[CONFORMED COPY]
FIRST AMENDMENT TO
CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of
October 14, 1993 (this "Amendatory Agreement"), among WARNACO
INC. (the "Borrower"), the various financial institutions
signatories hereto (the "Lenders") and THE BANK OF NOVA SCOTIA,
as agent (the "Agent") for the Lenders,
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent are parties
to a Credit Agreement, dated as of July 16, 1993 (as amended or
otherwise modified to the date hereof, the "Existing Credit
Agreement");
WHEREAS, the Borrower has requested that the Lenders amend
the Existing Credit Agreement in certain respects; and
WHEREAS, the Lenders have agreed, subject to the terms and
conditions hereinafter set forth, to amend the Existing Credit
Agreement in certain respects as provided below (the Existing
Credit Agreement, as so amended by this Amendatory Agreement,
being referred to as the "Credit Agreement");
NOW, THEREFORE, in consideration of the agreements herein
contained, the parties hereto agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. The following terms
(whether or not underscored) when used in this Amendatory
Agreement shall have the following meanings (such meanings to be
equally applicable to the singular and plural form thereof):
"Agent" is defined in the preamble.
"Amendatory Agreement" is defined in the preamble.
"Amendment No. 1" is defined in Subpart 3.1.
"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the third recital.
"Existing Credit Agreement" is defined in the first recital.
"First Amendment Effective Date" is defined in Subpart 3.1.
"Lenders" is defined in the preamble.
SUBPART 1.2. Other Definitions. Terms for which meanings
are provided in the Existing Credit Agreement are, unless
otherwise defined herein or the context otherwise requires, used
in this Amendatory Agreement with such meanings.
PART II
AMENDMENTS TO THE
EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the First
Amendment Effective Date, the Existing Credit Agreement is hereby
amended in accordance with Subpart 2.1 through Subpart 2.8;
except as so amended, the Existing Credit Agreement shall
continue in full force and effect.
SUBPART 2.1. Amendments to Article I. Article I of the
Existing Credit Agreement is hereby amended in accordance with
Subparts 2.1.1 through 2.1.2.
SUBPART 2.1.1. Section 1.1 of the Existing Credit Agreement
is hereby amended by inserting the following definitions in such
Section in the appropriate alphabetical sequence:
"Amendment No. 1" means the First Amendment, dated as of
October 14, 1993, to this Agreement among the Borrower,
the Lenders and the Agent.
"Applicable Margin" means a percentage per annum
determined by reference to the Implied Debt Rating as set
forth below:
Implied Debt Rating Base Rate Loans LIBO Rate Loans
BB or Below 0.500% 1.500%
BB+ 0.250% 1.250%
BBB- 0.000% 0.875%
BBB or Above 0.000% 0.750%
The Applicable margin shall be determined by reference
to the Implied Debt Rating in effect from time to time;
provided, however, that no change in the Applicable
Margin shall be effective until three Business Days
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after the date on which the Agent receives evidence
reasonably satisfactory to it from Group or the
Borrower that a new Implied Debt Rating is in effect.
In the event that at any time no Implied Debt Rating
shall be in effect, the Applicable Margin shall be
0.500% for each Base Rate Loan and 1.500% for each LIBO
Rate Loan.
"Collateral Agent" is defined in the U.S. Credit
Agreement.
"First Amendment Effective Date" is defined in
Subpart 3.1 of Amendment No. 2.
"Group" means The Warnaco Group, Inc., a Delaware
corporation.
"Implied Debt Rating" means the rating assigned by S&P
to Group's "implied senior debt" from time to time, as
notified to Group by S&P in its letter dated July 30, 1993
or any subsequent letter issued by S&P or, if such rating is
unavailable, the equivalent rating assigned by Moody's to
Group's "implied senior debt", as notified in writing to
Group by Moody's. For purposes of this Agreement, the
following is the equivalent rating by Moody's for each
rating by S&P:
S&P Moody's
BB Ba2
BB+ Ba1
BBB- Baa3
BBB Baa2
The Lenders acknowledge and agree that the Implied Debt
Rating as of the First Amendment Effective Date is BB+, and
that from and after the First Amendment Effective Date
interest and all other fees and amounts calculated by
reference to the Implied Debt Rating shall be calculated
after giving effect to such Implied Debt Rating.
