Exhibit 10.5





Exhibit 10.5




EXECUTION COPY




AMENDMENT NO. 1

TO CREDIT AGREEMENT




AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “Amendment”), dated as of June 17, 2011, among
Warnaco of Canada Company, a Nova Scotia unlimited liability company (the “Borrower”), the
affiliates of the Borrower party hereto, the Lenders (as defined in the Credit Agreement described
below) party hereto and Bank of America, N.A., as Administrative Agent and Collateral Agent (each
as defined in the Credit Agreement described below).



WHEREAS, the Borrower, The Warnaco Group, Inc., a Delaware corporation (“Group”), as a
guarantor, the Lenders, the Issuers, the Administrative Agent, the Collateral Agent, Merrill Lynch,
Pierce, Fenner & Smith Incorporated (as successor by merger to Banc of America Securities LLC)
(“Merrill Lynch”) and Deutsche Bank Securities Inc. (“DBSI”), as joint lead arrangers and joint
book managers, and DBSI, as sole syndication agent for the Lenders and the Issuers, entered into a
certain Credit Agreement, dated as of August 26, 2008 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders and
the Issuers have agreed, subject to certain terms and conditions, to make revolving credit
borrowings to the Borrower and to issue or to cause the issuance of letters of credit for the
account of the Borrower;



WHEREAS, the Borrower has informed the Administrative Agent that the U.S. Borrower, Calvin
Klein Jeanswear Company (the “CK Borrower”) and Warnaco Swimwear Products Inc. (the “Swimwear
Borrower”, and together with the Borrower and the CK Borrower, collectively, the “Term Borrowers”),
as borrowers, intend to enter into a U.S.$200,000,000 term loan facility with various financial
institutions and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for such
financial institutions, which term loan facility will be guaranteed by Group and the direct and
indirect domestic subsidiaries of Group (other than the Term Borrowers), including the U.S.
Subsidiary Guarantors (other than the Term Borrowers);



WHEREAS, the Borrower, the Requisite Lenders, the Administrative Agent and the Collateral
Agent desire to amend certain provisions of the Credit Agreement to, among other things, permit
Group, the Term Borrowers and the other U.S. Subsidiary Guarantors to enter into the term loan
facility described above;


 


 









 





NOW, THEREFORE, subject to the conditions precedent set forth in Section 6 hereof, the
Borrower, the Guarantors, the Requisite Lenders, the Administrative Agent and the Collateral Agent
hereby agree as follows:



SECTION 1. CAPITALIZED TERMS. Capitalized terms used but not defined herein shall have the respective meanings set forth in
the Credit Agreement.



SECTION 2. AMENDMENTS TO CREDIT AGREEMENT.



2.1 Section 1.1 of the Credit Agreement is hereby amended by amending and restating the
following definitions (if already included in Section 1.1) and adding the following definitions in
the appropriate alphabetical location (if not already included in Section 1.1):




“ABL Priority Collateral” has the meaning specified in the Intercreditor
Agreement.




“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, (iv) any expenditures in connection with the replacement, substitution, or
restoration of fixed assets to the extent made with the proceeds of an Asset Sale of
fixed assets or a Property Loss Event (as defined in the U.S. Facility) with respect
to fixed assets, in each case, within 180 days of the date of receipt of proceeds
from such Asset Sale or Property Loss Event (as defined in the U.S. Facility) and
(v) any portion of expenditures attributable to the acquisition of property, plant
and equipment which are part of a Permitted Acquisition.




“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 as
in effect on the Closing Date.




“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 prepayment of any Term Loans.


 


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“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
U.S. 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, or the power to exercise, directly or indirectly,
effective control for any purpose over, 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) so long as the Term Loan Credit Agreement
is in effect or any Term Loans are outstanding and the Term Agent has a Lien on any
of the Collateral (as defined in the U.S. Facility), any “Change of Control” as
defined in the Term Loan Credit Agreement.




