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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 10, 2009
Hanesbrands Inc.
(Exact name of registrant as specified in its charter)
| Maryland | 001-32891 | 20-3552316 | ||
| (State or other jurisdiction | (Commission File Number) | (IRS Employer Identification | ||
| of incorporation) | No.) | |||
| 1000 East Hanes Mill Road | ||||
| Winston-Salem, NC | 27105 | |||
| (Address of principal executive | (Zip Code) | |||
| offices) |
Registrant’s telephone number, including area code: (336) 519-8080
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 1.01. Entry into a Material Definitive Agreement
Issuance of Senior Notes due 2016
On December 10, 2009, Hanesbrands Inc. (the “Company”) completed the sale of $500 million in
aggregate principal amount of 8.000% senior notes due 2016 (the “Notes”). The public offering
price of the Notes was 98.686% of the principal amount of the Notes.
The Company received net proceeds, after deducting underwriting discounts and estimated offering expenses, of
approximately $479.9 million. Concurrently with the closing of the Notes offering, the Company
amended and restated its existing senior secured credit facility (the “Senior Secured Credit
Facility”) to provide for the $1.15 billion new senior secured credit facilities (the “New Senior
Secured Credit Facilities”). The Company used the net proceeds from the Notes offering, together
with the proceeds from the borrowings under the New Senior Secured Credit Facilities to refinance
and/or repay the borrowings under certain of the Company’s existing credit facilities and to pay
fees and expenses relating to these transactions.
The Notes were offered and sold pursuant to
an underwriting agreement, dated December 3, 2009 (the
“Underwriting Agreement”), between the Company and certain subsidiaries of the Company party
thereto with J.P. Morgan Securities Inc., as representative of the several underwriters named therein (collectively, the
“Underwriters”), under the Company’s registration statement on Form S-3
(Registration No. 333-152733), filed with the Securities and Exchange Commission (the “SEC”) on
August 1, 2008. The Company has filed with the SEC a prospectus supplement, dated December 3, 2009,
together with the accompanying prospectus, dated August 1, 2008,
relating to the offering.
A copy of
the Underwriting Agreement is
attached as Exhibit 1.1 to this Current Report on Form 8-K and is
incorporated by reference herein.
The Underwriters, the agents and
lenders under the New Senior Secured Credit Facilities, the agents and purchasers
under the Accounts Receivable Securitization Facility (defined below) and certain of their affiliates have provided from
time to time, and may provide in the future, investment and commercial banking and financial
advisory services to the Company and its affiliates in the ordinary course of business, for which
they have received and may continue to receive customary fees and commissions, and in particular
serve in roles described in this Current Report on Form 8-K.
In connection
with the transactions described above, the Company entered into the
following additional agreements:
Indenture
The Notes were issued pursuant to an indenture, dated as of August 1, 2008 (the “Base Indenture”),
between the Company and Branch Banking and Trust Company as
trustee (the “Trustee”), as amended and supplemented by the First Supplemental Indenture (the
“Supplemental Indenture” and with the Base Indenture, the “Indenture”) thereto, dated December 10,
2009, among the Company, the subsidiary guarantors party thereto and the Trustee. The Supplemental
Indenture provides, among other things, that the Notes will be senior unsecured obligations of the
Company. Interest is payable on the Notes on each December 15 and June 15, commencing June 15,
2010. The Company may redeem some or all of the Notes at any time prior to December 15, 2013 at a
price equal to 100% of the principal amount of the Notes redeemed plus an applicable premium
described in the Indenture. On or after December 15, 2013, the Company may redeem some or all of
the Notes at redemption prices set forth in the Supplemental Indenture. In addition, at any time
prior to December 15, 2012, the Company may redeem up to 35% of the aggregate principal amount of
the Notes at a redemption price of 108% of the principal amount of the Notes redeemed with the net
cash proceeds of certain equity offerings.
The Company’s payment obligations under the Notes are fully and unconditionally guaranteed by
substantially all of its current domestic subsidiaries (subject to certain exceptions).
The terms of the Indenture limit the ability of the Company and its restricted
subsidiaries to, among other things, incur additional debt and issue preferred stock; make certain investments, pay
dividends or distributions on its capital stock or make other restricted payments; sell assets,
including capital stock of its restricted subsidiaries; restrict dividends or other payments by
restricted subsidiaries; create liens that secure debt; enter into transactions with affiliates;
and merge or consolidate with other entities.
Subject to certain exceptions, in the event of a change of control of the Company (as defined in
the Indenture), the Company will be required to give the holders of the Notes an opportunity to
sell their Notes to the Company at a price equal to 101% of the principal amount of the Notes, plus
accrued and unpaid interest to the date of repurchase.
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The
Indenture contains customary events of default which include (subject in certain cases to
customary grace and cure periods), among others, nonpayment of principal or interest; breach of
other agreements in the Indenture; failure to pay certain other indebtedness; failure to pay
certain final judgments; failure of certain guarantees to be enforceable; and certain events of
bankruptcy or insolvency.
A copy of the Supplemental Indenture is attached as Exhibit 4.2 to this Current Report on
Form 8-K and is incorporated by reference herein. The above description of the material terms
of the Indenture and the Notes does not purport to be complete and is qualified in its entirety by
reference to such exhibits.
Execution of New Senior Secured Credit Facilities
Simultaneously with the closing of the
offering of the Notes, the Company amended and restated its
first lien credit agreement dated September 5, 2006 (the “Senior Secured Credit Facility”)
with the various financial institutions and other persons from time to time party thereto, Barclays Bank PLC and Goldman Sachs Credit Partners L.P., as the co-documentation
agents, Bank of America, N.A. and HSBC Securities (USA) Inc., as the co-syndication agents, JPMorgan Chase Bank, N.A.,
as the administrative agent and the collateral agent and J.P. Morgan Securities Inc., Banc of America Securities LLC,
HSBC Securities (USA) Inc. and Barclays Capital, the investment banking division of Barclays Bank PLC, as the joint lead
arrangers and joint bookrunners), to provide for new $1.15 billion senior secured credit facilities (the “New Senior Secured Credit
Facilities”). The Company used the net proceeds from the
offering of the Notes together with the proceeds from the borrowings
under the New Senior Secured Credit Facilities to refinance outstanding borrowings under the Senior
Secured Credit Facility, to repay the outstanding borrowings under its second lien credit
agreement dated September 5, 2006 (the “Second Lien Credit
Facility”) and to pay fees and expenses related to the offering
and the refinancing transactions.
The New Senior Secured Credit Facilities initially provide for aggregate borrowings of $1.15
billion, consisting of: (i) a $750 million term loan facility (the “New Term Loan Facility”) and
(ii) a $400 million revolving loan facility (the “New Revolving Loan Facility”). A portion of the
New Revolving Loan Facility is available for the issuances of letters of credit and the making of
swingline loans, and any such issuance of letters of credit or making of a swingline loan will
reduce the amount available under the New Revolving Loan Facility. At the Company’s option, at any
time after the effective date of the New Senior Secured Credit Facilities, it may add one or more
term loan facilities or increase the commitments under the New Revolving Loan Facility in an
aggregate amount of up to $300 million so long as certain conditions are satisfied, including,
among others, that no default or event of default is in existence and that the Company is in pro
forma compliance with the financial covenants set forth below.
The proceeds of the New Term Loan Facility will be used to refinance all amounts outstanding under
the existing Term A loan facility (in an initial principal amount of $250 million) and Term B loan
facility (in an initial principal amount of $1.4 billion) under the Senior Secured Credit Facility
and all amounts outstanding under the Second Lien Credit Facility. The proceeds of the New
Revolving Loan Facility will be used to pay fees and expenses in connection with the transaction,
for general corporate purposes and working capital needs.
The New Senior Secured Credit Facilities are guaranteed by substantially all of the Company’s
existing and future direct and indirect U.S. subsidiaries, with certain customary or agreed-upon
exceptions for certain subsidiaries. The Company and each of the guarantors under the New Senior
Secured Credit Facilities have granted the lenders under the New Senior Secured Credit Facilities a
valid and perfected first priority (subject to certain customary exceptions) lien and security
interest in the following:
| • | the equity interests of substantially all of the Company’s direct and indirect U.S. subsidiaries and 65% of the voting securities of certain first tier foreign subsidiaries; and | ||
| • | substantially all present and future property and assets, real and personal, tangible and intangible, of the Company and each guarantor, except for certain enumerated interests, and all proceeds and products of such property and assets. |
The New Term Loan Facility matures on or about December 10, 2015. The New Term Loan Facility will
be repaid in equal quarterly installments in an amount equal to 1% per annum, with the balance due
on the maturity date. The New Revolving Loan Facility matures on or about December 10, 2013. All
borrowings
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under the New Revolving Loan Facility must be repaid in full upon maturity. Outstanding borrowings
under the New Senior Secured Credit Facilities are prepayable without penalty. There are mandatory
prepayments of principal in connection with (i) the incurrence of certain indebtedness, (ii)
non-ordinary course asset sales or other dispositions (including as a result of casualty or
condemnation) that exceed certain thresholds in any period of twelve-consecutive months, with
customary reinvestment provisions, and (iii) excess cash flow, which percentage will be based upon
the Company’s leverage ratio during the relevant fiscal period.
At the Company’s option, borrowings under the New Senior Secured Credit Facilities may be
maintained from time to time as (a) Base Rate loans, which shall bear interest at the highest of
(i) 1/2 of 1% in excess of the federal funds rate, (ii) the rate publicly announced by JPMorgan
Chase Bank as its “prime rate” at its principal office in New York City, in effect
from time to time and (iii) the LIBO Rate (as defined in the New Senior Secured Credit Facilities
and adjusted for maximum reserves) for LIBOR-based loans with a one-month interest period plus
1.0%, in effect from time to time, in each case plus the applicable margin, or (b) LIBOR-based loans, which shall bear interest at the LIBO
Rate (as defined in the New Senior Secured Credit Facilities and adjusted for maximum reserves), as
determined by reference to the rate for deposits in dollars appearing on the Reuters Screen LIBOR01 Page for the
respective interest period or other commercially available source designated by the administrative agent,
plus the applicable margin in effect from time to time. The applicable
margin for the New Term Loan Facility and the New Revolving Loan Facility will be determined
by reference to a leverage-based pricing grid set forth in the New Senior Secured Credit
Facilities. In the case of the New Term Loan Facility, the applicable margin will be (a) 3.25% for
LIBOR-based loans and 2.25% for Base Rate loans if the Company’s leverage ratio is greater than or equal to
2.50 to 1, and (b) 3.00% for LIBOR-based loans and 2.00% for Base Rate loans if the Company’s leverage ratio
is less than 2.50 to 1. In the case of the New Revolving Loan Facility, the applicable margin will
range from a maximum of 4.75% in the case of LIBOR-based loans and 3.75% in the case of Base Rate
loans if the Company’s leverage ratio is greater than or equal to 4.00 to 1, and will step down in 0.25%
increments to a minimum of 4.00% in the case of LIBOR-based loans and 3.00% in the case of Base
Rate loans if the Company’s leverage ratio is less than 2.50 to 1. The applicable margin from the closing
date of the New Senior Secured Facilities through the delivery of the Company’s financial statements for the
second fiscal quarter of 2010 will be (a) in the case of the New Term Loan Facility, 3.25% and
2.25% for LIBOR-based loans and Base Rate loans, respectively, and
(b) in the case of the New
Revolving Loan Facility, 4.50% and 3.50% for LIBOR-based loans and Base Rate loans, respectively.
The New Senior Secured Credit Facilities require the Company to comply with customary affirmative,
negative and financial covenants. The New Senior Secured Credit Facilities require that the Company
maintain a minimum interest coverage ratio and a maximum total debt to EBITDA (earnings before
income taxes, depreciation expense and amortization), or leverage ratio. The interest coverage
ratio covenant requires that the ratio of the Company’s EBITDA for the preceding four fiscal
quarters to its consolidated total interest expense for such period shall not be less than a
specified ratio for each fiscal quarter beginning with the fourth fiscal quarter of 2009. This
ratio is 2.50 to 1 for the fourth fiscal quarter of 2009 and will increase over time until it
reaches 3.25 to 1 for the third fiscal quarter of 2011 and thereafter. The leverage ratio covenant
requires that the ratio of the Company’s total debt to its EBITDA for the preceding four fiscal
quarters will not be more than a specified ratio for each fiscal quarter beginning with the fourth
fiscal quarter of 2009. This ratio is 4.50 to 1 for the fourth fiscal quarter of 2009 and will
decline over time until it reaches 3.75 to 1 for the second fiscal quarter of 2011 and thereafter.
The method of calculating all of the components used in the covenants is included in the New Senior
Secured Credit Facilities.
The New Senior Secured Credit Facilities contain customary events of default, including nonpayment
of principal when due; nonpayment of interest after stated grace period, fees or other amounts
after stated grace period; material inaccuracy of representations and warranties; violations of
covenants; certain bankruptcies and liquidations; any cross-default to material indebtedness;
certain material judgments; certain events related to the Employee Retirement Income Security Act
of 1974, as amended, or “ERISA,” actual or asserted invalidity of any guarantee, security document
or subordination provision or non-perfection of security interest, and a change in control (as
defined in the New Senior Secured Credit Facilities).
Amendment of Accounts Receivable Securitization Facility
On
December 10, 2009, the Company, HBI Receivables
LLC (“Receivables LLC”), a wholly-owned bankruptcy-remote subsidiary of the Company, HSBC Bank USA, National
Association and PNC Bank, N.A., as committed purchasers, Bryant Park Funding LLC and Market Street Funding LLC,
as conduit purchasers, HSBC Securities (USA) Inc. and PNC Bank, N.A., as managing agents, and HSBC Securities
(USA) Inc., as assignee of JPMorgan Chase Bank, N.A., as agent, entered into Amendment No. 4 (the “Amendment”)
to the Receivables Purchase Agreement dated as of November 27, 2007 (the “Accounts Receivable Securitization Facility”).
Prior to the execution of the Amendment, the Accounts Receivable Securitization Facility contained
the same leverage ratio and interest coverage ratio provisions as the Senior Secured Credit Facility. The Amendment
conforms the leverage ratio and the interest coverage ratio under the Accounts Receivable Securitization Facility
to those under the New Senior Secured Credit Facilities.
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Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The descriptions of the Notes and of the New Senior Secured Credit Facilities and the Company’s
obligations with respect thereto above are incorporated herein by
reference to Item 1.01 above.
Item 7.01.
Regulation FD Disclosure
On
December 10, 2009, the Company issued a press release announcing
the closing of the Notes offering and the amendment and restatement
of the Senior Secured Credit Facility to provide for the New Senior
Secured Credit Facilities and reaffirming 2010 sales growth guidance. A
copy of the press release is attached as Exhibit 99.1 to this
Current Report on Form 8-K and is incorporated herein by
reference. Exhibit 99.1 includes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. Exhibit
99.1 is being “furnished” and shall not be deemed
“filed” for purposes of Section 18 of the Exchange
Act, nor shall it be deemed incorporated by reference in any filing
under the Securities Act or the Exchange Act, except as shall be
expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
Exhibit Number
| 1.1 | Underwriting Agreement, dated December 3, 2009, between Hanesbrands Inc., the subsidiary guarantors party thereto and J.P. Morgan Securities Inc., as representative of the several Underwriters | |
| 4.1 | Indenture dated August 1, 2008, between Hanesbrands Inc. and Branch Banking and Trust Company (incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement on Form S-3 (File No. 333-152733) filed August 1, 2008) | |
| 4.2 | First Supplemental Indenture, dated December 10, 2009, among Hanesbrands Inc., the subsidiary guarantors and Branch Banking and Trust Company | |
| 4.3 | Form of 8.000% Senior Note due 2016 (incorporated by reference to Exhibit 4.2 filed herewith) | |
| 5.1 | Opinion of Venable LLP | |
| 5.2 | Opinion of Kirkland & Ellis LLP | |
| 5.3 | Opinion of Hogan & Hartson LLP | |
| 99.1 | Press release, dated December 10, 2009 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| December 10, 2009 | HANESBRANDS INC. |
|||
| By: | /s/ E. Lee Wyatt Jr. | |||
| E. Lee Wyatt Jr. | ||||
| Executive Vice President, Chief Financial Officer | ||||
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Exhibit Table
| 1.1 | Underwriting Agreement, dated December 3, 2009, between Hanesbrands Inc., the subsidiary guarantors party thereto and J.P. Morgan Securities Inc., as representative of the several Underwriters | |
| 4.1 | Indenture dated August 1, 2008, between Hanesbrands Inc. and Branch Banking and Trust Company (incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement on Form S-3 (File No. 333-152733) filed August 1, 2008) | |
| 4.2 | First Supplemental Indenture, dated December 10, 2009, among Hanesbrands Inc., the subsidiary guarantors and Branch Banking and Trust Company | |
| 4.3 | Form of 8.000% Senior Note due 2016 (incorporated by reference to Exhibit 4.2 filed herewith) | |
| 5.1 | Opinion of Venable LLP | |
| 5.2 | Opinion of Kirkland & Ellis LLP | |
| 5.3 | Opinion of Hogan & Hartson LLP | |
| 99.1 | Press release, dated December 10, 2009 |
Exhibit 1.1
EXECUTION COPY
$500,000,000
HANESBRANDS INC.