"Moody's" means Moody's Investors Service, Inc.
"S&P" means Standard & Poor's Corporation.
SUBPART 2.1.2. Section 1.1 of the Existing Credit Agreement
is hereby further amended as follows:
(a) the definition of "Commitment Termination Event"
is hereby amended in its entirety to read as follows:
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"'Commitment Termination Event'" means
(a) the occurrence of any event or condition
described in clause (f) of Section 6.01 of the U.S.
Credit Agreement;
(b) the occurrence and continuance of any other
Event of Default and either
(i) the declaration of the Loans to be due
and payable pursuant to Section 9.3, or
(ii) in the absence of such declaration, the
giving of notice by the Agent, acting at the
direction of the Required Lenders, to the Borrower
that the Commitments have been terminated; or
(c) the termination of, or any refinancing,
refunding, replacement, renewal or restatement of, the
U.S. Credit Agreement.";
(b) the definition of "Intercreditor Agreement" is
hereby amended in its entirety to read as follows:
"`Intercreditor Agreement' means the Intercreditor
Agreement, dated as of October 14, 1993, between the
Agent and Citicorp USA, Inc., in substantially the form
of Annex 1 to Amendment No. 2.";
(c) the definition of "Loan Commitment Amount" is
hereby amended in its entirety to read as follows:
"`Loan Commitment Amount' means $20,000,000, as
such amount may be reduced by Section 2.2.
Notwithstanding anything to the contrary contained in
this Agreement (including Section 2.1.3) in no event
shall Scotiabank be required to make any Loans if and
to the extent that, after giving effect to such Loans
(and any adjustments to Scotiabank's Percentage (and
its resulting pro rata portion of Letter of Credit
Outstandings) required pursuant to the terms of this
Agreement), the aggregate outstanding principal amount
of Loans made by Scotiabank together with Scotiabank's
Percentage of Letter of Credit Outstandings would
exceed $40,000,000.";
(d) the definition of "Loan Document" is hereby
amended in its entirety to read as follows:
"`Loan Document' means this Agreement, each Note,
the Tradexpress Agreement, the Security Agreement and
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each other agreement, document or instrument delivered
in connection with this Agreement (including each
guaranty, mortgage and each other collateral security
agreement and pledge agreement delivered on (or,
pursuant to clauses (p) and (q) of Section 5.01 of the
U.S. Credit Agreement, after) the Second Amendment
Effective Date which grants in favor of, inter alia,
the Collateral Agent for the benefit of (or grants
directly to) the RL Lenders a security interest in the
Borrower's, any of its Subsidiaries' or Group's
assets), whether or not specifically mentioned
herein.";
(e) the definition of "Stated Maturity Date" is hereby
amended in its entirety to read as follows:
"'Stated Maturity Date'" means, in the case of any
Loan, the date that is 60 days after the Loan
Commitment Termination Date; provided, however, that in
the case of a Commitment Termination Event of the type
described in clause (c) of the definition of
"Commitment Termination Event", the Stated Maturity
Date shall be the date on which such event occurs.";
and
(f) the definition of "U.S. Credit Agreement" is
hereby amended in its entirety to read as follows:
"`U.S. Credit Agreement' means the Credit
Agreement, dated as of October 14, 1993, among the
Borrower, The Warnaco Group, Inc., the Banks named
therein, The Bank of Nova Scotia and Citicorp USA,
Inc., as Managing Agents, Citicorp USA, Inc., as
Documentation Agent and Collateral Agent, and The Bank
of Nova Scotia, as Paying Agent, Swing Line Bank and an
Issuing Bank, as such agreement was in effect on the
Second Amendment Effective Date, and as further
amended, restated or waived from time to time with the
consent of the Required Lenders hereunder solely for
purposes of this Agreement, and regardless of whether
such U.S. Credit Agreement is terminated, unless in
connection with such termination a replacement credit
facility satisfactory to the Required Lenders hereunder
is entered into in which case, the affirmative and
negative covenants in such facility shall become the
subject of this Agreement."
