.14 Communications and Amendments with respect to Canadian Facility
    80  
Section 6.15 Other Information
    80  
ARTICLE VII AFFIRMATIVE COVENANTS
    80  
Section 7.1 Preservation of Corporate Existence, Etc.
    80  
Section 7.2 Compliance with Laws, Etc.
    80  
Section 7.3 Conduct of Business
    80  
Section 7.4 Payment of Taxes, Etc.
    81  
Section 7.5 Maintenance of Insurance
    81  
Section 7.6 Access
    81  
Section 7.7 Keeping of Books
    81  
Section 7.8 Maintenance of Properties, Etc.
    81  
Section 7.9 Application of Proceeds
    82  
Section 7.10 Environmental
    82  
Section 7.11 Additional Personal Property Collateral and Guaranties
    82  
Section 7.12 [Intentionally Omitted]
    83  
Section 7.13 Real Property
    83  
Section 7.14 Senior Notes
    84  
Section 7.15 Post Closing Matters
    84  
ARTICLE VIII NEGATIVE COVENANTS
    84  
Section 8.1 Indebtedness
    84  
Section 8.2 Liens, Etc.
    86  
Section 8.3 Investments
    87  
Section 8.4 Sale of Assets
    88  
Section 8.5 Restricted Payments
    90  
Section 8.6 Prepayment and Cancellation of Indebtedness
    91  

 

iii

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS
(continued)

              Page    
Section 8.7 Restriction on Fundamental Changes
    92  
Section 8.8 Change in Nature of Business
    92  
Section 8.9 Transactions with Affiliates
    93  
Section 8.10 Restrictions on Subsidiary Distributions; No New Negative Pledge
    93  
Section 8.11 Modification of Constituent Documents
    93  
Section 8.12 Modification of Certain Documents and Certain Debt
    93  
Section 8.13 Modification of Debt Agreements
    94  
Section 8.14 Accounting Changes; Fiscal Year
    94  
Section 8.15 Margin Regulations
    94  
Section 8.16 Sale and Leasebacks Transactions
    94  
Section 8.17 No Speculative Transactions
    94  
Section 8.18 Compliance with ERISA
    94  
Section 8.19 Environmental
    95  
ARTICLE IX EVENTS OF DEFAULT
    95  
Section 9.1 Events of Default
    95  
Section 9.2 Remedies
    96  
Section 9.3 Actions in Respect of Letters of Credit
    97  
ARTICLE X THE FACILITY AGENTS
    97  
Section 10.1 Authorization and Action
    97  
Section 10.2 Agent’s Reliance, Etc.
    98  
Section 10.3 The Agents Individually
    99  
Section 10.4 Lender Credit Decision
    99  
Section 10.5 Indemnification
    99  
Section 10.6 Successor Agents
    100  
Section 10.7 Concerning the Collateral and the Collateral Documents
    101  
Section 10.8 Collateral Matters Relating to Related Obligations
    102  
Section 10.9 Posting of Approved Electronic Communications
    103  
Section 10.10 Syndication Agent; Co-Documentation Agents; Arrangers
    104  
ARTICLE XI MISCELLANEOUS
    104  
Section 11.1 Amendments, Waivers, Etc.
    104  
Section 11.2 Assignments and Participations
    107  

 

iv

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS
(continued)

              Page    
Section 11.3 Costs and Expenses
    111  
Section 11.4 Indemnities
    112  
Section 11.5 Limitation of Liability
    113  
Section 11.6 Right of Set-off
    113  
Section 11.7 Sharing of Payments, Etc.
    113  
Section 11.8 Notices, Etc.
    114  
Section 11.9 No Waiver; Remedies
    116  
Section 11.10 Binding Effect
    116  
Section 11.11 Governing Law
    116  
Section 11.12 Submission to Jurisdiction; Service of Process
    116  
Section 11.13 Waiver of Jury Trial
    117  
Section 11.14 Marshaling; Payments Set Aside
    117  
Section 11.15 Section Titles
    117  
Section 11.16 [Intentionally Omitted]
    117  
Section 11.17 [Intentionally Omitted]
    117  
Section 11.18 Entire Agreement
    117  
Section 11.19 Confidentiality
    118  
Section 11.20 Patriot Act Notice
    118  

 

v

--------------------------------------------------------------------------------

 

         
Schedules
       
 
       
Schedule I
  —   Commitments
Schedule II
  —   Applicable Lending Offices and Addresses for Notices
Schedule 2.4
  —   Existing Rollover 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 7.15
  —   Post Closing Matters
Schedule 8.1
  —   Existing Indebtedness
Schedule 8.2
  —   Existing Liens
Schedule 8.3
  —   Existing Investments
Schedule 8.4
  —   Specified Asset Sales
 
       
Exhibits
       
 
       
Exhibit A
  —   Form of Assignment and Acceptance
Exhibit B
  —   Form of Notice of Borrowing
Exhibit C
  —   Form of Swing Loan Request
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

--------------------------------------------------------------------------------

 

SCHEDULE I
COMMITMENTS

              Revolving Credit   Lender   Commitment  
Bank of America, N.A.
  $ 35,000,000.00  
Deutsche Bank Trust Company Americas
  $ 27,000,000.00  
JPMorgan Chase Bank, N.A.
  $ 30,000,000.00  
HSBC Business Credit (USA) Inc.
  $ 30,000,000.00  
RBS Business Capital, a division of RBS Asset Finance Inc.
  $ 30,000,000.00  
U.S. Bank National Association
  $ 20,000,000.00  
TD Bank N.A.
  $ 18,000,000.00  
Branch Banking and Trust Company
  $ 15,000,000.00  
Capital One Leverage Finance Corp.
  $ 15,000,000.00  
The Bank of Nova Scotia
  $ 10,000,000.00  
UBS Loan Finance LLC
  $ 15,000,000.00  
UPS Capital Corporation
  $ 12,000,000.00  
Intesa Sanpaolo S.p.A. New York Branch
  $ 8,000,000.00  
Israel Discount Bank of New York
  $ 5,000,000.00          
Total
  $ 270,000,000.00          

 

 

--------------------------------------------------------------------------------

 

SCHEDULE II
APPLICABLE LENDING OFFICES AND ADDRESSES FOR NOTICES
On File with Administrative Agent.

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 2.4
EXISTING ROLLOVER LETTERS OF CREDIT

                                  Outstanding       Letter of Credit   Bank  
Issue Date   Amount (USD)     Expiration Date
10120725
  The Bank of Nova Scotia   16-Jul-08     51,603.43     13-Sep-08
10120730
  The Bank of Nova Scotia   29-Jul-08     19,923.91     30-Aug-08
10120736
  The Bank of Nova Scotia   13-Aug-08     18,959.01     11-Oct-08
10120737
  The Bank of Nova Scotia   13-Aug-08     99,486.79     18-Sep-08
10120738
  The Bank of Nova Scotia   13-Aug-08     293,540.63     16-Sep-08
10120739
  The Bank of Nova Scotia   13-Aug-08     24,645.60     14-Sep-08
10120658
  The Bank of Nova Scotia   02-Jun-08     31,481.32     05-Sep-08
10120702
  The Bank of Nova Scotia   25-Jun-08     22,952.79     02-Sep-08
10120719
  The Bank of Nova Scotia   16-Jul-08     24,136.77     14-Sep-08
10120720
  The Bank of Nova Scotia   16-Jul-08     15,618.96     29-Aug-08
10120721
  The Bank of Nova Scotia   16-Jul-08     13,687.44     12-Sep-08
10120722
  The Bank of Nova Scotia   16-Jul-08     14,110.11     14-Sep-08
10120723
  The Bank of Nova Scotia   16-Jul-08     3,447.44     14-Sep-08
10120724
  The Bank of Nova Scotia   16-Jul-08     53,343.68     14-Sep-08
10120727
  The Bank of Nova Scotia   29-Jul-08     30,866.12     06-Nov-08
10120728
  The Bank of Nova Scotia   29-Jul-08     12,592.36     07-Dec-08
10120731
  The Bank of Nova Scotia   13-Aug-08     3,628.80     15-Sep-08
10120732
  The Bank of Nova Scotia   13-Aug-08     16,128.00     25-Sep-08
10120733
  The Bank of Nova Scotia   13-Aug-08     12,472.95     06-Nov-08
10120734
  The Bank of Nova Scotia   13-Aug-08     314,487.60     21-Nov-08
10120735
  The Bank of Nova Scotia   13-Aug-08     146,160.00     21-Nov-08
10120740
  The Bank of Nova Scotia   13-Aug-08     48,039.71     06-Nov-08
10120758
  The Bank of Nova Scotia   13-Aug-08     8,799.23     01-Jan-09
10100164
  The Bank of Nova Scotia   06-Feb-08     4,277.23     08-Sep-08
10100184
  The Bank of Nova Scotia   02-Apr-08     98,469.80     28-Aug-08
10100200
  The Bank of Nova Scotia   20-May-08     19,319.98     08-Sep-08
10100206
  The Bank of Nova Scotia   13-Jun-08     4,627.48     12-Sep-08
10100208
  The Bank of Nova Scotia   10-Jul-08     23,880.66     28-Sep-08
10100209
  The Bank of Nova Scotia   15-Jul-08     24,768.64     02-Sep-08
10100211
  The Bank of Nova Scotia   16-Jul-08     15,469.50     17-Sep-08
10100212
  The Bank of Nova Scotia   24-Jul-08     2,288.00     28-Aug-08
10100215
  The Bank of Nova Scotia   24-Jul-08     38,801.52     15-Sep-08
10100217
  The Bank of Nova Scotia   24-Jul-08     3,586.92     10-Dec-08
10100218
  The Bank of Nova Scotia   28-Jul-08     22,519.40     16-Sep-08
10100213
  The Bank of Nova Scotia   29-Jul-08     5,962.98     12-Sep-08
10100216
  The Bank of Nova Scotia   29-Jul-08     72,182.50     05-Oct-08
10100219
  The Bank of Nova Scotia   01-Aug-08     23,320.75     13-Dec-08
10100220
  The Bank of Nova Scotia   05-Aug-08     41,400.00     01-Nov-08
10100221
  The Bank of Nova Scotia   08-Aug-08     20,421.18     09-Nov-08
10100222
  The Bank of Nova Scotia   08-Aug-08     36,440.21     09-Nov-08
10100223
  The Bank of Nova Scotia   08-Aug-08     15,180.00     09-Nov-08
10120710
  The Bank of Nova Scotia   16-Jul-08     96,293.61     11-Sep-08
10120711
  The Bank of Nova Scotia   16-Jul-08     477,834.00     13-Sep-08
10120712
  The Bank of Nova Scotia   16-Jul-08     16,315.43     11-Sep-08
10120713
  The Bank of Nova Scotia   16-Jul-08     14,925.96     11-Sep-08
10120714
  The Bank of Nova Scotia   16-Jul-08     11,259.36     11-Sep-08
10120741
  The Bank of Nova Scotia   13-Aug-08     7,508.90     08-Oct-08

 

 

--------------------------------------------------------------------------------

 

                                  Outstanding       Letter of Credit   Bank  
Issue Date   Amount (USD)     Expiration Date
10120742
  The Bank of Nova Scotia   13-Aug-08     44,765.28     05-Oct-08
10120743
  The Bank of Nova Scotia   13-Aug-08     17,784.90     04-Oct-08
10120744
  The Bank of Nova Scotia   13-Aug-08     66,681.98     25-Sep-08
10120745
  The Bank of Nova Scotia   13-Aug-08     11,062.80     09-Oct-08
10120746
  The Bank of Nova Scotia   13-Aug-08     3,381.84     02-Oct-08
10120747
  The Bank of Nova Scotia   13-Aug-08     20,114.64     09-Oct-08
10120748
  The Bank of Nova Scotia   13-Aug-08     20,461.56     15-Oct-08
10120749
  The Bank of Nova Scotia   13-Aug-08     24,706.50     15-Oct-08
10120750
  The Bank of Nova Scotia   13-Aug-08     37,344.51     02-Oct-08
10120751
  The Bank of Nova Scotia   13-Aug-08     42,894.60     15-Oct-08
10120752
  The Bank of Nova Scotia   13-Aug-08     11,875.50     15-Oct-08
10120753
  The Bank of Nova Scotia   13-Aug-08     12,497.21     03-Oct-08
10120754
  The Bank of Nova Scotia   13-Aug-08     19,082.70     10-Oct-08
10120755
  The Bank of Nova Scotia   13-Aug-08     25,004.70     30-Sep-08
10120756
  The Bank of Nova Scotia   13-Aug-08     19,769.40     15-Oct-08
10120757
  The Bank of Nova Scotia   13-Aug-08     13,973.40     30-Sep-08
10120729
  The Bank of Nova Scotia   29-Jul-08     79,121.86     15-Sep-08
10120759
  The Bank of Nova Scotia   13-Aug-08     14,630.99     03-Oct-08
085-01-006831
  The Bank of Nova Scotia   07-Apr-08     465,415.44     29-Aug-08
085-01-001879
  The Bank of Nova Scotia   29-Jan-08     11,504.64     29-Aug-08
085-01-0019435
  The Bank of Nova Scotia   17-Mar-08     27,487.32     29-Aug-08
085-01-0019694
  The Bank of Nova Scotia   27-Mar-08     244,576.32     29-Aug-08
085-01-0019710
  The Bank of Nova Scotia   27-Mar-08     351,749.54     22-Sep-08
085-01-0019765
  The Bank of Nova Scotia   14-Jul-08     1,046,408.04     18-Sep-08
085-01-0019872
  The Bank of Nova Scotia   30-Apr-08     115,208.20     28-Aug-08
085-01-0019881
  The Bank of Nova Scotia   30-Apr-08     71,786.93     28-Aug-08
085-01-0019890
  The Bank of Nova Scotia   30-Apr-08     250,330.16     30-Aug-08
085-01-0020165
  The Bank of Nova Scotia   09-May-08     197,102.94     30-Aug-08
085-01-0020290
  The Bank of Nova Scotia   16-May-08     63,033.48     24-Aug-08
085-01-0020307
  The Bank of Nova Scotia   28-May-08     180,053.09     04-Sep-08
085-01-0020398
  The Bank of Nova Scotia   28-May-08     221,858.00     05-Sep-08
085-01-0020423
  The Bank of Nova Scotia   06-Jun-08     64,971.61     04-Sep-08
085-01-0020780
  The Bank of Nova Scotia   20-Jun-08     550,025.00     27-Oct-08
085-01-0020806
  The Bank of Nova Scotia   14-Jul-08     30,688.10     09-Sep-08
085-01-0020824
  The Bank of Nova Scotia   14-Jul-08     99,149.80     09-Sep-08
085-01-0020833
  The Bank of Nova Scotia   04-Jul-08     121,217.90     29-Aug-08
085-01-0020842
  The Bank of Nova Scotia   14-Jul-08     66,879.40     08-Sep-08
085-01-0020851
  The Bank of Nova Scotia   04-Jul-08     336,202.35     08-Sep-08
085-01-0020879
  The Bank of Nova Scotia   04-Jul-08     49,000.00     01-Sep-08
085-01-0020888
  The Bank of Nova Scotia   04-Jul-08     85,170.01     29-Aug-08
085-01-0020897
  The Bank of Nova Scotia   14-Jul-08     382,344.36     09-Sep-08
085-01-0020904
  The Bank of Nova Scotia   04-Jul-08     270,990.87     08-Sep-08
085-01-0020913
  The Bank of Nova Scotia   14-Jul-08     19,422.10     08-Sep-08
085-01-0020931
  The Bank of Nova Scotia   14-Jul-08     289,729.20     08-Sep-08
085-01-0020940
  The Bank of Nova Scotia   14-Jul-08     434,976.80     08-Sep-08
085-01-0020959
  The Bank of Nova Scotia   14-Jul-08     278,235.30     11-Sep-08
085-01-0020968
  The Bank of Nova Scotia   04-Jul-08     62,771.74     08-Sep-08
085-01-0020977
  The Bank of Nova Scotia   14-Jul-08     29,529.72     14-Sep-08
085-01-0020986
  The Bank of Nova Scotia   14-Jul-08     156,673.50     08-Sep-08
085-01-0021002
  The Bank of Nova Scotia   08-Jul-08     98,455.20     05-Sep-08
085-01-0021011
  The Bank of Nova Scotia   04-Jul-08     5,238.00     28-Aug-08

 

 

--------------------------------------------------------------------------------

 