“Disqualified Stock” means any Stock which, by its terms (or by the terms of
any security or other Stock into which it is convertible or for which it is
exchangeable), or upon the happening of any event or condition (a) matures or is
mandatorily redeemable (other than solely for Stock which is not otherwise
Disqualified Stock), pursuant to a sinking fund obligation or otherwise, (b) is
redeemable at the option of the holder thereof (other than solely for Stock which is
not otherwise Disqualified Stock), in whole or in part or (c) is or becomes
convertible into or exchangeable for Indebtedness or any other Stock that would
constitute Disqualified Stock, in each case, with respect to clauses (a) through
(c), prior to the date that is 91 days after the Revolving Loan Maturity Date (as
defined in the U.S. Facility).




“Intercreditor Agreement” means the Intercreditor Agreement, dated as of June
17, 2011, between the Administrative Agent, the Collateral Agent and the Term Agent
and acknowledged by Group, the U.S. Borrower and the other Loan Parties party
thereto from time to time, as amended, restated, supplemented, replaced or otherwise
modified from time to 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 first priority 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.




“Loan Documents” means, collectively, this Agreement, the Guaranty, the U.S.
Loan Party Canadian Facility Guaranty, each Letter of Credit Reimbursement
Agreement, the Collateral Documents, the Intercreditor Agreement 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
(it being understood and agreed that as a matter of clarification the U.S. Facility
is not a Loan Document).


 


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“Term Agent” means JPMorgan Chase Bank, N.A., in its capacities as
administrative agent and collateral agent for the Term Lenders, and its successors
and assigns in either such capacity from time to time.




“Term Lenders” means the lenders party from time to time to the Term Loan
Credit Agreement.




“Term Loan Credit Agreement” means that certain Term Loan Agreement, dated as
of the Term Loan Effective Date, among Group, the U.S. Borrower, Calvin Klein
Jeanswear Company, Warnaco Swimwear Products Inc., the lenders party thereto from
time to time and the Term Agent, as the same may be amended, modified, supplemented,
extended, refinanced or replaced from time to time in accordance with the terms
hereof, thereof and of the Intercreditor Agreement.




“Term Loan Documents” means, collectively, the Term Loan Credit Agreement and
all other documents, instruments and agreements executed and delivered with respect
to or in connection with the Term Loan Credit Agreement, as the same may be amended,
modified or supplemented from time to time in accordance with the terms hereof,
thereof and of the Intercreditor Agreement.




“Term Loan Effective Date” means the date, on or about June 17, 2011, of the
execution and delivery of the initial Term Loan Credit Agreement by the initial
parties thereto.




“Term Loans” means loans made pursuant to the Term Loan Credit Agreement.




“Term Priority Collateral” has the meaning specified in the Intercreditor
Agreement.




“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing (a) the sum of the total of the
products obtained by multiplying (i) the amount of each scheduled installment,
sinking fund, serial maturity or other required payment of principal including
payment at final maturity, in respect thereof, by (ii) the number of years
(calculated to the nearest one-twelfth) which will elapse between such date and the
making of such payment by (b) the then outstanding principal amount of such
Indebtedness.



2.2 Section 1.1 of the Credit Agreement is hereby further amended by deleting the following
defined terms: “Senior Note Indenture”, “Senior Note Indenture Trustee”, “Senior Noteholders”,
“Senior Note Documents” and “Senior Notes”.


 


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2.3 Section 1.1 of the Credit Agreement is hereby further amended by amending and restating
clause (a)(i)(C) of the definition of “Mortgage Supporting Documents” to read as follows:




(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 (A) Liens permitted under Section
8.2 and (B) such other Liens as the Administrative Agent may reasonably approve,



2.4 Section 1.1 of the Credit Agreement is further amended by adding the parenthetical “(and
including interest and fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under the Bankruptcy Code, the Bankruptcy and Insolvency Act
(Canada), the Companies’ Creditors Arrangement Act (Canada) or any other federal, foreign, state or
provincial debtor relief or insolvency proceeding naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in such proceeding)” to
the definition of “Obligations” immediately following the phrase “now existing or hereafter arising
and however acquired” appearing in such definition.



2.5 Section 1.1 of the Credit Agreement is further amended by amending and restating clause
(v) of the definition of “Permitted Acquisition” to read as follows:




(v) 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 (x) Section 7.11 within 30 days (or with respect to any Material
Owned Real Property, as provided in Section 7.13) of the closing of such Proposed
Acquisition (or such longer time as may be agreed by the Administrative Agent in its
sole discretion), and (y) Section 7.13 within the time frames set forth in such
section.