SUBPART 2.2. Amendments to Article III. Article III of the
Existing Credit Agreement is hereby amended in accordance with
Subparts 2.2.1 through 2.2.2.
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SUBPART 2.2.1. Clauses (a) and (b) of Section 3.2.1 of the
Existing Credit Agreement are hereby amended in their entirety to
read as follows:
"(a) on that portion maintained from time to
time as a Base Rate Loan, equal to the sum of the
Alternate Base Rate from time to time in effect
plus the Applicable Margin in effect from time to
time; or
(b) on that portion maintained as a LIBO Rate
Loan (whether made pursuant to clause (a) or clause (b)
of Section 2.3), during each Interest Period applicable
thereto, equal to the sum of the LIBO Rate (Reserve
Adjusted) for such Interest Period plus the Applicable
Margin in effect from time to time."
SUBPART 2.2.2. Section 3.3.1 of the Existing Credit
Agreement is hereby amended in its entirety to read as follows:
"SECTION 3.3.1 Letter of Credit Face Amount Fee. The
Borrower agrees to pay to the Agent, for the account of the
Lenders, a fee for each Letter of Credit for the period from
and including the date of the issuance of such Letter of
Credit to (but not including) the earlier of (a) the date
upon which such Letter of Credit expires and (b) the date
upon which the Stated Amount of such Letter of Credit is
irrevocably reduced to zero (by the making of a Disbursement
by the Issuer or otherwise), at the rates per annum
determined by reference to the Implied Debt Rating in effect
from time to time as set forth below; (provided, however,
that no change in the rate for Letters of Credit shall be
effective until three Business Days after the date on which
the Agent receives evidence reasonably satisfactory to it
from Group or the Borrower that a new Implied Debt Rating is
in effect):
Rate for
Implied Debt Rating Letters of Credit
BB or below 1.000%
BB+ 0.750%
BBB- 0.500%
BBB or above 0.500%
In the event that at any time no Implied Debt Rating shall
be in effect, the applicable rate per annum for purposes of
determining the letter of credit fees provided for hereunder
shall be 1.000% for documentary Letters of Credit. Such fee
shall be payable by the Borrower in arrears on each Monthly
Payment Date, and on the Letter of Credit Commitment
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Termination Date for any period then ending for which such
fee shall not theretofore have been paid, commencing on the
first such date after the issuance of such Letter of
Credit."
SUBPART 2.3. Amendment to Article IV. Article IV of the
Existing Credit Agreement is hereby amended in accordance with
Subpart 2.3.1.
SUBPART 2.3.1. The first sentence of Section 4.7 of the
Existing Credit Agreement is hereby amended in its entirety to
read as follows:
"Upon (i) the occurrence of any Commitment Termination
Event of the type described in clause (c) of the definition
of "Commitment Termination Event", (ii) the occurrence and
during the continuation of any event or condition specified
in clause (f) of Section 6.01 of the U.S. Credit Agreement,
or (iii) the occurrence and during the continuance of any
other Event of Default,
(a) an amount equal to that portion of Letter of
Credit Outstandings attributable to outstanding and undrawn
Letters of Credit shall, without demand upon or notice to
the Borrower, be deemed to have been paid or disbursed by
the Issuer under such Letters of Credit (notwithstanding
that such amount may not in fact have been so paid or
disbursed), and
(b) upon notification by the Issuer to the Agent and
the Borrower of its obligations under this Section, the
Borrower shall be immediately obligated to reimburse the
Issuer the amount deemed to have been so paid or disbursed
by the Issuer.
SUBPART 2.4. Amendment to Article V. Article V of the
Existing Credit Agreement is hereby amended in accordance with
Subpart 2.4.1.
SUBPART 2.4.1. Section 5.9 of the Existing Credit Agreement
is hereby amended by deleting the references to "clauses (f) and
(g) of Section 10.1 of the U.S. Credit Agreement" appearing in
the second and third lines of such Section, and inserting "clause
(f) of Section 6.01 of the U.S. Credit Agreement" in place
thereof.