                                  Outstanding       Letter of Credit   Bank  
Issue Date   Amount (USD)     Expiration Date
085-01-0021020
  The Bank of Nova Scotia   14-Jul-08     13,248.00     03-Sep-08
085-01-0021039
  The Bank of Nova Scotia   14-Jul-08     5,280.00     01-Sep-08
085-01-0021048
  The Bank of Nova Scotia   04-Jul-08     44,896.80     01-Sep-08
085-01-0021057
  The Bank of Nova Scotia   14-Jul-08     22,180.80     26-Oct-08
085-01-0021066
  The Bank of Nova Scotia   14-Jul-08     54,072.96     26-Oct-08
085-01-0021075
  The Bank of Nova Scotia   14-Jul-08     12,208.12     01-Oct-08
085-01-0021084
  The Bank of Nova Scotia   14-Jul-08     43,780.50     26-Oct-08
085-01-0021093
  The Bank of Nova Scotia   17-Jul-08     118,884.15     27-Nov-08
085-01-0021119
  The Bank of Nova Scotia   17-Jul-08     363,390.84     27-Nov-08
085-01-0021137
  The Bank of Nova Scotia   25-Jul-08     282,836.14     25-Dec-08
085-01-0021146
  The Bank of Nova Scotia   25-Jul-08     103,212.08     27-Nov-08
085-01-0021155
  The Bank of Nova Scotia   25-Jul-08     210,498.02     25-Dec-08
085-01-0021164
  The Bank of Nova Scotia   25-Jul-08     559,426.64     25-Dec-08
085-01-0021173
  The Bank of Nova Scotia   25-Jul-08     83,923.84     27-Nov-08
085-01-0021182
  The Bank of Nova Scotia   25-Jul-08     232,189.52     27-Nov-08
085-01-0021191
  The Bank of Nova Scotia   25-Jul-08     18,414.00     01-Sep-08
085-01-0021208
  The Bank of Nova Scotia   25-Jul-08     1,292,169.36     31-Dec-08
085-01-0021226
  The Bank of Nova Scotia   25-Jul-08     84,755.68     30-Dec-08
085-01-0021235
  The Bank of Nova Scotia   30-Jul-08     51,195.90     29-Sep-08
085-01-0021244
  The Bank of Nova Scotia   30-Jul-08     86,801.09     14-Dec-08
085-01-0021253
  The Bank of Nova Scotia   30-Jul-08     433,059.60     14-Dec-08
085-01-0021262
  The Bank of Nova Scotia   05-Aug-08     112,934.48     13-Jan-09
085-01-0021306
  The Bank of Nova Scotia   05-Aug-08     31,650.80     08-Jan-09
085-01-0021315
  The Bank of Nova Scotia   05-Aug-08     21,707.40     19-Sep-08
085-01-0021324
  The Bank of Nova Scotia   05-Aug-08     69,785.95     06-Oct-08
085-01-0021333
  The Bank of Nova Scotia   05-Aug-08     25,000.00     19-Sep-08
085-01-0021342
  The Bank of Nova Scotia   05-Aug-08     117,051.20     18-Oct-08
085-01-0021351
  The Bank of Nova Scotia   05-Aug-08     141,197.44     04-Oct-08
085-01-0021360
  The Bank of Nova Scotia   05-Aug-08     45,105.22     08-Oct-08
085-01-0021379
  The Bank of Nova Scotia   05-Aug-08     113,275.00     29-Sep-08
085-01-0021388
  The Bank of Nova Scotia   05-Aug-08     34,046.50     18-Sep-08
085-01-0021397
  The Bank of Nova Scotia   05-Aug-08     351,587.10     08-Oct-08
085-01-0021404
  The Bank of Nova Scotia   11-Aug-08     166,894.00     18-Oct-08
085-01-0021440
  The Bank of Nova Scotia   11-Aug-08     69,837.12     09-Oct-08
085-01-0021447
  The Bank of Nova Scotia   11-Aug-08     88,698.24     09-Oct-08
085-01-0021486
  The Bank of Nova Scotia   11-Aug-08     226,044.00     08-Oct-08
085-01-0021495
  The Bank of Nova Scotia   11-Aug-08     531,456.00     08-Oct-08
085-01-0021501
  The Bank of Nova Scotia   05-Aug-08     207,795.60     11-Dec-08
085-01-0021510
  The Bank of Nova Scotia   05-Aug-08     33,120.00     30-Dec-08
085-01-0021538
  The Bank of Nova Scotia   15-Aug-08     114,224.24     11-Dec-08
085-01-0021547
  The Bank of Nova Scotia   15-Aug-08     128,164.00     11-Dec-08
90366/80085
  The Bank of Nova Scotia   6-Dec-01     2,794,854.00     31-Dec-08
90531/80085
  The Bank of Nova Scotia   25-Mar-03     3,829,885.26     28-Jan-09
92186/80085
  The Bank of Nova Scotia   2-Mar-07     300,499.93     2-Mar-09
TD605500138739-8
  Bank of America   10-Jul-08     33,376.32     17-Sep-08
TD605500138740-8
  Bank of America   10-Jul-08     110,840.00     23-Sep-08
TD605500138741-8
  Bank of America   10-Jul-08     18,360.00     12-Sep-08
TD605500138742-8
  Bank of America   10-Jul-08     47,462.82     10-Sep-08
TD605500138753-8
  Bank of America   25-Jul-08     18,559.20     11-Sep-08
TD605500138803-8
  Bank of America   14-Aug-08     20,866.56     11-Oct-08
TD605500138804-8
  Bank of America   14-Aug-08     278,925.45     24-Sep-08

 

 

--------------------------------------------------------------------------------

 

                                  Outstanding       Letter of Credit   Bank  
Issue Date   Amount (USD)     Expiration Date
TD605500138805-8
  Bank of America   14-Aug-08     363,835.00     17-Oct-08
TD605500138806-8
  Bank of America   14-Aug-08     41,760.00     10-Oct-08
TD605500138666-8
  Bank of America   11-Apr-08     130,918.20     30-Aug-08
TD605500138738-8
  Bank of America   10-Jul-08     121,373.00     13-Sep-08
TD605500138809-8
  Bank of America   18-Aug-08     49,062.15     03-Oct-08
TD605500138810-8
  Bank of America   18-Aug-08     42,702.50     10-Oct-08
TD605500138811-8
  Bank of America   18-Aug-08     10,004.50     08-Oct-08
TD605500138812-8
  Bank of America   18-Aug-08     15,033.56     08-Oct-08
TD605500138813-8
  Bank of America   18-Aug-08     13,192.08     03-Oct-08
TD605500138814-8
  Bank of America   18-Aug-08     46,029.79     09-Oct-08
TD605500138815-8
  Bank of America   18-Aug-08     58,666.44     14-Oct-08
TD605500138816-8
  Bank of America   18-Aug-08     32,448.90     21-Oct-08
TD605500138817-8
  Bank of America   18-Aug-08     32,156.20     21-Oct-08
TD605500138818-8
  Bank of America   18-Aug-08     15,743.20     18-Oct-08
TD605500138724-8
  Bank of America   10-Jul-08     333,958.20     03-Sep-08
TD605500138725-8
  Bank of America   10-Jul-08     796,824.48     08-Sep-08
TD605500138726-8
  Bank of America   10-Jul-08     230,888.30     22-Aug-08
TD605500138727-8
  Bank of America   10-Jul-08     949,155.35     12-Sep-08
TD605500138730-8
  Bank of America   10-Jul-08     253,031.64     27-Aug-08
TD605500138731-8
  Bank of America   10-Jul-08     585,374.40     03-Sep-08
TD605500138732-8
  Bank of America   10-Jul-08     974,025.00     29-Aug-08
TD605500138733-8
  Bank of America   10-Jul-08     1,460,984.40     10-Sep-08
TD605500138728-8
  Bank of America   10-Jul-08     101,280.00     08-Sep-08
TD605500138734-8
  Bank of America   10-Jul-08     1,477,674.00     08-Sep-08
TD605500138735-8
  Bank of America   10-Jul-08     541,500.00     26-Aug-08
TD605500138736-8
  Bank of America   10-Jul-08     87,840.00     27-Aug-08
TD605500138737-8
  Bank of America   10-Jul-08     194,356.80     25-Aug-08
TD605500138761-8
  Bank of America   13-Aug-08     482,416.48     07-Nov-08
TD605500138772-8
  Bank of America   14-Aug-08     198,958.47     08-Oct-08
TD605500138773-8
  Bank of America   14-Aug-08     163,031.94     09-Oct-08
TD605500138774-8
  Bank of America   14-Aug-08     1,121,243.97     10-Oct-08
TD605500138775-8
  Bank of America   14-Aug-08     812,235.02     10-Oct-08
TD605500138776-8
  Bank of America   14-Aug-08     292,030.00     08-Oct-08
TD605500138777-8
  Bank of America   14-Aug-08     90,059.16     21-Oct-08
TD605500138778-8
  Bank of America   14-Aug-08     859,570.25     09-Oct-08
TD605500138779-8
  Bank of America   15-Aug-08     396,938.79     08-Oct-08
TD605500138780-8
  Bank of America   14-Aug-08     934,475.85     14-Oct-08
TD605500138781-8
  Bank of America   14-Aug-08     106,211.00     21-Oct-08
TD605500138782-8
  Bank of America   14-Aug-08     85,920.00     03-Oct-08
TD605500138783-8
  Bank of America   14-Aug-08     141,264.60     09-Oct-08
TD605500138784-8
  Bank of America   14-Aug-08     133,777.40     17-Oct-08
TD605500138785-8
  Bank of America   14-Aug-08     256,922.35     21-Oct-08
TD605500138786-8
  Bank of America   14-Aug-08     141,240.90     21-Oct-08
TD605500138787-8
  Bank of America   14-Aug-08     85,032.77     16-Oct-08
TD605500138788-8
  Bank of America   14-Aug-08     127,860.40     14-Oct-08
TD605500138789-8
  Bank of America   14-Aug-08     107,780.80     17-Sep-08
TD605500138790-8
  Bank of America   14-Aug-08     30,285.60     08-Oct-08
TD605500138791-8
  Bank of America   14-Aug-08     89,070.70     06-Oct-08
TD605500138792-8
  Bank of America   14-Aug-08     58,430.00     08-Oct-08
TD605500138793-8
  Bank of America   18-Aug-08     18,540.00     25-Sep-08
TD605500138794-8
  Bank of America   14-Aug-08     582,630.40     09-Oct-08

 

 

--------------------------------------------------------------------------------

 

                                  Outstanding       Letter of Credit   Bank  
Issue Date   Amount (USD)     Expiration Date
TD605500138795-8
  Bank of America   14-Aug-08     399,451.75     09-Oct-08
TD605500138796-8
  Bank of America   14-Aug-08     19,296.00     10-Oct-08
TD605500138797-8
  Bank of America   14-Aug-08     119,523.60     16-Oct-08
TD605500138798-8
  Bank of America   14-Aug-08     85,696.92     24-Sep-08
TD605500138799-8
  Bank of America   14-Aug-08     1,090,380.15     08-Oct-08
TD605500138800-8
  Bank of America   14-Aug-08     6,132.00     09-Oct-08
TD605500138762-8
  Bank of America   05-Aug-08     62,551.00     20-Sep-08
TD605500138763-8
  Bank of America   05-Aug-08     135,694.95     11-Oct-08
TD605500138764-8
  Bank of America   07-Aug-08     358,737.70     11-Oct-08
TD605500138765-8
  Bank of America   07-Aug-08     11,102.30     23-Sep-08
TD605500138766-8
  Bank of America   07-Aug-08     553,334.94     14-Oct-08
TD605500138767-8
  Bank of America   07-Aug-08     90,288.00     18-Sep-08
TD605500138708-8
  Bank of America   12-Jun-08     62,854.40     08-Aug-08
TD605500138743-8
  Bank of America   10-Jul-08     559,360.00     12-Sep-08
TD605500138744-8
  Bank of America   10-Jul-08     32,921.40     13-Sep-08
TD605500138745-8
  Bank of America   10-Jul-08     16,092.00     27-Aug-08
TD605500138746-8
  Bank of America   10-Jul-08     200,319.84     29-Aug-08
TD605500138747-8
  Bank of America   10-Jul-08     204,504.00     10-Sep-08
TD605500138748-8
  Bank of America   10-Jul-08     561,546.99     14-Oct-08
TD605500138751-8
  Bank of America   17-Jul-08     251,233.00     12-Sep-08
TD605500138752-8
  Bank of America   17-Jul-08     430,334.50     03-Sep-08
TD605500138754-8
  Bank of America   05-Aug-08     938,902.30     09-Oct-08
TD605500138755-8
  Bank of America   05-Aug-08     88,315.00     09-Oct-08
TD605500138756-8
  Bank of America   07-Aug-08     591,779.20     14-Oct-08
TD605500138757-8
  Bank of America   05-Aug-08     148,177.95     08-Oct-08
TD605500138758-8
  Bank of America   07-Aug-08     155,784.28     07-Oct-08
TD605500138759-8
  Bank of America   05-Aug-08     200,319.84     29-Sep-08
TD605500138768-8
  Bank of America   14-Aug-08     349,061.00     08-Nov-08
TD605500138769-8
  Bank of America   14-Aug-08     5,654.40     09-Oct-08
TD605500138770-8
  Bank of America   14-Aug-08     42,982.40     09-Oct-08
TD605500138771-8
  Bank of America   14-Aug-08     22,963.20     24-Sep-08
TD605500138807-8
  Bank of America   21-Aug-08     25,898.25     15-Sep-08
TD605500138718-8
  Bank of America   13-Jun-08     1,065,721.47     14-Oct-08
TD605500138719-8
  Bank of America   13-Jun-08     1,778,276.95     08-Oct-08
TD605500138749-8
  Bank of America   17-Jul-08     21,155.54     11-Sep-08
TD605500138750-8
  Bank of America   17-Jul-08     168,391.89     11-Sep-08
TD605500138801-8
  Bank of America   14-Aug-08     356,915.97     09-Oct-08
TD605500138802-8
  Bank of America   14-Aug-08     149,149.13     09-Oct-08

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 4.2
CONSENTS
None.

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 4.3
OWNERSHIP OF WARNACO ENTITIES

                                  Jurisdiction of       Number of   Percentage
of           Incorporation/   Number of Shares   Shares   each Class of   Parent
  Subsidiary   Organization   Authorized   Outstanding   Shares Owned  
4278941 Canada Inc.
  WBR Industria e Comercio de Vestuario S.A.   Brazil   400,000   196,000
common,
4,000 preferred     51 %
Calvin Klein Jeanswear Company
  CKJ Holdings, Inc.   Delaware   1,000 shares Common Stock, par value $0.01  
1,000     100 %
CKJ UK Limited
  Jeanswear Services, Ltd.   United Kingdom   N/A   100     100 %
CK Jeanswear Asia Ltd.
  CKJ Fashion (Shanghai) Ltd.   People’s Republic of China   1,050,000   157,500
    100 %
 
  Gold Lightening Limited   Hong Kong   N/A   65,000     100 %
Designer Holdings Ltd.
  Calvin Klein Jeanswear Company   Delaware   1,000 shares Common Stock, par
value $0.01   1,000     100 %
The Warnaco Group, Inc.
  Warnaco Inc.   Delaware   100,000 shares Common Stock, par value $1.00  
100,000     100 %
Warnaco B.V.
  A.E.S. Advanced Euro Service S.r.l   Italy   90,000   90,000     100 %
 
  CKJ UK Ltd.   United Kingdom   1,098,000 shares, par value £1.00   980,000    
100 %
 
  CK Jeanswear Australia Pty Limited   Australia   4,467,737   4,467,737     100
%
 
  CK Jeanswear Europe S.r.l.   Italy   N/A   3,500,000     100 %
 
  CK Jeanswear Korea Co. Limited   Korea   N/A   381,045     100 %
 
  CK Jeanswear NZ Ltd.   New Zealand   100   100     100 %
 
  Euro Retail S.r.l.   Italy   100,000   100,000     100 %

      **  
Certain shares are held as Directors’ qualifying shares, but in each case,
solely to the extent required by local law.

 

 

--------------------------------------------------------------------------------

 

                                  Jurisdiction of       Number of   Percentage
of           Incorporation/   Number of Shares   Shares   each Class of   Parent
  Subsidiary   Organization   Authorized   Outstanding   Shares Owned  
 
  Warnaco Argentina SRL   Argentina   12,000 quotas   1,080     95 %
 
  Warnaco Denmark A/S   Denmark   5000   5000     100 %
 
  Warnaco France S.A.R.L.   France   500, par value FF 100   500     100 %
 
  Warnaco Germany GmbH   Germany   €25,000   25,000     100 %
 
  Warnaco Netherlands B.V.   The Netherlands   2,500 shares   561 shares     100
%
 
  Warnaco Poland Sp.zo.o.   Poland   20,000 shares, par value 50 zlotys   1,000
    100 %
 
  Warnaco Portugal Vesutario   Portugal   €5,000   5,000     100 %
 
  e Acessorios Sociedade                    
 
  Unipessoal, Lda.                    
 
  Warner’s Company (Belgium) SPRL   Belgium   25,000 shares, par value 1,000 FF
  25,000     100 %
 
  Warner’s (EIRE) Teoranta   Ireland   1,000 shares, par value IR£1.00   101    
100 %**
 
  WAS Logistics B.V.   The Netherlands   €18,200   18,200     100 %
Warnaco France
  FA France S.A.R.L.   France   7,623   7,623     100 %
S.A.R.L.
                       
 
  Warner’s Aiglon, S.A.   France   215,000, par value FRF 100   215,000     100
%**
Warnaco (H.K.), Ltd.
  CK Jeanswear Asia Ltd.   Hong Kong   100   100     100 %
 
  Warnaco International   People’s Republic   1,655,420   1,655,420     100 %
 
  Trading (Shanghai) Co.   of China                
 
  Ltd.                    
 
  Warnaco Shanghai Co. Ltd.   People’s Republic of China   810,000   610,000    
100 %
 
  Warnaco   Singapore   100,000 shares,   2     100 %
 
  Singapore Private Ltd.       par value $1.00            

      **  
Certain shares are held as Directors’ qualifying shares, but in each case,
solely to the extent required by local law.