2.6 Section 4.2(d) of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:




(d) For so long as the Term Loan Credit Agreement is in effect, each borrowing,
issuance of a letter of credit and other financial accommodation made hereunder or
under the U.S. Facility (each a “Credit Event”) constitutes a representation and
warranty by each of Group and the Borrower that as of the date of such Credit Event,
such Credit Event does not result in a violation of the indebtedness negative
covenant in the Term Loan Credit Agreement.



2.7 Section 4.3(b) of the Credit Agreement is hereby amended by (i) adding the phrase “and
those permitted under Section 8.2(l)” immediately preceding the period at the end of the second
sentence thereof, (ii) adding the parenthetical “(other than Group)” immediately following “Warnaco
Entity” in the third sentence thereof and (iii) adding the phrase “and the Term Loan Documents”
immediately preceding the period at the end of the fourth sentence thereof.



2.8 Section 4.8(b) of the Credit Agreement is hereby amended by deleting the phrase “filing of
any Tax Return or the assessment or” appearing in clause (i) thereof.


 


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2.9 Section 4.20 of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:




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 and Liens securing Indebtedness in respect of purchase
money obligations and Capital Lease obligations permitted under Section 8.2, in each
case, having priority over such Liens), except, in the case of Liens granted by the
U.S. Loan Parties, as set forth in the Intercreditor Agreement.



2.10 Section 6.1(b) of the Credit Agreement is hereby amended by deleting “and consolidating”
in each instance where it appears.



2.11 Section 6.5 of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:




Section 6.5 Notices under Term Loan Documents. Promptly after the sending or filing
thereof (and to the extent the substance of which has not previously been or is not
concurrently being provided in writing to the Administrative Agent), Group shall
send the Administrative Agent copies of all material notices, certificates or
reports delivered pursuant to, or in connection with, any Term Loan Document.



2.12 Section 7.11 of the Credit Agreement is hereby amended by adding the following sentence
at the end thereof:




It is understood and agreed that, with respect to any treasury shares of Group, the
Collateral Agent does not intend to take a security interest in any such treasury
 shares of Group, and any and all treasury shares of Group shall not be subject to
the restrictions set forth in Section 8.2 and Section 8.4 hereunder. The parties
agree that all treasury shares of Group shall constitute Excluded Property as
defined in the Pledge and Security Agreement (as defined in the U.S. Facility).



2.13 Section 7.13(c)(ii) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:




(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 mortgage on such Material Owned Real Property
having at least the priorities described in Section 4.20 of this Agreement;



2.14 Section 7.14 of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:



Section 7.14 [Intentionally Omitted].


 


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2.15 Section 8.1(b) of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:




(b) the Term Loans in an aggregate outstanding principal amount not to exceed
U.S.$200,000,000 plus all additional amounts permitted to be borrowed pursuant to
Section 2.5 of the Term Loan Credit Agreement as such section and defined terms
relevant to Section 2.5(a)(E) are in effect on the Term Loan Effective Date;
provided that the Term Loans may not be guaranteed by any Canadian Subsidiary or by
any other Warnaco Entity that is not guaranteeing the Obligations (as defined in the
U.S. Facility);