SUBPART 2.5. Amendment to Article VI. Article VI of the
Existing Credit Agreement is hereby amended in accordance with
Subpart 2.5.1.
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SUBPART 2.5.1. Clauses (b) and (c) of Section 6.2.1 of the
Existing Credit Agreement are hereby amended in their entirety to
read as follows:
"(b) no event of default or any condition,
occurrence or event which, after notice or lapse of
time or both, would constitute an event of default
shall have occurred and be continuing in the
performance of any affirmative and negative covenants
contained in Article V of the U.S. Credit Agreement and
regardless of whether such U.S. Credit Agreement is
terminated, unless in connection with such termination
a replacement credit facility which the Required
Lenders hereunder have approved is entered into in
which case, the affirmative and negative covenants in
such facility shall become the subject of this clause
(b); and
(c) none of the events described in clauses (a),
(e), (f), (g), (h), (k), (l), (m) or (n) of Section
6.01 of the U.S. Credit Agreement (without giving
effect to any termination of the U.S. Credit Agreement,
unless in connection with such termination a
replacement credit facility to which the Required
Lenders hereunder have approved, in which case the
analogous provisions of such replacement credit
facility shall become the subject of this clause (c)),
shall have occurred and be continuing."
SUBPART 2.6. Amendments to Article VIII. Article VIII of
the Existing Credit Agreement is hereby amended in accordance
with Subparts 2.6.1 through 2.6.4.
SUBPART 2.6.1. Section 8.1.3 of the Existing Credit
Agreement is hereby amended in its entirety to read as follows:
"SECTION 8.1.3. Security. The Borrower covenants and
agrees
(a) to give to the Agent, for the benefit of the
Lender Parties (as defined in the Security Agreement),
solely to secure the Borrower's obligation to reimburse
the Issuer for Disbursements under a Letter of Credit
(and to pay fees in respect of such Letter of Credit),
from time to time a security interest in all documents
of title (including bills of lading, air way bills,
ocean bills, warehouse receipts and other documents,
instruments and other evidence of title) issued in
respect of Goods (as such term is defined in the
Security Agreement) relating to such Letter of Credit
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and all contracts, contract rights and policies or
certificates of insurance specifically relating to such
Goods relating to such Letter of Credit; and
(b) to grant to Agent, or to the Collateral Agent
(as defined in the U.S. Credit Agreement) for the
benefit of, inter alia, the RL Lenders, to secure all
of the Borrower's Obligations in respect of RL Loans
hereunder, a Lien on and security interest in all
assets in which a Lien was (or in the future may be)
granted in favor of the parties to the U.S. Credit
Agreement, with the Lien and security interest in favor
of the Agent and the RL Lenders described in this
clause to be pari passu with the Lien and security
interest granted in favor of the parties to the U.S.
Credit Agreement, all on terms reasonably satisfactory
to the Agent, together with guaranties from each Person
that delivers a guaranty pursuant to the terms of the
U.S. Credit Agreement."
SUBPART 2.6.2. Section 8.1.5 of the Existing Credit
Agreement is hereby amended in its entirety to read as follows:
"SECTION 8.1.5. Possession, etc. Until payment by the
Borrower to the Agent of all Obligations with respect to a
particular Letter of Credit, the Agent, on behalf of the
Lenders, shall have the absolute right and title to and the
unqualified right to the possession and disposal of the
Goods covered by such Letter of Credit, to the extent not
theretofore released to the Borrower on trust or bailee
receipt or otherwise, and all documents of title (including
bills of lading, air way bills, ocean bills, warehouse
receipts and other documents, instruments or other evidence
of title) issued in respect of the Goods relating to such
Letter of Credit, all contracts, contract rights and
policies or certificates of insurance specifically relating
to such Goods under such Letter of Credit (all of the
foregoing shall be referred to herein as the "Subject
Property" under such Letter of Credit) and shall be entitled
to exercise all rights as an unpaid seller of such Subject
Property."