 

 

--------------------------------------------------------------------------------

 

                                  Jurisdiction of       Number of   Percentage
of           Incorporation/   Number of Shares   Shares   each Class of   Parent
  Subsidiary   Organization   Authorized   Outstanding   Shares Owned  
Warnaco Inc.
  CKU.com Inc.   Delaware   1,000 shares Common Stock, par value $0.01   1,000  
  100 %
 
  Designer Holdings Ltd.   Delaware   1,000 shares Common Stock, par value $0.01
  1,000     100 %
 
  Ocean Pacific Apparel Corp.   Delaware   5,589   5,589     100 %
 
  Linda Vista de Veracruz S.A. de C.V.   Mexico   500 shares Serie B Subserie I;
225 shares   500 Serie B Subserie I     69 %**
 
          Serie B Subserie II, par value 100 Mexican            
 
          Pesos            
 
  Warnaco Intimo S.A.   Spain   11,000, par value 1,000 pesetas each   11,000  
  100 %
 
  Warnaco Puerto Rico, Inc.   Delaware   1,000 shares of Common Stock, par value
$0.01   1,000     100 %
 
  Warnaco Swimwear Inc.   Delaware   1,000 shares of Common Stock, par value
$0.01   1,000     100 %
 
  Warnaco U.S., Inc.   Delaware   1,000 shares Common Stock, par value $0.01  
1,000     100 %
 
  Warner’s de Mexico S.A. de C.V.   Mexico   50,000 Series A shares, par value
$0.10 Mexican Pesos; 60,545,220 Series B shares, par value $0.10 Mexican Pesos  
50,000 Series A shares; 60,545,220 Series B shares   Type A — 100
Type B — 100 %**
%
 
  WF Overseas Fashion C.V.   The Netherlands   100% partnership interests  
Warnaco Inc. holds 99% interest (as limited partner); Warnaco U.S., Inc. holds
1% interest (as general partner)     99 %

      **  
Certain shares are held as Directors’ qualifying shares, but in each case,
solely to the extent required by local law.

 

 

--------------------------------------------------------------------------------

 

                                  Jurisdiction of       Number of   Percentage
of           Incorporation/   Number of Shares   Shares   each Class of   Parent
  Subsidiary   Organization   Authorized   Outstanding   Shares Owned  
Warnaco Netherlands B.V.
  Eretex GmbH   Germany   DM 50,000   DM 50,000     100 %
 
  Lenitex-Warnaco Handelsgesellschaft   Austria   500,000 Austrian schillings  
500,000     100 %
 
  m.b.H.                    
 
  Lintex-Warnaco S.a.r.l.   Switzerland   50 shares   50     100 %
 
  Warnaco Argentina SRL   Argentina   12,000 quotas   120     5 %
 
  Warnaco of Canada Company   Province of Nova Scotia   1,000,000 Common Shares,
without par value   1,000,000     100 %
 
  Warner’s (United Kingdom) Limited   United Kingdom   5,520,000 shares at £1
each   5,520,000     100 %
Warnaco of Canada Company
  4278941 Canada Inc.   Canada   Unlimited number of Classes A-F   2,000 Class A
    100 %

                       
 
  Linda Vista de Veracruz S.A. de C.V.   Mexico   500 shares Serie B Subserie I;
225 shares Serie B Subserie II, par value 100 Mexican Pesos   225 Serie B
Subserie II     31 %**
Warnaco Swimwear Inc.
  Warnaco Swimwear Products Inc.   Delaware   10,000 shares of Common Stock, par
value $0.01   100     100 %
Warnaco Swimwear Products Inc.
  Authentic Fitness On-Line, Inc.   Nevada   100 shares of Common Stock, par
value $0.01   100     100 %
 
  CCC Acquisition Corp.   Delaware   1,000 shares Common Stock, par value $0.01
  100     100 %
 
  Vista de Yucatan S.A. de C.V.   Mexico   500 shares, par value 100 Mexican
Pesos   500     100 %**
 
  Warnaco Retail Inc.   Delaware   100 shares of Common Stock, par value $0.01  
100     100 %

      **  
Certain shares are held as Directors’ qualifying shares, but in each case,
solely to the extent required by local law.

 

 

--------------------------------------------------------------------------------

 

                                  Jurisdiction of       Number of   Percentage
of           Incorporation/   Number of Shares   Shares   each Class of   Parent
  Subsidiary   Organization   Authorized   Outstanding   Shares Owned  
Warnaco U.S., Inc.
  Warnaco (Macao) Company Limited   Macao   Uncertificated   Uncertificated    
100 %**
 
  WF Overseas Fashion C.V.   The Netherlands   100% partnership interests  
Warnaco Inc. holds     1 %
 
              99% interest (as        
 
              limited partner);        
 
              Warnaco U.S., Inc.        
 
              holds 1% interest        
 
              (as general        
 
              partner)        
Warner’s (United Kingdom) Ltd.
  Mullion International Limited   British Virgin Islands   50,000 shares   10  
  100 %
WF Overseas Fashion C.V.
  Designer Holdings Overseas Limited   Hong Kong   10,000 shares, par value
HK$1.00   10,000     100 %**
 
  Warnaco B.V.   The Netherlands   200,000 NLG   40,000     100 %
 
  Warnaco (H.K.) Limited   Barbados   1,000 common shares, no par value   1,000
    100 %
 
  Warnaco Taiwan Co. Ltd.   Taiwan   1,500,000   1,500,000     100 %

      **  
Certain shares are held as Directors’ qualifying shares, but in each case,
solely to the extent required by local law.

Number of Shares Covered by All Outstanding Options, Warrants,
Rights of Conversion or Purchase and Similar Rights
None.

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 4.15
LABOR MATTERS
Collective Bargaining Agreements
Local 1701 of the Union of Needle Trades Industrial and Textile Employees
AFL-CIO, CLC and Warnaco Inc.
Duncansville, PA
Expires March 1, 2009
Indigo Blue S.A. and Lintex-Warnaco S.a.r.l.
Collective Bargaining Agreement for employees of Foxtown Center,
Mendrisio, Switzerland
Expires December 31, 2011
Consulting Agreements
None.
Executive Employment Agreements

1  
Joseph Gromek, President and Chief Executive Officer
  2  
Lawrence R. Rutkowski, Executive Vice President and Chief Financial Officer
  3  
Helen McCluskey, President Intimate Apparel Group
  4  
Frank Tworecke, President Sportswear Group
  5  
Dwight Meyer, President Global Sourcing
  6  
Stanley Silverstein, Executive Vice president — International Strategy and
Business Development
  7  
Elizabeth Wood, Senior Vice President, Human Resources

Executive Compensation Plans
None.
Deferred Compensation Agreements

The Warnaco Group, Inc. Non-Employee Directors Deferred Compensation Plan
The Warnaco Group, Inc. Deferred Compensation Plan
Employee Stock Purchase and Stock Option Plans

The Warnaco Group, Inc. 2003 Stock Incentive Plan, as amended
The Warnaco Group, Inc. 2005 Stock Incentive Plan, as amended
Severance Plans
None.

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 4.16
ERISA MATTERS

              PLAN NAME   EMPLOYER ID NO.   PLAN NO. Retirement Plans

Employees Retirement Plan of Warnaco Inc.
  22-1897478     001  
The Warnaco Group, Inc. Employee Savings Plan
  95-4032739     020   Health and Welfare Plans

Warnaco Flexible Benefits Plan
  22-1897478     501  

Unfunded Pension Liability
The Plan is under funded, however under the terms of Warnaco Inc.’s Amended and
Restated Plan of Reorganization provided that the Warnaco Inc. will continue its
Employee Retirement Plan, including meeting the minimum funding standards under
ERISA and the Code. In connection with the Employee Retirement Plan, on an
actuarial basis the amount by which the present value of all accrued benefits
under the Employee Retirement Plan exceeds the fair market value of all assets
of such Plan allocable to such benefits in accordance with Title IV of ERISA is
approximately $8.95 million, as reported in Group’s 10-K for fiscal year 2007.
Withdrawal Liability
None.

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 4.19
MATERIAL REAL PROPERTY

      Address of Property   Record Owner
 
   
Material Owned Real Property:
   
 
   
None.
   
 
   
Material Leased Real Property:
   
 
   
The Warnaco Group, Inc.
  501 Seventh Ave. Associates L.L.C
501 7th Avenue
  c/o Insigna/ESG Inc.
New York, NY 10018
  200 Park Ave.
New York County
  New York, NY 10016
 
  Leased by: The Warnaco Group, Inc.
 
   
Distribution Facility
  Huntingdon Storage & Distribution
(Former) Fleming Building
  5506 Sixth Ave. Com Rear
RD # 4 Industrial Park
  Altoona, PA 16602
Huntingdon, PA 16652
  Attention: John Radionoff/Lenorad Fiore
Huntingdon County
  Leased by Warnaco Inc.
 
   
Distribution Facility
  Realty Associated Fund VIP
5305 Rivergrade Road
  Realty Associated Fund V Irwindale
Irwindale, CA 91076
  Distribution Center
Los Angeles County
  PO Box 51921 Unit 1
 
  Los Angeles, CA 90051-6210
 
  Leased by Authentic Fitness Products Inc.
 
  (N/K/A: Warnaco Swimwear Products Inc.)
 
   
Office Facility
  Corporate Campus/Joint Venture
470 Wheelers Farms Road
  c/o Lend Lease Real Estate Investments Inc.
Milford, CT 06040
  787 Seventh Ave.
Hartford County
  New York, NY 10019
 
  Leased by Warnaco Inc.

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 7.15
POST CLOSING MATTERS
To the extent not delivered on or prior to the Closing Date, within the periods
set forth below (or such later date as may be agreed by the Administrative
Agent), Group and the Borrower shall deliver, or cause to be delivered, to the
Administrative Agent the following documents, in each case, in form and
substance reasonably satisfactory to the Administrative Agent:
1. On or prior to the 30th day following the Closing Date, for each Loan Party
set forth below a good standing certificate from the applicable Governmental
Authority of each jurisdiction set forth below opposite the name of such Loan
Party:

      Loan Party   Jurisdiction
Warnaco Swimwear Inc.
  New York
Ocean Pacific Apparel Corp.
  New York
Warnaco Inc.
  Connecticut; New York
The Warnaco Group, Inc.
  Connecticut; New York
Warnaco Retail Inc.
  California; New York
Designer Holdings Ltd.
  New York
CKU.com Inc.
  Connecticut
Warnaco U.S., Inc.
  Connecticut
Calvin Klein Jeanswear Company
  Connecticut

2. On or prior to the 30th day following the Closing Date, certificates to
evidence the following pledged interests (to the extent such pledged interest is
evidenced by a certificate):

              Loan Party   Stock Issuer   Class of Stock   Number of Shares
Warnaco Inc.
  CKU.com Inc.   Common Stock    1,000
Warnaco Inc.
  Ocean Pacific Apparel Corp.   Common Stock    5,589
Warnaco Inc.
  Warnaco Intimo S.A.   Common Stock    7,260
Warnaco Inc.
  WF Overseas Fashion C.V.   Partnership Interests    65% of interests

 

 

--------------------------------------------------------------------------------

 

CONFIDENTIAL TREATMENT
SCHEDULE 8.1
EXISTING INDEBTEDNESS

                          Debt Balance (as of         Debtor   Creditor   August
19, 2008)   Maturity   Type of Debt
Warnaco of Canada Company
  SBI Holdings Ltd. & Anahar Holdings Ltd.   ***   12/31/06   Capital Lease
Calvin Klein Jeanswear Europe
  Banca Nazionale del Lavoro SpA   ***   Continuous, as agreed by the parties  
Local Revolving Credit
Calvin Klein Jeanswear Europe
  Banca Populare di Verona   ***   Continuous, as agreed by the parties   Local
Revolving Credit
Calvin Klein Jeanswear Europe
  Banca Toscana   ***   Continuous, as agreed by the parties   Local Revolving
Credit
Calvin Klein Jeanswear Europe
  Banca Cr Firenze   ***   Continuous, as agreed by the parties   Local
Revolving Credit
Calvin Klein Jeanswear Europe
  Fortis Bank   ***   Continuous, as agreed by the parties   Local Revolving
Credit
Calvin Klein Jeanswear Europe
  Intessa SanPaolo   ***   Continuous, as agreed by the parties   Local
Revolving Credit
Calvin Klein Jeanswear Europe
  Unicredit Banca d’Impresa   ***   Continuous, as agreed by the parties   Local
Revolving Credit
Calvin Klein Jeanswear Europe
  Monte Dei Paschi Di Siena   ***   Continuous, as agreed by the parties   Local
Revolving Credit
WBR Industria e Comercio de Vestuano S.A. Brazil
  Banco do Brasil-Giro; Banco do Braso-Fat; Banco Real ABN-Giro; Banco
HSBC-Garantida   ***   Continuous, as agreed by the parties   Local Revolving
Credit

The above local revolving credit facilities under which Calvin Klein Jeanswear
Europe is the debtor are collectively referred to as the “Italian Debt
Facility”.
INTERCOMPANY DEBT
See the Intercompany Notes referenced in Schedule 8.3 hereto.

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 8.2
EXISTING LIENS
Part I: U.S. Liens

                                                      Tax Liens/   UCC File    
    Entity   Jurisdiction   Judgments   Number   Secured Party   Type of
Collateral  
Denim Holdings Inc., a subsidiary of Calvin Klein Jeanswear Inc.
  New York County, NY   Supreme Court Case:
603702/99     G8612815     Union Transport Corp.   $ 77,810.11  

Part II: Canadian Liens
See attached.

 

 

--------------------------------------------------------------------------------

 

SUMMARY OF SEARCH RESULTS

     
Client Name:
  Warnaco of Canada Company
Matter Name:
  Refinancing of US and Canadian facilities
File Number:
  084167

COMPAGNIE WARNACO DU CANADA
PERSONAL PROPERTY SECURITY ACT

     
Party Searched:
  Compagnie Warnaco du Canada
Jurisdiction Searched:
  Province of Ontario
Office Searched:
  Ministry of Government Services, Companies and Personal Property Security
Branch
Statute Searched:
  Personal Property Security Act (Ontario)
File Currency:
  August 10, 2008

A certified PPSA enquiry response was obtained from this Office in respect of
“Compagnie Warnaco du Canada” indicating the following registrations:

                                                                         
INITIAL   AMENDMENT   REG’N   COLLATERAL   GENERAL COLLATERAL     SECURED PARTY
  REFERENCE   REGISTRATION   REGISTRATION   PERIOD   CLASSIFICATIONS  
DESCRIPTION / DEBTOR NAME   NAME   FILE NO.   NO.   NO.   (In years)   CG   I  
E   A   O   MV   ADDITIONAL NOTES
WARNACO OF CANADA LIMITED
  PHH CANADA INC.     082454544     19920924 2118 1513 2585   19960731 1929
1529 2742     4             X       X   X    
 
                                                       
 
                  B-RENEWAL
(3 YEARS)                                    
 
                                                       
 
                  19990806 1821
1531 7758                                    
 
                                                       
 
                  B-RENEWAL
(5 YEARS)                                    

 

 

--------------------------------------------------------------------------------

 

                                                              INITIAL  
AMENDMENT   REG’N   COLLATERAL   GENERAL COLLATERAL     SECURED PARTY  
REFERENCE   REGISTRATION   REGISTRATION   PERIOD   CLASSIFICATIONS   DESCRIPTION
/ DEBTOR NAME   NAME   FILE NO.   NO.   NO.   (In years)   CG   I   E   A   O  
MV   ADDITIONAL NOTES
 
              20010614 1814                               1999 OLDSMOBILE
INTRIGUE
 
              1531 6865                               VIN: 1G3WX52K1XF301921
 
                                               
 
              A-AMENDMENT (ADDING
COLLATERAL
DESCRIPTION
TO
REGISTRATION)                               ALL PRESENT AND FUTURE MOTOR
VEHICLES AND AUTOMOTIVE EQUIPMENT AND MATERIALS-HANDLING EQUIPMENT LEASED FROM
TIME TO TIME BY THE SECURED PARTY TO THE DEBTOR, TOGETHER WITH ALL PRESENT AND
FUTURE ATTACHMENTS, ACCESSIONS, APPURTENANCES, ACCESSORIES AND REPLACEMENT
PARTS, AND ALL PROCEEDS OF OR RELATING TO ANY OF THE FOREGOING.
 