2.16 Section 8.1(f) of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:




(f) Renewals, extensions, refinancings, exchanges and refundings of
Indebtedness permitted by clauses (b), (c) and (e) of this Section 8.1; provided,
however, that (A) any such renewal, extension, refinancing, exchange or refunding is
in an aggregate principal amount not greater than the principal amount of, and,
other than a renewal, extension, refinancing, exchange or refunding of Indebtedness
permitted by clause (b) above, is on terms not materially less favorable to the
Warnaco Entity obligated thereunder (as reasonably determined by a Responsible
Officer of such Warnaco Entity) (other than with respect to interest rates and other
pricing, all of which shall be market rates as reasonably determined by a
Responsible Officer of such Warnaco Entity), including as to weighted average
maturity and final maturity, than, the Indebtedness being renewed, extended,
refinanced, exchanged or refunded, and (B) additionally with respect to any renewal,
extension, refinancing, exchange or refunding of Indebtedness under the Term Loan
Documents, such renewal, extension, refinancing, exchange or refunding (i) is not
guaranteed by any Canadian Subsidiary or by any other Warnaco Entity that is not
guaranteeing the Obligations (as defined in the U.S. Facility), (ii) has a Weighted
Average Life to Maturity, calculated as of the date of such renewal, extension,
refinancing, exchange or refunding, that exceeds the sum of (1) the remaining
scheduled term of the U.S. Facility as of such date plus (2) six months, (iii)
matures at least six months after the Revolving Loan Maturity Date (as defined in
the U.S. Facility), and (iv) is subject to the Intercreditor Agreement;



2.17 Section 8.1(g) of the Credit Agreement is hereby amended by adding the following proviso
at the end thereof:




provided further that no such Indebtedness shall be incurred in connection with the
Term Loans;



2.18 Section 8.1(n) of the Credit Agreement is hereby amended by replacing “U.S.$50,000,000”
appearing therein with “U.S.$75,000,000”.


 


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2.19 Section 8.2(b) of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:




(b) Liens granted by a Foreign Subsidiary of Group (other than a Canadian Loan
Party) securing the Indebtedness permitted under Section 8.1(g), which Liens for the
avoidance of doubt shall not secure any Indebtedness under the Term Loan Credit
Agreement;



2.20 Section 8.2 of the Credit Agreement is hereby further amended by (i) deleting the word
“and” immediately following clause (j) thereof, (ii) deleting the period at the end of clause (k)
thereof and substituting therefor “; and” and (iii) adding the following clause (l) thereto:




(l) Liens granted by the U.S. Loan Parties pursuant to the Term Loan Documents,
subject in each case to the terms of the Intercreditor Agreement.



2.21 Section 8.4(b) of the Credit Agreement is hereby amended by amending and restating
clauses (ii), (iii) and (v) thereof in their entirety to read as follows:




(ii) if any such asset constitutes ABL Priority Collateral (or, in the case of a
sale of any or all of the Stock of a Subsidiary, if any asset of such Subsidiary
constitutes ABL Priority Collateral) no less than 100% of the purchase price for
such asset (or, in the case of a sale of any or all of the Stock of a Subsidiary
that owns any ABL Priority Collateral at the time of such sale, of the portion of
the purchase price for such Stock reasonably allocated to such ABL Priority
Collateral) shall be paid in cash, and in all other cases, 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 any 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 U.S. Facility), 50% of the purchase price for such
asset (or, in the case of a sale of any or all of the Stock of a Subsidiary that
owns any ABL Priority Collateral at the time of such sale, of the portion of the
purchase price for such Stock reasonably allocated to such ABL Priority Collateral)
may be paid in cash and the remaining amount paid in notes receivable) (which notes
receivable, if relating to the sale of any ABL Priority Collateral or of any or all
of the Stock of a Subsidiary that owns any ABL Priority Collateral at the time of
such sale, 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 indemnity obligations,




(v) in the case of a sale of assets by a U.S. Loan Party, Section 8.4(b)(v) and (vi)
of the U.S. Facility shall have been complied with and


 


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2.22 Section 8.5 of the Credit Agreement is hereby amended by (i) deleting the word “and”
immediately following clause (c) thereof, (ii) inserting the word “and” immediately
following the semicolon at the end of clause (d) thereof and (iii) adding the following clause
(e) thereto:




(e) other dividends and distributions on the Stock of Group and other
redemptions, repurchases or other acquisitions of the Stock of Group in an aggregate
amount not to exceed the principal amount of Indebtedness incurred pursuant to
Section 8.1(b) and the corresponding dividends to Group not earlier than ten days
prior to the related dividend, distribution, redemption, repurchase or other
acquisition not exceeding in the aggregate such principal amount; provided that no
Event of Default exists at the time of any such dividend, distribution, redemption,
repurchase or other acquisition or the corresponding dividend or would result
therefrom;



