THIRD AMENDMENT TO FIRST LIEN CREDIT AGREEMENT
Exhibit 10.1
THIRD AMENDMENT TO FIRST LIEN CREDIT AGREEMENT
This Third Amendment, dated as of March 10, 2009 (this “Amendment”), to that certain First
Lien Credit Agreement, dated as of September 5, 2006 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “First Lien Credit Agreement”), among
Hanesbrands Inc., a Maryland corporation (the “Borrower”), the various financial institutions and
other persons from time to time party thereto (the “Lenders”), HSBC Bank USA, National Association,
LaSalle Bank National Association and Barclays Bank PLC, as Co-Documentation Agents, Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxx Xxxxxxx Senior Funding, Inc., as the Co-Syndication
Agents, Citicorp USA, Inc., as administrative agent (in such capacity, the “Administrative Agent”),
Citibank, N.A., as the collateral agent (in such capacity, the “Collateral Agent”) and Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxx Xxxxxxx Senior Funding, Inc., as the Joint
Lead Arrangers and Joint Bookrunners, as amended by the First Amendment, dated as of February 22,
2007 (the “First Amendment”), among the Borrower and the Lenders party thereto, as further amended
by the Second Amendment to the First Lien Credit Agreement, dated as of August 21, 2008 (the
“Second Amendment”). Capitalized terms used herein but not defined herein are used as defined in
the First Lien Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Borrower, the Administrative Agent, the Lenders and other parties thereto are
parties to the First Lien Credit Agreement;
WHEREAS, X.X. Xxxxxx Securities Inc. (“JPMorgan”) is acting as arranger and bookrunner (in
such capacity, the “Arranger”) in connection with this Amendment;
WHEREAS, the Borrower has requested that the Lenders amend certain terms in the First Lien
Credit Agreement in the manner provided for herein; and
WHEREAS, the Lenders signatory to an acknowledgment and consent to amendment in the form
attached hereto (an “Acknowledgment and Consent to Amendment”) have consented to this Amendment on
the terms and subject to the conditions herein provided.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and obligations herein
set forth and other good and valuable consideration, the adequacy and receipt of which is hereby
acknowledged, and in reliance upon the representations, warranties and covenants herein contained,
the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1. Amendments.
(a) As of the Third Amendment Effective Date (as defined below), the Arranger, the
Administrative Agent (on behalf of the Required Lenders), the Borrower and the Lenders hereby agree
that the First Lien Credit Agreement shall be amended as set forth below:
(i) Section 1.1 (Defined Terms) of the First Lien Credit Agreement is hereby amended
by inserting the following definitions in the appropriate alphabetical order:
“Third Amendment” means the Third Amendment to this Agreement, dated as of the
Third Amendment Effective Date, by and among the Borrower, X.X. Xxxxxx Securities Inc., as
arranger and bookrunner for the Third Amendment, the Administrative Agent (on behalf of the
Required Lenders) and the Subsidiary Guarantors.
“Third Amendment Effective Date” means March 10, 2009.
2
(ii) The definition of “Applicable Margin” in Section 1.1 (Defined Terms) of the First
Lien Credit Agreement is hereby amended and restated in its entirety as follows:
“Applicable Margin” means (i) in the case of Term B Loans maintained as (A)
LIBO Rate Loans, a percentage per annum equal to 4.75% and (B) Base Rate Loans, a percentage
per annum equal to 3.75%, and (ii) in the case of Term A Loans and Revolving Loans, the
applicable percentage set forth below corresponding to the relevant Leverage Ratio:
| Applicable Margin | ||||
| Leverage Ratio | LIBO Rate Loans | Base Rate Loans | ||
| Greater than or equal to 4.00:1.00 | 4.75% | 3.75% | ||
| Less than 4.00:1.00 but greater than or equal to 3.25:1.00 | 4.50% | 3.50% | ||
| Less than 3.25:1.00 but greater than or equal to 2.50:1.00 | 4.25% | 3.25% | ||
| Less than 2.50:1.00 | 4.00% | 3.00% | ||
Notwithstanding anything to the contrary set forth in this Agreement (including the then
effective Leverage Ratio), the Applicable Margin for all Term A Loans and Revolving Loans
from the Closing Date through (and including) the date of delivery of the financial
statements for the second full Fiscal Quarter ending after Closing Date shall be (A) 1.75%,
in the case of LIBO Rate Loans, and (B) 0.75%, in the case of Base Rate Loans. The Leverage
Ratio used to compute the Applicable Margin shall be the Leverage Ratio set forth in the
Compliance Certificate most recently delivered by the Borrower to the Administrative Agent.