8.00% Senior Notes due 2016
Underwriting Agreement
December 3, 2009
J.P. Morgan Securities Inc.
As Representative of the
several Underwriters listed
in Schedule 1 hereto
several Underwriters listed
in Schedule 1 hereto
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
Hanesbrands Inc., a Maryland corporation (the “Company”), proposes to issue and sell to the
several Underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom you are acting as
representative (the “Representative”), $500,000,000 principal amount of its 8.00% Senior Notes due
2016 (the “Securities”). The Securities will be issued pursuant to an Indenture dated as of August
1, 2008 (the “Base Indenture”), as supplemented by a Supplemental Indenture (herein so called) of
even date therewith (the Base Indenture, as supplemented, being called the “Indenture”) among the
Company, the guarantors listed in Schedule 2 hereto (the “Guarantors”) and Branch Banking and Trust
Company, as trustee (the “Trustee”), and will be guaranteed on an unsecured senior basis by each of
the Guarantors (the “Guarantees”). The Indenture is unlimited in aggregate principal amount,
although the issuance of Securities in this offering is limited to $500.0 million. The Company may
issue an unlimited principal amount of additional securities having identical terms and conditions
as the Securities (the “Additional Securities”). Any Additional Securities will be part of the
same series of the Securities that the Company is currently offering and holders of any Additional
Securities will vote on all matters with holders of the Securities.
The Company hereby confirms its agreement with the several Underwriters concerning the
purchase and sale of the Securities, as follows:
1. Registration Statement. The Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “Securities Act”), a registration statement on Form S-3
(File No. 333-152733), including a prospectus, relating to the Securities. Such registration
statement, including the information, if any, deemed pursuant to Rule 430A, 430B or 430C under the
Securities Act to be part of the registration statement at the time of its
effectiveness (“Rule 430 Information”), is referred to herein as the “Registration Statement”;
and as used herein, the term “Preliminary Prospectus” means the base prospectus included in such
registration statement (and any amendments thereto), the prospectus supplement
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filed with the Commission pursuant to Rule 424(b)(5) under the Securities Act on November 30,
2009 and the prospectus included in the Registration Statement at the time of its effectiveness
that omits Rule 430 Information, and the term “Prospectus” means the prospectus in the form first
used (or made available upon request of purchasers pursuant to Rule 173 under the Securities Act)
in connection with confirmation of sales of the Securities. Any reference in this Agreement to
the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act, as of the effective date of the Registration Statement or the date of
such Preliminary Prospectus or the Prospectus, as the case may be and any reference to “amend”,
“amendment” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any documents filed after such date under
the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the “Exchange Act”) that are deemed to be incorporated by reference
therein. Capitalized terms used but not defined herein shall have the meanings given to such terms
in the Registration Statement and the Prospectus.
At or prior to the time when sales of the Securities were first made (the “Time of Sale”), the
Company had prepared the following information (collectively, the “Time of Sale Information”): a
Preliminary Prospectus dated November 30, 2009, and each “free-writing prospectus” (as defined
pursuant to Rule 405 under the Securities Act) listed on Annex B hereto.
2. Purchase of the Securities by the Underwriters. (a) The Company agrees to issue and sell the Securities to the several Underwriters as
provided in this Agreement, and each Underwriter, on the basis of the representations, warranties
and agreements set forth herein and subject to the conditions set forth herein, agrees, severally
and not jointly, to purchase from the Company the respective principal amount of Securities set
forth opposite such Underwriter’s name in Schedule 1 hereto at a price equal to 96.436% of the
principal amount thereof plus accrued interest, if any, from December 10, 2009 to the Closing Date
(as defined below). The Company will not be obligated to deliver any of the Securities except upon
payment for all the Securities to be purchased as provided herein.
(b) The Company understands that the Underwriters intend to make a public offering of the
Securities as soon after the effectiveness of this Agreement as in the judgment of the
Representative is advisable, and initially to offer the Securities on the terms set forth in the
Prospectus. The Company acknowledges and agrees that the Underwriters may offer and sell
Securities to or through any affiliate of an Underwriter and that any such affiliate may offer and
sell Securities purchased by it to or through any Underwriter.
(c) Payment for and delivery of the Securities will be made at the offices of Simpson Thacher
& Bartlett LLP, 425 Lexington Avenue, New York, New York 10017 at 10:00 A.M., New York City time,
on December 10, 2009, or at such other time or place on the same or such other date, not later than
the fifth business day thereafter, as the Representative and the Company may agree upon in writing.
The time and date of such payment and delivery is referred to herein as the “Closing Date”.
(d) Payment for the Securities shall be made by wire transfer in immediately available funds
to the account(s) specified by the Company to the Representative against
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delivery to the Trustee,
as custodian for The Depository Trust Company, for the account of the Underwriters, of one or more
global notes representing the Securities (collectively, the “Global Note”), with any transfer taxes
payable in connection with the sale of the Securities duly paid by the Company. The Global Note
will be made available for inspection by the Representative not later than 12:00 P.M., New York
City time, on the business day prior to the Closing Date.
(e) The Company and the Guarantors acknowledge and agree that the Underwriters are acting
solely in the capacity of an arm’s length contractual counterparty to the Company and the
Guarantors with respect to the offering of Securities contemplated hereby (including in connection
with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Company, the Guarantors or any other person. Additionally, neither the
Representative nor any other Underwriter is advising the Company, the Guarantors or any other
person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The
Company and the Guarantors shall consult with their own advisors concerning such matters and shall
be responsible for making their own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company
or the Guarantors with respect thereto. Any review by the Underwriters of the Company, the
Guarantors, the transactions contemplated hereby or other matters relating to such transactions
will be performed solely for the benefit of the Underwriters and shall not be on behalf of the
Company or the Guarantors. The Company agrees that it will not claim that the Underwriters, or any
of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar
duty to the Company, in connection with such transaction or the process leading thereto.
3. Representations and Warranties of the Company and the Guarantors.
The Company and the Guarantors jointly and severally represent and warrant to each
Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, complied in all material respects with the Securities Act and
did not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided that
the Company makes no representation and warranty with respect to any statements or omissions
made in reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Representative expressly
for use in any Preliminary Prospectus.
(b) Time of Sale Information. The Time of Sale Information, at the Time of Sale did
not, and at the Closing Date will not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided that
the Company makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter through the
Representative expressly for use in such Time of Sale Information. No statement of
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material
fact included in the Prospectus has been omitted from the Time of Sale Information and no
statement of material fact included in the Time of Sale Information that is required to be
included in the Prospectus has been omitted therefrom.
(c) Issuer Free Writing Prospectus. The Company (including its agents and
representatives, other than the Underwriters in their capacity as such) has not prepared,
made, used, authorized, approved or referred to and will not prepare, make, use, authorize,
approve or refer to any “written communication” (as defined in Rule 405 under the Securities
Act) that constitutes an offer to sell or solicitation of an offer to buy the Securities
(each such communication by the Company or its agents and representatives (other than a
communication referred to in clauses (i), (ii) and (iii) below) an “Issuer Free Writing
Prospectus”) other than (i) any document not constituting a prospectus pursuant to Section
2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act, (ii) the Preliminary
Prospectus, (iii) the Prospectus, (iv) the documents listed on Annex B hereto as
constituting the Time of Sale Information and (v) any electronic road show or other written
communications, in each case approved in writing in advance by the Representative. Each
such Issuer Free Writing Prospectus complied in all material respects with the Securities
Act, has been or will be (within the time period specified in Rule 433) filed in accordance
with the Securities Act (to the extent required thereby) and, when taken together with the
Preliminary Prospectus accompanying, or delivered prior to delivery of, such Issuer Free
Writing Prospectus, did not, and at the Closing Date will not, contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation and warranty with
respect to any statements or omissions made in each such Issuer Free Writing Prospectus in
reliance upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representative expressly for use in
any Issuer Free Writing Prospectus.
(d) Registration Statement and Prospectus. The Registration Statement is an “automatic
shelf registration statement” as defined under Rule 405 of the Securities Act that has been
filed with the Commission not earlier than three years prior to the date hereof; and no
notice of objection of the Commission to the use of such registration statement or any
post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has
been received by the Company. No order suspending the effectiveness of the Registration
Statement has been issued by the Commission and no proceeding for that purpose or pursuant
to Section 8A of the Securities Act against the Company or related to the offering has been
initiated or threatened by the Commission; as of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration Statement complied and
will comply in all material respects with the Securities Act and the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission thereunder (collectively,
the “Trust Indenture Act”), and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements
therein not misleading; and as of the date of the Prospectus and any amendment or
supplement thereto and as of the Closing Date, the Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein
or
5
necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that the Company makes no
representation and warranty with respect to (i) that part of the Registration Statement that
constitutes the Statement of Eligibility and Qualification (Form T-1) of the Trustee under
the Trust Indenture Act or (ii) any statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representative expressly for use in the Registration
Statement and the Prospectus and any amendment or supplement thereto.
(e) Incorporated Documents. The documents incorporated by reference in the
Registration Statement, the Prospectus and the Time of Sale Information, when they became
effective or were filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Exchange Act and none of such documents contained any
untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any further documents so filed
and incorporated by reference in the Registration Statement, the Prospectus or the Time of
Sale Information, when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(f) Financial Statements. The financial statements and the related notes thereto of
the Company and its consolidated subsidiaries included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the Prospectus comply in all
material respects with the applicable requirements of the Securities Act and the Exchange
Act, as applicable, and present fairly in all material respects the financial position of
the Company and its subsidiaries as of the dates indicated and the results of their
operations and the changes in their cash flows for the periods specified; such financial
statements have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby, and the supporting
schedules, if any, included or incorporated by reference in the Registration Statement
present fairly the information required to be stated therein; and the other financial
information included or incorporated by reference in the Registration Statement, the Time of
Sale Information and the Prospectus has been derived from the accounting records of the
Company and its subsidiaries and presents fairly the information shown thereby; and the
pro forma financial information and the related notes thereto incorporated
by reference in the Registration Statement, the Time of Sale Information and the Prospectus
have been prepared in accordance with the applicable requirements of the Securities Act and
the Exchange Act, as applicable, and the assumptions underlying such pro forma financial
information are reasonable and are set forth in the Registration Statement, the Time of Sale
Information and the Prospectus.
(g) No Material Adverse Change. Since the date of the most recent financial statements
of the Company included or incorporated by reference in the Registration
6
Statement, the Time
of Sale Information and the Prospectus, (i) there has not been any change in the capital
stock (except as a result of exercises of outstanding stock options, vesting of restricted
stock units and transactions pursuant to the Company’s employee stock purchase plan, not to
exceed 50,000 shares of common stock of the Company in the aggregate) or long-term debt of
the Company or any of its subsidiaries (except for ordinary course borrowings under the
revolving credit facility and the accounts receivable securitization facility in the
aggregate amount no to exceed $10.0 million), or any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on any class of capital stock,
or any material adverse change, or any development involving a prospective material adverse
change, in or affecting the business, properties, management, financial position, results of
operations or prospects of the Company and its subsidiaries taken as a whole; (ii) neither
the Company nor any of its subsidiaries has entered into any transaction or agreement that
is material to the Company and its subsidiaries taken as a whole or incurred any liability
or obligation, direct or contingent, that is material to the Company and its subsidiaries
taken as a whole; and (iii) neither the Company nor any of its subsidiaries has sustained
any material loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor disturbance or dispute or
any action, order or decree of any court or arbitrator or governmental or regulatory
authority, except in each case as otherwise disclosed in the Registration Statement, the
Time of Sale Information and the Prospectus.
(h) Organization and Good Standing. The Company and each of its subsidiaries have been
duly organized and are validly existing and in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and have all power
and authority necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to be so qualified, in good
standing or have such power or authority would not, individually or in the aggregate, have a
material adverse effect on the business, properties, management, financial position, results
of operations or prospects of the Company and its subsidiaries taken as a whole or on the
performance by the Company or the Guarantors of their obligations under the Securities and
the Guarantees, respectively (a “Material Adverse Effect”). The Company does not own or
control, directly or indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21 to the Annual Report on Form 10-K for the fiscal year
ended January 3, 2009, other than Hanesbrands UK Limited, a company formed under the laws of
the United Kingdom, and Hanesbrands Australia Pty Limited, a company formed under the laws
of Australia, both of which were formed after January 3, 2009.
(i) Capitalization. The Company has an authorized capitalization as set forth in the
Registration Statement, the Time of Sale Information and the Prospectus under the heading
“Capitalization” and all the outstanding shares of capital stock or other equity interests
of each subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable (except, in the case of any foreign
subsidiary, for directors’ qualifying shares and shares held by other persons to satisfy
applicable
7
legal requirements, as could not reasonably be expected to result in a Material
Adverse Effect) and are owned directly or indirectly by the Company, free and clear of any
lien, charge, encumbrance, security interest, restriction on voting or transfer or any other
claim of any third party other than liens, encumbrances or other restrictions pursuant to
the Existing Credit Facilities (as such term is defined in the Time of Sale Information) or
any lien, encumbrance or other restrictions with respect to any foreign subsidiary which
would not reasonably be expected, individually or in aggregate, to result in a Material
Adverse Effect. For the purpose of this Agreement, “subsidiary” means, with respect to any
person, any corporation, association or other business entity of which more than 50% of the
voting power of the outstanding voting stock is owned, directly or indirectly, by such
person and one or more other subsidiaries of such person.
(j) Due Authorization. The Company and each of the Guarantors have full right power
and authority to execute and deliver this Agreement, the Securities and the Base Indenture
and the First Supplemental Indenture (collectively, the “Transaction Documents”) and to
perform their respective obligations hereunder and thereunder; and all action required to be
taken for the due and proper authorization, execution and delivery of each of the
Transaction Documents to which the Company and each of the Guarantors is a party and the
consummation of the transactions contemplated thereby has been duly and validly taken.
(k) The Indenture. Each of the Base Indenture and the Supplemental Indenture has been
duly authorized by the Company and each of the Guarantors and upon effectiveness of the
Registration Statement the Indenture was or will have been duly qualified under the Trust
Indenture Act and, when each of the Base Indenture and the Supplemental Indenture have been
duly executed and delivered in accordance with its terms by each of the parties thereto, the
Indenture will constitute a valid and legally binding agreement of the Company and each of
the Guarantors enforceable against the Company and each of the Guarantors in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally or by equitable
principles relating to enforceability (collectively, the “Enforceability Exceptions”).
(l) The Securities and the Guarantees. The Securities have been duly authorized by the
Company and, when duly executed, authenticated, issued and delivered as provided in the
Indenture and paid for as provided herein, will be duly and validly issued and outstanding
and will constitute valid and legally binding obligations of the Company enforceable against
the Company in accordance with their terms, subject to the Enforceability Exceptions, and
will be entitled to the benefits of the Indenture; and the Guarantees have been duly
authorized by each of the Guarantors and, when the Securities have been duly executed,
authenticated, issued and delivered as provided in the Indenture and paid for as provided
herein, will be valid and legally binding obligations of each of the Guarantors, enforceable
against each of the Guarantors in accordance with their terms, subject to the Enforceability
Exceptions, and will be entitled to the benefits of the Indenture.
8
(m) Underwriting Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors.
(n) Descriptions of the Transaction Documents. Each Transaction Document conforms in
all material respects to the description thereof contained in the Registration Statement,
the Time of Sale Information and the Prospectus.
(o) No Violation or Default. Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or by-laws or similar organizational documents; (ii) in default,
and no event has occurred that, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject; or (iii) in violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a Material Adverse Effect.
(p) No Conflicts. The execution, delivery and performance by the Company and each of
the Guarantors of each of the Transaction Documents, the issuance and sale of the Securities
(including the Guarantees) and compliance by the Company and each of the Guarantors with the
terms thereof and the consummation of the transactions contemplated by the Transaction
Documents will not (i) conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of
the provisions of the charter or by-laws or similar organizational documents of the Company
or any of its subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (i) and (iii) above, for any such conflict,
breach, violation or default that would not, individually or in the aggregate, have a
Material Adverse Effect.