                                               
 
              20010619 1800
1531 2624                               ADDITIONAL DEBTORS
INCLUDE:
 
              A-AMENDMENT
(TO INCLUDE
ADDITIONAL
DEBTORS)                               WARNACO OF CANADA COMPANY;
COMPAGNIE WARNACO DU CANADA/;
WARNACO COMPANY OF CANADA, COMPANY/COMPAGNIE WARNACO DU CANADA,; AND COMPAGNIE
WARNACO DU CANADA/WARNACO OF CANADA COMPANY
 
                                               
 
              20030721 1055
1529 5434

A-AMENDMENT
(AMEND
SECURED
PARTY)                               SECURED PARTY AMENDED TO PHH VEHICLE
MANAGEMENT SERVICES INC. 2233 ARGENTIA RD., SUITE 400, MISSISSAUGA, ON L5N 2X7

 

2

--------------------------------------------------------------------------------

 

                                                              INITIAL  
AMENDMENT   REG’N   COLLATERAL   GENERAL COLLATERAL     SECURED PARTY  
REFERENCE   REGISTRATION   REGISTRATION   PERIOD   CLASSIFICATIONS   DESCRIPTION
/ DEBTOR NAME   NAME   FILE NO.   NO.   NO.   (In years)   CG   I   E   A   O  
MV   ADDITIONAL NOTES
 
              20030819 1537                               1999 OLDSMOBILE
INTRIGUE
 
              1530 2225                               VIN: 1G3WX53K1XF301921
 
                                               
 
              F-PART                                
 
              DISCHARGE                                
 
                                               
 
              20040811 1934                                
 
              1531 1642                                
 
                                               
 
              B-RENEWAL                                
 
              (5 YEARS)                                

 

3

--------------------------------------------------------------------------------

 

WARNACO OF CANADA COMPANY
PERSONAL PROPERTY SECURITY ACT

     
Party Searched:
  Warnaco of Canada Company
Jurisdiction Searched:
  Province of Ontario
Office Searched:
  Ministry of Government Services, Companies and Personal Property Security
Branch
Statute Searched:
  Personal Property Security Act (Ontario)
File Currency:
  August 10, 2008

A certified PPSA enquiry response was obtained from this Office in respect of
“Warnaco of Canada Company” indicating the following registrations:

                                                                         
INITIAL   AMENDMENT   REG’N   COLLATERAL   GENERAL COLLATERAL     SECURED PARTY
  REFERENCE   REGISTRATION   REGISTRATION   PERIOD   CLASSIFICATIONS  
DESCRIPTION / DEBTOR NAME   NAME   FILE NO.   NO.   NO.   (In years)   CG   I  
E   A   O   MV   ADDITIONAL NOTES
WARNACO OF CANADA COMPANY
  JAGUAR CREDIT CANADA LEASING, A DIV/CANADIAN ROAD LEASING CO     642614445    
20080208 1954 1531 7083         3             X       X   X   2008 JAGUAR VANDEN
PLAS
VIN: SAJXA82B78SH21378
 
                                                       
 
  CBSC CAPITAL     632484171     20070130 1938 1531 0376         3             X
      X        
 
                                                       
 
  BANK OF AMERICA, N.A.     613611342     20050324 1214 1862 5725         10    
    X   X   X   X   X    
 
                                                       
 
  BANK OF AMERICA, NATIONAL ASSOCIATION     613611351     20050324 1214 1862
5726         10         X   X   X   X   X    
 
                                                       
 
  STUART BUDD & SONS LTD     610307172     20041103 1039 1616 0722         4    
        X       X   X   2005 JAGUAR VANDEN PLAS
VIN: SAJXA82C25SG36310
 
                                                       
 
  XEROX CANADA
LTD     602126694     20031230 1021 1715 3205         5             X       X  
     

 

4

--------------------------------------------------------------------------------

 

                                                                             
INITIAL   AMENDMENT   REG’N   COLLATERAL   GENERAL COLLATERAL     SECURED PARTY
  REFERENCE   REGISTRATION   REGISTRATION   PERIOD   CLASSIFICATIONS  
DESCRIPTION / DEBTOR NAME   NAME   FILE NO.   NO.   NO.   (In years)   CG   I  
E   A   O   MV   ADDITIONAL NOTES
 
  PHH CANADA INC.     082454544     19920924 2118     19960731 1929     4      
      X       X   X    
 
              1513 2585     1529 2742                                    
 
                                                           
 
                      B-RENEWAL                                    
 
                      (3 YEARS)                                    
 
                                                           
 
                      19990806 1821                                    
 
                      1531 7758                                    
 
                                                           
 
                      B-RENEWAL                                    
 
                      (5 YEARS)                                    
 
                                                           
 
                      20010614 1814                                   1999
OLDSMOBILE INTRIGUE
 
                      1531 6865                                   VIN:
1G3WX52K1XF301921
 
                                                           
 
                      A-AMENDMENT (ADDING COLLATERAL DESCRIPTION TO
REGISTRATION)                                   ALL PRESENT AND FUTURE MOTOR
VEHICLES AND AUTOMOTIVE EQUIPMENT AND MATERIALS-HANDLING EQUIPMENT LEASED FROM
TIME TO TIME BY THE SECURED PARTY TO THE DEBTOR, TOGETHER WITH ALL PRESENT AND
FUTURE ATTACHMENTS, ACCESSIONS, APPURTENANCES, ACCESSORIES AND REPLACEMENT
PARTS, AND ALL PROCEEDS OF OR RELATING TO ANY OF THE FOREGOING.
 
                                                           
 
                      20010619 1800 1531 2624                                  
ADDITIONAL DEBTORS INCLUDE:
 
                      A-AMENDMENT (TO INCLUDE ADDITIONAL DEBTORS)              
                    WARNACO OF CANADA COMPANY; COMPAGNIE WARNACO DU CANADA/;
WARNACO COMPANY OF CANADA, COMPANY/COMPAGNIE WARNACO DU CANADA,; AND COMPAGNIE
WARNACO DU CANADA/WARNACO OF CANADA COMPANY

 

5

--------------------------------------------------------------------------------

 

                                                              INITIAL  
AMENDMENT   REG’N   COLLATERAL   GENERAL COLLATERAL     SECURED PARTY  
REFERENCE   REGISTRATION   REGISTRATION   PERIOD   CLASSIFICATIONS   DESCRIPTION
/ DEBTOR NAME   NAME   FILE NO.   NO.   NO.   (In years)   CG   I   E   A   O  
MV   ADDITIONAL NOTES
 
              20030721 1055
1529 5434

A-AMENDMENT (AMEND SECURED PARTY)                               SECURED PARTY
AMENDED TO PHH VEHICLE MANAGEMENT SERVICES INC. 2233 ARGENTIA RD., SUITE 400,
MISSISSAUGA, ON L5N 2X7
 
                                               
 
              20030819 1537
1530 2225                               1999 OLDSMOBILE INTRIGUE
VIN: 1G3WX53K1XF301921
 
                                               
 
              F-PART DISCHARGE                                
 
                                               
 
              20040811 1934
1531 1642                                
 
                                               
 
              B-RENEWAL
(5 YEARS)                                

 

6

--------------------------------------------------------------------------------

 

WARNACO DU CANADA LIMITED
PERSONAL PROPERTY SECURITY ACT

     
Party Searched:
  Warnaco du Canada limited
Jurisdiction Searched:
  Province of Ontario
Office Searched:
  Ministry of Government Services, Companies and Personal Property Security
Branch
Statute Searched:
  Personal Property Security Act (Ontario)
File Currency:
  August 10, 2008

A certified PPSA enquiry response was obtained from this Office in respect of
“Warnaco du Canada Limited” indicating the following registrations:

                                                                         
INITIAL   AMENDMENT   REG’N   COLLATERAL   GENERAL COLLATERAL     SECURED PARTY
  REFERENCE   REGISTRATION   REGISTRATION   PERIOD   CLASSIFICATIONS  
DESCRIPTION / DEBTOR NAME   NAME   FILE NO.   NO.   NO.   (In years)   CG   I  
E   A   O   MV   ADDITIONAL NOTES
WARNACO OF CANADA LIMITED
  PHH CANADA INC.     082454544     19920924 2118 1513 2585   19960731 1929
1529 2742     4             X       X   X    
 
                                                       
 
                  B-RENEWAL
(3 YEARS)                                    
 
                                                       
 
                  19990806 1821
1531 7758                                    
 
                                                       
 
                  B-RENEWAL
(5 YEARS)                                    
 
                                                       
 
                  20010614 1814
1531 6865                                   1999 OLDSMOBILE INTRIGUE
VIN: 1G3WX52K1XF301921
 
                                                       
 
                  A-AMENDMENT
(ADDING
COLLATERAL
DESCRIPTION
TO
REGISTRATION)                                   ALL PRESENT AND FUTURE MOTOR
VEHICLES AND AUTOMOTIVE EQUIPMENT AND MATERIALS-HANDLING EQUIPMENT LEASED FROM
TIME TO TIME BY THE SECURED PARTY TO THE DEBTOR, TOGETHER WITH ALL PRESENT AND
FUTURE ATTACHMENTS, ACCESSIONS, APPURTENANCES, ACCESSORIES AND REPLACEMENT
PARTS, AND ALL PROCEEDS OF OR RELATING TO ANY OF THE FOREGOING.

 

7

--------------------------------------------------------------------------------

 

                                                              INITIAL  
AMENDMENT   REG’N   COLLATERAL   GENERAL COLLATERAL     SECURED PARTY  
REFERENCE   REGISTRATION   REGISTRATION   PERIOD   CLASSIFICATIONS   DESCRIPTION
/ DEBTOR NAME   NAME   FILE NO.   NO.   NO.   (In years)   CG   I   E   A   O  
MV   ADDITIONAL NOTES
 
              20010619 1800
1531 2624
                              ADDITIONAL DEBTORS
INCLUDE:  
 
              A-AMENDMENT
(TO INCLUDE
ADDITIONAL
DEBTORS)                               WARNACO OF CANADA COMPANY;
COMPAGNIE WARNACO DU CANADA/; WARNACO COMPANY OF CANADA, COMPANY/COMPAGNIE
WARNACO DU CANADA,; AND COMPAGNIE WARNACO DU CANADA/WARNACO OF CANADA COMPANY
 
                                               
 
              20030721 1055
1529 5434

A-AMENDMENT
(AMEND SECURED PARTY)                               SECURED PARTY AMENDED TO PHH
VEHICLE MANAGEMENT SERVICES INC. 2233 ARGENTIA RD., SUITE 400, MISSISSAUGA, ON
L5N 2X7
 
                                               
 
              20030819 1537
1530 2225                               1999 OLDSMOBILE INTRIGUE
VIN: 1G3WX53K1XF301921
 
                                               
 
              F-PART
DISCHARGE                                
 
                                               
 
              20040811 1934
1531 1642                                
 
                                               
 
              B-RENEWAL
(5 YEARS)                                

 

8

--------------------------------------------------------------------------------

 

(RSS LOGO) [c05912c0591201.gif]
Robinson Sheppard Shapiro
S.E.N.C.R.L. • L.L.P.
Avocats • Barristers & Solicitors
SEARCH REPORT
Register of Personal and Movable Real Rights (Quebec) (“RPMRR”)

         
Name(s) searched:
         
Current name(s)
  •   Warnaco of Canada Company
 
       
Previous name(s) (as per Sharon
  •   Compagnie Warnaco du Canada
Druker’s request)
  •   Warnaco du Canada Limitee
 
  •   3024368 Nova Scotia Company
 
  •   Authentic Fitness of Canada Inc.
 
  •   Condition Physique Authentique du Canada Inc.
 
       
Trade name(s)
  •   Nil.
 
       
Date of search:
  August 5, 2008
Date and time of certification of the RPMRR:
  August 5, 2008 at 1:10 p.m.

                              Amount         Nature of Rights &       (Cdn $) &
  Collateral Affected     Registration Details   Parties   Interest Rate  
(summary only)
1.
  Rights resulting from a lease
# 06-0194340-0017
Date: April 12, 2006 at 2:52 p.m.
Expiry: April 5, 2012   Lessor:
Xerox Canada Ltd.
Lessee:
Warnaco of Canada Company Inc. (sic)   n/a  
Equipment, other
All present and future office equipment and software supplied or financed from
time to time by the secured party (whether by lease, conditional sale or
otherwise), whether or not manufactured by the secured party or any affiliate
thereof.

IMPORTANT DISCLAIMERS:
A) The information set forth in this search results summary does not constitute
(and should not be construed as) a legal opinion of Robinson Sheppard Shapiro
llp. For more information in connection with each registration summarized
herein, please refer to the underlying computer printouts from the RPMRR
corresponding to such registration.
B) We draw to your attention that the RPMRR is a computer data base which may
suffer from sporadic glitches and manual transcription errors of the registrar
which can give rise to uncertainties. Although rare, there have been instances
where a proper search of the RPMRR has failed to disclose all entries.
Page 1 of 6

 

--------------------------------------------------------------------------------

 

(RSS LOGO) [c05912c0591201.gif]

                              Amount         Nature of Rights &       (Cdn $)&  
Collateral Affected     Registration Details   Parties   Interest Rate  
(summary only)
 
  Ancillary Registrations & Comments:              
 
  • Nil.            
 
               
2.
  Rights resulting from a lease
# 06-0194340-0007
Date: April 12, 2006 at 2:52 p.m.
Expiry: April 3, 2012   Lessor:
Xerox Canada Ltd.
Lessee:
Warnaco of Canada Company Inc. (sic)   n/a   Equipment, other

All present and future office equipment and software supplied or financed from
time to time by the secured party (whether by lease, conditional sale or
otherwise), whether or not manufactured by the secured party or any affiliate
thereof.
 
               
 
  Ancillary Registrations & Comments:              
 
  • Nil.            
 
               
3.
  Rights resulting from a lease and assignment thereof
# 06-0118596-0062   Lessor:
Des Sources Dodge Chrysler Ltee
Assignee:   n/a   Dodge Grand Caravan SXT, 2006
S.N.: 2D4GP44L76R653741
 
  Date: March 9, 2006 at 2:57 p.m.
Expiry: May 16, 2009   Services Financiers DaimlerChrysler Canada Inc., acting
under its business name: Services Financiers Chrysler
Lessee:
Warnaco of Canada Company        

              Ancillary Registrations & Comments:
 
       
 
  •   The assignment grants all rights;
 
       
 
  •  
By an assignment of rights in Leases registered on April 27, 2007 under number
07-0226452-0001, DaimlerChrysler Financial Services Canada Inc., Services
Financiers DaimlerChrysler Canada Inc. and DaimlerChrysler Canada Inc. assigned
to Computershare Trust Company of Cnada (sic) acting as Trustee for King Street
Funding Trust, all right, title and interest of DCCI and DCFSC in the Designated
Eligible Leases, as more fully described in the registration (this registration
was modified by a rectification of an inscription dated June 21, 2007 under
number 07-0357060-0001);
 
       
 
  •  
By an assignment of the universality of claims and rights registered on May 12,
2008 under number 08-0269491-0001, King Street Funding Trust assigned to
Computershare Trust Company of Canada, acting as Trustee for DaimlerChrysler
Financial Services Canada Inc., Chrysler Canada Inc. and Services Financiers
DaimlerChrysler Canada Inc., all of the remaining rights of King Street Funding
Trust in and to a) the universality of claims and b) the rights resulting from
the leases registered at the RPMRR listed in the registration (as more fully
described in the registration);
 
       
 
  •  
By an assignment of rights registered on May 12, 2008 under number
08-0269497-0001, Chrysler Canada Inc. and DaimlerChrysler Financial Services
Canada Inc. assigned to Chrysler Lease Receivables Partnership, all of the
right, title and interest of each Assignor in and to all Québec Leases (other
than Excluded Québec Leases) and all Related Lease Rights and the rights of the
Assignors under the rights resulting from the leases registered at the RPMRR
listed in the registration (this registration was modified by a rectification of
an inscription dated May 30, 2008 under number 08-0315817-0001);

Page 2 of 6

--------------------------------------------------------------------------------

 

(RSS LOGO) [c05912c0591201.gif]

                                      Amount         Nature of Rights &      
(Cdn $) &   Collateral Affected     Registration Details   Parties   Interest
Rate   (summary only)
 
                        •  
By an assignment of rights registered on May 12, 2008 under number
08-0269500-0001, Chrysler Lease Receivables Partnership assigned to
Computershare Trust Company of Canada, acting as Trustee for Chrysler Lease
Trust, all right, title and interest of the Partnership in an to all Designated
Eligible Leases, including the Related lease Rights and the rights of the
Partnership under the rights resulting from the leases registered at the RPMRR
listed in the registration (this registration was modified by a rectification of
an inscription dated May 30, 2008 under number 08-0315817-0004).

                 
4.
  Conventional hypothec without delivery
# 05-0176608-0003
Date: April 1, 2005 at 9:00 a.m.
Expiry: April 1, 2015   Holder:
Bank of America, National Association
Grantor:
Warnaco of Canada Company Warnaco of Canada Company, acting under its business
name: Warnaco du Canada   $25,000,000

25% per annum  
The universality of all of the Grantor’s movable property, present and future,
corporeal and incorporeal, of whatever nature and kind and wheresoever situated
(hereinafter collectively called the “Collateral”), including, without
limitation, all tools and equipment pertaining to the enterprises of the
Grantor, all claims and customer accounts, all securities, all patents,
trademarks and other intellectual property rights and all corporeal movables
included in the assets of any of the Grantor’s enterprises kept for sale, lease
or processing in the manufacture or transformation of property intended for
sale, for lease or for use in providing a service.
 
 
  Ancillary Registrations & Comments:        
 
  • Nil.            
 
               
5.
  Conventional hypothec without delivery
# 05-0176608-0002
Date: April 1, 2005 at 9:00 a.m.
Expiry: April 1, 2015   Holder:
Bank of America, National Association
Grantor:
Warnaco of Canada Company Warnaco of Canada Company, acting under its business
name: Warnaco du Canada   $25,000,000

25% per annum  
The universality of all of the Grantor’s movable property, present and future,
corporeal and incorporeal, of whatever nature and kind and wheresoever situated
(hereinafter collectively called the “Collateral”), including, without
limitation, all tools and equipment pertaining to the enterprises of the
Grantor, all claims and customer accounts, all securities, all patents,
trademarks and other intellectual property rights and all corporeal movables
included in the assets of any of the Grantor’s enterprises kept for sale, lease
or processing in the manufacture or transformation of property intended for
sale, for lease or for use in providing a service.

Page 3 of 6

--------------------------------------------------------------------------------

 

(RSS LOGO) [c05912c0591201.gif]

                              Amount         Nature of Rights &       (Cdn $) &
  Collateral Affected     Registration Details   Parties   Interest Rate  
(summary only)
 
  Ancillary Registrations & Comments:

•      Nil.          
 
               
6.
  Rights resulting from a lease
# 04-0526417-0011
Date: September 9, 2004 at 2:58 p.m.
Expiry: September 8, 2010   Lessor: Xerox Canada Ltd
Lessee: Warnaco of Canada Company   n/a   Equipment, other

All present and future office equipment and software supplied or financed from
time to time by the secured party (wheather (sic) by lease, conditional sale or
otherwise), whether or not manufactured by the secured party or any affiliate
thereof.
 
               
 
  Ancillary Registrations & Comments:

•      Nil.            
 
               
7.
  Rights of ownership of the
Lessor under a leasing contract
or crédit-bail
# 03-0632560-0001
Date: November 26, 2003 at
10:18 a.m.
Expiry: October 30, 2008   Lessor (crédit-bailleur):
Équipements G.N. Johnston Ltée
Lessee (crédit-preneur):
Warnaco du Canada (sic)   n/a   Chariots Raymond Model: EASI-OPC30TT
S.N.: EASI-03-AL33171, EASI-03-AL33172, EASI-03-AL33173, EASI-03-AL33174
Batteries Oldham model: 12-125-13
S.N.: D28333, D28334, D28335, D28336
 
               
 
  Ancillary Registrations & Comments:

•      Nil.            
 