Changes in the Applicable Margin resulting from a change in the Leverage Ratio shall become
effective upon delivery by the Borrower to the Administrative Agent of a new Compliance
Certificate pursuant to clause (c) of Section 7.1.1. If the Borrower fails
to deliver a Compliance Certificate on or before the date required pursuant to clause
(c) of Section 7.1.1, the Applicable Margin from and including the day after
such required date of delivery to but not including the date the Borrower delivers to the
Administrative Agent a Compliance Certificate shall equal the highest Applicable Margin set
forth above.
(iii) The definition of “Applicable Percentage” in Section 1.1 (Defined Terms) of the
First Lien Credit Agreement is hereby amended by deleting clause (ii) thereof in its entirety and
inserting in lieu thereof the following new clause (ii):
“(ii) with respect to a mandatory prepayment in respect of Excess Cash Flow pursuant to
clause (g) of Section 3.1.1, (A) 75.0%, if the Leverage Ratio set forth in the Compliance
Certificate most recently delivered by the Borrower to the Administrative Agent was greater
than or equal to 3.75:1, (B) 50.0%, if the Leverage Ratio set forth in such Compliance
Certificate was less than 3.75:1 but greater than or equal to 3.25:1, (C) 25.0%, if the
Leverage Ratio set forth in such Compliance Certificate was less than 3.25:1 but greater
than or equal to 2.75:1, and (D) 0%, if the Leverage Ratio set forth in such Compliance
Certificate was less than 2.75:1”
(iv) The definition of “First Amendment Effective Date” in Section 1.1 (Defined Terms)
of the First Lien Credit Agreement is hereby amended and restated in its entirety as follows:
“First Amendment Effective Date” means February 22, 2007.
(v) The definition of “Loan Documents” in Section 1.1 (Defined Terms) of the First
Lien Credit Agreement is hereby amended and restated in its entirety as follows:
“Loan Documents” means, collectively, this Agreement, the First Amendment, the
Second Amendment, the Third Amendment, the Notes, the Letters of Credit, each Rate
3
Protection Agreement, the Fee Letter, the Intercreditor Agreement, the Security
Agreement, each Mortgage, each Foreign Pledge Agreement, each other agreement pursuant to
which the Collateral Agent is granted by the Borrower or its Subsidiaries a Lien to secure
the Obligations, the Guaranty and each other agreement, certificate, document or instrument
delivered in connection with any Loan Document, whether or not specifically mentioned herein
or therein.
(vi) The definition of “Second Amendment Effective Date” in Section 1.1 (Defined
Terms) of the First Lien Credit Agreement is hereby amended and restated in its entirety as
follows:
“Second Amendment Effective Date” means August 21, 2008.
(vii) Section 7.2.4 (Financial Condition and Operations) of the First Lien Credit
Agreement is hereby amended and restated in its entirety as follows:
“SECTION 7.2.4 Financial Condition and Operations. The Borrower will not permit any of
the events set forth below to occur.
(a) The Borrower will not permit the Leverage Ratio as of the last day of any Fiscal
Quarter occurring during any period set forth below to be greater than the ratio set forth
opposite such period:
| Leverage | ||||
| Period | Ratio | |||
Each Fiscal Quarter ending between December 15, 2006 and April 15, 2007 |
5.50:1.00 | |||
Each Fiscal Quarter ending between April 16, 2007 and July 15, 2007 |
5.00:1.00 | |||
Each Fiscal Quarter ending between July 16, 2007 and October 15, 2007 |
4.75:1.00 | |||
Each Fiscal Quarter ending between October 16, 2007 and April 15, 2008 |
4.50:1.00 | |||
Each Fiscal Quarter ending between April 16, 2008 and July 15, 2008 |
4.25:1.00 | |||
Each Fiscal Quarter ending between July 16, 2008 and October 15, 2008 |
4.00:1.00 | |||
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 | |||
(b) The Borrower will not permit the Interest Coverage Ratio as of the last day of any
Fiscal Quarter occurring during any period set forth below to be less than the ratio set
forth opposite such period:
| Interest | ||
| Coverage | ||
| Period | Ratio | |
Each Fiscal Quarter ending between December 15, 2006 and July 15, 2007
|
2.00:1.00 | |
Each Fiscal Quarter ending between July 16, 2007 and January 15, 2008
|
2.25:1.00 | |
Each Fiscal Quarter ending between January 16, 2008 and October 15, 2008
|
2.50:1.00 | |
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” |
4
Section 2. Conditions Precedent. This Amendment shall become effective as of the Third Amendment
Effective Date upon the satisfaction (or duly consented waiver) of each of the following conditions
precedent:
(a) Certain Documents. The Arranger shall have received each of the following:
(i) this Amendment, duly executed by the Borrower, the Arranger, the Administrative
Agent (on behalf of the Required Lenders) and each Subsidiary Guarantor; and
(ii) an Acknowledgment and Consent to Amendment, in the form set forth hereto as
Exhibit A, duly executed by the Required Lenders.
