AMENDMENT NO. 2 TO RECEIVABLES PURCHASE AGREEMENT
Exhibit 10.3
EXECUTION COPY
THIS AMENDMENT NO. 2 TO RECEIVABLES PURCHASE AGREEMENT (this “Amendment”), dated as of
April 13, 2009, is entered into among HBI RECEIVABLES LLC, as seller (“Seller”),
HANESBRANDS INC., in its capacity as servicer (in such capacity, the “Servicer”), the
Committed Purchasers party hereto, the Conduit Purchasers party hereto, the Managing Agents party
hereto, and HSBC SECURITIES (USA) INC. (“HSBC”), as assignee of JPMORGAN CHASE BANK, N.A.,
as agent (in such capacity, the “Agent”). Capitalized terms used herein without definition
shall have the meanings ascribed thereto in the “Purchase Agreement” referred to below.
PRELIMINARY STATEMENTS
A. Reference is made to that certain Receivables Purchase Agreement dated as of November 27,
2007 among Seller, Servicer, the Committed Purchasers, the Conduit Purchasers and the Agent (as
amended prior to the date hereof and as the same may be further amended, restated, supplemented or
modified from time to time, the “Purchase Agreement”).
B. For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto have agreed to amend certain provisions of the Purchase Agreement
upon the terms and conditions set forth herein.
SECTION 1. Amendment. Subject to the satisfaction of the conditions precedent set
forth in Section 3 hereof, the parties hereto hereby agree to amend the Purchase Agreement
as follows:
(a) Section 2.4 of the Purchase Agreement is hereby amended to delete the
second clause in the priority of payments contained therein in its entirety and
replace it with the following:
(ii) second, to the Agent, for its own account, all accrued and unpaid
fees under the Agent Fee Letter, and to each Managing Agent, for its own account
or for the benefit of the Purchasers in its Purchase Group, all accrued and
unpaid fees under the Fee Letter and all Yield, ratably in accordance with such
amounts owed to such parties;
(b) Section 7.1 of the Purchase Agreement is hereby amended to add the
following paragraph (n) to the end of such section:
(n) Covenant to Amend Definition of Eligible Receivables. Each of the
Seller and the Servicer hereby covenants and agrees that the definition of
“Eligible Receivables” shall be amended, in form and substance mutually
satisfactory to the Seller, Servicer, each Managing Agent and the Agent, no
later than 30 days following the date on which the Managing Agents complete
their review of the results of the Post-Closing Field Examination if
such
* PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST
amendment is deemed necessary or desirable by each of the Managing Agents in
their sole, reasonable discretion (it being understood that any such amendment
shall not affect the status of any Receivable as an Eligible Receivable prior to
the effective date of such amendment).
For purposes of this paragraph (n), “Post-Closing Field Examination” shall mean
the field examination designated as such by, and performed by representatives
of, the Managing Agents, following April 13, 2009, of the Servicer’s collection,
operating and reporting systems, the Credit and Collection Policy of the
Originator, and historical receivables, data and accounts. The Managing Agents
agree to provide a copy of the results of the Post-Closing Field Examination to
Servicer, each other Managing Agent and the Agent within 5 Business Days of its
receipt thereof.
(c) Article VIII of the Purchase Agreement is hereby amended to delete
Section 8.5 in its entirety and replace it with the following:
Section 8.5 Reports. The Servicer shall prepare and forward to
each Managing Agent and the Agent (i) at any time during which a Downgrade Event
has occurred and is continuing, on each Business Day, a Daily Report which will
include information regarding the Receivables as of the previous Business Day,
(ii) on Wednesday of each week (or if such Wednesday is not a Business Day, on
the immediately preceding Business Day), a Weekly Report which will include
information regarding the Receivables for the seven (7)-day period ending (and
including) the immediately preceding Friday, (iii) (x) prior to May 2009, on the
third Thursday of each month (or, if such day is not a Business Day, on the next
succeeding Business Day) and (y) commencing in May 2009, on the 23rd
day of each month (or, if such day is not a Business Day, on the next succeeding
Business Day), and at such other additional times as the Agent or any Managing
Agent shall request, a Settlement Report which will include information
regarding the Receivables for the most recently ended Calendar Month and (iv) at
such times as the Agent or any Managing Agent shall request, a listing by
Obligor of all Receivables together with an aging of such Receivables.