(q) No Consents Required. No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company and each of the
Guarantors of each of the Transaction Documents to which it is a party, the issuance and
sale of the Securities (including the Guarantees) and compliance by the Company and each of
the Guarantors with the terms thereof and the consummation of the transactions contemplated
by the Transaction Documents, except for the registration of the Securities under the
Securities Act, the qualification of the Indenture under the Trust Indenture Act and such
consents, approvals, authorizations, orders and
9
registrations or qualifications as may be required under applicable state securities
laws in connection with the purchase and distribution of the Securities by the Underwriters.
(r) Legal Proceedings. Except as described in the Registration Statement, the Time of
Sale Information and the Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or any of its
subsidiaries is or may be a party or to which any property of the Company or any of its
subsidiaries is or may be the subject that, individually or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, could reasonably be expected to have a
Material Adverse Effect; no such investigations, actions, suits or proceedings are
threatened or, to the best knowledge of the Company, contemplated by any governmental or
regulatory authority or threatened by others; and (i) there are no current or pending legal,
governmental or regulatory actions, suits or proceedings that are required under the
Securities Act to be described in the Registration Statement or the Prospectus that are not
so described in the Registration Statement, the Time of Sale Information and the Prospectus
and (ii) there are no statutes, regulations or contracts or other documents that are
required under the Securities Act to be filed as exhibits to the Registration Statement or
described in the Registration Statement and the Prospectus that are not so filed as exhibits
to the Registration Statement or described in the Registration Statement, the Time of Sale
Information and the Prospectus.
(s) Independent Accountants. PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries, is an independent registered
public accounting firm with respect to the Company and its subsidiaries within the
applicable rules and regulations adopted by the Commission and the Public Company Accounting
Oversight Board (United States) and as required by the Securities Act.
(t) Title to Real and Personal Property. The Company and its subsidiaries have good
and marketable title in fee simple to, or have valid rights to lease or otherwise use, all
items of real and personal property that are material to the respective businesses of the
Company and its subsidiaries, in each case free and clear of all liens, encumbrances, claims
and defects and imperfections of title except those that (i) do not materially interfere
with the use made and proposed to be made of such property by the Company and its
subsidiaries, (ii) exist pursuant to the Existing Credit Facilities; or (iii) could not
reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(u) Title to Intellectual Property. Except as could not reasonably be expected,
individually or in aggregate, to have a Material Adverse Effect, the Company and its
subsidiaries own or possess adequate rights to use all patents, patent applications,
trademarks, service marks, trade names, trade secrets, trademark registrations, service mark
registrations, copyrights, licenses and know-how necessary for the conduct of their
respective businesses; and the conduct of their respective businesses will not conflict with
any such rights of others, except those that (i) exist pursuant to the Existing Credit
Facilities or (ii) could not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect. The Company and its subsidiaries have not received any
10
notice of any claim of infringement of or conflict with any such rights of others and
the Company’s or its subsidiaries’ intellectual property rights are not being infringed by
third parties.
(v) No Undisclosed Relationships. No relationship, direct or indirect, exists between
or among the Company or any of its subsidiaries, on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on
the other, that is required by the Securities Act to be described in the Registration
Statement and the Prospectus and that is not so described in such documents and in the Time
of Sale Information.
(w) Investment Company Act. Neither the Company nor any of its subsidiaries is and,
after giving effect to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Registration Statement, the Time of Sale Information
and the Prospectus, none of them will be, an “investment company” or an entity “controlled”
by an “investment company” within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder (collectively,
“Investment Company Act”).
(x) Taxes. The Company and its subsidiaries have paid all federal, state, local and
foreign taxes (except for any such taxes that are currently being contested in good faith
and with respect to which adequate reserves have been established in accordance with
generally accepted accounting principles) and filed all tax returns required to be paid or
filed through the date hereof, except in any case in which the failure so to pay such taxes
or file such returns would not reasonably be expected to have a Material Adverse Effect; and
except as otherwise disclosed in the Registration Statement, the Time of Sale Information
and the Prospectus, there is no tax deficiency that has been, or could reasonably be
expected to be, asserted against the Company or any of its subsidiaries or any of their
respective properties or assets.
(y) Licenses and Permits. The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective properties or
the conduct of their respective businesses as described in the Registration Statement, the
Time of Sale Information and the Prospectus, except where the failure to possess or make the
same would not, individually or in the aggregate, have a Material Adverse Effect; and except
as described in the Registration Statement, the Time of Sale Information and the Prospectus,
neither the Company nor any of its subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or authorization or has any reason to
believe that any such license, certificate, permit or authorization will not be renewed in
the ordinary course.
(z) No Labor Disputes. No labor disturbance by or dispute with employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company and each of
the Guarantors, is contemplated or threatened and neither the Company nor any Guarantor is
aware of any existing or imminent labor disturbance by, or dispute with, the
11
employees of any of the Company’s or the Company’s subsidiaries’ principal suppliers,
contractors or customers, except as would not reasonably be expected to have a Material
Adverse Effect.
(aa) Compliance With Environmental Laws. (i) The Company and its subsidiaries (x) are,
and at all prior times were, in compliance with any and all applicable federal, state, local
and foreign laws, rules, regulations, requirements, decisions and orders relating to the
protection of human health or safety, the environment, natural resources, hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (y)
have received and are in compliance with all permits, licenses, certificates or other
authorizations or approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (z) have not received notice of any actual or potential
liability under or relating to any Environmental Laws, including for the investigation or
remediation of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, and have no knowledge of any event or condition that would
reasonably be expected to result in any such notice, and (ii) there are no costs or
liabilities associated with Environmental Laws of or relating to the Company or its
subsidiaries, except in the case of each of (i) and (ii) above, for any such failure to
comply, or failure to receive required permits, licenses or approvals, or cost or liability,
as would not, individually or in the aggregate, have a Material Adverse Effect; and (iii)
except as described in each of the Time of Sale Information and the Prospectus, (x) there
are no proceedings that are pending, or that are known to be contemplated, against the
Company or any of its subsidiaries under any Environmental Laws in which a governmental
entity is also a party, other than such proceedings regarding which it is reasonably
believed no monetary sanctions of $100,000 or more will be imposed, (y) the Company and its
subsidiaries are not aware of any issues regarding compliance with Environmental Laws, or
liabilities or other obligations under Environmental Laws or concerning hazardous or toxic
substances or wastes, pollutants or contaminants, that could reasonably be expected to have
a material effect on the capital expenditures, earnings or competitive position of the
Company and its subsidiaries, and (z) none of the Company and its subsidiaries anticipates
material capital expenditures relating to any Environmental Laws.
(bb) Compliance With ERISA. Except as described in the Registration Statement, the
Time of Sale Information and the Prospectus or as would not reasonably be expected,
individually or in aggregate, to have a Material Adverse Effect, (i) each employee benefit
plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), for which the Company or any member of its “Controlled Group”
(defined as any organization which is a member of a controlled group of corporations within
the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”))
would have any liability (each, a “Plan”) has been maintained in compliance with its terms
and the requirements of any applicable statutes, orders, rules and regulations, including
but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan
excluding transactions effected pursuant to a statutory or administrative exemption or
transactions that have previously been corrected in accordance with applicable correction
procedures; (iii) for
12
each Plan that is subject to the funding rules of Section 412 of the Code or Section
302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code,
whether or not waived, has occurred or is reasonably expected to occur; (iv) to the best
knowledge of the Company, no “reportable event” (within the meaning of Section 4043(c) of
ERISA) has occurred for which notice to the PBGC either has been waived or has been
provided; and (v) neither the Company nor any member of the Controlled Group has incurred,
nor reasonably expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC, in the ordinary course and without
default or pursuant to the agreement with the PBGC dated September 8, 2009) in respect of a
Plan (including a “multiemployer plan”, within the meaning of Section 4001(a)(3) of ERISA).
(cc) Disclosure Controls. The Company and its subsidiaries, on a consolidated basis,
maintain an effective system of “disclosure controls and procedures” (as defined in Rule
13a-15(e) of the Exchange Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the
Commission’s rules and forms, including controls and procedures designed to ensure that such
information is accumulated and communicated to the Company’s management as appropriate to
allow timely decisions regarding required disclosure. The Company and its subsidiaries have
carried out evaluations of the effectiveness of their disclosure controls and procedures as
required by Rule 13a-15 of the Exchange Act.
(dd) Accounting Controls. The Company and its subsidiaries, on a consolidated basis,
maintain systems of “internal control over financial reporting” (as defined in Rule
13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and
have been designed by, or under the supervision of, their respective principal executive and
principal financial officers, or persons performing similar functions, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting
principles, including, but not limited to internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except as disclosed in the
Registration Statement, the Time of Sale Information and the Prospectus, there are no
material weaknesses in the Company’s internal controls, on a consolidated basis.
(ee) Insurance. The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are engaged; the Company and its
subsidiaries are in compliance with the terms of such policies and instruments in all
material respects; and there are no material claims by the Company or any
13
of its subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause.
(ff) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company and each of the Guarantors, any director, officer, agent, employee
or other person associated with or acting on behalf of the Company or any of its
subsidiaries has (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(gg) Compliance with Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency (collectively, the
“Money Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.
(hh) Compliance with OFAC. None of the Company, any of its subsidiaries or, to the
knowledge of the Company, any director, officer, agent, employee or Affiliate of the Company
or any of its subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering of the Securities
hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.
(ii) Solvency. On and immediately after the Closing Date, the Company (after giving
effect to the issuance of the Securities and the other transactions related thereto as
described in the Registration Statement, the Time of Sale Information and the Prospectus)
will be Solvent. As used in this paragraph, the term “Solvent” means, with respect to a
particular date, that on such date (i) the present fair market value (or present fair
saleable value) of the assets of the Company is not less than the total amount required to
pay the liabilities of the Company on its total existing debts and liabilities (including
contingent liabilities) as they become absolute and matured; (ii) the Company is able to
realize upon its assets and pay its debts and other liabilities, contingent obligations and
commitments as they mature and become due in the normal course of business; (iii) assuming
consummation of the issuance of the Securities as contemplated by this Agreement, the
Registration Statement, the Time of Sale Information and the Prospectus, the Company is not
incurring debts or liabilities beyond its ability to pay as such debts and liabilities
mature; (iv) the
14
Company is not engaged in any business or transaction, and does not propose to engage
in any business or transaction, for which its property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in the industry in which
the Company is engaged; and (v) the Company is not a defendant in any civil action that
would result in a judgment that the Company is or would become unable to satisfy.
(jj) No Restrictions on Subsidiaries. No subsidiary of the Company is currently
prohibited, directly or indirectly from paying any dividends to the Company, from making any
other distribution on such subsidiary’s capital stock, from repaying to the Company any
loans or advances to such subsidiary from the Company or from transferring any of such
subsidiary’s properties or assets to the Company or any other subsidiary of the Company,
except for restrictions permitted under the indenture governing the Company’s existing
floating rate Senior Notes due 2014.
(kk) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to
any contract, agreement or understanding with any person (other than this Agreement) that
would give rise to a valid claim against the Company or any of its subsidiaries or any
Underwriter for a brokerage commission, finder’s fee or like payment in connection with the
offering and sale of the Securities.
(ll) No Registration Rights. No person has the right to require the Company or any of
its subsidiaries to register any securities for sale under the Securities Act by reason of
the filing of the Registration Statement with the Commission or the issuance and sale of the
Securities.
(mm) No Stabilization. The Company has not taken, directly or indirectly, any action
designed to or that could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Securities.
(nn) Margin Rules. Neither the issuance, sale and delivery of the Securities nor the
application of the proceeds thereof by the Company as described in the Registration
Statement, the Time of Sale Information and the Prospectus will violate Regulation T, U or X
of the Board of Governors of the Federal Reserve System or any other regulation of such
Board of Governors.
(oo) Forward-Looking Statements. No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the
Registration Statement, the Time of Sale Information and the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(pp) Statistical and Market Data. Nothing has come to the attention of the Company
that has caused the Company to believe that the statistical and market-related data included
in the Registration Statement, the Time of Sale Information and the Prospectus is not based
on or derived from sources that are reliable and accurate in all material respects.
15
(qq) Sarbanes-Oxley Act. There is and has been no failure on the part of the Company
or any of the Company’s directors or officers, in their capacities as such, to comply with
any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and
Sections 302 and 906 related to certifications.
(rr) Status under the Securities Act. The Company is not an ineligible issuer and is a
well-known seasoned issuer, in each case as defined under the Securities Act, in each case
at the times specified in the Securities Act in connection with the offering of the
Securities.
4. Further Agreements of the Company and the Guarantors.
The Company and each of the Guarantors jointly and severally covenant and agree with each
Underwriter that:
(a) Required Filings. The Company will file the final Prospectus with the Commission within
the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act,
will file any Issuer Free Writing Prospectus (including the Term Sheet in the form of Annex C
hereto) to the extent required by Rule 433 under the Securities Act; and will file promptly all
reports and any definitive proxy or information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Securities; and the Company will furnish copies of the Prospectus
and each Issuer Free Writing Prospectus (to the extent not previously delivered) to the
Underwriters in New York City prior to 10:00 A.M., New York City time, on the business day next
succeeding the date of this Agreement in such quantities as the Representative may reasonably
request. The Company will pay the registration fees for this offering within the time period
required by Rule 456(b)(1)(i) under the Securities Act (without giving effect to the proviso
therein) and in any event prior to the Closing Date.
(b) Delivery of Copies. The Company will deliver, without charge, (i) to the Representative,
two signed copies of the Registration Statement as originally filed and each amendment thereto, in
each case including all exhibits and consents filed therewith and documents incorporated by
reference therein; and (ii) to each Underwriter (A) a conformed copy of the Registration Statement
as originally filed and each amendment thereto, in each case including all exhibits and consents
filed therewith and (B) during the Prospectus Delivery Period (as defined below), as many copies of
the Prospectus (including all amendments and supplements thereto and documents incorporated by
reference therein) and each Issuer Free Writing Prospectus as the Representative may reasonably
request. As used herein, the term “Prospectus Delivery Period” means such period of time after the
first date of the public offering of the Securities as in the opinion of counsel for the
Underwriters a prospectus relating to the Securities is required by law to be delivered (or
required to be delivered but for Rule 172 under the Securities Act) in connection with sales of the
Securities by any Underwriter or dealer.
(c) Amendments or Supplements; Issuer Free Writing Prospectuses. Before making, preparing,
using, authorizing, approving, referring to or filing any Issuer Free Writing
Prospectus, and before filing any amendment or supplement to the Registration Statement or the
Prospectus, the Company will furnish to the Representative and counsel for the Underwriters a
16
copy
of the proposed Issuer Free Writing Prospectus, amendment or supplement for review and will not
make, prepare, use, authorize, approve, refer to or file any such Issuer Free Writing Prospectus or
file any such proposed amendment or supplement to which the Representative reasonably objects prior
to such filing.
(d) Notice to the Representative. The Company will advise the Representative promptly, and
confirm such advice in writing, (i) when any amendment to the Registration Statement has been filed
or becomes effective; (ii) when any supplement to the Prospectus or any amendment to the Prospectus
or any Issuer Free Writing Prospectus has been filed; (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to the Prospectus or the
receipt of any comments from the Commission relating to the Registration Statement or any other
request by the Commission for any additional information; (iv) of the issuance by the Commission of
any order suspending the effectiveness of the Registration Statement or preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or the initiation or threatening of any
proceeding for that purpose or pursuant to Section 8A of the Securities Act; (v) of the occurrence
of any event within the Prospectus Delivery Period as a result of which the Prospectus, the Time of
Sale Information or any Issuer Free Writing Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus, the Time of Sale Information or any such Issuer Free
Writing Prospectus is delivered to a purchaser, not misleading; (vi) of the receipt by the Company
of any notice of objection of the Commission to the use of the Registration Statement or any
post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act; and (vii) of
the receipt by the Company of any notice with respect to any suspension of the qualification of the
Securities for offer and sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the
issuance of any such order suspending the effectiveness of the Registration Statement, preventing
or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any such
qualification of the Securities and, if any such order is issued, will obtain as soon as possible
the withdrawal thereof.
(e) Time of Sale Information. If at any time prior to the Closing Date (i) any event shall
occur or condition shall exist as a result of which the Time of Sale Information as then amended or
supplemented would include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the circumstances, not
misleading or (ii) it is necessary to amend or supplement the Time of Sale Information to comply
with law, the Company will immediately notify the Underwriters thereof and forthwith prepare and,
subject to paragraph (c) above, file with the Commission (to the extent required) and furnish to
the Underwriters and to such dealers as the Representative may designate, such amendments or
supplements to the Time of Sale Information as may be necessary so that the statements in the Time
of Sale Information as so amended or supplemented will not, in the light of the circumstances, be
misleading or so that the Time of Sale Information will comply with law.