(b) Payment of Fees, Costs and Expenses. The Arranger, the Administrative Agent and the
Lenders shall have received from the Borrower, as applicable (i) an amendment fee for the account
of each Lender consenting to this Amendment by 12:00 Noon (New York City time) on March 10, 2009,
in an amount equal to 1.00% of the sum of each such Lender’s Revolving Loan Commitment and
outstanding Term Loans, and (ii) all other fees required to be paid, and all reasonable
out-of-pocket costs and expenses for which invoices have been presented (including the reasonable
fees and expenses of legal counsel) as required by Section 4 hereof.
(c) Representations and Warranties. Each of the representations and warranties contained in
Section 3 below shall be true and correct.
Section 3. Representations and Warranties. The Borrower and each Subsidiary Guarantor hereby
represents and warrants to the Arranger, the Administrative Agent and each Lender, as follows:
(a) After giving effect to this Amendment, each of the representations and warranties in the
First Lien Credit Agreement and in the other Loan Documents are true and correct in all material
respects (except to the extent that such representation or warranty is qualified as to materiality,
in which case it shall be true and correct in all respects) on and as of the date hereof as though
made on and as of such date, except to the extent that any such representation or warranty
expressly relates to an earlier date, in which case such representation or warranty shall be true
and correct in all material respects (except to the extent that such representation or warranty is
qualified as to materiality, in which case it shall be true and correct in all respects) as of such
earlier date;
(b) The Borrower and each Subsidiary Guarantor has taken all necessary action to authorize the
execution, delivery and performance of this Amendment, this Amendment has been duly executed and
delivered by the Borrower and each Subsidiary Guarantor, and this Amendment is the legal, valid and
binding obligation of the Borrower and each Subsidiary Guarantor, enforceable against each in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles; and
(c) At the time of and immediately after giving effect to this Amendment, no Default or Event
of Default has occurred and is continuing.
Section 4. Costs and Expenses. The Borrower agrees to pay and reimburse the Arranger
and the Administrative Agent for all of their reasonable out-of-pocket costs and expenses incurred
in connection with the preparation and delivery of this Amendment, including, without limitation,
the reasonable fees and disbursements of counsel to the Arranger and the Administrative Agent.
5
Section 5. Reference to and Effect on the Loan Documents.
(a) As of the Third Amendment Effective Date, each reference in the First Lien Credit
Agreement and the other Loan Documents to “this Agreement,” “hereunder,” “hereof,” “herein,” or
words of like import, and each reference in the other Loan Documents to the First Lien Credit
Agreement (including, without limitation, by means of words like “thereunder”, “thereof” and words
of like import), shall mean and be a reference to the First Lien Credit Agreement as amended hereby
with respect to the certain requirements outlined above, and this Amendment and the First Lien
Credit Agreement shall be read together and construed as a single instrument.
(b) Except as expressly amended hereby, all of the terms and provisions of the First Lien
Credit Agreement and all other Loan Documents are and shall remain in full force and effect and are
hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of the Administrative Agent, any
Lender or any Issuer under the First Lien Credit Agreement or any Loan Document, or constitute a
waiver or amendment of any other provision of the First Lien Credit Agreement or any Loan Document
(as amended hereby) except as and to the extent expressly set forth herein.
(d) Each of the Borrower and (by its acknowledgment hereof as set forth on the signature pages
hereto) each Subsidiary Guarantor hereby confirms that the guaranties, security interests and liens
granted pursuant to the Loan Documents (as amended hereby) continue to guarantee and secure the
Obligations as set forth in the Loan Documents (as amended hereby) and that such guaranties,
security interests and liens remain in full force and effect.
Section 6. Arranger. Each Lender hereby acknowledges and agrees that JPMorgan, in its capacity
as Arranger for this Amendment, shall be entitled to the benefits of Article IX of the First Lien
Credit Agreement mutatis mutandis, as if it were the Administrative Agent, in each case, solely for
the purposes of this Amendment.
Section 7. 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 shall be deemed
to be an original and all of which taken together shall constitute one and the same agreement.
Receipt by the Arranger of a facsimile (or other electronic transmission) copy of an executed
signature page hereof shall constitute receipt by the Arranger of an executed counterpart of this
Amendment.