SUBPART 2.6.3. Section 8.1.8 of the Existing Credit
Agreement is hereby amended in its entirety to read as follows:
"SECTION 8.1.8 Sale Upon Default. As more fully set
forth in the Security Agreement, the Borrower agrees that
the Agent, on behalf of the Lenders, whenever in its
discretion it deems it necessary for its protection, so long
as the Borrower is in default of its repayment Obligations
under a Letter of Credit (after giving effect to any grace
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period), may, without regard to the maturity of any of the
other Obligations, and with notice to the Borrower of not
less than 24 hours, sell by public or private sale or
realize in such other manner as the Agent thinks fit all or
any of the Goods in respect of such Letter of Credit, before
or after arrival and to the extent not theretofore released
to the Borrower on trust or bailee receipt or otherwise,
upon such terms and conditions and for such price in money
or other consideration as the Agent thinks fit; and the
Borrower covenants that any moneys received by the Agent as
proceeds of any such sale, after deduction of all fees and
expenses in connection therewith which with interest shall
be borne by the Borrower, shall be applied against the
Obligations in respect of such Letter of Credit and the
Borrower shall remain liable for and covenants to pay to the
Agent (for the benefit of the Lenders) on demand the balance
of the Obligations in respect of such Letter of Credit."
SUBPART 2.6.4. Section 8.1.9 of the Existing Credit
Agreement is hereby deleted in its entirety.
SUBPART 2.7. Amendments to Article IX. Article IX of the
Existing Credit Agreement is hereby amended in accordance with
Subparts 2.7.1 through 2.7.3.
SUBPART 2.7.1. Section 9.1.5 of the Existing Credit
Agreement is hereby amended by deleting the reference to "Section
10.1" appearing in the fifth line of such Section, and inserting
"Sections 6.01 or 6.02" in place thereof.
SUBPART 2.7.2. Section 9.1.6 of the Existing Credit
Agreement is hereby amended by deleting the reference to "clauses
(f) or (g) of Section 10.1" appearing in the second line of such
Section, and inserting "clause (f) of Section 6.01" in place
thereof.
SUBPART 2.7.3. Section 9.1.7 of the Existing Credit
Agreement is hereby amended in its entirety to read as follows:
"SECTION 9.1.7. Impairment of Security, etc. Any Loan
Document, or any Lien granted thereunder, shall (except in
accordance with clause (b)(ii) of Section 2.05 of the U.S.
Credit Agreement), in whole or in part, terminate, cease to
be effective or cease to be the legally valid, binding and
enforceable obligation of the obligor that is a party
thereto; the Borrower or any other party shall, directly or
indirectly, contest in any manner such effectiveness,
validity, binding nature or enforceability (except as
aforesaid); or any Lien securing any Obligation shall, in
whole or in part, cease to be a perfected first priority
Lien (except as aforesaid), subject only to those exceptions
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expressly permitted by a Loan Document or pursuant to the
Intercreditor Agreement."
SUBPART 2.8. Global Amendment to Existing Credit Agreement
and Loan Documents. The Existing Credit Agreement and each Loan
Document is hereby amended by
(a) deleting each reference to the "Agent under the
U.S. Credit Agreement" (and similar references to such
agent), and substituting the "Collateral Agent" in place
thereof; and
(b) deleting each reference to "clauses (f) or (g) of
Section 10.1 of the U.S. Credit Agreement", and substituting
"clause (f) of Section 6.01 of the U.S. Credit Agreement" in
place thereof.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1. Second Amendment Effective Date. This
Amendatory Agreement (and the amendments and modifications
contained herein) shall become effective, and shall thereafter be
referred to as "Amendment No. 2", on the date (the "Second
Amendment Effective Date") when all of the conditions set forth
in this Subpart 3.1 have been satisfied.
SUBPART 3.1.1. Execution of Counterparts. The Agent shall
have received counterparts of this Amendatory Agreement, duly
executed and delivered on behalf of the Borrower, the Agent and
each Lender.