(f) Ongoing Compliance. If during the Prospectus Delivery Period (i) any event shall occur or
condition shall exist as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
17
fact required to be
stated therein or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it
is necessary to amend or supplement the Prospectus to comply with law, the Company will immediately
notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file
with the Commission and furnish to the Underwriters and to such dealers as the Representative may
designate, such amendments or supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that
the Prospectus will comply with law.
(g) Blue Sky Compliance. The Company will qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representative shall reasonably request
and will continue such qualifications in effect so long as required for distribution of the
Securities; provided that the Company shall not be required to (i) qualify as a foreign
corporation or other entity or as a dealer in securities in any such jurisdiction where it would
not otherwise be required to so qualify, (ii) file any general consent to service of process in any
such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not
otherwise so subject.
(h) Earning Statement. The Company will make generally available to its security holders and
the Representative as soon as practicable an earning statement that satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering
a period of at least twelve months beginning with the first fiscal quarter of the Company occurring
after the “effective date” (as defined in Rule 158) of the Registration Statement.
(i) Clear Market. During the period from the date hereof through and including the date that
is 90 days after the date hereof, the Company will not, without the prior written consent of the
Representative, offer, sell, contract to sell, pledge or otherwise dispose of any debt securities
issued or guaranteed by the Company and having a tenor of more than one year.
(j) Use of Proceeds. The Company will apply the net proceeds from the sale of the Securities
as described in the Registration Statement, the Time of Sale Information and the Prospectus under
the heading “Use of proceeds”.
(k) No Stabilization. The Company will not take, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any stabilization or manipulation of
the price of the Securities.
(l) Record Retention. The Company will, pursuant to reasonable procedures developed in good
faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission
in accordance with Rule 433 under the Securities Act.
5. Certain Agreements of the Underwriters. Each Underwriter hereby represents and agrees that:
(a) It has not and will not use, authorize use of, refer to, any “free writing prospectus”, as
defined in Rule 405 under the Securities Act (which term includes use of any written information
furnished to the Commission by the Company and not incorporated by
18
reference into the Registration
Statement and any press release issued by the Company) other than (i) a free writing prospectus
that, solely as a result of use by such underwriter, would not trigger an obligation to file such
free writing prospectus with the Commission pursuant to Rule 433, (ii) any Issuer Free Writing
Prospectus listed on Annex B or prepared pursuant to Section 3(c) or Section 4(c) above (including
any electronic road show), or (iii) any free writing prospectus prepared by such underwriter and
approved by the Company in advance in writing (each such free writing prospectus referred to in
clauses (i) or (iii), an “Underwriter Free Writing Prospectus”). Notwithstanding the foregoing,
the Underwriters may use a term sheet substantially in the form of Annex C hereto without the
consent of the Company.
(b) It is not subject to any pending proceeding under Section 8A of the Securities Act with
respect to the offering (and will promptly notify the Company if any such proceeding against it is
initiated during the Prospectus Delivery Period).
6. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to purchase Securities on the Closing Date as provided
herein is subject to the performance by the Company and each of the Guarantors of their respective
covenants and other obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceeding for such purpose, pursuant to Rule
401(g)(2) or pursuant to Section 8A under the Securities Act shall be pending before or threatened
by the Commission; the Prospectus and each Issuer Free Writing Prospectus shall have been timely
filed with the Commission under the Securities Act (in the case of an Issuer Free Writing
Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with
Section 4(a) hereof; and all requests by the Commission for additional information shall have been
complied with to the reasonable satisfaction of the Representative.
(b) Representations and Warranties. The representations and warranties of the Company and
each of the Guarantors contained herein shall be true and correct on the date hereof and on and as
of the Closing Date; and the statements of the Company and each of the Guarantors and their
respective officers made in any certificates delivered pursuant to this Agreement shall be true and
correct on and as of the Closing Date.
(c) No Downgrade. Subsequent to the earlier of (A) the Time of Sale and (B) the execution and
delivery of this Agreement, (i) no downgrading shall have occurred in the rating accorded the
Securities or any other debt securities or preferred stock of or guaranteed by the Company or any
of its subsidiaries by any “nationally recognized statistical rating organization”, as such term is
defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act and (ii) no such
organization shall have publicly announced that it has under surveillance or review, or has changed
its outlook with respect to, its rating of the Securities or of any other debt
securities or preferred stock of or guaranteed by the Company or any of its subsidiaries
(other than an announcement with positive implications of a possible upgrading).
(d) No Material Adverse Change. No event or condition of a type described in Section 3(g)
hereof shall have occurred or shall exist, which event or condition is not described in the Time of
Sale Information (excluding any amendment or supplement thereto) and the
19
Prospectus (excluding any
amendment or supplement thereto) and the effect of which in the judgment of the Representative
makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the
Securities on the terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Prospectus.
(e) Officer’s Certificate. The Representative shall have received on and as of the Closing
Date a certificate of an executive officer of the Company and of each Guarantor who has specific
knowledge of the Company’s or such Guarantor’s financial matters and is satisfactory to the
Representative (i) confirming that such officer has carefully reviewed the Registration Statement,
the Time of Sale Information and the Prospectus and, to the knowledge of such officer, the
representations set forth in Sections 3(b) or 3(d) hereof are true and correct, (ii) confirming
that the other representations and warranties of the Company and the Guarantors in this Agreement
are true and correct and that the Company and the Guarantors have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the
Closing Date and (iii) to the effect set forth in paragraphs (a), (c) and (d) above.
(f) Comfort Letters. On the date of this Agreement and on the Closing Date,
PricewaterhouseCoopers LLP shall have furnished to the Representative, at the request of the
Company, letters, dated the respective dates of delivery thereof and addressed to the Underwriters,
in form and substance reasonably satisfactory to the Representative, containing statements and
information of the type customarily included in accountants’ “comfort letters” to underwriters with
respect to the financial statements and certain financial information contained and incorporated by
reference in the Registration Statement, the Time of Sale Information and the Prospectus;
provided that the letter delivered on the Closing Date shall use a “cut-off” date no more
than three business days prior to the Closing Date.
(g) Opinions & Certificate of Counsel for the Company. Each of (i) Kirkland & Ellis LLP,
counsel for the Company, (ii) Hogan & Hartson LLP, special Colorado counsel for the Company, and
(iii) Venable LLP, special Maryland counsel for the Company, shall have furnished to the
Representative, at the request of the Company, their respective written opinions, dated the Closing
Date and addressed to the Underwriters, in form and substance reasonably satisfactory to the
Representative, to the effect set forth in Annex A-1, A-2 and A-3 hereto, respectively. Joia M.
Johnson, General Counsel of the Company, shall have furnished to the Representative a certificate
to the effect set forth in Annex A-4 hereto.
(h) Opinion and 10b-5 Statement of Counsel for the Underwriters. The Representative shall
have received on and as of the Closing Date an opinion and 10b-5 statement of Simpson Thacher &
Bartlett LLP, counsel for the Underwriters, with respect to such matters as the Representative may
reasonably request, and such counsel shall have received such
documents and information as they may reasonably request to enable them to pass upon such
matters.
(i) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or
sale of the Securities or the issuance of the Guarantees; and no injunction or order of
20
any
federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent
the issuance or sale of the Securities or the issuance of the Guarantees.
(j) Good Standing. The Representative shall have received on and as of the Closing Date
satisfactory evidence of the good standing of the Company and the Guarantors in their respective
jurisdictions of organization and their good standing in such other jurisdictions as the
Representative may reasonably request, in each case in writing or any standard form of
telecommunication from the appropriate governmental authorities of such jurisdictions.
(k) Additional Documents. On or prior to the Closing Date, the Company and the Guarantors
shall have furnished to the Representative such further certificates and documents as the
Representative may reasonably request.
(l) New Credit Facilities. Concurrently with or prior to the Closing Date, (a) the Company
shall have entered into the New Senior Secured Credit Facilities consistent in all material
respects with the terms described in the Time of Sale Information; and (b) the Representative shall
have received conformed counterparts thereof and all other documents and agreements entered into
and received thereunder in connection with the closing of the New Senior Secured Credit Facilities,
including, but not limited to security and collateral agreements, each in forms and substance
reasonably satisfactory to the Representative; provided that if the credit agreement governing the
New Senior Secured Credit Facilities is not signed, the Representative may not waive the condition
described in clause (a) of this Section 6(l) without the Company’s consent.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
7. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company and each of the Guarantors jointly and
severally agree to indemnify and hold harmless each Underwriter, its affiliates, directors and
officers and each person, if any, who controls such Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are
incurred), joint or several, that arise out of, or are based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration Statement or caused by
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary in order to make the statements therein, not misleading,
(ii) or any untrue statement or alleged untrue statement of a material fact contained in the
Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus or any Time
of Sale Information, or caused by any omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading, in each case except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any information relating to
21
any
Underwriter furnished to the Company in writing by such Underwriter through the Representative
expressly for use therein.
(b) Indemnification of the Company and the Guarantors. Each Underwriter agrees, severally and
not jointly, to indemnify and hold harmless the Company, each of the Guarantors, each of their
respective directors, their respective officers who signed the Registration Statement and each
person, if any, who controls the Company or any of the Guarantors within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set
forth in paragraph (a) above, but only with respect to any and all losses, claims, damages or
liabilities (or actions and proceedings in respect thereof) that arise out of, or are based upon,
any untrue statement or omission or alleged untrue statement or omission made in reliance upon and
in conformity with any information relating to such Underwriter furnished to the Company in writing
by such Underwriter through the Representative expressly for use in the Registration Statement, the
Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus or any Time
of Sale Information, it being understood and agreed that the only such information consists of the
following: the concession and reallowance figures appearing in the third paragraph under the
caption “Underwriting”, the information contained in the third and fourth sentences of the fifth
paragraph under the caption “Underwriting” and the information contained in the ninth paragraph
under the caption “Underwriting.
(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against any person in
respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such
person (the “Indemnified Person”) shall promptly notify the person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it may have
under this Section 7 except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this Section 7. If any
such proceeding shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified
Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and any others
entitled to indemnification pursuant to Section 7 that the Indemnifying Party may designate in such
proceeding and shall pay the fees and expenses of such proceeding and shall pay the fees and
expenses of counsel related to such proceeding, as incurred. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory
to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it that are different from or in addition to those available to
the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded
parties) include both the Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential differing interests
between them. It is understood and agreed that the Indemnifying
22
Person shall not, in connection
with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for any Underwriter, its affiliates, directors and officers and any control persons
of such Underwriter shall be designated in writing by J.P. Morgan Securities Inc. and any such
separate firm for the Company, the Guarantors, their respective directors, their respective
officers who signed the Registration Statement and any control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each
Indemnified Person from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is entered into more than 30
days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request prior to the date
of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such proceeding and (y) does
not include any statement as to or any admission of fault, culpability or a failure to act by or on
behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) (i)
in such proportion as is appropriate to reflect the relative benefits received by the Company and
the Guarantors on the one hand and the Underwriters on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits referred to in clause
(i) but also the relative fault of the Company and the Guarantors on the one hand and the
Underwriters on the other in connection with the statements or omissions that resulted in such
losses, claims,
damages or liabilities, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same respective proportions as the net proceeds (before deducting expenses) received
by the Company from the sale of the Securities and the total underwriting discounts and commissions
received by the Underwriters on the other in connection therewith, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate offering price of the Securities. The
relative fault of the Company and the Guarantors on the one hand and the Underwriters on the other
shall be determined by reference to, among other things, whether the
23
untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or any Guarantor or by the Underwriters and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) Limitation on Liability. The Company, the Guarantors and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified
Person in connection with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall an Underwriter be required to contribute any amount
in excess of the amount by which the total underwriting discounts and commissions received by such
Underwriter with respect to the offering of the Securities exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations
to contribute pursuant to this Section 7 are several in proportion to their respective purchase
obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any Indemnified Person
at law or in equity.
8. Effectiveness of Agreement. This Agreement shall become effective upon the execution and delivery hereof by the
parties hereto.
9. Termination. This Agreement may be terminated in the absolute discretion of the Representative, by
notice to the Company, if after the execution and delivery of this Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially limited on the New York
Stock Exchange or the over-the-counter market; (ii) trading of any securities issued or
guaranteed by the Company shall have been suspended on any exchange or in any over the counter
market; (iii) a general moratorium on commercial banking activities shall have been declared by
federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any material disruption in securities
settlement and clearance services or any calamity or crisis, either within or outside the United
States, that, in the judgment of the Representative, is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on
the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the
Prospectus.
10. Defaulting Underwriter. (a) If, on the Closing Date, any Underwriter defaults on its obligation to purchase the
Securities that it has agreed to purchase hereunder, the non-
24
defaulting Underwriters may in their
discretion arrange for the purchase of such Securities by other persons satisfactory to the Company
on the terms contained in this Agreement. If, within 36 hours after any such default by any
Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Securities,
then the Company shall be entitled to a further period of 36 hours within which to procure other
persons satisfactory to the non-defaulting Underwriters to purchase such Securities on such terms.
If other persons become obligated or agree to purchase the Securities of a defaulting Underwriter,
either the non defaulting Underwriters or the Company may postpone the Closing Date for up to five
full business days in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement and the Prospectus or
in any other document or arrangement, and the Company agrees to promptly prepare any amendment or
supplement to the Registration Statement and the Prospectus that effects any such changes. As used
in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the
context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this
Section 10, purchases Securities that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Securities of a
defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as
provided in paragraph (a) above, the aggregate principal amount of such Securities that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities,
then the Company shall have the right to require each non-defaulting Underwriter to purchase the
principal amount of Securities that such Underwriter agreed to purchase hereunder plus such
Underwriter’s pro rata share (based on the principal amount of Securities that such
Underwriter agreed to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Securities of a
defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as
provided in paragraph (a) above, the aggregate principal amount of such Securities that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities, or if the
Company shall not exercise the right described in paragraph (b) above, then this Agreement shall
terminate without liability on the part of the non-defaulting Underwriters. Any termination of
this Agreement pursuant to this Section 10 shall be without liability on the part of the
Company, except that the Company will continue to be liable for the payment of expenses as set
forth in Section 11 hereof and except that the provisions of Section 7 hereof shall not terminate
and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company or any non-defaulting Underwriter for damages caused by its default.
11. Payment of Expenses. (a) Whether or not the transactions contemplated by this Agreement are consummated or this
Agreement is terminated, the Company and each of the Guarantors jointly and severally agree to pay
or cause to be paid all costs and expenses incident to the performance of their respective
obligations hereunder, including without limitation, (i) the costs incident to the authorization,
issuance, sale, preparation and delivery of the Securities and any taxes payable in that
connection; (ii) the costs incident to the preparation, printing and filing under the Securities
Act of the Registration Statement, the Preliminary Prospectus, any Issuer
25
Free Writing Prospectus,
any Time of Sale Information and the Prospectus (including all exhibits, amendments and supplements
thereto) and the distribution thereof; (iii) the costs of reproducing and distributing each of the
Transaction Documents; (iv) the fees and expenses of the Company’s and the Guarantors’ counsel and
independent accountants; (v) the fees and expenses incurred in connection with the registration or
qualification and determination of eligibility for investment of the Securities under the laws of
such jurisdictions as the Representative may designate and the preparation, printing and
distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the
Underwriters subject to a maximum amount of $10,000); (vi) any fees charged by rating agencies for
rating the Securities; (vii) the fees and expenses of the Trustee and any paying agent (including
related fees and expenses of any counsel to such parties); (viii) all expenses and application fees
incurred in connection with any filing with, and clearance of the offering by, FINRA; and (ix) all
expenses incurred by the Company (but not the Underwriters) in connection with any “road show”
presentation to potential investors.
(b) If (i) this Agreement is terminated pursuant to Section 9, (ii) the Company for any reason
fails to tender the Securities for delivery to the Underwriters or (iii) the Underwriters decline
to purchase the Securities for any reason permitted under this Agreement, the Company agrees to
reimburse the Underwriters for all out-of-pocket costs and expenses (including the reasonable fees
and expenses of their counsel) reasonably incurred by the Underwriters in connection with this
Agreement and the offering contemplated hereby.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective successors and the officers and directors and any controlling persons referred to
herein, and the affiliates of each Underwriter referred to in Section 7 hereof. Nothing in this
Agreement is intended or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Securities from any Underwriter shall be deemed to be a successor merely by reason of
such purchase.
13. Survival. The respective indemnities, rights of contribution, representations, warranties and
agreements of the Company, the Guarantors and the Underwriters contained in this Agreement or made
by or on behalf of the Company, the Guarantors or the Underwriters pursuant to this Agreement or
any certificate delivered pursuant hereto shall survive the delivery of and payment for the
Securities and shall remain in full force and effect, regardless of any termination of this
Agreement or any investigation made by or on behalf of the Company or the Underwriters.
14. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term
“affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business
day” means any day other than a day on which banks are permitted or required to be closed in New
York City; and (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities
Act.
15. Miscellaneous. (a) Authority of the Representative. Any action by the Underwriters hereunder may be
taken by J.P. Morgan Securities Inc. on behalf of the
26
Underwriters, and any such action taken by
J.P. Morgan Securities Inc. shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted and confirmed by any standard form of
telecommunication. Notices to the Underwriters shall be given to the Representative c/o J.P.
Morgan Securities Inc., 270 Park Avenue, New York, New York 10017 (fax: (212) 270-1063); Attention:
Lauren Camp. Notices to the Company shall be given to it at Hanesbrands Inc., 1000 East Hanes Mill
Road, Winston-Salem, North Carolina 27105 (fax: (336) 714-3638), Attention: Joia M. Johnson,
General Counsel, with a copy to Gerald T. Nowak, P.C., Kirkland & Ellis LLP, 300 North LaSalle
Street, Chicago, IL 60654 (fax: (312) 862-2200).
(c) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.
(f) Headings. The headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
27
If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.
| Very truly yours, HANESBRANDS INC. |
||||
| By | /s/ E. Lee Wyatt Jr. | |||
| Name: | E. Lee Wyatt Jr. | |||
| Title: | Executive Vice President, Chief Financial Officer | |||
| On behalf of each of the Guarantors listed below: BA INTERNATIONAL, L.L.C. CARIBESOCK, INC. CARIBETEX, INC. CASA INTERNATIONAL, LLC CEIBENA DEL, INC. HANES MENSWEAR, LLC HANES 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/ Richard D. Moss | |||
| Name: | Richard D. Moss | |||
| Title: | Treasurer | |||
28
| Accepted: December 3, 2009 J.P. MORGAN SECURITIES INC. For itself and on behalf of the several Underwriters listed in Schedule 1 hereto. |
||||
| By | /s/ David A. Dwyer | |||
| Name: David A. Dwyer | ||||
| Title: Executive Director | ||||
Schedule 1
| Underwriter | Principal Amount | |||
J.P. Morgan Securities Inc. |
$ | 137,500,000 | ||
Banc of America Securities LLC |
100,000,000 | |||
HSBC Securities (USA) Inc. |
100,000,000 | |||
Goldman, Sachs & Co. |
75,000,000 | |||
Barclays Capital Inc. |
50,000,000 | |||
BB&T
Capital Markets, a division of Scott & Stringfellow, LLC |
12,500,000 | |||
PNC Capital Markets LLC |
12,500,000 | |||
RBC Capital Markets Corporation |
12,500,000 | |||
Total |
$ | 500,000,000 | ||
S-1-1
Schedule 2
Guarantors
BA International, L.L.C.
Caribesock, Inc.
Caribetex, Inc.
CASA International, LLC
Ceibena Del, Inc.
Hanes Menswear, LLC
Hanes 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.
Caribesock, Inc.
Caribetex, Inc.
CASA International, LLC
Ceibena Del, Inc.
Hanes Menswear, LLC
Hanes 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.
S-2-1
Annex A-1
Form of Opinion of Kirkland & Ellis LLP
A-1
December 10, 2009
J.P. Morgan Securities Inc.
and the other several underwriters
named in Schedule A hereto
and the other several underwriters
named in Schedule A hereto
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, NY 10017
270 Park Avenue
New York, NY 10017
| Re: | Offering of $500,000,000 aggregate principal
amount of 8.000% Senior Notes due 2016 of Hanesbrands Inc. |
Ladies and Gentlemen:
We are issuing this letter in our capacity as special counsel for Hanesbrands Inc., a Maryland
corporation (the “Company”), and the Guarantors (as defined below) with respect to the matters
described herein. This letter is being delivered in response to the requirement in Section 6(g) of
the Underwriting Agreement, dated December 3, 2009 (the “Underwriting Agreement”), among the
Company, the guarantors listed on Schedule B hereto (the “Guarantors”) and J.P. Morgan
Securities, Inc., as representative of the several Underwriters named in Schedule A hereto
(collectively, “you” or the “Underwriters”) relating to the sale by the Company to the Underwriters
of $500,000,000 aggregate principal amount of the Company’s 8.000% Senior Notes due 2016 (the
“Notes”) to be issued under the Indenture, dated as of August 1, 2008 (the “Base Indenture”),
between the Company and Branch Banking and Trust Company, as trustee (the “Trustee”), as
supplemented by the First Supplemental Indenture thereto dated as of the date hereof among the
Company, the Guarantors and the Trustee (together with the Base Indenture, the “Indenture”). The
Notes are expected to be guaranteed pursuant to the guarantees to be issued by the Guarantors on
the date hereof pursuant to the terms of the Indenture (the “Guarantees,” and together with the
Notes, the “Securities”).
In connection with the preparation of this letter, we have among other things read:
| (a) | the registration statement, including the Incorporated Documents (as defined below), (the “Registration Statement”) on Form S-3ASR (Registration No. 333-152733) filed by the Company with the Securities and Exchange Commission (the “Commission”) on August 1, 2008 for the purpose of registering the offering of the Securities under the Securities Act of 1933, as amended (the “Securities Act”); |
| (b) | the Company’s base prospectus, dated August 1, 2008, as supplemented by the Company’s preliminary prospectus supplement, dated as of November 30, 2009, filed by the Company pursuant to Rule 424(b) of the Commission, relating to the offering and sale of the Securities, as supplemented or amended by the Free Writing Prospectus dated December 3, 2009, containing, among other things, certain pricing and other terms of the Notes, and the Incorporated Documents (collectively, the “Time of Sale Information”); | ||
| (c) | the Company’s base prospectus, dated August 1, 2008, as supplemented by the Company’s final prospectus supplement, dated December 3, 2009, relating to the offering and sale of the Securities (the “Prospectus”); | ||
| (d) | the documents specifically incorporated by reference or deemed to be incorporated by reference in the Time of Sale Information, the Registration Statement and the Prospectus (together, the “Incorporated Documents”); | ||
| (e) | an executed copy of the Underwriting Agreement; | ||
| (f) | an executed copy of the Indenture; | ||
| (g) | the executed Notes and the executed Guarantees; | ||
| (h) | certified copies of the certificates of incorporation, certificates of formation, by-laws, limited liability company agreements or operating agreements of the entities identified in Schedule B, as applicable (the “Organizing Documents”); | ||
| (i) | a certified copy of resolutions adopted by the members and the management committee, manager, management board or boards of directors, as the case may be, of the Company and each of the Guarantors relating to the offering, sale and issuance of the Securities; | ||
| (j) | certificates of good standing, with respect to the Company and each of the Guarantors, as supplemented by electronic bringdowns thereof dated the date hereof; | ||
| (k) | the certificate of Joia M. Johnson, Secretary of the Company, dated the date hereof, including all exhibits thereto; | ||
| (l) | the certificate of Richard Moss, Treasurer of the Company, dated the date hereof, furnished to the Underwriters pursuant to Section 6(e) of the Underwriting Agreement; |
2
| (m) | copies of all certificates and other documents delivered in connection with the sale of the Securities on the date hereof and the consummation of the other transactions contemplated by the Underwriting Agreement; | ||
| (n) | copies of the documents listed on Schedule C hereto; and | ||
| (o) | such other records, certificates and documents as we have deemed necessary or appropriate in order to deliver the advice set forth herein. |
The Underwriting Agreement, the Indenture, and the Securities, are collectively referred to
herein as the “Transaction Documents.”
Subject to the assumptions, qualifications, exclusions and other limitations which are
identified in this letter, we advise you that:
| 1. | Each of the Guarantors is a corporation or limited liability company existing and in good standing under the relevant law of its state of incorporation or formation, as the case may be, and as set forth on Schedule B. The Company is in good standing under the jurisdictions set forth on Schedule D. | ||
| 2. | Each of the Guarantors has full corporate power or limited liability company power and authority to own, lease and operate its properties and conduct its business as described in the Time of Sale Information and the Prospectus. | ||
| 3. | The Underwriting Agreement has been duly authorized, executed and delivered by each of the Guarantors and duly executed and delivered by the Company. | ||
| 4. | The Indenture has been duly authorized, executed and delivered by each of the Guarantors and duly executed and delivered by the Company and, assuming due authorization by the Company, and due authorization, execution and delivery by the Trustee, the Indenture is a valid and binding obligation of the Company and each of the Guarantors and is enforceable against the Company and each of the Guarantors in accordance with its terms. | ||
| 5. | The Notes have been duly executed and delivered by the Company and, when paid for by the Underwriters in accordance with the Underwriting Agreement (assuming the due authorization of the Indenture by the Trustee and the Company and due authentication and delivery of the Notes by the Trustee in accordance with the Indenture), the Notes will constitute valid and binding obligations of the Company, and will be enforceable against the Company in accordance with their terms. |
3
| 6. | The Guarantees have been duly authorized by each of the Guarantors and, when the Notes are issued and delivered by the Company against payment therefor in accordance with the terms of the Underwriting Agreement and the Indenture, will constitute the legal, valid and binding obligations of each of the Guarantors enforceable against each of the Guarantors in accordance with their terms. | ||
| 7. | The statements in the Time of Information and the Prospectus under the headings “Description of Notes” and “Description of Other Indebtedness” insofar as such statements purport to summarize terms of the Securities, the Indenture or other documents referred to therein, are correct in all material respects. | ||
| 8. | The Company and each of the Guarantors, as applicable, is not required to obtain any consent, approval, authorization or other order of, or registration or filing with, any court or other governmental, administrative or regulatory authority or agency under any Specified Law for the Company’s and each of the Guarantor’s execution, delivery and performance of the Transaction Documents, except (A) as have already been obtained or made and are in full force and effect and (B) as required under applicable state securities or blue sky laws, or the rules and regulations of the Financial Industry Regulatory Authority, Inc. | ||
| 9. | The execution and delivery of the Transaction Documents by the Company and the Guarantors and the performance by the Company and the Guarantors of their respective obligations thereunder do not and will not (i) result in any violation of any Specified Law, (ii) constitute a violation, or result in a breach or default, under any existing obligation of the Company or its Subsidiaries under any provision of any Specified Contract (provided that we express no opinion as to compliance with any financial test or cross-default provision in any such Specified Contract), or (iii) conflict or violate any of the terms or provisions of the Certificate of Incorporation or By-Laws of the Company or any of the Guarantors. | ||
| 10. | None of the Company or any of the Guarantors is, and after giving effect to the application of proceeds as set forth under “Use of Proceeds” in the Time of Sale Information and the Prospectus, will be an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| 11. | The Registration Statement, at the time it became effective, and the Prospectus, as of its date, appeared on their faces to have complied as to form in all material respects with the requirements of the Securities Act and the rules and regulations promulgated thereunder, except that in each case we do not express any opinion as to any financial statements, financial and accounting data, or supporting schedules (or any notes to any such statements or schedules) or other financial or |
4
| statistical information derived therefrom in (or omitted from) the Registration Statement or the Prospectus. |
Assuming the accuracy of the representations and warranties of the Company set forth in the
Underwriting Agreement, (i) the Registration Statement became effective upon filing with the
Commission pursuant to Rule 462 of the Securities Act; and (ii) the Indenture has been qualified
under the Trust Indenture Act of 1939, as amended. We have been orally advised by the staff of the
Commission that no stop order suspending the effectiveness of the Registration Statement has been
issued under the Securities Act. To the best of our knowledge, no proceedings for that purpose have
been instituted or are pending or threatened by the Commission. Any required filing of the
Prospectus by the Company pursuant to Rule 424(b) of the Securities Act has been made in the manner
and within the time period required by such rule.
Except as described above, we have not undertaken any investigation to determine the facts
upon which the advice in this letter is based.
Each opinion (an “enforceability opinion”) in this letter that any particular contract is a
valid and binding obligation or is enforceable in accordance with its terms is subject to: (i) the
effect of bankruptcy, insolvency, fraudulent conveyance and other similar laws and judicially
developed doctrines in this area such as substantive consolidation and equitable subordination;
(ii) the effect of general principles of equity; and (iii) other commonly recognized statutory and
judicial constraints on enforceability, including statutes of limitations. “General principles of
equity” include but are not limited to: principles limiting the availability of specific
performance and injunctive relief; principles which limit the availability of a remedy under
certain circumstances where another remedy has been elected; principles requiring reasonableness,
good faith and fair dealing in the performance and enforcement of an agreement by the party seeking
enforcement; principles which may permit a party to cure a material failure to perform its
obligations; and principles affording equitable defenses such as waiver, laches and estoppel. It
is possible that terms in a particular contract covered by our enforceability opinion may not prove
enforceable for reasons other than those explicitly cited in this letter should an actual
enforcement action be brought, but (subject to all the exceptions, qualifications, exclusions and
other limitations contained in this letter) such unenforceability would not in our view prevent the
party entitled to enforce that contract from realizing the principal benefits purported to be
provided to that party by the terms in that contract which are covered by our enforceability
opinion. To the extent any opinion relates to the enforceability of the choice of New York law and
choice of New York forum provisions of the Transaction Documents, our opinion is rendered in
reliance upon N.Y. Gen. Oblig. Law §§ 5-1401, 5-1402 (McKinney 2001) and N.Y. C.P.L.R. 327(b)
(McKinney 2001) and is subject to the qualification that such enforceability may be limited by
public policy considerations.
We have assumed for purposes of this letter: each document we have reviewed for purposes of
this letter is accurate and complete, each such document that is an original is
5
authentic, each such document that is a copy conforms to an authentic original, and all
signatures on each such document are genuine; that each such document was duly authorized, executed
and delivered (other than with respect to the authorization by the Guarantors and execution and
delivery by the Company and the Guarantors) and each constitutes a valid and binding obligation of
each party to that document (other than the Company and the Guarantors) and that each such party
(other than the Company and the Guarantors) has satisfied all legal requirements that are
applicable to such party to the extent necessary to entitle such party to enforce such agreement;
and that you have acted in good faith and without notice of any fact which has caused you to reach
any conclusion contrary to any of the advice provided in this letter.
Whenever this letter provides advice about (or based upon) our knowledge of any particular
information or about any information which has or has not come to our attention such advice is
based entirely on the actual knowledge obtained in acting as legal counsel to the Company at the
time this letter is delivered on the date it bears by the following lawyers currently with Kirkland
& Ellis LLP (after consultation with such attorneys of the firm as we deemed appropriate) who have
represented the Company in connection with (i) the offering contemplated by the Time of Sale
Information and the Prospectus, (ii) the Transactions (as such term is defined in the Time of Sale
Information) and (iii) any prior offerings of securities of the
Company: Gerald T. Nowak, P.C., Linda K.
Myers, P.C., Theodore A. Peto, Amy Peters, Maureen Dixon, Michael Chu, J. Terence Patterson and
Shelia Kang.
In preparing this letter we have relied without independent verification upon: (i) information
contained in certificates obtained from governmental authorities; (ii) factual information
represented to be true in the Underwriting Agreement and other documents specifically identified at
the beginning of this letter as having been read by us; (iii) factual information provided to us by
the Company or its representatives; and (iv) factual information we have obtained from such other
sources as we have deemed appropriate. We have also, without conducting any research or
investigation with respect thereto, relied upon the opinion of Venable LLP for certain matters of
Maryland law, and upon the opinion of Hogan & Hartson LLP for certain matters of Colorado law. We
have assumed that there has been no relevant change or development between the dates as of which
the information cited in the preceding sentence was given and the date of this letter and that the
information upon which we have relied is accurate and does not omit disclosures necessary to
prevent such information from being misleading. For purposes of numbered paragraph 1, we have
relied exclusively upon certificates issued by governmental authorities in the relevant
jurisdiction and such opinion is not intended to provide any conclusion or assurance beyond that
conveyed by those certificates. We have made other assumptions which we have deemed appropriate
for this letter.
Our advice on every legal issue addressed in this letter is based exclusively on the internal
law of the State of New York, the General Corporation Law of the State of Delaware, the Limited
Liability Company Act of the State of Delaware, or the federal law of the United States to the
extent specifically referred to herein (the “Specified Laws”), and represents our
6
view as to how that issue would be resolved were it to be considered by the highest court in
the jurisdiction which enacted such law. In our view, New York state courts would apply New York
state law to resolve state law issues arising under the Transaction Documents. We express no view
as to what law might be applied by any other courts to resolve any issue addressed by our letter
and we express no view as to whether any relevant difference exists between the laws upon which our
advice is based and any other laws which may actually be applied to resolve issues which may arise
under the Transaction Documents. The manner in which any particular issue would be treated in any
actual court case would depend in part on facts and circumstances particular to the case and would
also depend on how the court involved chose to exercise the wide discretionary authority generally
available to it. This letter is not intended to guarantee the outcome of any legal dispute which
may arise in the future.