               
8.
  Change of name
# 01-0301961-0003
Date: August 21, 2001 at 1:49 p.m.
Expiry: n/a   Old name:
Warnaco of Canada Limited
Warnaco du Canada Limitée
New name:
Warnaco of Canada Company / Compagnie Warnaco du Canada Warnaco of Canada
Company Compagnie Warnaco du Canada   n/a   n/a
 
               
 
  Ancillary Registrations & Comments:
                  •      This change of name affects a Rights of ownership of
the Lessor under a leasing contract or crédit-bail (refer to #9 for
       references).

 

Page 4 of 6

--------------------------------------------------------------------------------

 

(RSS LOGO) [c05912c0591201.gif]

                              Amount         Nature of Rights &       (Cdn $)&  
Collateral Affected     Registration Details   Parties   Interest Rate  
(summary only)
9.
  Rights of ownership of the
Lessor under a leasing
contract or crédit-bail
(Global registration
(art. 2961.1 C.c.Q.))
# 00-0207115-0008
Date: July 25, 2000 at 9:00 a.m.
Expiry: July 24, 2010   Lessor (crédit-bailleur):
PHH Vehicle Management Services Inc.
Lessee (crédit-preneur):
Warnaco of Canada Limited
Warnaco du Canada Limitee   n/a  
All present and future motor vehicles (including, without limitation, passenger
automobiles, trucks, truck tractors, truck trailers, truck chassis, or truck
bodies), automotive equipment (including, without limitation, trailers, boxes
and refrigeration units), and materials-handling equipment leased from time to
time by the Lessor to the Lessee, together with all present and future
attachments, accessions, appurtenances, accessories and replacement parts, and
all proceeds of or relating to any of the foregoing.

Ancillary Registrations & Comments:

  •  
By an assignment of rights registered on September 14, 2000 under number
00-0274576-0001, PHH Vehicle Management Services Inc. and PHH Services de
Gestion de Vehicules Inc. assigned to TD Trust Company, acting as Trustee for
Leaf Trust, all of the Assignor’s rights which have been registered at the RPMRR
and listed in the registration;
    •  
By an assignment of rights registered on September 14, 2000 under number
00-0274576-0002, PHH Vehicle Management Services Inc. and PHH Services de
Gestion de Vehicules Inc. assigned to TD Trust Company, acting as Trustee for
Leaf Trust, all of the Assignor’s rights which have been registered at the RPMRR
and listed in the registration;
    •  
By an assignment of rights registered on September 14, 2000 under number
00-0274576-0003, PHH Vehicle Management Services Inc. and PHH Services de
Gestion de Vehicules Inc. assigned to TD Trust Company, acting as Trustee for
Leaf Trust, all of the Assignor’s rights which have been registered at the RPMRR
and listed in the registration;
    •  
By an assignment of rights registered on September 14, 2000 under number
00-0274576-0004, PHH Vehicle Management Services Inc. and PHH Services de
Gestion de Vehicules Inc. assigned to TD Trust Company, acting as Trustee for
Leaf Trust, all of the Assignor’s rights which have been registered at the RPMRR
and listed in the registration;
    •  
Change of name (refer to #8 for references);
    •  
By a modification a of published right registered on September 5, 2003 under
number 03-0465017-0009, the address of PHH Vehicle Management Services Inc. was
changed.

 

Page 5 of 6

--------------------------------------------------------------------------------

 

(RSS LOGO) [c05912c0591201.gif]

     
Name(s) searched:

     
Current name(s)
  •      4278941 Canada Inc.
 
   
Previous name(s) (as disclosed per corporate search)
  •      Nil.
 
   
Trade name(s)
  •      Nil.

     
Date of search:
  August 5, 2008
Date and time of certification of the RPMRR:
  August 5, 2008 at 1:10 p.m.

                              Amount                 (Cdn $) &         Nature of
Rights &       Interest   Collateral Affected     Registration Details   Parties
  Rate   (summary only)
1.
  Clear            
 
               
 
  Ancillary Registrations & Comments:

•      Nil.            

 

Page 6 of 6

--------------------------------------------------------------------------------

 

SCHEDULE “A”
Searches and Inquiries
We have conducted searches in the Province of Nova Scotia with respect to
Warnaco of Canada Company and the following predecessor names:
•       Compagnie Warnaco du Canada

•       Warnaco of Canada Limited

•       Warnaco du Canada Limitée

•       3024368 Nova Scotia Company

•       Authentic Fitness of Canada Inc.

•       Condition Physique Authentique du Canada Inc.

•       171173 Canada Inc.

•       4278941 Canada Inc.
The results of our searches are as follows:
Corporate
Warnaco of Canada Company was formed by the amalgamation under the laws of Nova
Scotia of Authentic Fitness of Canada Inc. and Warnaco of Canada
Company/Compagnie Warnaco du Canada effective January 4, 2004. The company is up
to date with respect to the filing of its annual returns.
Personal Property Security Act (includes any outstanding executions)
(current to August 22, 2008 for Warnaco of Canada Company and August 11, 2008
for all other names)
PPSA Registration No. 9369578
Debtor: Warnaco of Canada Company
Secured Party: Bank of America, N.A.
Registration Date (and Term): 2005-03-22 (10 years)
Collateral Description: A security interest is taken in all of the debtor’s
present and after-acquired personal property.
Note — This registration was discharged by discharge statement no. 14337869
entered 2008-08-25 but remains searchable for a period of thirty days from the
date of discharge.
PPSA Registration No. 9369630
Debtor: Warnaco of Canada Company
Secured Party: Bank of America, National Association
Registration Date (and Term): 2005-03-22 (10 years)
Collateral Description: A security interest is taken in all of the debtor’s
present and after-acquired personal property.
Note — This registration was discharged by discharge statement no. 14338024
entered 2008-08-25 but remains searchable for a period of thirty days from the
date of discharge.

 

 

--------------------------------------------------------------------------------

 

PPSA Registration No. 14333355
Debtor: Warnaco of Canada Company
Secured Party: Bank of America, N.A., as Collateral Agent
Registration Date (and Term): 2008-08-22 (7 years)
Collateral Description: A security interest is taken in all of the debtor’s
present and after-acquired personal property.
Bank Act (Canada)
We have received certificates from the Canadian Securities Registration Systems
each dated August 11, 2008, confirming that there are no outstanding
registrations under the Bank Act (Canada) at the Halifax Office of the Bank of
Canada with respect to Warnaco of Canada Company or any of the predecessor
names.
Bankruptcy and Insolvency Act (Canada)
We have obtained certificates from the Office of the Superintendent of
Bankruptcy, Industry Canada each dated August 14, 2008, indicating that a name
search has been made of the public record kept by the Superintendent for all of
the Districts and divisions in Canada under the Bankruptcy and Insolvency Act
(Canada) and that the public record was found to contain no facts nor any
reference to Warnaco of Canada Company or any of the predecessor names from 1978
to 2008/08/11.

 

- 2 -

--------------------------------------------------------------------------------

 

CONFIDENTIAL TREATMENT
SCHEDULE 8.3
EXISTING INVESTMENTS
STOCK
None.
NOTES RECEIVABLE

                          Commencement   Remaining   Status (as of EOM Customer
  Original Amount   Date   Balance   12/2007) ***   ***   May-03   ***   In
Collections ***   ***   Dec-03   ***   In Collections ***   ***   Dec-03   ***  
Current

INTERCOMPANY DEBT

          Creditor   Debtor   Amount (USD)
Warnaco B.V.
  Eratex GmbH   ***
Eratex GmbH
  Warnaco B.V.   ***
Lintex-Warnaco S.a.r.l.
  Warnaco B.V.   ***
Lintex-Warnaco S.a.r.l.
  Warnaco B.V.   ***
Lenitex-Warnaco Handelsgesellschaft
  Warnaco B.V.   ***
Warnaco B.V.
  Aiglon   ***
Warnaco Netherlands B.V.
  Eratex GmbH   ***
Mullion International Limited
  Warnaco B.V.   ***
WF Overseas Fashion C.V.
  Warnaco B.V.   ***
WF Overseas Fashion C.V.
  (Warnaco B.V.   ***
Warnaco B.V.
  Warnaco Poland Sp.zo.o   ***
Warnaco Inc.
  CKJ UK Ltd.   ***
Warnaco B.V.
  Warnaco Germany GmbH   ***
Warnaco Inc.
  CK Jeanswear Asia Ltd.   ***
Warnaco B.V.
  Warner’s (United Kingdom) Limited   ***
Warnaco (H.K.), Ltd.
  Warnaco Taiwan Co. Ltd.   ***
WF Overseas Fashion C.V.
  Warnaco France S.A.R.L.   ***
WF Overseas Fashion C.V.
  CK Jeanswear Europe S.r.l.   ***
WF Overseas Fashion C.V.
  CKJ UK Ltd.   ***
WF Overseas Fashion C.V.
  CK Jeanswear Australia Pty Limited   ***
Euro Retail S.r.l.
  WF Overseas Fashion C.V.   ***
Warnaco of Canada Company
  WF Overseas Fashion C.V.   ***
Mullion International Limited
  WF Overseas Fashion C.V.   ***
Designer Holdings Ltd.
  Calvin Klein Jeanswear Company   ***
Warnaco Inc.
  Ocean Pacific Apparel Corp.   ***

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 8.4
ASSET SALES
None.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A
TO
CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE dated as of                           , 20_____
between [NAME OF ASSIGNOR] (the “Assignor”) and [NAME OF ASSIGNEE] (the
“Assignee”).
Reference is made to the Credit Agreement, dated as of August  _____, 2008 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among Warnaco Inc., as borrower (the
“Borrower”), The Warnaco Group, Inc., the Lenders and Issuers party thereto,
Bank of America, N.A., as administrative agent for the Revolving Credit Facility
(in such capacity, the “Administrative Agent”) and as Collateral Agent for the
Lenders and the Issuers (together with the Administrative Agent, the “Facility
Agents”), and the other Persons party thereto. Capitalized terms used herein and
not otherwise defined herein are used herein as defined in the Credit Agreement.
The Assignor and the Assignee hereby agree as follows:

1.  
As of the Effective Date (as defined below), the Assignor hereby sells and
assigns to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, all of the Assignor’s rights and obligations under the Credit
Agreement to the extent related to the amounts and percentages specified on
Section 1 of Schedule I hereto.

2.  
The Assignor (a) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim, (b) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Loan Document or any other instrument or document furnished pursuant thereto or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other Loan Document or any other instrument
or document furnished pursuant thereto and (c) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Warnaco Entity or the performance or observance by any Loan Party of any
of its obligations under the Credit Agreement or any other Loan Document or any
other instrument or document furnished pursuant thereto.

3.  
The Assignee (a) agrees that it will, independently and without reliance upon
the Facility Agents, the Assignor 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 the Credit
Agreement, (b) appoints and authorizes each Facility Agent to take such action
as agent on its behalf and to exercise such powers under the Credit Agreement
and the other Loan Documents as are delegated to each such Facility Agent by the
terms thereof, together with such powers as are reasonably incidental thereto,
(c) agrees that it will perform in accordance with their terms all of the
obligations that, by the terms of the Credit Agreement, are required to be
performed by it as a Lender, (d) represents and warrants that it is an Eligible
Assignee, (e) confirms it has received such documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance, (f) specifies as its Domestic Lending Office
(and address for notices) and Eurodollar Lending Office the offices set forth
beneath its name on the signature pages hereof and (g) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying as to
the Assignee’s status for purposes of determining exemption from, or a reduced
rate of withholding of, United States withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement if required to
establish such exemption or reduction of withholding for such Assignee.

 

 

--------------------------------------------------------------------------------

 

4.  
Following the execution of this Assignment and Acceptance by the Assignor and
the Assignee, it will be delivered to the Administrative Agent (together with an
assignment fee in the amount of $3,500 payable by the Assignee to the
Administrative Agent pursuant to Section 11.2(b)(Assignments and
Participations)) for acceptance and recording in the Register by the
Administrative Agent. The effective date of this Assignment and Acceptance shall
be the effective date specified in Section 2 of Schedule I hereto (the
“Effective Date”).

5.  
Upon such acceptance and recording in the Register by the Administrative Agent,
then, as of the Effective Date, (a) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations under the Credit Agreement of a Lender and, if such
Lender were an Issuer, of such Issuer and (b) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights (except those
surviving 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 the Effective Date.

6.  
Upon such acceptance and recording in the Register by the Administrative Agent,
from and after the Effective Date, the Administrative Agent shall make all
payments under the Loan Documents in respect of the interest assigned hereby
(a) to the Assignee, in the case of amounts accrued with respect to any period
on or after the Effective Date, and (b) to the Assignor, in the case of amounts
accrued with respect to any period prior to the Effective Date.

7.  
This Assignment and Acceptance shall be governed by, and be construed and
interpreted in accordance with, the internal law of the State of New York.

 

 

--------------------------------------------------------------------------------

 

8.  
This Assignment and Acceptance may be executed in any number of counterparts and
by different parties on separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement. Delivery of an executed counterpart
of this Assignment and Acceptance by telecopier or electronic transmission (in
pdf format) shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.

[SIGNATURE PAGES FOLLOW]

 

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written.

            [NAME OF ASSIGNOR], as Assignor
      By:           Name:        Title:         [NAME OF ASSIGNEE], as Assignee
      By:           Name:        Title:      

Domestic Lending Office (and address for notices):
[Insert Address (including contact name, fax number and e-mail address)]
Eurodollar Lending Office:
[Insert Address (including contact name, fax number and e-mail address)]

         

 

 

--------------------------------------------------------------------------------

 

ACCEPTED AND AGREED
this  _____  day of  _____  20_____:
BANK OF AMERICA, N.A.,
as Administrative Agent

         
By:
       
 
 
 
Name:    
 
  Title:    

1[CONSENTED TO:
WARNACO INC.

         
By:
       
 
 
 
Name:    
 
  Title:]    

 

1  
If consent is required under Credit Agreement

 

 

--------------------------------------------------------------------------------

 

SCHEDULE I
TO
ASSIGNMENT AND ACCEPTANCE
SECTION 1.

         
Ratable Portion assigned to Assignee:
      %
 
       
Revolving Credit Commitment assigned to Assignee:
  $    
 
       
Aggregate Outstanding Principal Amount of Revolving Loans Assigned to Assignee:
  $    
 
     

SECTION 2.

      Effective Date:                                , 20       

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B
TO
CREDIT AGREEMENT
FORM OF NOTICE OF BORROWING
BANK OF AMERICA, N.A.,
     as Administrative Agent under the
     Credit Agreement referred to below
335 Madison Avenue
New York, New York 10017
                             , 20       
Attention:                     
Re: Warnaco Inc. (the “Borrower”)
Reference is made to the Credit Agreement, dated as of August          , 2008
(as the same may be amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among the Borrower, The Warnaco Group,
Inc., the Lenders and Issuers party thereto, Bank of America, N.A., as
administrative agent for the Revolving Credit Facility (in such capacity, the
“Administrative Agent”) and as Collateral Agent for the Lenders and the Issuers,
and certain other Persons. Capitalized terms used herein and not otherwise
defined herein are used herein as defined in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section 2.2
(Borrowing Procedures) of the Credit Agreement that the undersigned hereby
requests a Borrowing of Revolving Loans under the Credit Agreement and, in that
connection, sets forth below the information relating to such Borrowing (the
“Proposed Borrowing”) as required by Section 2.2 (Borrowing Procedures) of the
Credit Agreement:

  (a)  
The date of the Proposed Borrowing is                                 ,
20             (the “Funding Date”).

  (b)  
The aggregate amount of the Proposed Borrowing is $                    , of
which amount [$                     consists of Base Rate Loans] [and
$                     consists of Eurodollar Rate Loans having an initial
Interest Period of [one] [two] [three] [six] month[s]].

  (c)  
The Available U.S. Credit (after giving effect to the Proposed Borrowing) is
$                    .

 

 

--------------------------------------------------------------------------------

 

The undersigned hereby certifies that the following statements are true on the
date hereof and shall be true on the Funding Date both before and after giving
effect to the Proposed Borrowing and to the application of the proceeds
therefrom:
Section 1.01 the representations and warranties set forth in Article IV
(Representations and Warranties) of the Credit Agreement and in the other Loan
Documents are true and correct [in all material respects]2 on and as of the
Funding Date with the same effect as though made on and as of such date, except
to the extent any such representation or warranty expressly relates to an
earlier date, in which case such representation or warranty shall have been true
and correct as of such earlier date; and

  (d)  
no Default or Event of Default has occurred and is continuing on the Funding
Date.

[The undersigned hereby irrevocably authorizes and directs the Administrative
Agent to disburse the proceeds of the Proposed Borrowing in accordance with the
instructions set forth on Schedule 1 hereto.]3

            WARNACO INC.
      By:           Name:           Title:      

 

        2  
Insert for any Proposed Borrowing after the Closing Date.
  3  
Insert only for Proposed Borrowing on the Closing Date.

