AMENDMENT NO. 1 TO RECEIVABLES PURCHASE AGREEMENT
Exhibit 10.2
Execution
Copy
THIS AMENDMENT NO. 1 TO RECEIVABLES PURCHASE AGREEMENT (this “Amendment”), dated as of
March 16, 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 JPMORGAN CHASE BANK, N.A. (“JPMorgan”), 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 2.1 of the Purchase Agreement is hereby amended to delete
clause (i) of the first sentence in its entirety and replace it with the following:
(i) such fees as set forth in the Fee Letter and in the Agent Fee Letter,
(b) Section 2.1 of the Purchase Agreement is hereby amended to delete the third
sentence in its entirety and replace it with the following:
Notwithstanding the foregoing, no provision of this Agreement, the Fee Letter or the Agent
Fee Letter shall require the payment or permit the collection of any amounts hereunder in
excess of the maximum permitted by applicable law.
(c) 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 or to be distributed to each
Managing Agent, for the benefit of the Purchasers in its Purchase
Group, as applicable,
* PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST
all
accrued and unpaid fees under the Fee Letter and the Agent Fee Letter and all Yield, ratably
in accordance with such amounts owed to such parties;
(d) 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) on each Business Day, a Daily Report which
will include information regarding the Receivables as of the previous Business
Day, (ii) on the third Thursday 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 (iii) 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.
(e) Section 9.1 of the Purchase Agreement is hereby amended to delete paragraph
(a)(i) in its entirety and replace it with the following:
(a) (i) Any Seller Party or the Originator shall fail to make any payment or
deposit required hereunder or under any other Transaction Document when due and,
in the case of a payment or deposit in respect of Capital, Yield or any fees due
under the Fee Letter or the Agent Fee Letter, such failure continues for two (2)
Business Days and, in the case of any such payment or deposit which is not in
respect of Capital, Yield or fees due under the Fee Letter or the Agent Fee
Letter, such failure continues for five (5) Business Days;
(f) Section 9.1 of the Purchase Agreement is hereby amended to delete paragraph
(f) in its entirety and replace it with the following:
(f) (i) As at the end of any Calendar Month through July 4, 2009:
| (A) | the average of the Delinquency Ratios as of the end of such Calendar Month and the two preceding Calendar Months shall exceed 4.0%; | ||
| (B) | the average of the Loss-to-Liquidation Ratios as of the end of such Calendar Month and the two preceding Calendar Months shall exceed 2.25%; or | ||
| (C) | the average of the Dilution Ratios as of the end of such Calendar Month and the two preceding Calendar Months shall exceed 13.5%; or |
(ii) As at the end of any Calendar Month beginning with the Calendar Month that begins on July
5, 2009:
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| (A) | the average of the Delinquency Ratios as of the end of such Calendar Month and the two preceding Calendar Months shall exceed 4.75%; | ||
| (B) | 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 | ||
| (C) | the average of the Dilution Ratios as of the end of such Calendar Month and the two preceding Calendar Months shall exceed 14.25%; or |
(g) Section 9.1 of the Purchase Agreement is hereby amended to delete paragraph
(h) in its entirety and replace it with the following:
(h) (i) As of the last day of any Fiscal Quarter occurring during any period set
forth below, HBI permits the Leverage Ratio to be greater than the ratio set
forth opposite such period:
| Period | Leverage Ratio | ||||
| Each Fiscal Quarter ending between October 16, 2008 and April 15, 2009 | 4.25:1.00 | ||||
| Each Fiscal Quarter ending between April 16, 2009 and July 15, 2009 | 4.20:1.00 | ||||
| Each Fiscal Quarter ending between July 16, 2009 and October 15, 2009 | 3.95:1.00 | ||||
| Each Fiscal Quarter ending between October 16, 2009 and January 15, 2010 | 3.60:1.00 | ||||
| Each Fiscal Quarter ending between January 16, 2010 and July 15, 2010 | 3.50:1.00 | ||||
| Each Fiscal Quarter ending between July 16, 2010 and July 15, 2011 | 3.25:1.00 | ||||
| Each Fiscal Quarter ending July 16, 2011 and thereafter | 3.00:1.00 | ||||
; or
(ii) As of the last day of any Fiscal Quarter occurring during any period set
forth below, HBI permits the Interest Coverage Ratio to be less than the ratio
set forth opposite such period:
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| Period | Interest Coverage Ratio | ||||
| Each Fiscal Quarter ending between October 16, 2008 and April 15, 2009 | 2.75:1.00 | ||||
| Each Fiscal Quarter ending between April 16, 2009 and January 15, 2010 | 2.50:1.00 | ||||
| Each Fiscal Quarter ending between January 16, 2010 and July 15, 2010 | 2.75:1.00 | ||||
| Each Fiscal Quarter ending between July 16, 2010 and July 15, 2011 | 3.00:1.00 | ||||
| Each Fiscal Quarter ending July 16, 2011 and thereafter | 3.25:1.00 | ||||
; or
(h) Article X of the Purchase Agreement is hereby amended to add the following
Section 10.5 thereto:
SECTION 10.5 Accounting Based Consolidation Event. If an Accounting
Based Consolidation Event shall at any time occur then, upon demand by the Agent
or the applicable Managing Agent, the Seller shall pay to the Agent or such
applicable Managing Agent, for the benefit of the relevant Affected Entity, such
amounts as such Affected Entity reasonably determines will compensate or
reimburse such Affected Entity for any resulting (i) fee, expense or increased
cost charged to, incurred or otherwise suffered by such Affected Entity, (ii)
reduction in the rate of return on such Affected Entity’s capital or reduction
in the amount of any sum received or receivable by such Affected Entity or (iii)
internal capital charge or other imputed cost determined by such Affected Entity
to be allocable to the Seller or the transactions contemplated in this Agreement
in connection therewith. Amounts under this Section 10.5 may be
demanded at any time without regard to the timing of issuance of any financial
statement by any Conduit or by any Affected Entity; provided, however,
that in no event may any Affected Entity (or the applicable Agent or Managing
Agent on its behalf) claim or receive reimbursement or compensation for amounts
under this Section 10.5 that would exceed 2.00% per annum on the Group
Purchase Limit for the related Purchaser Group from the date such Accounting
Based Consolidation Event occurs. If the Agent or any Managing Agent becomes or
reasonably believes that it will become entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Borrower of the event
by reason of which it has become or will become so entitled; provided
that any failure to give such notice shall not affect the rights to demand
payment under this section.
