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, Merrill Lynch, Pierce, Fenner
& Smith Incorporated and Morgan Stanley 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 Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Morgan Stanley 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.
WHEREAS,
the Borrower, the Administrative Agent, the Lenders and other
parties thereto are parties to the First Lien Credit
Agreement;
WHEREAS,
J.P. Morgan 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:
(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, J.P. Morgan 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.
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(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:
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Applicable Margin
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Leverage
Ratio
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LIBO Rate Loans
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Base Rate Loans
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Greater than or
equal to 4.00:1.00
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4.75%
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3.75%
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Less than
4.00:1.00 but greater than or equal to 3.25:1.00
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4.50%
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3.50%
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Less than
3.25:1.00 but greater than or equal to 2.50:1.00
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4.25%
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3.25%
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Less than
2.50:1.00
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4.00%
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3.00%
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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
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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:
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Leverage
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Period
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Ratio
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Each Fiscal Quarter ending between
December 15, 2006 and April 15, 2007
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5.50:1.00
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Each Fiscal Quarter ending between
April 16, 2007 and July 15, 2007
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5.00:1.00
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Each Fiscal Quarter ending between July 16,
2007 and Oc
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