 

 

--------------------------------------------------------------------------------

 

[Schedule 1 to Notice of Borrowing]4
Disbursement Instructions
 

        4  
Insert only for Proposed Borrowing on the Closing Date.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT C
TO
CREDIT AGREEMENT
FORM OF SWING LOAN REQUEST
BANK OF AMERICA, N.A.,
     as Administrative Agent under the
     Credit Agreement referred to below
335 Madison Avenue
New York, New York 10017
                              , 20          
Attention:                     
Re: Warnaco Inc. (the “Borrower”)
Reference is made to the Credit Agreement, dated as of August         , 2008 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among the Borrower, The Warnaco Group, Inc.,
the Lenders and Issuers party thereto, Bank of America, N.A., as administrative
agent for the Revolving Credit Facility (in such capacity, the “Administrative
Agent”) and as Collateral Agent for the Lenders and the Issuers, and certain
other Persons. Capitalized terms used herein and not otherwise defined herein
are used herein as defined in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section 2.3(b)
(Swing Loans) of the Credit Agreement that the undersigned hereby requests a
Swing Loan under the Credit Agreement and, in that connection, sets forth below
the information relating to such Swing Loan (the “Proposed Swing Loan”) as
required by Section 2.3(b) (Swing Loans) of the Credit Agreement:

  (e)  
The date of the Proposed Swing Loan is                                 ,
20         (the “Funding Date”).

  (f)  
The amount of the Proposed Swing Loan is $                    .

  (g)  
The Available U.S. Credit (after giving effect to the Proposed Swing Loan) is
$                    .

 

 

--------------------------------------------------------------------------------

 

The undersigned hereby certifies that the following statements are true on the
date hereof and shall be true on the Funding Date both before and after giving
effect to the Proposed Swing Loan and to the application of the proceeds
therefrom:
Section 1.01 the representations and warranties set forth in Article IV
(Representations and Warranties) of the Credit Agreement and in the other Loan
Documents are true and correct [in all material respects]5 on and as of the
Funding Date with the same effect as though made on and as of such date, except
to the extent any such representation or warranty expressly relates to an
earlier date, in which case such representation or warranty shall have been true
and correct as of such earlier date; and

  (h)  
no Default or Event of Default has occurred and is continuing on the Funding
Date.

[The undersigned hereby irrevocably authorizes and directs the Administrative
Agent to disburse the proceeds of the Proposed Swing Loan in accordance with the
instructions set forth on Schedule 1 hereto.]6

            WARNACO INC.
      By:           Name:           Title:      

 

        5  
Insert for any Proposed Borrowing after the Closing Date.
  6  
Insert only for Proposed Borrowing on the Closing Date.

 

 

--------------------------------------------------------------------------------

 

[Schedule 1 to Swing Loan Request]7
Disbursement Instructions
 

        7  
Insert only for Proposed Borrowing on the Closing Date.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT D
TO
CREDIT AGREEMENT
FORM OF LETTER OF CREDIT REQUEST
BANK OF AMERICA, N.A.,
     as Administrative Agent under the
     Credit Agreement referred to below
335 Madison Avenue
New York, New York 10017
                                , 20           
Attention:                     
Re: Warnaco Inc. (the “Borrower”)
Reference is made to the Credit Agreement, dated as of August       , 2008 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among the Borrower, The Warnaco Group, Inc.,
the Lenders and Issuers party thereto, Bank of America, N.A., as administrative
agent for the Revolving Credit Facility (in such capacity, the “Administrative
Agent”) and as Collateral Agent for the Lenders and the Issuers, and certain
other Persons. Capitalized terms used herein and not otherwise defined herein
are used herein as defined in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section 2.4(c)
(Letters of Credit) of the Credit Agreement that the undersigned requests the
issuance of a Letter of Credit by [Name of Issuer] in the form of a [standby]
[documentary] letter of credit for the benefit of [Name of Beneficiary], in the
amount of [$                    ] [Amount in Alternative Currency (the Dollar
Equivalent of which is                      as of the date hereof)], to be
issued on                     ,                      (the “Issue Date”) and
having an expiration date of                     ,                     .
The form of the requested Letter of Credit is attached hereto.
The undersigned hereby certifies that the following statements are true on the
date hereof (with respect to clauses (d) and (e) only) and shall be true on the
Issue Date both before and after giving effect to the issuance of the Letter of
Credit requested hereby:
(i) the aggregate amount of the Letter of Credit Obligations then outstanding
will not exceed the Letter of Credit Sub-Limit;

 

 

--------------------------------------------------------------------------------

 

(j) 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 in effect;
(k) the representations and warranties set forth in Article IV (Representations
and Warranties) of the Credit Agreement and in the other Loan Documents are true
and correct [in all material respects]8 with the same effect as though made on
and as of the date hereof, or the Issue Date, as the case may be, except to the
extent any such representation or warranty expressly relates to an earlier date,
in which case such representation or warranty shall have been true and correct
as of such earlier date; and
(l) no Default or Event of Default has occurred and is continuing on the date
hereof or the Issue Date.

            WARNACO INC.
      By:           Name:           Title:        

 

        8  
Insert for any Proposed Issuance after the Closing Date.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT E
TO
CREDIT AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
See attached.

 

 

--------------------------------------------------------------------------------

 

CONFIDENTIAL TREATMENT
WARNACO, GROUP
AVAILABILITY SCHEDULE (000’s)

              Gordon         Brothers Exam   Current     7/5/2008   8/2/2008  
Gross Accounts Receivable
  ***   ***
 
       
Ineligible A/R
       
Over *** Days
  ***   ***
Aged Credits
  ***   ***
Cross-Aged
  ***   ***
Dr Memo / Chargebacks
  ***   ***
Cr & Rebill Refreshed
  ***   ***
Contra
  ***   ***
Concentration
  ***   ***
Bankruptcy/Credit Hold
  ***   ***
***+ TERMS
  ***   ***
Foreign
  ***   ***
Government
  ***   ***
***-*** TERMS ***+ OS
  ***   ***
 
  ***   ***
Other
  ***   ***
Total Ineligible A/R
  ***   ***
Net Eligible A/R
  ***   ***
Advance Rate
  ***   ***
 
       
Eligible A/R @ Adv %
  ***   ***
Less: Dilution Reserve (***-***=***)
  ***   ***
Less: Other Reserve
  ***   ***
 
       
Eligible A/R @ Adv %, net of Reserves
  ***   ***
Sub Limit
  ***   ***
 
       
A/R Availability
  ***   ***
 
       
 
       
Gross Inventory
  ***   ***
 
       
Ineligible Inventory
  ***   ***
In-transit Inventory
  ***   ***
Off Site & Foreign Locations
  ***   ***
Reserve for FG Markdowns
  ***   ***
Misc Inventory Adjustments
  ***   ***
Capitalized Variances Reserve
  ***   ***
Obsolete Inventory
  ***   ***
Royalties
  ***   ***
Shrink Reserve
  ***   ***
Other
  ***   ***
0
  ***   ***
0
  ***   ***
 
       
Total Ineligible Inventory
  ***   ***
 
       
Net Eligible Inventory
  ***   ***
*** of NOLV of *** = *** 
  ***   ***
 
       

 

 

--------------------------------------------------------------------------------

 

CONFIDENTIAL TREATMENT

              Gordon         Brothers Exam   Current     7/5/2008   8/2/2008  
Eligible Inventory @ Adv %
  ***   ***
Less: Rents and Fees on Leased Inv. Locations
  ***   ***
Less: AP to Outside Processors
  ***   ***
Less: Royalties (Future)
  ***   ***
Less: Other2
  ***   ***
 
       
Eligible Inventory @ Adv %, net of Reserves
  ***   ***
 
       
Gross Inventory at __% of OLV %
  ***   ***
Sub Limit
  ***   ***
 
       
Inventory Availability
  ***   ***
 
       
 
       
L/C’S DOCUMENTARY *** of NOLV of*** = ***/intransit
  ***   ***
ACCRUED DOMESTIC ROYALTIES
  ***   ***
Cash Collateral (reflects estimated cash on hand at closing)
  ***   ***
 
       
Total Other Availability/Credit Products Reserve
  ***   ***
 
       
 
       
Gross Availability
  ***   ***
Line Amount
  ***   ***
 
       
ADJUSTED GROSS AVAILABILITY
  ***   ***
 
       
 
       
Revolving Loan Balance including accrued fees & interest
  ***   ***
Letters of Credit [reflects estimated CITI L/C]
  ***   ***
AP Amount to Vendors with Lien/Security Interests
  ***   ***
Delinquent Payables (One time only at closing)
  ***   ***
Minimum Excess Availability
  ***   ***
 
       
Loan Exposures
  ***   ***
 
       
 
       
NET AVAILABILITY / (SHORTFALL)
  ***   ***
 
       

 

 

--------------------------------------------------------------------------------

 

EXHIBIT F
TO
CREDIT AGREEMENT
FORM OF NOTICE OF CONVERSION OR CONTINUATION
BANK OF AMERICA, N.A.,
     as Administrative Agent under the
      Credit Agreement referred to below
335 Madison Avenue
New York, New York 10017
                                            , 20               

         
Attention:
       
 
 
 
   

Re: Warnaco Inc. (the “Borrower”)
Reference is made to the Credit Agreement, dated as of August
                    , 2008 (as the same may be amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among the
Borrower, The Warnaco Group, Inc., the Lenders and Issuers party thereto, Bank
of America, N.A., as administrative agent for the Revolving Credit Facility (in
such capacity, the “Administrative Agent”) and as Collateral Agent for the
Lenders and the Issuers, and certain other Persons. Capitalized terms used
herein and not otherwise defined herein are used herein as defined in the Credit
Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section 2.11
(Conversion/Continuation Option) of the Credit Agreement that the undersigned
hereby requests a [conversion] [continuation] on                    ,
                     of $                     in principal amount of presently
outstanding Revolving Loans that are [Base Rate Loans] [Eurodollar Rate Loans
having an Interest Period ending on                    ,                     
][to] [as] [Base Rate][Eurodollar Rate] Loans. [The Interest Period for such
amount requested to be converted to or continued as Eurodollar Rate Loans is
[[one] [two] [three] [six] month[s]].

 

 

--------------------------------------------------------------------------------

 

In connection herewith, the undersigned hereby certifies that no Default or
Event of Default has occurred and is continuing on the date hereof.

            WARNACO INC.
      By:           Name:                      Title:                

 

 

--------------------------------------------------------------------------------

 

         

EXHIBIT G
TO
CREDIT AGREEMENT
FORM OF OPINION OF COUNSEL FOR THE LOAN PARTIES
See attached.

 

 

--------------------------------------------------------------------------------

 

(LETTER HEAD) [c05912c0591202.gif]
August 26, 2008
Bank of America, N.A.,
      in its capacities as Administrative Agent and Collateral Agent
335 Madison Avenue
New York, New York 10017
the Lenders and Issuers listed on Schedule A hereto
Re: Warnaco Inc. Credit Agreement
Ladies and Gentlemen:
We have acted as special counsel to The Warnaco Group, Inc., a Delaware
corporation (“Group”), Warnaco Inc., a Delaware corporation (the “Borrower”),
and each of the other direct and indirect subsidiaries of Group listed on
Schedule I hereto (each, a “Subsidiary” and, together with the Borrower and
Group, the “Loan Parties” and each a “Loan Party”) in connection with the
preparation, execution and delivery of: (i) the Credit Agreement, dated as of
August 26, 2008 (the “Credit Agreement”), among the Borrower, Group, the Lenders
parties thereto, the Issuers parties thereto, Bank of America, N.A. (“BOA”), as
administrative agent (in such capacity, the “Administrative Agent”) and as
collateral agent for the Lenders and the Issuers, Banc of America Securities LLC
and Deutsche Bank Securities Inc., as Joint Lead Arrangers, Banc of America
Securities LLC, Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc.,
as Joint Bookrunners, Deutsche Bank Securities Inc., as Sole Syndication Agent
and HSBC Business Credit (USA) Inc., JPMorgan Chase Bank, N.A., and RBS Business
Capital, a division of RBS Asset Finance Inc., as Co-Documentation Agents;
(ii) the Pledge and Security Agreement, dated as of August 26, 2008 (the
“Security Agreement”), by each Loan Party, collectively as grantors, in favor of
BOA, in its capacity as collateral agent for the benefit of the Secured Parties
(as defined therein) (in such capacity, the “Collateral Agent”); and
(iii) certain other agreements, instruments and documents related to the Credit
Agreement. This opinion is being delivered pursuant to Section 3.1(a)(viii) of
the Credit Agreement.

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
      Agent and Collateral Agent
August 26, 2008
Page 2
In our examination, we have assumed the genuineness of all signatures including
endorsements, the legal capacity and competency of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as facsimile, electronic,
certified or photostatic copies, and the authenticity of the originals of such
copies. As to any facts relevant to this opinion which we did not independently
establish or verify, we have relied upon statements and representations of the
Loan Parties and their officers and other representatives, including the Loan
Parties’ Certificate described below, and of public officials, including the
facts and conclusions set forth therein.
In rendering the opinions set forth herein, we have examined and relied on
originals or copies of the following:
(a) the Credit Agreement;
(b) the Security Agreement;
(c) the Guaranty, dated as of August 26, 2008 (the “Guaranty”), by Group and
each of Group’s subsidiaries which are parties thereto in favor of the
Guarantied Parties (as defined therein);
(d) the Trademark Security Agreement, dated as of August 26, 2008, by Warnaco
Inc., Warnaco U.S., Inc., Warnaco Swimwear Inc., Warnaco Swimwear Products Inc.
and CCC Acquisition Corp. in favor of the Collateral Agent;
(e) the Copyright Security Agreement, dated as of August 26, 2008, by Warnaco
Inc., Warnaco U.S., Inc., Warnaco Swimwear Inc. and Warnaco Swimwear Products
Inc. in favor of the Collateral Agent;
(f) the Patent Security Agreement, dated as of August 26, 2008, by Warnaco Inc.,
Warnaco U.S., Inc., Warnaco Swimwear Inc., Warnaco Swimwear Products Inc. and
CCC Acquisition Corp. in favor of the Collateral Agent;

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
      Agent and Collateral Agent
August 26, 2008
Page 3
(g) the fee letter, dated August 26, 2008, among the Borrower, BOA and Banc of
America Securities LLC;
(h) an unfiled copy of a separate financing statement for each of Group,
Borrower and each of the entities listed on Part 1-A of Schedule I hereto
(together with Group and Borrower, each, a “Delaware Loan Party”), each
identifying a different Delaware Loan Party, as debtor, and all identifying
“Bank of America, N.A., as Collateral Agent”, as secured party, each of which we
understand will be filed in the office of the Secretary of State of the State of
Delaware (such filing office, the “Delaware Filing Office” and such financing
statements, the “Delaware Financing Statements”);
(i) the Possessory Certificates (as defined herein);
(j) the certificate of the Vice President of each of Group and Borrower, dated
the date hereof, a copy of which is attached as Exhibit A hereto (the “Loan
Parties’ Certificate”);
(k) copies of the certificate of incorporation (“Certificates of Incorporation”)
of each Delaware Loan Party, certified by the Secretary of State of the State of
Delaware, on August 1, 2008, August 4, 2008, August 6, 2008 and August 19, 2008,
as applicable, and certified by the Assistant Secretary or Vice President of
each Delaware Loan Party, as applicable, as of the date hereof;
(1) copies of the bylaws (together with the Certificates of Incorporation, the
“Organizational Documents”), of each Delaware Loan Party, certified by the
Secretary of each Delaware Loan Party as of the date hereof;
(m) certified copies of certain resolutions of the board of directors of each
Delaware Loan Party certified by the Assistant Secretary or Vice President of
each Delaware Loan Party, as applicable, as of the date hereof;
(n) certificates, dated August 1, 2008, August 4, 2008, August 12, 2008 and
August 19, 2008, as applicable, and facsimile bringdowns thereof, dated the date
hereof, from the Secretary of State of the State of Delaware as to the existence
and good standing in the State of Delaware of each Delaware Loan Party (the
“Delaware Good Standing Certificates”); and

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
      Agent and Collateral Agent
August 26, 2008
Page 4
(o) such other documents as we have deemed necessary or appropriate as a basis
for the opinions set forth below.
We express no opinion as to the laws of any jurisdiction (including, without
limitation, the laws of the State of Nevada and laws of the foreign countries
listed on Schedule III hereto) other than (i) the Applicable Laws of the State
of New York, (ii) the Applicable Laws of the United States of America
(including, without limitation, Regulations U and X of the Federal Reserve
Board), (iii) the General Corporation Law of the State of Delaware (the “DGCL”)
and (iv) solely the UCC (as defined below) for purposes of our opinions in
paragraphs 8 through 12.
Capitalized terms used and not otherwise defined herein shall have the same
meanings herein as ascribed thereto in the Credit Agreement. The documents
identified in clauses (a) through (g) above shall hereinafter be referred to
collectively as the “Transaction Agreements.” As used herein:
“Applicable Contracts” means those agreements or instruments set forth on
Schedule I to the Loan Parties’ Certificate;
“Applicable Laws” means those laws, rules and regulations which, in our
experience, are normally applicable to transactions of the type contemplated by
the Transaction Agreements, without our having made any special investigation as
to the applicability of any specific law, rule or regulation, and which are not
the subject of a specific opinion herein referring expressly to a particular law
or laws;
“Applicable Orders” means those orders or decrees of governmental authorities
identified on Schedule II to the Loan Parties’ Certificate;
“Delaware UCC” means the Uniform Commercial Code as in effect on the date hereof
in the State of Delaware (without regard to laws referenced in Section 9-201
thereof);
“Governmental Approval” means any consent, approval, license, authorization or
validation of, or filing, recording or registration with, any governmental
authority pursuant to the Applicable Laws of the State of New York or the
Applicable Laws of the United States of America;

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
      Agent and Collateral Agent
August 26, 2008
Page 5
“New York UCC” means the Uniform Commercial Code as in effect on the date hereof
in the State of New York (without regard to laws referenced in Section 9-201
thereof);
“Possessory Certificates” means those certificates identified on Schedule II
hereto and delivered to the Collateral Agent on the date hereof;
“UCC” means (a) the New York UCC and (b) the Delaware UCC, as applicable; and
“UCC Collateral” means that portion of the Collateral (as such term is defined
in the Security Agreement), including the Possessory Certificates, to the extent
the New York UCC governs the creation of a security interest in such collateral.
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:
1. Based solely on our review of the Delaware Good Standing Certificates, each
Delaware Loan Party is validly existing and in good standing under the DGCL.
2. Each Delaware Loan Party has the corporate power and authority to execute,
deliver and perform all of its obligations under each of the Transaction
Agreements to which it is a party under the DGCL. The execution and delivery by
each Delaware Loan Party of each of the Transaction Agreements to which it is a
party and the consummation by each Delaware Loan Party of the transactions
contemplated thereby, and the filing of the Delaware Financing Statements, have
been duly authorized by all requisite corporate action on the part of each
Delaware Loan Party under the DGCL. Each of the Transaction Agreements has been
duly executed and delivered by each Delaware Loan Party which is a party thereto
under the DGCL.
3. Each of the Transaction Agreements constitutes the valid and binding
obligation of each Loan Party which is a party thereto, enforceable against each
such Loan Party in accordance with its terms under the Applicable Laws of the
State of New York.