(d) Section 9.1 of the Purchase Agreement is hereby amended to delete paragraph
(f) in its entirety and replace it with the following:
(f) As at the end of any Calendar Month:
| (i) | the average of the Delinquency
Ratios as of the end of such Calendar Month and the two
preceding Calendar Months shall exceed 4.75%; |
2
| (ii) | the average of the
Loss-to-Liquidation Ratios as of the end of such Calendar Month
and the two preceding Calendar Months shall exceed 2.75%; or |
||
| (iii) | the average of the Dilution
Ratios as of the end of such Calendar Month and the two
preceding Calendar Months shall exceed 14.25%. |
(e) Exhibit I to the Purchase Agreement is hereby amended to add the following
definitions of “Downgrade Event” and “PNC” in the appropriate alphabetical
order:
“Downgrade Event” means the occurrence of any one or more of the
following: (i) HBI’s issuer rating is below B- by S&P, (ii) HBI’s senior
unsecured long-term debt rating is below B3 by Xxxxx’x or (iii) HBI’s debt under
the First Lien Credit Agreement is rated below B3 by Xxxxx’x.
“PNC” means PNC Bank, N.A., and its successors and assigns.
(f) Exhibit I to the Purchase Agreement is hereby amended to delete the
definitions of “Agent Fee Letter”, “Concentration Limit”, “CP Rate”,
“Dilution Reserve Floor”, “Facility Termination Date”, “Fee Letter”,
“HSBC”, “Loss Reserve Floor”, “Settlement Date” and “Stress
Factor” and replace them with the following:
“Agent Fee Letter” means the letter agreement dated as of April 13,
2009, between the Agent and Seller as the same may be amended, restated,
supplemented or otherwise modified from time to time.
“Concentration Limit” means, for any Obligor and its Affiliates, at
any time, the amount equal to the product of (a) either (i) 3.00% or (ii) such
other higher percentages (each, a “Special Concentration Percentage”)
for such Obligors and its Affiliates as are set forth on Schedule C,
which Special Concentration Percentage is subject to reduction or cancellation
(1) by the Agent with respect to any Obligor, or (2) by the Agent, upon written
demand by any Managing Agent, with respect to any Obligor whose short term debt
ratings are withdrawn or downgraded by S&P or Xxxxx’x, in either case of (1) or
(2), upon five (5) Business Days’ prior notice to Seller, the other Managing
Agents, the Agent and the Servicer and (b) the aggregate Outstanding Balance of
all Eligible Receivables at such time.
“CP Rate” means:
(a) with respect to any Conduit Purchaser for which HSBC or PNC is
the Managing Agent, for any Accrual Period for any Purchaser Interest, to
the extent such Conduit Purchaser funds such Purchaser Interest by
issuing Commercial Paper, a per annum rate equal to the weighted average
of the rates (as determined by the
3
applicable Managing Agent and which shall include commissions of
placement agents and dealers, incremental carrying costs incurred with
respect to the commercial paper of such Person maturing on dates other
than those on which corresponding funds are received by such Conduit
Purchaser, other borrowings by such Conduit Purchaser and any other costs
associated with the issuance of commercial paper) payable by such Conduit
Purchaser in respect of its Commercial Paper outstanding during such
Accrual Period that is allocated, in whole or in part, to fund or
maintain such Purchaser Interest during such Accrual Period, converted
(as necessary) to an annual yield equivalent rate calculated on the basis
of a 360-day year; and
(b) for any Accrual Period for any Purchaser Interest funded by a
Conduit Purchaser that becomes a party to this Agreement pursuant to an
Assignment Agreement, to the extent such Conduit Purchaser funds such
Purchaser Interest by issuing Commercial Paper, the “CP Rate” set forth
in such Assignment Agreement;
provided, that at all times after the occurrence and during the
continuance of an Amortization Event, the CP Rate shall mean the Default
Rate.