2.23 Section 8.6(b) of the Credit Agreement is hereby amended by amending and restating
clauses (v), (vi) and (vii) thereof in their entirety and by adding a new clause (viii) to the end
thereof, all of which to read as follows:




(v) repay Term Loans using then available Cash on Hand in an aggregate amount not to
exceed U.S.$10,000,000, (vi) renew, extend, refinance, exchange and refund
Indebtedness, as long as such renewal, extension, refinancing, exchange or refunding
is permitted under Section 8.1(f) (in the case of Indebtedness under any of clauses
(b), (c) or (e) of Section 8.1) or permitted under other clauses of Section 8.1 (in
the case of any other Indebtedness permitted under Section 8.1), (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) (i) on the date of such prepayment, redemption, purchase, defeasance or
satisfaction on a pro forma basis after giving effect to such prepayment,
redemption, purchase, defeasance or satisfaction, Available Credit is at least 25%
of the Aggregate Borrowing Limit on such date and additionally, if a Canadian Loan
Party is making such prepayment, redemption, purchase, defeasance or satisfaction,
Available Canadian Credit is at least 10% of the lesser of (x) the Revolving Credit
Commitments in effect at such time and (y) the Borrowing Base on such date and (ii)
for the 30 consecutive day period prior to the date of such prepayment, redemption,
purchase, defeasance or satisfaction (pro forma as if such prepayment, redemption,
purchase, defeasance or satisfaction occurred on the first day of such 30
consecutive day period), average Available Credit is at least 25% of the Aggregate
Borrowing Limit on such date and additionally, if a Canadian Loan Party is making
such prepayment, redemption, purchase, defeasance or satisfaction,


 


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average Available
Canadian Credit is at least 10% of the lesser of (x) the Revolving Credit Commitments in effect on such date and (y) the Borrowing Base
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, Available Credit and, if applicable, Available
Canadian Credit and (viii) convert or exchange Indebtedness into Stock of Group
other than Disqualified Stock of Group.



2.24 Section 8.10 of the Credit Agreement is hereby amended by amending and restating the
introductory paragraph thereof in its entirety to read as follows:




Section 8.10 Restrictions on Subsidiary Distributions; No New Negative Pledge.
Other than (x) pursuant to the Loan Documents, the Term Loan Documents, the U.S.
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,
exchange 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, exchange or refunding of the Term Loans
permitted under Section 8.1(f), (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:



2.25 Section 8.13 of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:




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 any of the Term Loan Documents (or any indenture, agreement or
other material document entered into in connection therewith) if the effect of such
change or amendment is to (w) increase (or permit the increase in) the aggregate
principal amount of the Term Loans beyond the amount permitted under Section 8.1(b)
or (x) change the final maturity date of any of the Term Loans to a date that is
less than six months after the Revolving Loan Maturity Date (as defined in the U.S.
Facility) or (y) cause the Weighted Average Life to Maturity of the Term Loans (or
any class thereof), calculated as of the effective date of such change or amendment,
to be less than the sum of (1) the remaining scheduled term of the U.S. Facility as
of such date plus (2) six months or (z) contravene any of the terms of the
Intercreditor Agreement.


 


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2.26 Section 9.1(d) of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:




(d) (i) any Warnaco Entity shall fail to make any payment on (x) so long as the
Term Agent has a Lien on any of the Collateral (as defined in the U.S. Facility),
any Indebtedness under any of the Term Loan Documents or (y) any Indebtedness (other
than the Obligations, but including any Indebtedness under any of the Term Loan
Documents) of any Warnaco Entity (or any Guaranty Obligation in respect of
Indebtedness of any other Person) having a U.S. Dollar Equivalent principal amount
of U.S.$25,000,000 or more, when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) beyond
any applicable grace periods; or (ii) any other event shall occur or condition shall
exist under any agreement or instrument relating to any such Indebtedness referenced
in clause (i), if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness referenced in clause
(i); or (iii) any such Indebtedness referenced in clause (i) 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 Term Loans,
a provision requiring a prepayment in the event of the receipt by a Warnaco Entity
of proceeds of an Asset Sale or casualty loss of property (other than ABL Priority
Collateral), an equity issuance by Group or a debt issuance not permitted hereunder
or from excess cash flow), prior to the stated maturity thereof; or