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
      Agent and Collateral Agent
August 26, 2008
Page 6
4. The execution and delivery by each Loan Party of each of the Transaction
Agreements to which it is a party and the performance by each Loan Party of its
obligations under each such Transaction Agreement, each in accordance with its
terms, do not (i) conflict with such Loan Party’s Organizational Documents,
(ii) constitute a violation of, or a default under, any Applicable Contract or
(iii) cause the creation of any security interest or lien (other than the liens
granted under, or created by or pursuant to, the Transaction Agreements) upon
any of the property of such Loan Party pursuant to any Applicable Contract. We
do not express any opinion, however, as to whether the execution, delivery or
performance by any Loan Party of the Transaction Agreements will constitute a
violation of, or a default under, any covenant, restriction or provision with
respect to financial ratios or tests or any aspect of the financial condition or
results of operations of the Loan Parties. We call to your attention that
certain of the Applicable Contracts are governed by laws other than those as to
which we express our opinion. We express no opinion as to the effect of such
other laws on the opinions herein stated.
5. Neither the execution, delivery or performance by any Loan Party of any of
the Transaction Agreements to which it is a party nor the compliance by such
Loan Party with the terms and provisions thereof will contravene any provision
of any Applicable Law of the State of New York or any Applicable Law of the
United States of America.
6. No Governmental Approval, which has not been obtained or taken and is not in
full force and effect, is required to authorize, or is required in connection
with, the execution, delivery or performance of any of the Transaction
Agreements by any Loan Party which is a party thereto or the enforceability of
any of the Transaction Agreements against such Loan Party except those
Governmental Approvals set forth in Schedule III to the Loan Parties’
Certificate.
7. Neither the execution, delivery or performance by any Loan Party of its
obligations under any of the Transaction Agreements to which it is a party nor
compliance by such Loan Party with the terms thereof will contravene any
Applicable Order to which such Loan Party is subject.
8. Under the New York UCC, the provisions of the Security Agreement are
effective to create a valid security interest in favor of the Collateral Agent
in each Loan Party’s rights in the UCC Collateral to secure the Secured
Obligations (as defined in the Security Agreement) of such Loan Party.

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
      Agent and Collateral Agent
August 26, 2008
Page 7
9. Pursuant to the provisions of the Security Agreement, each Delaware Loan
Party has authorized the filing of the respective Delaware Financing Statement
naming such Delaware Loan Party as debtor for purposes of Section 9-509 of the
Delaware UCC.
10. Each Delaware Financing Statement includes not only all of the types of
information required by Section 9-502(a) of the Delaware UCC but also the types
of information without which the Delaware Filing Office may refuse to accept
such Delaware Financing Statement pursuant to Section 9-516 of the Delaware UCC.
11. To the extent the Delaware UCC is applicable, the security interest of the
Collateral Agent will be perfected in each Delaware Loan Party’s rights in all
UCC Collateral upon the later of the attachment of the security interest and the
filing of the Delaware Financing Statement naming such Delaware Loan Party as
debtor in the Delaware Filing Office; provided, however, we express no opinion
under this paragraph 11 with respect to (i) money, (ii) deposit accounts,
(iii) letter of credit rights, (iv) goods covered by a certificate of title
statute, (v) as-extracted collateral or (vi) any property subject to a statute,
regulation or treaty of the United States whose requirements for a security
interest’s obtaining priority over the rights of a lien creditor with respect to
the property preempt Section 9-310(a) of the Delaware UCC.
12. Assuming neither the Collateral Agent nor any of the Secured Parties has
notice of any adverse claims with respect to the Possessory Certificates then,
upon the later of the attachment of the security interest and the delivery of
such Possessory Certificates to the Collateral Agent in the State of New York
indorsed, by an effective indorsement, either in blank or to the Collateral
Agent, the Collateral Agent will acquire such Possessory Certificates (and the
shares represented thereby) free of any adverse claims under 8-303 of the New
York UCC. As used herein, “notice of adverse claim” has the meaning set forth in
Section 8-105 of the New York UCC and includes, without limitation, any adverse
claim that the Collateral Agent or any of the Secured Parties would discover
upon any investigation which such person has a duty, imposed by statute or
regulation, to investigate.
13. No Loan Party is and, solely after giving effect to the loans made pursuant
to the Transaction Agreements and the application of the proceeds thereof, will
not be an “investment company” as such term is defined in the Investment Company
Act of 1940, as amended.

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
      Agent and Collateral Agent
August 26, 2008
Page 8
Our opinions are subject to the following assumptions and qualifications:
(a) enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally and by general principles of equity (regardless of whether enforcement
is sought in equity or at law);
(b) we have assumed that each of the Transaction Agreements constitutes the
valid and binding obligation of each party to such Transaction Agreement (other
than the Loan Parties to the extent expressly set forth herein) enforceable
against such other party in accordance with its terms;
(c) we express no opinion as to the effect on the opinions expressed herein of
(i) the compliance or non-compliance of any party (other than the Loan Parties
to the extent expressly set forth herein) to the Transaction Agreements with any
state, federal or other laws or regulations applicable to them or (ii) the legal
or regulatory status or the nature of the business of any party (other than the
Loan Parties to the extent expressly set forth herein);
(d) we express no opinion as to the enforceability of any rights to contribution
or indemnification provided for in the Transaction Agreements which are
violative of the public policy underlying any law, rule or regulation (including
any federal or state securities law, rule or regulation);
(e) we express no opinion on the enforceability of any provision in a
Transaction Agreement purporting to prohibit, restrict or condition the
assignment of rights under such Transaction Agreement to the extent such
restriction on assignability is governed by the Uniform Commercial Code;
(f) in the case of the Guaranty certain of the provisions, including waivers,
with respect to the Guaranty are or may be unenforceable in whole or in part,
but the inclusion of such provisions does not affect the validity of the
Guaranty, taken as a whole;
(g) certain of the remedial provisions with respect to the security contained in
the Security Agreement, including waivers, may be unenforceable in whole or in
part, but the inclusion of such provisions does not affect the validity of the
Security Agreement, taken as a whole, and the Security Agreement, taken as a
whole, together with applicable law, contains adequate provisions for the
practical realization of the benefits of the security;

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
      Agent and Collateral Agent
August 26, 2008
Page 9
(h) we express no opinion as to the enforceability of any section of any
Transaction Agreement to the extent it purports to waive any objection a person
may have that a suit, action or proceeding has been brought in an inconvenient
forum or a forum lacking subject-matter jurisdiction;
(i) we express no opinion with respect to any section of the Security Agreement
to the extent it establishes a standard of care for collateral in the possession
or control of the Collateral Agent to the extent such standard of care is
unenforceable under Sections 1-102 and 9-207 of the UCC;
(j) we express no opinion with respect to any provision of the Credit Agreement
to the extent it authorizes or permits any purchaser of a participation interest
or Affiliate of any Lender or the Administrative Agent to set-off or apply any
deposit, property or indebtedness or the effect thereof on the opinions
contained herein;
(k) we express no opinion with respect to Section 2.4(j) of the Credit Agreement
to the extent it excuses the issuer of a letter of credit from liability to the
extent such provision is unenforceable pursuant to Section 5-103 of the UCC;
(l) to the extent that any opinion relates to the enforceability of the choice
of New York law and choice of New York forum provisions of the Transaction
Agreements, our opinion is rendered in reliance upon N.Y. Gen. Oblig. Law §§
5-1401, 5-1402 (McKinney 2001) and N.Y. CPLR 327(b) (McKinney 2001) and is
subject to the qualifications that such enforceability may be limited by public
policy considerations of any jurisdiction, other than the courts of the State of
New York, in which enforcement of such provisions, or of a judgment upon an
agreement containing such provisions, is sought;
(m) we wish to point out that where reference is made in the Transaction
Agreements to the internal laws of the State of New York we have assumed that
N.Y. Gen. Oblig. Law §§ 5-1401, 5-1402 (McKinney 2001) will be deemed to be
internal laws;
(n) we have assumed that all conditions precedent contained in Section 3.1 of
the Credit Agreement, which conditions require the delivery of documents,
evidence or other items satisfactory in form, scope and/or substance to the
Administrative Agent or the satisfaction of which is otherwise in the discretion
or control of the Administrative Agent have been, or contemporaneously with the
delivery hereof will be, fully satisfied or waived;

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
     Agent and Collateral Agent
August 26, 2008
Page 10
(o) we have assumed that each Loan Party has rights in, or with respect to
after-acquired property will have rights in, the UCC Collateral (within the
meaning of Section 9-203(b)(2) of the UCC), and we express no opinion as to the
nature or extent of the rights of any Loan Party in any of the UCC Collateral
and we note that with respect to any after-acquired property, the security
interest will not attach until such Loan Party acquires rights (within the
meaning of Section 9-203(b)(2) of the UCC) therein;
(p) our opinion with respect to proceeds is subject to the limitations set forth
in Section 9-315 of the UCC and, in addition, we call to your attention that in
the case of certain types of proceeds, other parties such as holders in due
course, protected purchasers of securities, persons who obtain control over
securities entitlements and buyers in the ordinary course of business may
acquire a superior interest or may take their interest free of the security
interest of a secured party;
(q) we express no opinion with respect to commercial tort claims, timber to be
cut or cooperative interests;
(r) we express no opinion with respect to any goods which are accessions to, or
commingled or processed with, other goods to the extent that the security
interest is limited by Section 9-335 or 9-336 of the UCC;
(s) we express no opinion with respect to the choice of law governing
(i) authorization to file the Delaware Financing Statements, or (ii) perfection,
the effect of perfection and non-perfection or priority of the security
interest;
(t) we call to your attention that the issuers of certain of the Possessory
Certificates and other equity interests that may constitute UCC Collateral are
organized under the laws of those foreign countries listed on Schedule III
hereto (each such country, a “Foreign Country”; and such Possessory
Certificates, the “Foreign Certificates”), and we express no opinion as to the
effect of the laws of any Foreign Countries on the opinions herein stated. In
addition, we express no opinion in paragraph 12 with respect to the Foreign
Certificates except to the extent each of the Foreign Certificates constitute a
“certificated security” as defined in Section 8-102 of the UCC. Our opinion is
limited to the UCC, and the laws of the jurisdiction of the issuer of such
Foreign Certificates may affect, among other things, whether such Foreign
Certificate is characterized as a “certificated security” under the UCC, the
exercise of remedies with respect to such Foreign Certificate and the exercise
of voting or other rights with respect to such Foreign Certificate;

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
     Agent and Collateral Agent
August 26, 2008
Page 11
(u) we advise you that with respect to that portion of the UCC Collateral in
which the Collateral Agent has been granted a security interest by more than one
agreement, a court may limit the Collateral Agent’s right to choose among the
rights and remedies to which it may be entitled;
(v) we express no opinion regarding any copyrights, patents, trademarks, service
marks or other intellectual property, the proceeds thereof or money due with
respect to the lease, license or use thereof except to the extent Article 9 of
the UCC may be applicable to the foregoing and, without limiting the generality
of the foregoing, we express no opinion as to the effect of any federal laws
relating to copyrights, patents, trademarks, service marks or other intellectual
property on the opinions expressed herein;
(w) we express no opinion with respect to the security interest of the
Collateral Agent for the benefit of the Secured Parties to secure the Secured
Obligations owing to the Secured Parties except to the extent that the
Collateral Agent has been duly appointed as agent for such Persons as of the
date hereof and for any Person who becomes a Lender by executing an Assignment
and Acceptance or an Assumption Agreement;
(x) we express no opinion whether the description “all other goods and personal
property” set forth in Section 2.1(a) of the Security Agreement is an adequate
description of property for purposes of Sections 9-108 or 9-203 of the UCC; and
(y) we express no opinion with respect to (i) the descriptions “trade dress”,
and “other source or business identifiers” (as contained in the term “Trademark”
in the Security Agreement) and (ii) the descriptions in items (i) and (iii) of
the term “Excluded Property” (as defined in the Security Agreement) or the
effect of (i) or (ii) on the adequacy of the description of any of the
“Collateral” (as defined in the Security Agreement) for purposes of
Sections 9-108 or 9-203 of the UCC and the opinions stated herein.

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
     Agent and Collateral Agent
August 26, 2008
Page 12
In rendering the foregoing opinions, we have assumed, with your consent, that:
(a) Authentic Fitness On-Line, Inc. (“AF On-Line”) is validly existing and in
good standing under the laws of the State of Nevada;
(b) AF On-Line has the power and authority to execute, deliver and perform all
of its obligations under each Transaction Agreement to which it is a party, and
the execution and delivery by AF On-Line of each such Transaction Agreement and
the consummation by AF On-Line of the transactions contemplated thereby have
been duly authorized by all requisite action on the part of AF On-Line and do
not and will not conflict with, contravene, violate or constitute a default
under AF On-Line’s certificate of incorporation or by-laws. AF On-Line has duly
executed and delivered each Transaction Agreement to which it is a party;
(c) the execution, delivery and performance by the Loan Parties of any of their
obligations under the Transaction Agreements does not and will not conflict
with, contravene, violate or constitute a default under (i) any lease,
indenture, instrument or other agreement to which the Loan Parties or their
property is subject (other than the Applicable Contracts as to which we express
our opinion in paragraph 4 herein), (ii) any rule, law or regulation to which
the Loan Parties are subject (other than Applicable Laws of the State of New
York and Applicable Laws of the United States of America as to which we express
our opinion in paragraph 5 herein) or (iii) any judicial or administrative order
or decree of any governmental authority (other than Applicable Orders as to
which we express our opinion in paragraph 7 herein); and
(d) no authorization, consent or other approval of, notice to or filing with any
court, governmental authority or regulatory body (other than Governmental
Approvals as to which we express our opinion in paragraph 6 herein) is required
to authorize or is required in connection with the execution and delivery by or
enforceability against each Loan Party of any Transaction Agreement to which it
is a party or the transactions contemplated thereby.

 

 

--------------------------------------------------------------------------------

 

Bank of America, N.A., as Administrative
     Agent and Collateral Agent
August 26, 2008
Page 13
This opinion is being furnished only to you in connection with the Transaction
Agreements and is solely for your benefit and is not to be used, circulated,
quoted or otherwise referred to for any other purpose or relied upon by any
other person or entity for any purpose without our prior written consent;
provided that any Person that becomes a Lender or an Issuer under the Credit
Agreement may rely on this opinion as if addressed to and delivered to such
Person on the date hereof; and provided further that this opinion may be
disclosed to bank regulatory authorities and to the auditors of any Lender or
Issuer and to any prospective assignees or participants in the Revolving Credit
Facility; provided that such Persons are not entitled to rely on this opinion.

     
 
  Very truly yours,

/s/ Skadden, Arps, Slate, Meagher & Flom LLP

 

 

--------------------------------------------------------------------------------

 

SCHEDULE A
(Lenders and Issuers)
Bank of America, N.A.
Deutsche Bank Trust Company Americas
JPMorgan Chase Bank, N.A.
HSBC Business Credit (USA) Inc.
RBS Business Capital, a division of RBS Asset Finance Inc.
U.S. Bank National Association
TD Bank N.A.
Branch Banking and Trust Company
Capital One Leverage Finance Corp.
The Bank of Nova Scotia
UBS Loan Finance LLC
UPS Capital Corporation
Intesa Sanpaolo S.p.A. New York Branch
Israel Discount Bank of New York

 

 

--------------------------------------------------------------------------------

 

SCHEDULE I
(Subsidiaries)
PART I-A
(Delaware Subsidiaries)
Calvin Klein Jeanswear Company
CCC Acquisition Corp.
CKJ Holdings, Inc.
CKU.com Inc.
Designer Holdings Ltd.
Ocean Pacific Apparel Corp.
Warnaco Puerto Rico, Inc.
Warnaco Retail Inc.
Warnaco Swimwear Inc.
Warnaco Swimwear Products Inc.
Warnaco U.S., Inc.
PART I-B
(Other Subsidiaries)
Authentic Fitness On-Line, Inc.

 

 

--------------------------------------------------------------------------------

 

SCHEDULE II
(Possessory Certificates)
Part I: U.S. Subsidiaries

                                          Stock           Percentage of        
      Certificate   Number of     Outstanding   Loan Party   Stock Issuer  
Class of Stock   No(s)   Shares     Shares  
Calvin Klein
Jeanswear Company
  CKJ Holdings, Inc.   Common Stock   2     1,000       100 %
Designer Holdings
  Calvin Klein   Common Stock   2     1,000       100 %
Ltd. (f/k/a Jeanswear Holdings, Inc.)
  Jeanswear
Company                        
The Warnaco Group, Inc.
  Warnaco Inc.   Common Stock   43     100,000       100 %
Warnaco Inc.
  CKU.com Inc.   Common Stock   2     1,000       100 %
 
  Designer Holdings Ltd.   Common Stock   2     1,000       100 %
 
  Ocean Pacific   Common Stock   9     5,589       100 %
 
  Apparel Corp.                        
 
