Exhibit 99.10
Designer Holdings Limited
90 Park Avenue
New York, NY 10016
December 1, 2000
Corporate Trust Agency Department Mr. Stanley P. Silverstein,
The Bank of New York, as Indenture as Regular Trustee
Trustee and as Property Trustee Mr. William S. Finkelstein,
101 Barclay Street as Regular Trustee
New York, New York 10286 c/o Designer Holdings Ltd.
90 Park Avenue
New York, New York 10016
Re: Interest Period Extension Election
Ladies and Gentlemen:
As you are aware, on September 29, 2000, The Warnaco Group, Inc.
announced agreements that restructured all of its and its subsidiaries'
bank debt in the amount of $2.56 billion through August 12, 2002 with no
material debt maturities prior to August 2002. These agreements closed and
funded on October 6, 2000.
As was announced on September 29, 2000, as part of the agreements
reached with the lender groups approving the financing transactions,
Warnaco agreed to suspend future cash dividends on Warnaco's common stock
through at least the maturity date of the restructured loan facilities. The
agreements from Designer Holdings Ltd. involving its 6% Convertible
Subordinated Debentures due 2016 permit the Company to extend its currently
running interest payment period under the Debentures at any time when The
Warnaco Group, Inc. is not declaring and paying common stock dividends for
up to twenty consecutive financial quarters.
The Company has determined, in connection with the $2.56 billion
financing recapitalization and the implementation of its global operating
initiatives program that the Company believes should result in substantial
improvement in operating earnings in 2001, that it would be appropriate at
this time to implement the contractual extension provisions of its
agreements with you to extend its currently running interest payment period
under the agreements.
Accordingly, we refer to the Indenture dated as of November 6,
1996 (the "Indenture"), between Designer Holdings Ltd., as Issuer (the
"Issuer"), and IBJ Schroder Bank and Trust Company, as Trustee, and the
Issuer's 6% Convertible Subordinated Debentures due 2016 (the "Debentures")
issued thereunder to Designer Finance Trust. The Issuer hereby notifies you
of its election pursuant to the provisions of the Debentures and of Section
312 of the Indenture to extend the currently running interest payment
period, which otherwise would end on December 31, 2000, by an additional
quarter to March 31, 2001. Although the extension provided for in this
notice is for one quarter, it is the Issuer's present expectation that it
will continue to extend the interest period on a quarterly basis at least
through the earliest maturity date of current financing facilities, which
is August 12, 2002.
As Warnaco commented in its September 2000 release, Warnaco
believes that the new financing agreements, together with the operational
initiatives that it has been implementing and expanding over the last
several months, provide a foundation for Warnaco's future performance.
Warnaco continues to expect that its earlier global operating initiatives
program and the additional operating initiatives that are presently being
implemented should result in substantial improvement in operating earnings
in 2001. Warnaco remains fully engaged and committed to achieving enhanced
financial performance, maximizing the business enterprise value of the
company and reinstating the common stock dividend and the cash interest
payment provisions of our agreements with you when appropriate in the
future.
Very truly yours,
DESIGNER HOLDINGS LTD.
By: /s/ William S. Finkelstein
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Name: William S. Finkelstein
Title: Senior Vice President and
Treasurer