2.27 Section 9.1(g) of the Credit Agreement is hereby amended by inserting the following
language immediately preceding the semicolon and the end thereof:




, or the Intercreditor Agreement shall, in whole or in part, terminate, cease to be
effective or cease to be legally valid, binding and enforceable against the Term
Agent, any Term Lender or any other holder of Indebtedness under the Term Loan
Documents



2.28 Sections 11.8(a)(iv) and (v) of the Credit Agreement are hereby amended and restated in
their entirety to read as follows:




	 	(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: seth.tyminski@baml.com

Telecopy No.: (646) 556-0260




 


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with a copy to:




Bank of America, N.A.

CityPlace I, 35th Floor

CT2-500-35-02

185 Asylum Street

Hartford, CT 06103

Attention: Legal Department

Email: timothy.clarke@bankofamerica.com



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: seth.tyminski@baml.com

Telecopy No.: (646) 556-0260



with a copy to:




Bank of America, N.A.

CityPlace I, 35th Floor

CT2-500-35-02

185 Asylum Street

Hartford, CT 06103

Attention: Legal Department

Email: timothy.clarke@bankofamerica.com



2.29 Section 11.16 of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:




Section 11.16 Intercreditor Agreement. Each Secured Party hereby grants to
each of the Facility Agents all requisite authority to enter into or otherwise
become bound by the Intercreditor Agreement (including any Intercreditor Agreement
entered into in connection with any renewal, extension, refinancing, exchange or
refunding of the Term Loans permitted hereunder) and to bind the Secured Parties
thereto by the Facility Agents’ entering into or otherwise becoming bound thereby,
and no further consent or approval on the part of any of the Secured Parties is or
will be required in connection with the performance of the Intercreditor Agreement
(including any Intercreditor Agreement entered into in connection with any renewal,
extension, refinancing, exchange or refunding of the Term Loans permitted
hereunder), including, if required by the Intercreditor Agreement, amending any
Collateral Documents (as defined in the U.S. Facility) to include a legend
referencing the Intercreditor Agreement, and all actions taken by each Facility
Agent under or pursuant to the


 


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Intercreditor Agreement (including any Intercreditor
Agreement entered into in connection with any renewal, extension, refinancing, exchange or refunding of the
Term Loans permitted hereunder) shall be binding upon each Secured Party as if it
were a direct signatory to the Intercreditor Agreement (including any Intercreditor
Agreement entered into in connection with any renewal, extension, refinancing,
exchange or refunding of the Term Loans permitted hereunder). Each Secured Party
hereby acknowledges that, pursuant to the Intercreditor Agreement, the Collateral
Agent’s Lien, for the benefit of the Secured Parties, in certain of the Collateral
securing the Secured Obligations, referred to in the Intercreditor Agreement as the
Term Priority Collateral, will be subordinated to the Lien of the Term Agent in such
Term Priority Collateral.




Notwithstanding anything to the contrary in this Agreement or in any other Loan
Document:




(a) the priority of the Liens and security interests granted by the U.S. Loan
Parties to the Collateral Agent for the benefit of the Secured Parties pursuant to
the Collateral Documents (as defined in the U.S. Facility), including any Mortgage,
and the exercise of any right or remedy related to any Collateral granted thereunder
shall be subject, in each case, to the terms of the Intercreditor Agreement; and




(b) in the event of a conflict between the express terms of any Collateral
Document (as defined in the U.S. Facility) entered into by a U.S. Loan Party, on the
one hand, and of the Intercreditor Agreement, on the other hand, the terms and
provisions of the Intercreditor Agreement shall control.




No Loan Party shall have or be entitled to assert any rights or benefits under
the Intercreditor Agreement or this Section 11.16.



SECTION 3. WAIVER. The Lenders hereby waive all existing defaults solely with respect to any
failure to deliver prior to the date hereof (i) consolidating balance sheets or consolidating
statements of income as required by Section 6.1(b) of the Credit Agreement, (ii) summaries of
outstanding balances of intercompany Indebtedness as required by Section 6.1(f) of the Credit
Agreement and (iii) reports with respect to insurance coverage and the insurance broker’s statement
as required by Section 6.9 of the Credit Agreement, including, in each case, any cross-defaults
arising under Section 9.1(d) of the Credit Agreement with respect the existence of the same default
under the U.S. Facility.