“Dilution Reserve Floor” means 17.0%.
“Facility Termination Date” means the earliest to occur of (i)
April 12, 2010 and (ii) the Amortization Date.
“Fee Letter” means that certain letter agreement dated as of April
13, 2009, among Seller, the Agent and the Managing Agents, as it may be amended,
restated, supplemented or otherwise modified and in effect from time to time.
“HSBC” means HSBC Securities (USA) Inc., and its successors and
assigns.
“Loss Reserve Floor” means 15.0%.
“Prime Rate” means the rate of interest per annum publicly
announced from time to time by HSBC Bank USA, N.A. as its prime rate in effect
at its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective; provided that at all times after the occurrence and during
the continuance of an Amortization Event, the Prime Rate shall mean the Default
Rate.
“Settlement Date” means (i) prior to May 2009, the date that is two
(2) Business Days after the third Thursday of each month (or, if such third
Thursday is not a Business Day, two (2) Business Days after the next
4
succeeding Business Day) and (ii) commencing in May 2009, the 15th
day of each month (or, if such day is not a Business Day, the next succeeding
Business Day).
“Stress Factor” means, (i) at any time during which a Downgrade
Event has occurred and is continuing, 2.50, and (ii) at all other times, 2.25.
(g) Exhibit I to the Purchase Agreement is hereby amended to delete the
definitions of “CP Costs” and “JPMorgan” in their entirety.
(h) The Purchase Agreement is hereby amended to delete each and every reference to
“JPMorgan” and “JPMorgan Chase Bank, N.A.” insofar as such references are made to the Person
serving as the “Agent”, and to replace such references with “HSBC” and “HSBC Securities
(USA) Inc.”, respectively.
(i) The Purchase Agreement is hereby amended to delete Schedule A in its
entirety and replace it with the new Schedule A attached hereto as Attachment 1.
(j) The Purchase Agreement is hereby amended to delete Schedule C in its
entirety and replace it with the new Schedule C attached hereto as Attachment 2.
SECTION 2. Representations and Warranties. Each of the Seller and the Servicer
hereby represents and warrants to each of the other parties hereto, as to itself that:
(a) It has all necessary corporate or company power and authority to execute and
deliver this Amendment and to perform its obligations under the Purchase Agreement as
amended hereby, the execution and delivery of this Amendment and the performance of its
obligations under the Purchase Agreement as amended hereby has been duly authorized by all
necessary corporate or company action on its part and this Amendment constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws relating to or limiting creditors’ rights generally and by general
principles of equity (regardless of whether enforcement is sought in a proceeding in equity
or at law).
(b) On the date hereof, before and after giving effect to this Amendment, (i) no
Amortization Event or Potential Amortization Event has occurred and is continuing and (ii)
the aggregate Purchaser Interests do not exceed 100%.
5
SECTION 3. Conditions Precedent. This Amendment shall become effective on the first
Business Day (the “Effective Date”) on which (i) the Agent or its counsel has received five
(5) counterpart signature pages to each of this Amendment, the Fee Letter of even date herewith and
the Agent Fee Letter of even date herewith, in each case, executed by each of the parties hereto
and (ii) each Managing Agent has received the Up-Front Fee (as such term is defined in the Fee
Letter) due in connection with the execution of this Amendment.
SECTION 4. Reference to and Effect on the Transaction Documents.
(a) Upon the effectiveness of this Amendment, (i) each reference in the Purchase
Agreement to “this Receivables Purchase Agreement”, “this Agreement”, “hereunder”, “hereof”,
“herein” or words of like import shall mean and be a reference to the Purchase Agreement as
amended or otherwise modified hereby, and (ii) each reference to the Purchase Agreement in
any other Transaction Document or any other document, instrument or agreement executed
and/or delivered in connection therewith, shall mean and be a reference to the Purchase
Agreement as amended or otherwise modified hereby.