None of the advice contained in this letter considers or covers: (i) any state securities (or
“blue sky”) laws or regulations, (ii) any financial statements or supporting schedules (or any
notes to any such statements or schedules) or other financial information set forth in (or omitted
from) the Preliminary Prospectus and the Prospectus or (iii) any rules and regulations of the
Financial Industry Regulatory Authority, Inc. This letter does not cover any other laws, statutes,
governmental rules or regulations or decisions which in our experience are not usually considered
for or covered by opinions like those contained in this letter or are not generally applicable to
transactions of the kind covered by the Underwriting Agreement.
This letter speaks as of the time of its delivery on the date it bears. We do not assume any
obligation to provide you with any subsequent advice.
This letter is being furnished to you solely in your capacity as underwriters in connection
with the sale of the Securities to you pursuant to and as contemplated by the Underwriting
Agreement and may only be relied upon by you in your capacity as such. Without our written
consent: (i) no person (including, without limitation, subsequent purchasers of the Securities)
other than you may rely on this letter for any purpose; (ii) this letter may not be cited or quoted
in any financial statements, prospectus, private placement memorandum or other similar document;
(iii) this letter may not be cited or quoted in any other document or communication which might
encourage reliance upon this letter by any person or for any purpose excluded by the restrictions
in this paragraph; and (iv) copies of this letter may not be furnished to anyone for purposes of
encouraging such reliance.
Sincerely,
KIRKLAND & ELLIS LLP
7
Schedule A
Underwriters
J.P. Morgan Securities Inc.
Banc of America Securities LLC
HSBC Securities (USA) Inc.
Goldman, Sachs & Co.
Barclays Capital Inc.
BB&T Capital Markets, a division of Scott & Stringfellow, LLC
PNC Capital Markets LLC
RBC Capital Markets Corporation
Banc of America Securities LLC
HSBC Securities (USA) Inc.
Goldman, Sachs & Co.
Barclays Capital Inc.
BB&T Capital Markets, a division of Scott & Stringfellow, LLC
PNC Capital Markets LLC
RBC Capital Markets Corporation
Schedule B
| Jurisdiction of | ||
| Name of Guarantor | Formation/Incorporation | |
BA International, L.L.C.
|
Delaware | |
Caribesock, Inc.
|
Delaware | |
Caribetex, Inc.
|
Delaware | |
CASA International, LLC
|
Delaware | |
Ceibena Del, Inc.
|
Delaware | |
Hanes Menswear, LLC
|
Delaware | |
Hanes Puerto Rico, Inc.
|
Delaware | |
Hanesbrands Distribution, Inc.
|
Delaware | |
HBI Branded Apparel Limited, Inc.
|
Delaware | |
HBI Branded Apparel Enterprises, LLC
|
Delaware | |
HbI International, LLC
|
Delaware | |
HBI Sourcing, LLC
|
Delaware | |
Inner Self LLC
|
Delaware | |
Jasper-Costa Rica, L.L.C.
|
Delaware | |
Playtex Dorado, LLC
|
Delaware | |
Playtex Industries, Inc.
|
Delaware | |
Seamless Textiles, LLC
|
Delaware | |
UPCR, Inc.
|
Delaware | |
UPEL, Inc.
|
Delaware |
Schedule C
Company’s Material Contracts
| 1. | Rights Agreement, dated as of September 1, 2006, between Hanesbrands Inc. and Computershare Trust Company, N.A. | |
| 2. | Form of Rights Certificate, pursuant to the Rights Agreement, dated as of September 1, 2006, between Hanesbrands Inc. and Computershare Trust Company, N.A. | |
| 3. | Master Separation Agreement, dated as of August 31, 2006, between Sara Lee Corporation and Hanesbrands Inc. | |
| 4. | Tax Sharing Agreement, dated as of August 31, 2006, by and among Sara Lee Corporation and its Affiliates and Hanesbrands Inc. and its Affiliates | |
| 5. | Employee Matters Agreement, dated as of August 31, 2006, between Sara Lee Corporation and Hanesbrands Inc. | |
| 6. | Master Transition Services Agreement, dated as of August 31, 2006, between Sara Lee Corporation and Hanesbrands Inc. | |
| 7. | Real Estate Matters Agreement, dated as of August 31, 2006, between Sara Lee Corporation and Hanesbrands Inc. | |
| 8. | Indemnification and Insurance Matters Agreement, dated as of August 31, 2006, between Sara Lee Corporation and Hanesbrands Inc. | |
| 9. | Intellectual Property Matters Agreement, dated as of August 31, 2006, between Sara Lee Corporation and Hanesbrands Inc. | |
| 10. | Indenture, dated as of December 14, 2006, among Hanesbrands Inc., certain subsidiaries of Hanesbrands Inc., and Branch Banking and Trust Company, as Trustee. | |
| 11. | First Lien Credit Agreement dated September 5, 2006 (the “Senior Secured Credit Facility”) among the Company the various financial institutions and other persons from time to time party thereto, HSBC Bank USA, National Association, LaSalle Bank National Association, Barclays Bank PLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley Senior Funding, Inc., Citicorp USA, Inc. and Citibank, N.A., as amended through the date of this opinion letter. | |
| 12. | Second Lien Credit Agreement dated September 5, 2006 (the “Second Lien Credit Agreement”) among HBI Branded Apparel Limited, Inc., Hanesbrands Inc., the various financial institutions and other persons from time to time party thereto, HSBC Bank USA, National Association, LaSalle Bank National Association, Barclays Bank PLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley Senior Funding, Inc., Citicorp USA, Inc. and Citibank, N.A., as amended through the date of this opinion letter. |
| 13. | Receivables Purchase Agreement dated as of November 27, 2007 among HBI Receivables LLC and the Registrant, JPMorgan Chase Bank, N.A., HSBC Bank USA, National Association, Falcon Asset Securitization Company LLC, Bryant Park Funding LLC, and HSBC Securities (USA) Inc., as amended through the date of this opinion letter. |
| 14. | Amended and Restated Credit Agreement, dated on or about December 10, 2009, among the Company as borrower, the various financial institutions and other persons from time to time party thereto as lenders, Barclays Bank PLC and Goldman Sachs Credit Partners L.P., as the co-documentation agents, Bank of America, N.A. and HSBC Securities (USA) Inc., as the co-syndication agents, JPMorgan Chase Bank, N.A., as the administrative agent and the collateral agent, and JPMorgan Securities Inc., Banc of America Securities LLC, HSBC Securities (USA) Inc. and Barclays Capital, as the joint lead arrangers and joint bookrunners. |
Schedule D
Company’s Jurisdictions of Good Standing
Alaska
Alabama
Arkansas
Arizona
California
Colorado
Connecticut
District of Columbia
Delaware
Florida
Georgia
Hawaii
Iowa
Idaho
Illinois
Indiana
Kansas
Kentucky
Lousiana
Massachusetts
Maryland
Maine
Michigan
Minnesota
Missouri
Mississippi
Montana
North Carolina
North Dakota
Nebraska
New Hampshire
New Jersey
New Mexico
New York
Nevada
Ohio
Oklahoma
Oregon
Alabama
Arkansas
Arizona
California
Colorado
Connecticut
District of Columbia
Delaware
Florida
Georgia
Hawaii
Iowa
Idaho
Illinois
Indiana
Kansas
Kentucky
Lousiana
Massachusetts
Maryland
Maine
Michigan
Minnesota
Missouri
Mississippi
Montana
North Carolina
North Dakota
Nebraska
New Hampshire
New Jersey
New Mexico
New York
Nevada
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Virginia
Vermont
Washington
Wisconsin
West Virginia
Wyoming
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Virginia
Vermont
Washington
Wisconsin
West Virginia
Wyoming
Annex A-2
Form of Opinion of Hogan & Hartson LLP, Special Colorado Counsel to the Company
A-2
| Hogan & Hartson LLP | ||
| One Tabor Center, Suite 1500 | ||
| 1200 Seventeenth Street | ||
| Denver, CO 80202 | ||
| +1.303.899.7300 Tel | ||
| +1.303.899.7333 Fax | ||
| www.hhlaw.com |
December 10, 2009
J.P. Morgan Securities Inc.
and the other several Underwriters Listed
in Schedule 1 to the Underwriting Agreement
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
and the other several Underwriters Listed
in Schedule 1 to the Underwriting Agreement
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
We are acting as special Colorado counsel to Hanesbrands Direct, LLC, a Colorado limited
liability company (the “Colorado Guarantor”), in connection with the issuance and sale pursuant to
Indenture, dated as of August 1, 2008 (the “Base Indenture”), as supplemented by the Supplemental
Indenture, dated as of December 10, 2009 (the “Supplemental Indenture,” and together with the Base
Indenture, the “Indenture”) among Hanesbrands Inc., a Maryland corporation (the “Issuer”), the
Colorado Guarantor and the other guarantors named therein, and Branch Banking and Trust Company, as
trustee (the “Trustee”), of $500,000,000 in aggregate principal amount of the Issuer’s 8.00% Senior
Notes due 2016 (the “Notes”), guaranteed as to payment of principal, premium, if any, and interest
on the Notes on an unsecured senior basis by the Colorado Guarantor (the “Colorado Guarantee”) and
certain other guarantors (such guarantees together with the Colorado Guarantee, the “Guarantees”),
and the sale of the Notes pursuant to an Underwriting Agreement, dated as of December 3, 2009 (the
“Agreement”) among the Issuer, you (collectively with the other underwriters named therein, the
“Underwriters”), the Colorado Guarantor and the other guarantors named therein. This opinion
letter is furnished to you pursuant to the requirements set forth in Section 6(g) of the Agreement
in connection with the closing thereunder on the date hereof. Capitalized terms used herein that
are defined in the Agreement shall have the meanings set forth in the Agreement, unless otherwise
defined herein
For purposes of the opinions, which are set forth in paragraphs (a) through (f) below (the
“Opinions”), and the other statements made in this letter, we have examined copies of the documents
listed on Schedule 1 attached hereto (the “Documents”). We believe the Documents
J.P. Morgan Securities Inc. et. al
December 10, 2009
Page 2
December 10, 2009
Page 2
provide an appropriate basis on which to render the opinions hereinafter expressed. The Agreement
and the Indenture are hereafter referred to collectively as the “Transaction Documents.”
In our examination of the Transaction Documents and the other Documents, we have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the accuracy and
completeness of all of the Documents, the authenticity of all originals of the Documents and the
conformity to authentic originals of all of the Documents submitted to us as copies (including
telecopies). As to all matters of fact relevant to the Opinions and other statements made herein,
we have relied on the representations and statements of fact made in the Documents, we have not
independently established the facts so relied on, and we have not made any investigation or inquiry
other than our examination of the Documents. The Opinions are given, and other statements are
made, in the context of the foregoing.
As used in this opinion letter, the phrase “to our knowledge” means the actual knowledge (that
is, the conscious awareness of facts or other information) of lawyers currently in the firm who
have given substantive legal attention to representation of the Colorado Guarantor.
For purposes of this opinion letter, we have assumed that (i) each party to the Transaction
Documents (other than the Colorado Guarantor) has all requisite power and authority under all
applicable laws, regulations and governing documents to execute, deliver and perform its
obligations under the Transaction Documents and each of such other parties has complied with all
legal requirements pertaining to its status as such status relates to its rights to enforce the
Transaction Documents against the Colorado Guarantor, (ii) each of such other parties has duly
authorized, executed and delivered the Transaction Documents to which it is a party, (iii) each of
such other parties is validly existing and in good standing in all necessary jurisdictions, (iv)
each of the Transaction Documents constitutes a valid and legally binding obligation of such other
parties thereto, enforceable against each of such other parties in accordance with its terms, (v)
there has been no mutual mistake of fact or misunderstanding or fraud, duress or undue influence,
in connection with the negotiation, execution or delivery of the Transaction Documents and the
conduct of all parties to the each of the Transaction Documents has complied with any requirements
of good faith, fair dealing and conscionability, and (vi) there are and have been no agreements or
understandings among the parties, written or oral, and there is and has been no usage of trade or
course of prior dealing among the parties that would, in either case, define, supplement or qualify
the terms of any of the Transaction Documents. We have also assumed the validity and
constitutionality of each relevant statute, rule, regulation and agency action covered by this
opinion letter.
For purposes of the opinions set forth in paragraphs (e) and (f) below, we have made the
further assumptions: (i) all orders, judgments, decrees, agreements and contracts would be enforced
as written; (ii) that the Issuer and Colorado Guarantor will not in the future take any
discretionary action (including a decision not to act) permitted under the Transaction Documents
that would result in a violation of law or constitute a breach or default under any order,
judgment, decree, agreement or contract; (iii) that the Issuer and the Colorado Guarantor will
obtain all permits, consents and governmental approvals required in the future, and take all
actions required, which are relevant to subsequent consummation of the transactions
J.P. Morgan Securities Inc. et. al
December 10, 2009
Page 3
December 10, 2009
Page 3
contemplated under the Transaction Documents or performance of the Transaction Documents; and (iv)
that all parties to the Transaction Documents will act in accordance with, and will refrain from
taking any action that is forbidden by, the terms and conditions of the Transaction Documents.
The Opinions are based as to matters of law solely on applicable provisions of Colorado law,
as currently in effect.
Based upon, subject to and limited by the limitations and qualifications set forth in this
opinion letter, we are of the opinion that:
(a) The Colorado Guarantor is a limited liability company duly formed, validly existing and in
good standing under the laws of the State of Colorado.
(b) The Colorado Guarantor has the limited liability company power (i) to execute, deliver and
perform it obligations under the Transaction Documents and (ii) to own, lease and operate its
current properties and to conduct its business in as described in the Time of Sale Information and
the Final Prospectus.
(c) The Transaction Documents have been duly authorized, executed and delivered by the
Colorado Guarantor.
(d) The Colorado Guarantee has been duly authorized and executed by the Colorado Guarantor.
(e) The execution, delivery and performance on the date hereof by the Colorado Guarantor of
the Transaction Documents and the issuance and sale of the Colorado Guarantee do not violate (i)
any Colorado statute or any rule or regulation that has been issued pursuant to any Colorado
statute, (ii) the articles of organization or the limited liability company agreement of the
Colorado Guarantor, as applicable, or (iii) to our knowledge, any court or administrative order,
judgment or decree that names the Colorado Guarantor and is specifically directed to it or any of
its property.
(f) No approval or consent of, or registration or filing with any Colorado governmental agency
is required to be obtained or made by the Colorado Guarantor under the Colorado Limited Liability
Company Act, as amended, in connection with the execution,
delivery and performance on the date hereof by the Colorado Guarantor of the Transaction Documents.
In addition to the assumptions, qualifications, exceptions and limitations elsewhere set forth
in this opinion letter, our opinions expressed above are also subject to the effect of: (i)
bankruptcy, insolvency, reorganization, receivership, moratorium and other laws affecting
creditors’ rights (including, without limitation, the effect of statutory and other law regarding
fraudulent conveyances, fraudulent transfers and preferential transfers); and (ii) the exercise of
judicial discretion and the application of principles of equity, good faith, fair dealing,
J.P. Morgan Securities Inc. et. al
December 10, 2009
Page 4
December 10, 2009
Page 4
reasonableness, conscionability and materiality (regardless of whether the applicable agreements
are considered in a proceeding in equity or at law).
Nothing herein shall be construed to cause us to be considered “experts” within the meaning of
Section 11 of the Securities Act of 1933, as amended.
We express no opinion herein as to any other laws and regulations not specifically identified
above (and in particular, we express no opinion as to any effect that such other laws and
regulations may have on the Opinions). The opinions set forth in paragraphs (e) and (f) are based
upon a review of only those laws and regulations that, in our experience, are generally recognized
as applicable to transactions of the type contemplated in the Transaction Documents. We express no
opinion herein as to federal or state securities, antitrust, unfair competition, banking, or tax
laws or regulations or laws or regulations of any political subdivision below the state level.