If any Affected Entity (or the applicable Agent or Managing Agent on its behalf)
requests compensation under this Section 10.5, then the Seller may, at its
sole
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expense and effort, upon notice to such Affected Entity and its related Managing
Agent, require the entire related Purchaser Group (but may not require less than all
of the Purchasers and the Managing Agent in such Purchaser Group) to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 12.1), all of their interests, rights and obligations
under this Agreement to assignees that shall assume such obligations (which
assignees may be other Purchasers if such Purchasers accept such assignment);
provided that each such assigning Purchaser and Managing Agent receives
payment in full, pursuant to an Assignment Agreement, of an amount equal to such
Persons’s share of the Aggregate Capital and Yield owing to such Purchaser and all
accrued but unpaid fees and other costs and expenses payable in respect of such
Purchaser Group’s share of the Purchaser Interests.
(i) Article XII of the Purchase Agreement is hereby amended to add the
following Section 12.3 thereto:
SECTION 12.3 Federal Reserve. Notwithstanding any other provision of
this Agreement to the contrary, any Committed Purchaser may at any time pledge
or grant a security interest in all or any portion of its rights (including,
without limitation, any Purchaser Interest and any rights to payment of Capital
and Yield) under this Agreement to secure obligations of such Committed
Purchaser to a Federal Reserve Bank, without notice to or consent of the Seller,
the Agent or any other Person; provided that no such pledge or grant of
a security interest shall release a Committed Purchaser from any of its
obligations hereunder, or substitute any such pledgee or grantee for such
Committed Purchaser as a party hereto.
(j) Section 13.5(b) of the Purchase Agreement is hereby amended to replace the
term “the Fee Letter” in the first sentence thereof with the phrase “the Fee Letter, the
Agent Fee Letter”.
(k) Exhibit I to the Purchase Agreement is hereby amended to add the following
definitions of “Accounting Based Consolidation Event”, “Affected Entity”,
“Agent Fee Letter”, “Alternate Base Rate”, “Federal Funds Effective
Rate” and “Stress Factor” in the appropriate alphabetical order:
“Accounting Based Consolidation Event” means the consolidation, for
financial and/or regulatory accounting purposes, of all or any portion of the
assets and liabilities of any Conduit that are subject to this Agreement or any
other Transaction Document with all or any portion of the assets and liabilities
of an Affected Entity. An Accounting Based Consolidation Event shall be deemed
to occur on the date any Affected Entity shall acknowledge in writing that any
such consolidation of the assets and liabilities of such Conduit shall occur.
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“Affected Entity” means (i) any Committed Purchaser, (ii) any
insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to a Conduit, (iii) any
agent, administrator or manager of a Conduit, or (iv) any bank holding company
in respect of any of the foregoing.
“Agent
Fee Letter” means the letter agreement dated as of
March 16, 2009 between the Agent and Seller as the same may be amended, restated,
supplemented or otherwise modified from time to time.
“Alternate Base Rate” means, for any date, a rate per annum equal
to the greatest of (a) LIBO for a one month Tranche Period at approximately
11:00 a.m. London time on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1.0%, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% and (c) the rate of interest per annum
publicly announced from time to time by JPMorgan as its prime rate in effect at
its principal office in New York City; each change in the rate described in this
clause (c) shall be effective from and including the date such change is
publicly announced as being effective. Any change in the Alternate Base Rate
due to a change in any rate described in clause (a), (b) or (c) above shall be
effective from and including the effective date of such change.
“Federal Funds Effective Rate” means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.
“Stress Factor” means, (i) 2.0 at all times prior to July 5, 2009,
and (ii) 2.5 at all times on and after July 5, 2009.