  Warnaco Puerto Rico, Inc.   Common Stock   1     1,000       100 %
 
  Warnaco Swimwear   Common Stock   3     1,000       100 %
 
  Inc. (f/k/a Authentic Fitness Corporation)                        
 
  Warnaco U.S., Inc.   Common Stock   1     1,000       100 %
Warnaco Swimwear
  Warnaco Swimwear   Common Stock   6     100       100 %
Inc. (f/k/a Authentic Fitness Corporation)
  Products Inc. (f/k/a Authentic Fitness Products Inc.)                        
Warnaco Swimwear
  Authentic Fitness   Common Stock   1     100       100 %
Products Inc. (f/k/a Authentic Fitness Products Inc.)
  On-Line, Inc.                        
 
  Warnaco Retail Inc.   Common Stock   1     100       100 %
 
  (f/k/a Authentic                        
 
  Fitness Retail Inc.)                        
 
  CCC Acquisition Corp.   Common Stock   3     100       100 %

 

 

--------------------------------------------------------------------------------

 

Part II: First-Tier Foreign Subsidiaries

                                          Stock           Percentage of        
      Certificate   Number of     Outstanding   Loan Party   Stock Issuer  
Class of Stock   No(s)   Shares     Shares  
Warnaco Inc.
  Linda Vista de   Series B   1     329       66 %
 
  Veracruz S.A. de C.V.                        
 
                         
 
  Warnaco Intimo S.A.   Common Stock   N/A     7,260       66 %
 
  WF Overseas Fashion C.V.   Partnership Interests   Uncertificated  
Uncertificated       65 %
 
  Warner’s de   Series A   1     33,000       66 %
 
  Mexico S.A. de C.V.    Series B   4     39,959,844       66 %
Warnaco Swimwear
  Vista de Yucatan   Series B   1     329       66 %
Products Inc.
  S.A. de C.V.                        
(f/k/a Authentic Fitness Products Inc.)
                           
Warnaco U.S., Inc.
  Warnaco (Macao)   Uncertificated   Uncertificated   Uncertificated       66 %
 
  Company Limited                        

 

 

--------------------------------------------------------------------------------

 

SCHEDULE III
(Foreign Countries)
Macao
Mexico
Spain
The Netherlands

 

 

--------------------------------------------------------------------------------

 

Exhibit A to Opinion of
Special Counsel to The Warnaco Group, Inc.
Officer’s Certificate
August 26, 2008
I, Ericka Alford, am the duly elected, qualified and acting Associate General
Counsel of each of The Warnaco Group, Inc., a Delaware corporation (“Group”),
and Warnaco Inc., a Delaware corporation (the “Borrower”). I understand that
pursuant to Section 3.1(a)(viii) of the Credit Agreement, dated as of August 26,
2008 (the “Credit Agreement”), among the Borrower, Group, the Lenders parties
thereto, the Issuers parties thereto, Bank of America, N.A. (“BOA”) as
administrative agent (in such capacity, the “Administrative Agent”) and as
collateral agent for the Lenders and the Issuers, Banc of America Securities LLC
and Deutsche Bank Securities Inc., as Joint Lead Arrangers, Banc of America
Securities LLC, Deutsche Bank Securities Inc., and J.P. Morgan Securities Inc.,
as Joint Bookrunners, Deutsche Bank Securities Inc., as Sole Syndication Agent,
and HSBC Business Credit (USA) Inc., JPMorgan Chase Bank, N.A., and RBS Business
Capital, a division of RBS Asset Finance Inc., as Co-Documentation Agents,
Skadden, Arps, Slate, Meagher & Flom LLP (“SASM&F”) is rendering an opinion (the
“Opinion”) to the Administrative Agent, the Collateral Agent, the Lenders and
the Issuers. Capitalized terms used herein but not otherwise defined herein
shall have the meanings assigned to such terms as set forth in the Opinion. I
further understand that SASM&F is relying on this officer’s certificate and the
statements made herein in rendering such Opinion.
With regard to the foregoing, on behalf of each Loan Party, I hereby certify
that:
1. I am familiar with the business of each Loan Party and its subsidiaries, and
due inquiry has been made of all persons deemed necessary or appropriate to
verify or confirm the statements contained herein.
2. SASM&F may rely on the respective representations and warranties that each
Loan Party has made in the Credit Agreement, each of the other Transaction
Agreements and each of the certificates delivered pursuant thereto. I have made
a careful review of each of such representations and warranties and hereby
confirm, to the best of my knowledge and belief, that such representations and
warranties are true, correct and complete on and as of the date of this
certificate.
3. Set forth on Schedule I hereto is a complete and accurate list of the
agreements and instruments to which each Loan Party is subject which are
material to the business or financial condition of the Loan Parties, taken as a
whole or that are relevant to the transactions contemplated by the Transaction
Agreements.

 

19

--------------------------------------------------------------------------------

 

4. Set forth on Schedule II hereto is a complete and accurate list of those
orders and decrees of any governmental authority of the State of New York and
the United States of America by which any Loan Party is bound that are material
to the business or financial condition of the Loan Parties, taken as a whole or
that are relevant to the transactions contemplated by the Transaction
Agreements.
5. Set forth on Schedule III hereto is a complete and accurate list of those
Governmental Approvals applicable to any of the Loan Parties that are material
to the business or financial condition of the Loan Parties, taken as a whole or
that are relevant to the transactions contemplated by the Transaction
Agreements.
6. Less than twenty-five percent (25%) of the assets of each Loan Party and its
subsidiaries on a consolidated basis and on an unconsolidated basis consist of
Margin Stock (as defined below).
7. The Loan Parties are primarily engaged directly, or indirectly through
Majority-Owned Subsidiaries, in the business of the manufacture, sale and
distribution of apparel; and no Loan Party (i) is, or holds itself out as being
engaged primarily, or proposes to engage primarily, in the business of
investing, reinvesting or trading in Securities, (ii) has or is engaged in, or
proposes to engage in, the business of issuing Face-Amount Certificates of the
Installment Type or has such certificate outstanding and (iii) owns or proposes
to acquire Investment Securities having a Value exceeding forty percent (40%) of
the Value of the total assets of such Loan Party (exclusive of Government
Securities and cash items) on an unconsolidated basis.
8. As used in paragraph 6 of this certificate, the following term shall have the
following meaning:
“Margin Stock” means: (i) any equity security registered or having unlisted
trading privileges on a national securities exchange; (ii) any OTC security
designated as qualified for trading in the National Market System under a
designation plan approved by the Securities and Exchange Commission; (iii) any
debt security convertible into a margin stock or carrying a warrant or right to
subscribe to or purchase a margin stock; (iv) any warrant or right to subscribe
to or purchase a margin stock; or (v) any security issued by an investment
company registered under Section 8 of the Investment Company Act of 1940.
9. As used in paragraphs 7 and 9 of this certificate, the following terms shall
have the following meanings:
“Exempt Fund” means a company that is excluded from treatment as an investment
company solely by section 3(c)(1) or 3(c)(7) of the Investment Company Act of
1940 (applicable to certain privately offered investment funds).

 

20

--------------------------------------------------------------------------------

 

“Face-Amount Certificate of the Installment Type” means any certificate,
investment contract, or other Security that represents an obligation on the part
of its issuer to pay a stated or determinable sum or sums at a fixed or
determinable date or dates more than 24 months after the date of issuance, in
consideration of the payment of periodic installments of a stated or
determinable amount.
“Government Securities” means all Securities issued or guaranteed as to
principal or interest by the United States, or by a person controlled or
supervised by and acting as an instrumentality of the government of the United
States pursuant to authority granted by the Congress of the United States; or
any certificate of deposit for any of the foregoing.
“Investment Securities” includes all Securities except (A) Government
Securities, (B) Securities issued by companies the only shareholders in which
are employees and former employees of a company and its subsidiaries, members of
the families of such persons and the company and its subsidiaries and
(C) Securities issued by Majority-Owned Subsidiaries of Group which are not
engaged and do not propose to be engaged in activities within the scope of
clause (i), (ii) or (iii) of paragraph 7 of this Certificate or which are
exempted or excepted from treatment as an investment company by statute, rule or
governmental order (other than Exempt Funds).
“Majority-Owned Subsidiary” of a person means a company fifty percent (50%) or
more of the outstanding Voting Securities of which are owned by such person, or
by a company which, within the meaning of this paragraph, is a Majority-Owned
Subsidiary of such person.
“Security” means any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option, or privilege on
any security (including a certificate of deposit) or on any group or index of
securities (including any interest therein or based on the value thereof), or
any put, call, straddle, option, or privilege entered into on a national
securities exchange relating to foreign currency, or, in general, any interest
or instrument commonly known as a “security,” or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing.

 

21

--------------------------------------------------------------------------------

 

“Value” means (i) with respect to Securities owned at the end of the last
preceding fiscal quarter for which market quotations are readily available, the
market value at the end of such quarter; (ii) with respect to other Securities
and assets owned at the end of the last preceding fiscal quarter, fair value at
the end of such quarter, as determined in good faith by or under the direction
of the board of directors; and (iii) with respect to securities and other assets
acquired after the end of the last preceding fiscal quarter, the cost thereof.
“Voting Security” means any security presently entitling the owner or holder
thereof to vote for the election of directors of a company (or its equivalent,
e.g., general partner or manager of a limited liability company).

 

22

--------------------------------------------------------------------------------

 

IN WITNESS THEREOF, I have executed this certificate this 26th day of August,
2008.

             
 
  By:   /s/ Ericka Alford
 
        Name: Ericka Alford         Title:   Assistant Secretary    

[OPINION CERTIFICATE]

 

 

--------------------------------------------------------------------------------

 

SCHEDULE I
(Applicable Contracts)

1.  
Jeanswear License Agreement, dated as of August 4, 1994, between Calvin Klein,
Inc. and Calvin Klein Jeanswear Company, as amended.
  2.  
Settlement Agreement dated as of January 22, 2001, between the Calvin Klein
Trademark Trust, Calvin Klein, Inc., Calvin Klein, Linda Wachner, The Warnaco
Group, Inc., Warnaco Inc., Designer Holdings, Ltd., CKJ Holdings, Inc.,
Jeanswear Holdings Inc., Calvin Klein Jeanswear Company and Outlet Holdings,
Inc.
  3.  
Amendment and Agreement dated June 5, 2003 between Calvin Klein, Inc., Philips
Van-Heusen Corporation, Warnaco Inc., Calvin Klein Jeanswear Company and CKJ
Holdings Inc. amending each of the Calvin Klein Jeanswear and Underwear
Agreements and setting forth terms of the Calvin Klein Swimwear Agreements.
  4.  
CK/Calvin Klein Jeans Store License for Central and South America dated July 26,
2004 (and effective as of June 1, 2004) between Calvin Klein, Inc., CKJ
Holdings, Inc. and Calvin Klein Jeanswear Company, as amended.
  5.  
Speedo License Agreement, dated as of May 10, 1990, among Speedo Knitting Mills
Pty. Limited, Warnaco Inc. and Warnaco International Inc., as amended.
  6.  
Speedo License Agreement, dated as of May 10, 1990, among Speedo International
Limited and Authentic Fitness Corporation, as amended.
  7.  
Amendment to the Speedo Licenses dated November 25, 2002, among Speedo
International Limited, Authentic Fitness Corporation and Authentic Fitness
Products Inc.
  8.  
Chaps Sportswear Amended and Restated Design Services Agreement, effective as of
as of January 1, 1996, between Polo Ralph Lauren Enterprises, L.P. and Warnaco
Inc., as amended.

  (a)  
Chaps Canada Sportswear Amended and Restated Trademark License Agreement, dated
as of November 1, 1995, between PRL USA, Inc., as successor to Polo Ralph
Lauren, L.P. and Warnaco of Canada Company, as amended.
    (b)  
CHAPS Letter Agreement and Amendment dated June 16, 1999 between Polo Ralph
Lauren Corporation and Warnaco Inc.
    (c)  
License Agreement and Design Services Agreement Amendment and Extension to CHAPS
Licenses dated September, 2003 between PRL USA, Inc., as successor to Polo Ralph
Lauren, L.P., The Polo/Lauren Company, LP and Warnaco Inc. and Warnaco of Canada
Company, as amended.

9.  
Administration Agreement between Calvin Klein, Inc. and Warnaco Inc., dated as
of March 14, 1994, as amended by Amendment and Agreement dated June 5, 2003.

 

 

--------------------------------------------------------------------------------

 

10.  
Men’s Underwear License Agreement between Calvin Klein, Inc. and Calvin Klein
Trademark Trust, dated as of March 14, 1994.
  11.  
Women’s Intimate Apparel License Agreement between Calvin Klein, Inc. and Calvin
Klein Trademark Trust, dated as of March 14, 1994.
  12.  
Calvin Klein Women’s Swimwear Agreement effective July 1, 2004 between Calvin
Klein, Inc. and Warnaco Swimwear Inc., as amended.
  13.  
Indenture, dated as of June 12, 2003, among Warnaco Inc. and certain of its
subsidiaries and Wells Fargo Bank Minnesota, National Association as the
Indenture Trustee.
  14.  
Amended and Restated License Agreement dated January 1, 1997 between Calvin
Klein, Inc. and CK Jeanswear Europe, S.p.A., as amended.
  15.  
Amended and Restated License Agreement dated January 1, 1997 between Calvin
Klein, Inc. and Calvin Klein Jeanswear Asia Ltd., as amended.
  16.  
CK Jeanswear World Store License dated July 16, 1997 between Calvin Klein, Inc.
and CK Jeanswear N.V., as amended.
  17.  
Jeans Accessories License Agreement dated January 31, 2006 between Calvin Klein,
Inc., CK Jeanswear Europe S.p.A., CK Jeanswear Asia Limited and WF Overseas
Fashion C.V.
  18.  
Bridge Accessories License Agreement dated January 31, 2006 between Calvin
Klein, Inc., CK Jeanswear Europe S.p.A. and WF Overseas Fashion C.V.
  19.  
Bridge Apparel License Agreement dated January 31, 2006 between Calvin Klein,
Inc., CK Jeanswear Europe S.p.A. and WF Overseas Fashion C.V.

 

 

--------------------------------------------------------------------------------

 

SCHEDULE II
(Applicable Orders)
None

 

 

--------------------------------------------------------------------------------

 

SCHEDULE III
(Governmental Approvals)
None

 

 

--------------------------------------------------------------------------------

 

EXHIBIT H
TO
CREDIT AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
Reference is made to the Credit Agreement, dated as of August  _____, 2008 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among Warnaco Inc., a Delaware corporation, as
borrower (the “Borrower”), The Warnaco Group, Inc. (“Group”), the Lenders and
Issuers party thereto, Bank of America, N.A., as administrative agent for the
Revolving Credit Facility and as Collateral Agent for the Lenders and the
Issuers, and certain other Persons. Capitalized terms used herein without
definition have the meanings ascribed to them in the Credit Agreement. This
Compliance Certificate is submitted concurrently with the [quarterly][annual]
financial statements of Group for the period ended ____ _____, 20_____  [(the
“Fiscal Period End Date”)]9. Pursuant to Section 6.1(d) of the Credit Agreement,
the undersigned hereby certifies that he/she is a Responsible Officer of Group
and further certifies on behalf of Group as follows:
1. The calculations attached hereto as Annex A with respect to the covenant set
forth in Section 5.1 of the Credit Agreement [(as if a Trigger Event had
occurred and the Fiscal Period End Date were the last day of a Test Period)]10
and the Applicable Margin are true, accurate and complete, and are made in
accordance with the terms and provisions of the Credit Agreement.
2. [No Default or Event of Default has occurred and is continuing and no Default
or Event of Default (as defined in the Canadian Facility) has occurred and is
continuing.] [A Default or Event of Default or a Default or Event of Default (as
defined in the Canadian Facility) has occurred and is continuing. The nature
thereof and the action which Group proposes to take with respect thereto is as
follows:  _____].
3. [The amount of the Available Credit at any time during the period covered by
this Compliance Certificate did not fall to an amount which gave rise to an
Accelerated Borrowing Base Certificate Delivery Date or a Trigger Event.]
[During the period covered by this Compliance Certificate, the Available Credit
fell to an amount which gave rise to an Accelerated Borrowing Base Certificate
Delivery Date and/or a Trigger Event.] [Describe which occurred and date when
first occurred]].
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand on this
 _____  day of _____,  _____ 
 

      9  
Bracketed text to be used only if no Trigger Event has occurred and therefore
Section 5.1 financial covenant not currently being tested.
  10  
Bracketed text to be used only if no Trigger Event has occurred and therefore
Section 5.1 financial covenant not currently being tested.

 

 

--------------------------------------------------------------------------------

 

            THE WARNACO GROUP, INC.
      By:           Name:           Title     

 

 

--------------------------------------------------------------------------------

 

EXHIBIT I
TO
CREDIT AGREEMENT

FORM OF PLEDGE AND SECURITY AGREEMENT
See Exhibit 10.3 to The Warnaco Group, Inc.’s Form 10-Q filed November [•], 2010

 

 

--------------------------------------------------------------------------------

 

EXHIBIT J
TO
CREDIT AGREEMENT
FORM OF GUARANTY
See Exhibit 10.2 to The Warnaco Group, Inc.’s Form 10-Q filed August 6, 2010