We assume no obligation to advise you of any changes in the foregoing subsequent to the
delivery of this opinion letter. This opinion letter has been prepared solely for your use in
connection with the closing under the Agreement on the date hereof, and should not be quoted in
whole or in part or otherwise be referred to, and should not be filed with or furnished to any
governmental agency or other person or entity, without the prior written consent of this firm.
| Very truly yours, HOGAN & HARTSON L.L.P. |
||||
J.P. Morgan Securities Inc. et. al
December 10, 2009
Page 5
December 10, 2009
Page 5
SCHEDULE 1
| 1. | Executed copy of the Agreement. | ||
| 2. | Executed copy of the Issuer’s automatic shelf registration statement on Form S-3 (333-152733) (as amended or supplemented, the “Registration Statement”) filed with the Securities and Exchange Commission on August 1, 2008, under the Securities Act of 1933, as amended. | ||
| 3. | The Preliminary Prospectus Supplement, dated November 30, 2009. | ||
| 4. | The Prospectus Supplement, dated December 3, 2009 (the “Final Prospectus”). | ||
| 5. | A copy of the executed form of Notes. | ||
| 6. | Executed copy of the Indenture. | ||
| 7. | Executed copy of the Colorado Guarantee. | ||
| 8. | The Articles of Organization of the Colorado Guarantor, as certified by the Secretary of State of the State of Colorado on November 25, 2009 and certified by the Secretary of the Colorado Guarantor on the date hereof as being complete, accurate and in effect. | ||
| 9. | Certificate of Good Standing of the Colorado Guarantor issued by the Secretary of State of the State of Colorado dated December 8, 2009. | ||
| 10. | The Limited Liability Company Agreement of the Colorado Guarantor, as certified by the Secretary of the Colorado Guarantor on the date hereof as being complete, accurate and in effect. | ||
| 11. | That certain written consents of the Board of Managers of the Colorado Guarantor approving, among other things, the Agreement, the Indenture, the Colorado Guarantee, dated July 31, 2008 and December 2, 2009, as certified by the Secretary of the Colorado Guarantor on the date hereof as being complete, accurate and in effect. |
Annex A-3
Form of Opinion of Venable LLP, Special Maryland Counsel to the Company
A-3
December 10, 2009
J.P. Morgan Securities Inc.,
and the other Underwriters named in Schedule 1
to the Underwriting Agreement referred to below
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, NY 10017
and the other Underwriters named in Schedule 1
to the Underwriting Agreement referred to below
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, NY 10017
Branch Banking & Trust Company, as Trustee
under the Indenture referred to below
200 South College Street, 9th Floor
Charlotte, NC 28202-3214
under the Indenture referred to below
200 South College Street, 9th Floor
Charlotte, NC 28202-3214
Hanesbrands Inc.
1000 East Hanes Mill Road
Winston Salem, NC 27105
1000 East Hanes Mill Road
Winston Salem, NC 27105
Re: Hanesbrands Inc.
Ladies and Gentlemen:
We have served as Maryland counsel to Hanesbrands Inc., a Maryland corporation (the
“Company”), in connection with certain matters of Maryland law arising out of the sale and issuance
by the Company to the Underwriters (as defined below) of $500,000,000 aggregate principal amount of
Senior Notes due 2016 (the “Securities”) pursuant to that certain Underwriting Agreement, dated as
of December 3, 2009 (the “Agreement”), between J.P. Morgan Securities Inc., as representative of
the several underwriters named in Schedule 1 thereto (together, the “Underwriters”), the Company
and the Guarantors named therein.
This opinion is being delivered to you at the request of the Company in connection with
Section 6(g) of the Agreement. Unless otherwise defined herein, capitalized terms used herein have
the meanings given to them in the Agreement. This firm did not participate in the negotiation or
drafting of the Agreement.
In connection with our representation of the Company, and as a basis for the opinion
hereinafter set forth, we have examined originals, or copies certified or otherwise identified to
our satisfaction, of the following documents (hereinafter collectively referred to as the
“Documents”):
J.P. Morgan Securities Inc.,
and the other Underwriters named in Schedule 1
to the Underwriting Agreement referred to below
Branch Banking & Trust Company, as Trustee
Hanesbrands Inc.
December 10, 2009
Page 2
and the other Underwriters named in Schedule 1
to the Underwriting Agreement referred to below
Branch Banking & Trust Company, as Trustee
Hanesbrands Inc.
December 10, 2009
Page 2
1. The Registration Statement on Form S-3 (No. 333-152733) and all amendments thereto filed by
the Company to date with the Securities and Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “1933 Act”);
2. The Prospectus, dated August 1, 2008 (the “Base Prospectus”), as supplemented by the
Company’s preliminary prospectus supplement, dated as of November 30, 2009, filed by the Company
pursuant to Rule 424(b) of the Commission, relating to the offering and sale of the Securities, as
supplemented or amended by the Free Writing Prospectus listed on Annex B to the Underwriting
Agreement (collectively, the “Time of Sale Information”);
3. The Base Prospectus, as supplemented by a Prospectus Supplement, dated December 3, 2009,
filed with the Commission pursuant to Rule 424(b) of the General Rules and Regulations promulgated
under the 1933 Act (collectively, the “Prospectus”);
4. The charter of the Company (the “Charter”), certified by the State Department of
Assessments and Taxation of Maryland (the “SDAT”);
5. The Bylaws of the Company (the “Bylaws”), certified as of the date hereof by an officer of
the Company;
6. A certificate of the SDAT as to the good standing of the Company, dated as of a recent
date;
7. The following documents (together, the “Note Documents”):
(a) The Agreement;
(b) The Indenture, dated as of August 1, 2008, among the Company, the guarantors named therein
and Branch Banking & Trust Company, as trustee (the “Trustee”), as supplemented by the Supplemental
Indenture, dated December 10, 2009, by and between the Company, the guarantors named therein and
the Trustee with respect to the Securities (as so supplemented, the “Indenture”); and
(c) The Global Note evidencing the Securities;
J.P. Morgan Securities Inc.,
and the other Underwriters named in Schedule 1
to the Underwriting Agreement referred to below
Branch Banking & Trust Company, as Trustee
Hanesbrands Inc.
December 10, 2009
Page 3
and the other Underwriters named in Schedule 1
to the Underwriting Agreement referred to below
Branch Banking & Trust Company, as Trustee
Hanesbrands Inc.
December 10, 2009
Page 3
8. Resolutions of the Board of Directors of the Company, or a duly authorized committee
thereof, relating to, among other things, the execution and delivery by the Company of the Note
Documents and the issuance of the Securities, certified as of the date hereof by an officer of the
Company;
9. A certificate executed by an officer of the Company, dated as of the date hereof, relating
to certain factual matters; and
10. Such other documents and matters as we have deemed necessary or appropriate to express the
opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or
another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party (other than the
Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the Documents has duly and
validly executed and delivered each of the Documents to which such party is a signatory, and such
party’s obligations set forth therein are legal, valid and binding and are enforceable in
accordance with all stated terms.
4. All Documents submitted to us as originals are authentic. The form and content of all
Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this
opinion from the form and content of such Documents as executed and delivered. All Documents
submitted to us as certified or photostatic copies conform to the original documents. All
signatures on all Documents are genuine. All public records reviewed or relied upon by us or on
our behalf are true and complete. All representations, warranties, statements and information
contained in the Documents are true and complete. There has been no oral or written modification
of or amendment to any of the Documents, and there has been no waiver of any provision of any of
the Documents, by action or omission of the parties or otherwise.
J.P. Morgan Securities Inc.,
and the other Underwriters named in Schedule 1
to the Underwriting Agreement referred to below
Branch Banking & Trust Company, as Trustee
Hanesbrands Inc.
December 10, 2009
Page 4
and the other Underwriters named in Schedule 1
to the Underwriting Agreement referred to below
Branch Banking & Trust Company, as Trustee
Hanesbrands Inc.
December 10, 2009
Page 4
The phrase “known to us” is limited to the actual knowledge, without independent inquiry, of
the lawyers at our firm who have performed legal services on behalf of the Company.
Based upon the foregoing, and subject to the assumptions, limitations and qualifications
stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and validly existing under the laws of the
State of Maryland and is in good standing with the SDAT.
2. The Company has the corporate power to own, lease and operate its properties and to conduct
its business as described in the Time of Sale Information and the Prospectus under the caption
“Description of Our Business” and to enter into and perform its obligations under the Note
Documents, including the issuance of the Securities.
3. The execution, delivery and performance of its obligations under the Note Documents have
been duly authorized by all necessary corporate action of the Company. The Securities have been
duly authorized by the Company for issuance and sale pursuant to the Agreement and the Indenture.
The Note Documents have been duly executed and, so far as is known to us, delivered by the Company.
4. The execution, delivery and performance by the Company of its obligations under the Note
Documents and the consummation by the Company of the transactions contemplated thereby, including
the sale and issuance of the Securities by the Company, do not and will not conflict with the
Charter or Bylaws or with any judgment, ruling, decree or order known to us, or any statute, rule
or regulation of any court or other government agency or body of the State of Maryland applicable
to the Company. We call your attention to the fact that, in connection with the delivery of this
opinion, we have not ordered or reviewed judgment, lien or any other searches of public or private
records of the Company or its properties.
The foregoing opinion is limited to the substantive laws of the State of Maryland and we do
not express any opinion herein concerning any other law. We express no opinion as to the
applicability or effect of federal or state securities laws, including the securities laws of the
State of Maryland, or as to federal or state laws regarding fraudulent transfers. We note that
each of the Note Documents provides that it shall be governed by the laws of the State of New York.
To the extent that any matter as to which our opinion is expressed herein would be
J.P. Morgan Securities Inc.,
and the other Underwriters named in Schedule 1
to the Underwriting Agreement referred to below
Branch Banking & Trust Company, as Trustee
Hanesbrands Inc.
December 10, 2009
Page 5
and the other Underwriters named in Schedule 1
to the Underwriting Agreement referred to below
Branch Banking & Trust Company, as Trustee
Hanesbrands Inc.
December 10, 2009
Page 5
governed by the laws of any jurisdiction other than the State of Maryland, we do not express any
opinion on such matter. Our opinion expressed in paragraph 4 above is based upon our consideration
of only those judgments, rulings, decrees, orders, statutes, rules and regulations of any court or
other government agency or body of the State of Maryland, if any, which, in our experience, are
normally applicable to transactions of the type discussed in such paragraph. The opinion expressed
herein is subject to the effect of judicial decisions which may permit the introduction of parol
evidence to modify the terms or the interpretation of agreements.
The opinion expressed herein is limited to the matters specifically set forth herein and no
other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to
supplement this opinion if any applicable law changes after the date hereof or if we become aware
of any fact that might change the opinion expressed herein after the date hereof.
This opinion is being furnished to you solely for your benefit in connection with the Note
Documents. Accordingly, it may not be relied upon by, quoted in any manner to, or delivered to any
other person or entity (except Kirkland & Ellis LLP, counsel to the Company, and Simpson Thacher &
Bartlett LLP, counsel to the Underwriters, who may rely on this opinion as if it were addressed to
them for the purpose of delivering their opinions of even date herewith pursuant to the Note
Documents) without, in each instance, our prior written consent.
Very truly yours,
Venable
LLP
Annex A-4
Form of Certificate of the Company’s General Counsel
I, Joia M. Johnson, the duly appointed Executive Vice President, General Counsel, and
Corporate Secretary of Hanesbrands Inc., a Maryland corporation (the “Company”), pursuant to
Section 6(g) of the Underwriting Agreement dated December ___, 2009 (the “Underwriting Agreement”)
among the Company, the guarantors named therein and J.P. Morgan Securities Inc. as representative
(the “Representative”) of the several underwriters set forth on Schedule 1 thereto (the
“Underwriters”), hereby certify, solely in my capacity as an officer of the Company (and not in my
individual capacity), subject to the limitations set forth herein, that:
Except as described in the Registration Statement, the Time of Sale Information and the
Prospectus, I have no knowledge of any legal, governmental or regulatory actions, suits or
proceedings pending to which the Company or any of its subsidiaries is a party or to which
any property of the Company or any of its subsidiaries is subject which could reasonably be
expected to have a Material Adverse Effect or which could reasonably be expected to
materially and adversely affect the consummation of the transactions contemplated under the
Underwriting Agreement; and to my knowledge, no such actions, suits or proceedings are
threatened by any governmental or regulatory authority or are threatened by others.
For purposes of this certificate, my “knowledge” is based entirely on my conscious awareness
as of the date hereof after consultation with those attorneys in my legal department and outside
counsel whom I have deemed appropriate. I do not assume any obligation to update this certificate
by reason of any fact about which I did not have knowledge as of the date hereof, or for any other
reason. I have relied without independent verification upon factual information provided to me by
the Company and my staff. I have assumed that there has been no relevant change between the dates
as of which the information cited in the preceding sentence was given and the date of hereof.
This certificate is furnished to the Underwriters pursuant to Section 6(g) of the Underwriting
Agreement. Without my prior consent, this certificate may not be relied upon or furnished to any
other person. All capitalized terms which are defined in the Underwriting Agreement and used but
not otherwise defined herein shall have the meanings given in the Underwriting Agreement.
A-4
Annex B
Time of Sale Information
Term sheet in the form of Annex C hereto.
B-1
Annex C
Issuer Free Writing Prospectus Filed Pursuant to Rule 433
(Related to Preliminary Prospectus Supplement Dated November 30, 2009)
Registration No. 333-152733
December 3, 2009
(Related to Preliminary Prospectus Supplement Dated November 30, 2009)
Registration No. 333-152733
December 3, 2009
Hanesbrands Inc.
Pricing Term Sheet
This Pricing Term Sheet is qualified in its entirety by reference to the Preliminary Prospectus
Supplement, dated November 30, 2009. The information in this Pricing Term Sheet supplements the
Preliminary Prospectus Supplement and supersedes the information in the Preliminary Prospectus
Supplement to the extent it is inconsistent with the information in the Preliminary Prospectus
Supplement. Capitalized terms used in this Pricing Term Sheet but not defined have the meanings
given them in the Preliminary Prospectus Supplement.
Issuer: |
Hanesbrands Inc. | |
Size: |
$500,000,000 | |
Maturity: |
December 15, 2016 | |
Coupon: |
8% | |
Price: |
98.686% of face amount | |
Yield to maturity: |
8.25% | |
Spread to Benchmark Treasury: |
+541 basis points | |
Benchmark Treasury: |
UST 4.625% due 11/15/2016 | |
Interest Payment Dates: |
December 15 and June 15, commencing June 15, 2010 | |
Gross Proceeds: |
$493,430,000 | |
Net Proceeds to the Issuer (before expenses): |
$482,180,000 | |
Redemption Provisions: |
||
First call date: |
December 15, 2013 | |
Make-whole call: |
Before the first call date at a discount rate of Treasury plus 50 basis points | |
Redemption prices: |
||
| Commencing December 15, 2013: 104.000% | ||
| Commencing December 15, 2014: 102.000% | ||
| Commencing December 15, 2015: 100.000% | ||
Redemption with proceeds of equity offering: |
Prior to December 15, 2012, up to 35% may be redeemed at 108% | |
Change of control: |
Put at 101% of principal plus accrued interest | |
Trade date: |
December 3, 2009 | |
Settlement: |
T+5; December 10, 2009 |
C-1
Denominations: |
$2,000 and integral multiples of $1,000 | |
CUSIP/ISIN: |
410345 AF9/US410345AF99 | |
Form of Offering: |
SEC Registered (Registration No. 333-152733) | |
Ratings: |
Moody’s: B11 | |
| S&P: B+1 | ||
Joint book-running managers: |
J.P. Morgan Securities Inc. | |
| Banc of America Securities LLC | ||
| HSBC Securities (USA) Inc. | ||
| Goldman, Sachs & Co. | ||
Co-managers: |
Barclays Capital Inc. | |
| BB&T Capital Markets | ||
| PNC Capital Markets LLC | ||
| RBC Capital Markets Corporation | ||
Additional information: |
The closing of this offering is conditioned, | |
| among other thing, on the Company having | ||
| entered, on or prior to the closing date of | ||
| this offering, into the New Senior Secured | ||
| Credit Facilities. |
| 1 | A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. |
The issuer has filed a registration statement (including a prospectus and prospectus supplement)
with the SEC for the offering to which this communication relates. Before you invest, you should
read the prospectus in that registration statement and other documents the issuer has filed with
the SEC for more complete information about the issuer and this offering. You may get these
documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the
issuer, any underwriter or any dealer participating in the offering will arrange to send you the
prospectus if you request it by contacting J.P. Morgan Securities Inc. at (800) 245-8812; Banc of
America Securities LLC at (800) 294-1322; HSBC Securities (USA) Inc. at (866) 811-8049; or Goldman,
Sachs & Co. at (866) 471-2526.
C-2
EXHIBIT
4.2
EXECUTION VERSION
HANESBRANDS INC.