(l) Exhibit I to the Purchase Agreement is hereby amended to delete the
definitions of “Concentration Limit”, “Default Rate”, “Dilution Reserve
Floor”, “Dilution Reserve Percentage”, “Facility Termination Date”,
“Fee Letter”, “Loss Reserve Floor”, “Loss Reserve Percentage”,
“Prime Rate” and “Transaction Documents” and replace them with the
following:
“Concentration Limit” means, for any Obligor and its Affiliates, at
any time, the amount equal to the product of (a) either (i) 3.00% at all times
prior to July 5, 2009, and 4.40% at all times on and after July 5, 2009, or (ii)
such other higher percentages (each, a “Special Concentration
Percentage”)
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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.
“Default Rate” means a rate per annum equal to 3.00% above the
Alternate Base Rate.
“Dilution Reserve Floor” means (i) 17.0% at all times prior to July
5, 2009, and (ii) 16.00% at all times on and after July 5, 2009.
“Dilution Reserve Percentage” means, at any time, the greater of
(i) the Dilution Reserve Floor and (ii) the amount expressed as a percentage and
calculated in accordance with the following formula:
DRP = (SF x ED) + ((DS — ED) x (DS / ED)) x DHR
where:
SF = the Stress Factor at such time.
ED = the average of the Dilution Ratios for the twelve months most recently
ended at such time.
DS = the highest two (2) consecutive month average of the Dilution Ratios during
the immediately preceding twelve months.
DHR = the aggregate Original Balance of all Receivables generated by Originator
during the most recently ended one and one-half (1.5) Calendar Month-period
divided by the Net Receivables Balance as of the last day of such Calendar
Month; provided that any Managing Agent may specify such other period of
time for purposes of determining the numerator of DHR upon three (3) Business
Days’ prior written notice to the other parties hereto at any time within two
(2) months after the date on which the Managing Agents receive the results of
any annual audit report prepared at the request of any Managing Agent pursuant
to Section 7.1(d), provided, that no Managing Agent may specify
any such other period of time unless such other period of
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time is reasonably based upon and verified by the results of any such annual
audit report.
“Facility Termination Date” means the earliest to occur of (i)
March 15, 2010 and (ii) the Amortization Date.
“Fee Letter” means that certain letter agreement dated as of March
16, 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.
“Loss Reserve Floor” means (i) 12.0% at all times prior to July 5,
2009, and (ii) 22.00% at all times on and after July 5, 2009.
“Loss Reserve Percentage” means, at any time, the greater of (i)
the Loss Reserve Floor and (ii) the amount expressed as a percentage and
calculated in accordance with the following formula:
LRP = LR x LHR x SF
where:
LR = the greatest three-month average Default Ratio during the immediately
preceding 12-month period.
LHR = the aggregate Original Balance of all Receivables generated by Originator
during the three and one-half (3.5) Calendar Months ending as of the last day of
the most recently ended Calendar Month immediately preceding such time divided
by the Net Receivables Balance as of the last day of the most recently ended
Calendar Month.
SF = the Stress Factor at such time.
“Prime Rate” means the rate of interest per annum publicly
announced from time to time by JPMorgan 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.
“Transaction Documents” means, collectively, this Agreement, each
Purchase Notice, the Receivables Sale Agreement, each Collection Account
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Agreement, the Fee Letter, the Agent Fee Letter, the Subordinated Note (as
defined in the Receivables Sale Agreement) and all other instruments, documents
and agreements executed and delivered in connection herewith.
(m) 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 A.
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%.
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 four
(4) 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 first installment of 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.
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(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.
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]
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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. 1 to RPA
to
Amendment No. 1 to RPA
| FALCON ASSET SECURITIZATION COMPANY LLC, as a Conduit Purchaser |
||||
| By: | JPMorgan Chase Bank, N.A., its attorney-in-fact | |||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: Xxxx X. Xxxxxx Title: Vice President |
||||
| JPMORGAN CHASE BANK, N.A., as a Committed Purchaser, a Managing Agent and Agent |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: Xxxx X. Xxxxxx Title: Vice President |
||||
Signature Page
to
Amendment No. 1 to RPA
to
Amendment No. 1 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 | ||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: Xxxxxxx Xxxxx Title: Vice President |
||||
| HSBC BANK USA, NATIONAL ASSOCIATION, as a Committed Purchaser |
||||
| By: | /s/ Xxxxxx Xxxxx | |||
| Name: Xxxxxx Xxxxx Title: Managing Director |
||||
Signature Page
to
Amendment No. 1 to RPA
to
Amendment No. 1 to RPA
Attachment A to Amendment No. 1 to Receivables Purchase Agreement
SCHEDULE C
SPECIAL CONCENTRATION PERCENTAGES
| Obligor Name | Special Concentration | Special Concentration | ||||||
| Percentage | Percentage | |||||||
| prior to July 5, 2009 | on and after July 5, 2009 | |||||||
[****]
|
[****]% | [****]% | ||||||
[****]
|
[****]% | [****]% | ||||||
[****]
|
[****]% | [****]% | ||||||
[****]
|
[****]% | [****]% | ||||||
**** Omitted pursuant to a confidential treatment request