SECTION 4. AMENDMENT TO PLEDGE AND SECURITY AGREEMENT.
Each Lender party hereto hereby grants to the Collateral Agent all requisite authority to
enter into or otherwise become bound by an amendment to the Pledge and Security Agreement (as
defined in the U.S. Facility) to reflect the transactions contemplated by the Intercreditor
Agreement and this Amendment and to bind the Secured Parties thereto by the Collateral Agent’s
entering into or otherwise becoming bound thereby, and no further consent or approval on the part
of any of the Secured Parties is or will be required in connection with the performance of the
Pledge and Security Agreement as amended by such amendment. Each Lender party hereto
further authorizes the Collateral Agent to deliver to the Term Agent any and all Term Priority
Collateral in its possession, including without limitation, instruments, stock certificates, and
transfer powers that are required to be delivered to the Term Agent pursuant to the Term Loan
Documents with respect to Term Priority Collateral.


 


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SECTION 5. REPRESENTATIONS AND WARRANTIES. Each of the Borrower and the Guarantors represents
and warrants, as of the Effective Date (as defined below) after giving effect to this Amendment, as
follows (which representations and warranties shall survive the execution and delivery of this
Amendment):



5.1 all representations and warranties contained in the Credit Agreement and each of the other
Loan Documents are true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the Effective Date (except to the extent
that such representations or warranties expressly related to a specified prior date, in which case
such representations and warranties shall be true and correct in all material respects as of such
specified prior date);



5.2 the execution, delivery and performance by each Loan Party of this Amendment (i) are
within such Loan Party’s corporate, limited liability, partnership or other powers, (ii) have been
duly authorized by all necessary corporate, limited liability 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 Loan Party’s or any of its Subsidiaries’ respective Constituent
Documents, (B) violate any other Requirement of Law applicable to such Loan Party (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 Loan Party, (C) conflict with or result in a breach of,
or constitute a default under, or result in or permit the termination or acceleration of, any
Contractual Obligation of such Loan Party or any of its Subsidiaries or (D) result in the creation
or imposition of any Lien upon any property of such Loan Party or any of its Subsidiaries and (iv)
do not require the consent of, authorization by, approval of, notice to or filing or registration
with, any Governmental Authority or any other Person, other than those obtained or made;



5.3 this Amendment has been duly executed and delivered by each Loan Party and is the legal,
valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party
in accordance with its terms; and



5.4 there exists no Default or Event of Default.



SECTION 6. EFFECTIVENESS. This Amendment shall become effective upon the date (such date, the “Effective Date”) that the
following conditions precedent have been satisfied, as determined in the Administrative Agent’s
sole discretion:



6.1 The Administrative Agent shall have received each of the following, each dated the
Effective Date unless otherwise indicated or agreed to by the Administrative Agent, in form and
substance satisfactory to the Administrative Agent:




6.1.1 counterparts hereof duly executed and delivered by the Borrower, the Guarantors,
Lenders constituting Requisite Lenders, the Collateral Agent and the Administrative Agent;


 


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6.1.2 a fee letter, in form and substance satisfactory to the Administrative Agent,
duly executed and delivered by the U.S. Borrower, and the payment of all of the fees payable
thereunder;




6.1.3 the Intercreditor Agreement, in form and substance reasonably satisfactory to the
Facility Agents, duly executed and delivered by all parties thereto; and




6.1.4 duly executed copies of each of the Term Loan Documents, which shall be in form
and substance reasonably satisfactory to the Administrative Agent and its counsel;



6.2 As of the Effective Date, Available Credit shall be not less than U.S.$75,000,000 (after
giving effect to the borrowings, issuances of letters of credit and financial accommodations
hereunder and under the U.S. Facility, if any, in each instance, requested or deemed requested to
be made on the Effective Date and any payments or prepayments made under the Credit Agreement or
the U.S. Facility on the Effective Date); and



6.3 There shall have been paid all reasonable and documented fees and expenses (including
reasonable and documented fees and expenses of counsel) due and payable on or before the Effective
Date.