Section 8. 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 law of the State of New
York without regard to the conflicts of laws provisions (other than Sections 5-1401 and 5-1402 of
the New York General Obligations Law, which the parties hereto agree apply hereto).
Section 9. Loan Document and Integration. This Amendment is a Loan Document, and together with
the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the
subject matter hereof and is the final expression and agreement of the parties hereto with respect
to the subject matter hereof.
Section 10. Headings. Section headings contained in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment for any other
purposes.
Section 11. Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TRIAL BY JURY IN
ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers and members thereunto duly authorized, as of the date indicated above.
| HANESBRANDS INC., as Borrower |
||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: Xxxxxxx X. Xxxx Title: Senior Vice President and Treasurer |
||||
| X.X. XXXXXX SECURITIES INC., as Arranger |
||||
| By: | /s/ Xxxx Xxxxx | |||
| Name: Xxxx Xxxxx Title: Executive Director |
||||
| CITICORP USA, INC., as Administrative Agent |
||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: Xxxxxxx Xxxxx Title: Vice President |
||||
[SIGNATURE PAGE — THIRD AMENDMENT TO FIRST LIEN CREDIT AGREEMENT]
For the purposes of Sections 3 and 5(d) hereof, each Subsidiary Guarantor set forth below (i)
makes the representations set forth in Section 3 hereof on the Third Amendment Effective Date and
(ii) hereby consents to this Amendment and confirms that all guaranties, security interests and
Liens granted by it, and all its other obligations, pursuant to the Loan Documents (as amended
hereby) remain in full force and effect.
| BA INTERNATIONAL, L.L.C. CARIBESOCK, INC. CARIBETEX, INC. CASA INTERNATIONAL, LLC CEIBENA DEL, INC. XXXXX MENSWEAR, LLC XXXXX PUERTO RICO, INC. HANESBRANDS DIRECT, LLC HANESBRANDS DISTRIBUTION, INC. HBI BRANDED APPAREL ENTERPRISES, LLC HBI BRANDED APPAREL LIMITED, INC. HBI INTERNATIONAL, LLC HBI SOURCING, LLC INNER SELF LLC JASPER-COSTA RICA, L.L.C. PLAYTEX DORADO, LLC PLAYTEX INDUSTRIES, INC. SEAMLESS TEXTILES, LLC UPCR, INC. UPEL, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: Xxxxxxx X. Xxxx Title: Treasurer |
||||
[SIGNATURE PAGE — THIRD AMENDMENT TO FIRST LIEN CREDIT AGREEMENT]
Acknowledgment and Consent to Amendment
To:
|
CITICORP USA, INC., as Administrative Agent 000 Xxxxxxxxx Xxxxxx Xxx Xxxx, XX 00000 Attention: Xxxxx Xxxxxx |
RE: HANESBRANDS INC.
Reference is made to that certain First Lien Credit Agreement, dated as of September 5, 2006
(as the same may be amended, restated, supplemented or otherwise modified from time to time, the
“First Lien Credit Agreement”), among Hanesbrands Inc., a Maryland corporation (the “Borrower”),
the various financial institutions and other persons from time to time party thereto (the
“Lenders”), HSBC Bank USA, National Association and LaSalle Bank National Association and Barclays
Bank PLC, as Co-Documentation Agents, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxx
Xxxxxxx Senior Funding, Inc., as the Co-Syndication Agents, Citicorp USA, Inc., as administrative
agent (in such capacity, the “Administrative Agent”), Citibank, N.A., as the collateral agent (in
such capacity, the “Collateral Agent”) and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and
Xxxxxx Xxxxxxx Senior Funding, Inc., as the Joint Lead Arrangers and Joint Bookrunners, as amended
by the First Amendment, dated as of February 22, 2007 (the “First Amendment”), among the Borrower
and the Lenders party thereto, as further amended by the Second Amendment dated as of August 21,
2008 (the “Second Amendment”). Capitalized terms used herein but not defined herein are used as
defined in the First Lien Credit Agreement.
The Borrower has requested that the Lenders consent to an amendment to the
First Lien Credit Agreement on the terms described in the Third Amendment (the “Amendment”), the
form of which is attached hereto.
Pursuant to Section 10.1 of the First Lien Credit Agreement, the undersigned
Lender hereby consents to the terms of the Amendment and authorizes the Administrative Agent to
execute and deliver the Amendment on its behalf.
| Very truly yours, | ||||
| Name of Lender | ||||
| By: | ||||
| Name: Title: |
||||
Dated as of __________________, 2009 |
||||
[LENDER ACKNOWLEDGMENT AND CONSENT TO THIRD AMENDMENT TO FIRST LIEN CREDIT AGREEMENT]