SUBPART 3.1.2. Intercreditor Agreement. The Agent shall
have received a copy of the Intercreditor Agreement,
substantially in the form of Annex I hereto, duly executed and
delivered by the parties thereto.
SUBPART 3.1.3. Consummation of Refinancing. The Agent
shall have received evidence satisfactory to it that the
conditions to the effectiveness of the U.S. Credit Agreement have
been satisfied (or waived, pursuant to the terms thereof), and
that such U.S. Credit Agreement has refinanced all obligations
theretofore outstanding under the credit agreement, dated as of
March 26, 1992, as amended and restated as of October 1, 1992
(and as further amended or otherwise modified, the "Original U.S.
Credit Agreement"), among General Electric Capital Corporation,
as agent, certain financial institutions parties thereto, the
Borrower and Group.
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SUBPART 3.1.4. The Agent shall have received copies of each
agreement required to be delivered pursuant to clauses (e)(ii),
(e)(iii), (e)(iv), (e)(vi), (e)(viii), (e)(ix) and (e)(x) of
Section 3.01 of the U.S. Credit Agreement, duly executed and
delivered by each of the parties thereto, in form and substance
satisfactory to the Agent (including as to naming the RL Lenders
as secured parties, where applicable).
SUBPART 3.1.5. Opinions. The Agent shall have received
executed copies of each of the opinions required to be delivered
pursuant to clauses (e)(xviii) and (e)(xix) of Section 3.01 of
the U.S. Credit Agreement, naming the RL Lender as addressee.
SUBPART 3.1.6. Legal Details, etc. All documents executed
or submitted pursuant hereto shall be satisfactory in form and
substance to the Agent and its counsel. The Agent and its
counsel shall have received all information and such counterpart
originals or such certified or other copies or such materials, as
the Agent or its counsel may reasonably request, and all legal
matters incident to the transactions contemplated by this
Amendatory Agreement shall be satisfactory to the Agent and its
counsel.
PART IV
MISCELLANEOUS
SUBPART 4.1. Cross-References. References in this
Amendatory Agreement to any Part or Subpart are, unless otherwise
specified or otherwise required by the context, to such Part or
Subpart of this Amendatory Agreement.
SUBPART 4.2. Loan Document Pursuant to Existing Credit
Agreement. This Amendatory Agreement is a Loan Document executed
pursuant to the Existing Credit Agreement and shall be construed,
administered and applied in accordance with all of the terms and
provisions of the Existing Credit Agreement.
SUBPART 4.3. Successors and Assigns. This Amendatory
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
SUBPART 4.4. Counterparts. This Amendatory Agreement may
be executed by the parties hereto in several counterparts, each
of which when executed and delivered shall be deemed to be an
original and all of which shall constitute together but one and
the same agreement.
SUBPART 4.5. Governing Law. THIS AMENDATORY AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
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SUBPART 4.6. Consent to New U.S. Credit Agreement. By its
signature below each Lender hereby consents to the Borrower
terminating the Original U.S. Credit Agreement, and approves of
the terms of the U.S. Credit Agreement being entered into by the
Borrower, Group and others on the date hereof.
SUBPART 4.7. Waiver of Certain Provisions, etc. The
Lenders hereby waive any Default or Event of Default under the
Existing Credit Agreement (including Section 9.1.7 thereof) and
each Loan Document caused by the release and termination by
General Electric Capital Corporation as agent under the U.S.
Credit Agreement (as in effect immediately prior to the Second
Amendment Effective Date) on the Second Amendment Effective Date
of all liens (including any Liens) and security interests in the
collateral securing the Obligations.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendatory Agreement to be executed by their respective officers
as of the day and year first above written.
WARNACO INC.
By /s/ William S. Finklestein
Title: Senior Vice President
THE BANK OF NOVA SCOTIA,
as Agent and as Lender
By /s/ Terry K. Fryett
Title: Vice President
MITSUI NEVITT CAPITAL CORPORATION
By /s/ Jerry Parisi
Title: Vice President
SOCIETE GENERALE, NEW YORK BRANCH
By /s/ Jan Wertlieb
Title: Vice President
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