(b) Except as specifically amended, terminated or otherwise modified above, the terms
and conditions of the Purchase Agreement, of all other Transaction Documents and any other
documents, instruments and agreements executed and/or delivered in connection therewith,
shall remain in full force and effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of the Agent or any Purchaser under the Purchase
Agreement or any other Transaction Document or any other document, instrument or agreement
executed in connection therewith, nor constitute a waiver of any provision contained
therein.
6
SECTION 5. Execution in Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument. Delivery of an executed counterpart of a signature
page to this Amendment by facsimile or other electronic format shall be effective as delivery of a
manually executed counterpart of this Amendment.
SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK.
SECTION 7. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment for any other
purpose.
SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to pay on demand
all reasonable costs and expenses of the Agent, the Managing Agents or Purchasers in connection
with the preparation, execution and delivery of this Amendment and any of the other instruments,
documents and agreements to be executed and/or delivered in connection herewith, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel to the Agent or Purchasers
with respect thereto.
[Remainder of Page Deliberately Left Blank]
7
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed
by their respective officers as of the date first above written.
| HBI RECEIVABLES LLC | ||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: Xxxxxxx X. Xxxx Title: President and Chief Executive Officer |
||||
| HANESBRANDS INC., as Servicer | ||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: Xxxxxxx X. Xxxx Title: Senior Vice President and Treasurer |
||||
Signature Page
to
Amendment No. 2 to RPA
to
Amendment No. 2 to RPA
| BRYANT PARK FUNDING LLC, as a Conduit Purchaser | ||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: Xxxxxx X. Xxxxx Title: Vice President |
||||
| HSBC SECURITIES (USA) Inc., as
a Managing Agent and Agent |
||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: Xxxxxxx Xxxxx Title: Vice President |
||||
| HSBC BANK USA, NATIONAL
ASSOCIATION, as a Committed Purchaser |
||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: Xxxxxxx X. Xxxxx Title: Assistant Vice President |
||||
Signature Page
to
Amendment No. 2 to RPA
to
Amendment No. 2 to RPA
| MARKET STREET FUNDING LLC, as a Conduit Purchaser | ||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: Xxxxx X. Xxxxx Title: Vice President |
||||
| PNC BANK, N.A., as a Committed Purchaser and as a Managing Agent |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: Xxxxxxx X. Xxxxxx Title: Vice President |
||||
Signature Page
to
Amendment No. 2 to RPA
to
Amendment No. 2 to RPA
Attachment 1 to Amendment No. 2 to Receivables Purchase Agreement
SCHEDULE A
PURCHASE GROUPS; COMMITMENTS; GROUP PURCHASE LIMITS
PURCHASE GROUPS; COMMITMENTS; GROUP PURCHASE LIMITS
HSBC Purchase Group |
||
Group Purchase Limit:
|
$125,000,000 | |
Managing Agent:
|
HSBC Securities (USA) Inc. | |
Conduit Purchaser:
|
Bryant Park Funding LLC | |
Committed Purchaser:
|
HSBC Bank USA, National Association | |
Commitment:
|
$125,000,000 | |
PNC Purchase Group |
||
Group Purchase Limit:
|
$125,000,000 | |
Managing Agent:
|
PNC Bank, N.A. | |
Conduit Purchaser:
|
Market Street Funding LLC | |
Committed Purchaser:
|
PNC Bank, N.A. | |
Commitment:
|
$125,000,000 |
Attachment 2 to Amendment No. 2 to Receivables Purchase Agreement
SCHEDULE C
SPECIAL CONCENTRATION PERCENTAGES
Obligor Name
|
Special Concentration Percentage | ||||
[****]
|
[****]% | ||||
[****]
|
[****]% | ||||
[****]
|
[****]% | ||||
[****]
|
[****]% | ||||
[****]
|
[****]% | ||||
[****]
|
[****]% | ||||
**** Omitted pursuant to a confidential treatment request