SECTION 7. COUNTERPARTS. This Amendment 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 Amendment
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
Amendment signed by all parties shall be lodged with the Borrower and the Administrative Agent.



SECTION 8. REFERENCES TO CREDIT AGREEMENT. From and after the effectiveness of this Amendment and the amendments contemplated hereby, all
references in the Credit Agreement to “this Agreement”, “hereof”, “herein”, and similar terms shall
mean and refer to the Credit Agreement, as amended and modified by this Amendment, and all
references in other documents to the Credit Agreement shall mean such agreement as amended and
modified by this Amendment.



SECTION 9. GOVERNING LAW. This Amendment 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
Province of Ontario, Canada.


 


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SECTION 10. RATIFICATION AND CONFIRMATION. The Credit Agreement and each of the other Loan Documents is hereby ratified and confirmed and,
except as herein agreed, remains in full force and effect. The amendments and waiver contained
herein shall not be construed as a waiver or amendment of any other provision of the Credit
Agreement or the other Loan Documents or for any purpose except as expressly set forth herein or a
consent to any further or future action on the part of the Borrower or any other Loan Party that
would require the waiver or consent of any of the Lenders. Each of the Borrower and the Guarantors
hereby ratifies (i) its obligations and liabilities under the Credit Agreement and other Loan
Documents (including, without limitation, its Secured Obligations) and (ii) its grant of a security
interest in the Collateral in which it has an interest to secure the payment of the Obligations.



[Remainder of page intentionally left blank]



 


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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their
respective authorized officers as of the day and year first above written.



	 	 	 	 	 	 	 	 	 
	 	 	Warnaco of Canada Company, as Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Stanley P. Silverstein	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Stanley P. Silverstein	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	The Warnaco Group, Inc., as Group	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Jay Dubiner	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Jay Dubiner	 	 
	 

	 	 	 	Title:
	 	Senior Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Warnaco Inc., as Guarantor	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Jay Dubiner	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Jay Dubiner	 	 
	 

	 	 	 	Title:
	 	Senior Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Authentic Fitness On-Line, Inc.	 	 
	 	 	Calvin Klein Jeanswear Company	 	 
	 	 	CCC Acquisition Corp.	 	 
	 	 	Ckj Holdings, Inc.	 	 
	 	 	Designer Holdings Ltd.	 	 
	 	 	Ocean Pacific Apparel Corp.	 	 
	 	 	Warnaco Puerto Rico, Inc.	 	 
	 	 	Warnaco Retail Inc.	 	 
	 	 	Warnaco Swimwear Inc.	 	 
	 	 	Warnaco Swimwear Products Inc.	 	 
	 	 	Cku.Com Inc.	 	 
	 	 	Warnaco U.S., Inc., as Guarantors	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Stanley P. Silverstein	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Stanley P. Silverstein	 	 
	 

	 	 	 	Title:
	 	President and Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	4278941 Canada Inc., as Guarantor	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Stanley P. Silverstein	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Stanley P. Silverstein	 	 
	 

	 	 	 	Title:	 	 	 	 





[SIGNATURE PAGE TO CANADIAN AMENDMENT NO. 1]




 


 









 





	 	 	 	 	 	 	 	 	 
	 	 	Bank of America, N.A. (acting through its Canada Branch),	 	 
	 	 	as Administrative Agent and Collateral Agent	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Medina Sales de Andrade	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Medina Sales de Andrade	 	 
	 

	 	 	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Lenders	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Bank of America, N.A.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Medina Sales de Andrade	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Medina Sales de Andrade	 	 
	 

	 	 	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Deutsche Bank AG, Canada Branch	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Paul M. Jurist	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Paul M. Jurist	 	 
	 

	 	 	 	Title:
	 	Chief Country Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Marcellus Leung	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Marcellus Leung	 	 
	 

	 	 	 	Title:
	 	Assistant Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	The Bank of Nova Scotia	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ David Mahmood	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	David Mahmood	 	 
	 

	 	 	 	Title:
	 	Managing Director	 	 






[SIGNATURE PAGE TO CANADIAN AMENDMENT NO. 1]