AND EACH OF THE SUBSIDIARY GUARANTORS PARTY HERETO
8.000% SENIOR NOTES DUE 2016
FIRST SUPPLEMENTAL INDENTURE
Dated as of December 10, 2009
Branch Banking and Trust Company
Trustee
CROSS-REFERENCE TABLE
| Trust Indenture | Supplemental/Base | ||||
| Act Section | Indenture Section | ||||
310
|
(a)(1) | 7.10 of the Base Indenture | |||
| (a)(2) | 7.10 of the Base Indenture | ||||
| (a)(3) | N.A. | ||||
| (a)(4) | N.A. | ||||
| (a)(5) | 7.10 of the Base Indenture | ||||
| (b) | 7.10 of the Base Indenture | ||||
| (c) | N.A. | ||||
311
|
(a) | 7.11 of the Base Indenture | |||
| (b) | 7.11 of the Base Indenture | ||||
| (c) | N.A. | ||||
312
|
(a) | 2.06 of the Base Indenture | |||
| (b) | 13.03 | ||||
| (c) | 13.03 | ||||
313
|
(a) | 7.6 of the Base Indenture | |||
| (b)(2) | 7.6; 7.7 of the Base Indenture | ||||
| (c) | 7.6 of the Base Indenture; 13.02 | ||||
| (d) | 7.6 of the Base Indenture | ||||
314
|
(a) | 4.03; 13.02; 13.05 | |||
| (c)(1) | 13.04 | ||||
| (c)(2) | 13.04 | ||||
| (c)(3) | N.A. | ||||
| (d) | N.A. | ||||
| (e) | 13.05 | ||||
| (f) | N.A. | ||||
315
|
(a) | 7.1 of the Base Indenture | |||
| (b) | 7.5 of the Base Indenture, 13.02 | ||||
| (c) | 7.1 of the Base Indenture | ||||
| (d) | 7.1 of the Base Indenture | ||||
| (e) | 6.11 | ||||
i
| Trust Indenture | Supplemental/Base | |||||
| Act Section | Indenture Section | |||||
316
|
(a) (last sentence) | 2.10 of the Base Indenture | ||||
| (a)(1)(A) | 6.05 | |||||
| (a)(1)(B) | 6.04 | |||||
| (a)(2) | N.A. | |||||
| (b) | 6.07 | |||||
| (c) | 2.04 | |||||
317
|
(a)(1) | 6.08 | ||||
| (a)(2) | 6.09 | |||||
| (b) | 2.5 of the Base Indenture | |||||
318
|
(a) | N.A. | ||||
| (b) | N.A. | |||||
| (c) | 13.01 | |||||
N.A. means not applicable.
| * | This Cross Reference Table is not part of this Supplemental Indenture. |
Table of Contents
| Page | ||||
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE |
2 | |||
SECTION 1.01 Definitions |
2 | |||
SECTION 1.02 Other Definitions |
29 | |||
SECTION 1.03 Incorporation by Reference of Trust Indenture Act |
30 | |||
SECTION 1.04 Rules of Construction |
30 | |||
SECTION 1.05 Conflicts with Base Indenture |
31 | |||
ARTICLE 2 THE NOTES |
31 | |||
SECTION 2.01 Form and Dating |
31 | |||
SECTION 2.02 Execution and Authentication |
32 | |||
SECTION 2.03 Outstanding Notes |
33 | |||
SECTION 2.04 Defaulted Interest |
34 | |||
SECTION 2.05 Registrar and Paying Agent |
34 | |||
ARTICLE 3 REDEMPTION AND PREPAYMENT |
35 | |||
SECTION 3.01 Notices to Trustee |
35 | |||
SECTION 3.02 Selection of Notes to Be Redeemed or Purchased |
35 | |||
SECTION 3.03 Notice of Redemption |
35 | |||
SECTION 3.04 Effect of Notice of Redemption |
36 | |||
SECTION 3.05 Deposit of Redemption or Purchase Price |
36 | |||
SECTION 3.06 Notes Redeemed or Purchased in Part |
37 | |||
SECTION 3.07 Optional Redemption |
37 | |||
SECTION 3.08 Mandatory Redemption |
38 | |||
ARTICLE 4 COVENANTS |
38 | |||
SECTION 4.01 Payment of Notes |
38 | |||
SECTION 4.02 Maintenance of Office or Agency |
38 | |||
SECTION 4.03 SEC Reports and Reports to Holders |
39 | |||
SECTION 4.04 Compliance Certificate |
40 | |||
SECTION 4.05 Taxes |
40 | |||
SECTION 4.06 Stay, Extension and Usury Laws |
40 | |||
SECTION 4.07 Restricted Payments |
40 | |||
SECTION 4.08 Limitation on
Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries |
45 | |||
SECTION 4.09 Limitation on Incurrence of Indebtedness |
47 | |||
SECTION 4.10 Limitation on Asset Sales |
50 | |||
SECTION 4.11 Limitation on Transactions with Shareholders and Affiliates |
51 | |||
SECTION 4.12 Limitation on Liens |
53 | |||
SECTION 4.13 Business Activities |
54 | |||
SECTION 4.14 Corporate Existence |
54 | |||
SECTION 4.15 Repurchase of Notes Upon a Change of Control |
55 | |||
iii
| Page | ||||
SECTION 4.16 Limitation on the Issuances and Sale of Capital Stock of Restricted
Subsidiaries |
57 | |||
SECTION 4.17 Payments for Consent |
57 | |||
SECTION 4.18 Limitation on Issuance of Guarantees by Restricted Subsidiaries |
58 | |||
SECTION 4.19 Changes in Covenants when Notes Rated Investment Grade |
59 | |||
ARTICLE 5 SUCCESSORS |
60 | |||
SECTION 5.01 Consolidation, Merger and Sale of Assets |
60 | |||
SECTION 5.02 Successor Corporation Substituted |
61 | |||
ARTICLE 6 DEFAULTS AND REMEDIES |
61 | |||
SECTION 6.01 Events of Default |
61 | |||
SECTION 6.02 Acceleration |
63 | |||
SECTION 6.03 Other Remedies |
63 | |||
SECTION 6.04 Waiver of Past Defaults |
64 | |||
SECTION 6.05 Control by Majority |
64 | |||
SECTION 6.06 Limitation on Suits |
64 | |||
SECTION 6.07 Rights of Holders of Notes to Receive Payment |
65 | |||
SECTION 6.08 Collection Suit by Trustee |
65 | |||
SECTION 6.09 Trustee May File Proofs of Claim |
65 | |||
SECTION 6.10 Priorities |
65 | |||
SECTION 6.11 Undertaking for Costs |
66 | |||
ARTICLE 7 [RESERVED] |
66 | |||
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE |
66 | |||
SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance |
66 | |||
SECTION 8.02 Legal Defeasance and Discharge |
66 | |||
SECTION 8.03 Covenant Defeasance |
67 | |||
SECTION 8.04 Conditions to Legal or Covenant Defeasance |
68 | |||
SECTION 8.05 Deposited Money and U.S. Government to Obligations be Held in
Trust; Other Miscellaneous Provisions |
69 | |||
SECTION 8.06 Repayment to Company |
69 | |||
SECTION 8.07 Reinstatement |
70 | |||
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER |
70 | |||
SECTION 9.01 Without Consent of Holders of Notes |
70 | |||
SECTION 9.02 With Consent of Holders of Notes |
71 | |||
SECTION 9.03 Compliance with Trust Indenture Act |
72 | |||
SECTION 9.04 Revocation and Effect of Consents |
72 | |||
SECTION 9.05 Notation on or Exchange of Notes |
73 | |||
SECTION 9.06 Trustee to Sign Amendments, etc. |
73 | |||
ARTICLE 10 [RESERVED] |
74 | |||
ARTICLE 11 NOTE GUARANTEES |
74 | |||
SECTION 11.01 Guarantee |
74 | |||
SECTION 11.02 Intentionally Omitted |
75 | |||
SECTION 11.03 Limitation on Subsidiary Guarantor Liability |
75 | |||
SECTION 11.04 Execution and Delivery of Note Guarantee |
75 | |||
SECTION 11.05 Subsidiary Guarantors May Consolidate, etc., on Certain Terms |
76 | |||
iv
| Page | ||||
SECTION 11.06 Releases |
77 | |||
ARTICLE 12 SATISFACTION AND DISCHARGE |
77 | |||
SECTION 12.01 Satisfaction and Discharge |
77 | |||
SECTION 12.02 Application of Trust Money |
78 | |||
ARTICLE 13 MISCELLANEOUS |
79 | |||
SECTION 13.01 Trust Indenture Act Controls |
79 | |||
SECTION 13.02 Notices |
79 | |||
SECTION 13.03 Communication by Holders of Notes with Other Holders of Notes |
80 | |||
SECTION 13.04 Certificate and Opinion as to Conditions Precedent |
80 | |||
SECTION 13.05 Statements Required in Certificate or Opinion |
81 | |||
SECTION 13.06 Rules by Trustee and Agents |
81 | |||
SECTION 13.07 No Personal Liability of Incorporators, Stockholders, Officers,
Directors or Employees |
81 | |||
SECTION 13.08 Governing Law |
81 | |||
SECTION 13.09 No Adverse Interpretation of Other Agreements |
82 | |||
SECTION 13.10 Successors |
82 | |||
SECTION 13.11 Severability |
82 | |||
SECTION 13.12 Counterpart Originals |
82 | |||
SECTION 13.13 Table of Contents, Headings, etc. |
82 | |||
SECTION 13.14 Confirmation of Indenture; Benefits of Indenture |
82 | |||
EXHIBITS
Exhibit A
|
Form of Note | |
Exhibit B
|
Form of Note Guarantee | |
Exhibit C
|
Form of Supplemental Indenture |
v
THIS FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of December
10, 2009 among Hanesbrands Inc., a Maryland corporation (the “Company”), the Subsidiary
Guarantors (as defined below) and Branch Banking and Trust Company, a North Carolina state banking
corporation, as trustee (the “Trustee”) under the indenture, dated as of August 1, 2008,
between the Company and the Trustee (the “Base Indenture” and, as amended and supplemented
by this Supplemental Indenture, in respect of the Notes, the “Indenture”). Upon execution
and delivery by all parties hereto, the Indenture shall be effective as to all such parties.
The Company and the Subsidiary Guarantors have duly authorized, executed and delivered the
Base Indenture to provide for the issuance from time to time of the Company’s debentures, notes or
other debt instruments (herein called the “Securities”), to be issued in one or more
series, and the Guarantee by each of the Subsidiary Guarantors of the Securities, as the Base
Indenture provides.
The Base Indenture provides, among other things, that the Company, the Subsidiary Guarantors
and the Trustee may enter into indentures supplemental to the Base Indenture to establish the form
or terms of any Security.
The Company desires to execute this Supplemental Indenture to establish the form and terms,
and to provide for the issuance, of a series of senior notes designated as 8.000% Senior Notes due
2016 in an aggregate principal amount of $500,000,000 (the “Initial Notes”).
From time to time subsequent to the Closing Date, the Company may, if permitted to do so
pursuant to the terms of the Indenture, the Initial Notes and the terms of its other indebtedness
existing on such future date, issue additional senior notes of the same series as the Initial Notes
in accordance with this Supplemental Indenture (the “Additional Notes” and, together with
the Initial Notes, the “Notes”), pursuant to this Supplemental Indenture.
The Subsidiary Guarantors will derive direct and indirect economic benefit from the issuance
of the Securities. Accordingly, each Subsidiary Guarantor has duly authorized the execution and
delivery of this Supplemental Indenture to provide for its unconditional and joint and several
Guarantee of the Notes to the extent provided for in or pursuant to the Indenture.
This Supplemental Indenture is subject to the provisions of the Trust Indenture Act of 1939,
as amended, that are required to be a part of this Supplemental Indenture and shall, to the extent
applicable, be governed by such provisions.
All things necessary have been done to make the Notes, upon execution, authentication and
delivery of the Notes, the valid and legally binding obligations of the Company and to make this
Supplemental Indenture, upon execution and delivery of this Supplemental Indenture, a valid and
legally binding agreement of the Company, in accordance with their and its terms.
All things necessary have been done to make the Guarantees, upon execution and delivery of
this Supplemental Indenture, the valid obligations of each of the Company and each Subsidiary
Guarantor and to make the Indenture a valid and legally binding agreement of each of the Company
and each Subsidiary Guarantor, in accordance with their and its terms.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by the Holders thereof,
it is mutually covenanted and agreed, for the equal and ratable benefit of all Holders, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 Definitions.
“Acquired Indebtedness” means Indebtedness of a Person existing at the time such
Person becomes a Restricted Subsidiary or Indebtedness of a Restricted Subsidiary assumed in
connection with an Asset Acquisition by such Restricted Subsidiary; provided such
Indebtedness was not Incurred in connection with or in contemplation of such Person becoming a
Restricted Subsidiary or such Asset Acquisition.
“Adjusted Consolidated Net Income” means, for any period, the aggregate net income (or
loss) of the Company and its Restricted Subsidiaries for such period determined in conformity with
GAAP; provided that the following items shall be excluded in computing Adjusted
Consolidated Net Income (without duplication):
(1) the net income (or loss) of any Person that is not a Restricted Subsidiary except
to the extent that dividends or similar distributions have been paid by such Person to the
Company or a Restricted Subsidiary;
(2) solely for purposes of calculating the amount of Restricted Payments that may be
made pursuant to clause (C) of the first paragraph of Section 4.07, the net income (or loss)
of any Person accrued prior to the date it becomes a Restricted Subsidiary or is merged into
or consolidated with the Company or any of its Restricted Subsidiaries or all or
substantially all of the property and assets of such Person are acquired by the Company or
any of its Restricted Subsidiaries;
(3) the net income of any Restricted Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Restricted Subsidiary of such net
income is at the time prohibited by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary;
(4) any gains or losses (on an after tax basis) attributable to asset dispositions;
(5) all extraordinary gains or extraordinary losses;
(6) the cumulative effect of a change in accounting principles;
2
(7) any non-cash compensation expenses recorded from grants of stock options,
restricted stock, stock appreciation rights and other equity equivalents to Officers,
directors and employees;
(8) any impairment charge or asset write off;
(9) net cash charges associated with or related to any restructurings since October 1,
2006 in an aggregate amount not to exceed $120.0 million;
(10) all other non-cash charges, including unrealized gains or losses on agreements
with respect to Hedging Obligations and all non-cash charges associated with announced
restructurings, whether announced previously or in the future (such non-cash restructuring
charges being “Non-Cash Restructuring Charges”); and
(11) income or loss attributable to discontinued operations (including, without
limitation, operations disposed of during such period whether or not such operations were
classified as discontinued).
“Affiliate” means, as applied to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with, such Person. For
purposes of this definition, “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common control with”), as applied to any Person, means
the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
“Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent.
“Applicable Premium” means, with respect to any Note on any applicable Redemption
Date, the greater of:
(1) 1.0% of the principal amount of such Note; or
(2) the excess, if any, of:
(a) the present value at such Redemption Date of (i) the redemption price of the Note
at December 15, 2013, (such redemption price being set forth in the table appearing under
Section 3.07) plus (ii) all required interest payments (excluding accrued and unpaid
interest to such Redemption Date) due on the Note through December 15, 2013, computed using
a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points;
over
(b) the principal amount of such Note.
“Applicable Procedures” means, with respect to any transfer or exchange of or for
beneficial interests in any Global Security, the rules and procedures of the Depositary, Euroclear
and Clearstream that apply to such transfer or exchange.
3
“Asset Acquisition” means (1) an investment by the Company or any of its Restricted
Subsidiaries in any other Person pursuant to which such Person shall become a Restricted Subsidiary
or shall be merged into or consolidated with the Company or any of its Restricted Subsidiaries or
(2) an acquisition by the Company or any of its Restricted Subsidiaries of the property and assets
of any Person other than the Company or any of its Restricted Subsidiaries that constitute
substantially all of a division or line of business of such Person.
“Asset Disposition” means the sale or other disposition by the Company or any of its
Restricted Subsidiaries of (1) all or substantially all of the Capital Stock of any Restricted
Subsidiary or (2) all or substantially all of the assets that constitute a division or line of
business of the Company or any of its Restricted Subsidiaries.
“Asset Sale” means any sale, transfer or other disposition (including by way of merger
or consolidation or Sale and Leaseback Transaction) in one transaction or a series of related
transactions by the Company or any of its Restricted Subsidiaries to any Person other than the
Company or any of its Restricted Subsidiaries of:
(1) all or any of the Capital Stock of any Restricted Subsidiary (other than sales of
preferred stock that are permitted under Section 4.09);
(2) all or substantially all of the property and assets of a division or line of
business of the Company or any of its Restricted Subsidiaries; or
(3) any other property and assets (other than the Capital Stock or other Investment in
an Unrestricted Subsidiary) of the Company or any of its Restricted Subsidiaries outside the
ordinary course of business of the Company or such Restricted Subsidiary, and
in each case, that is not governed by the provisions of this Supplemental Indenture applicable to
mergers, consolidations and sales of assets of the Company; provided that “Asset Sale”
shall not include:
(a) sales, transfers or other dispositions of assets constituting a Permitted
Investment or Restricted Payment permitted to be made under Section 4.07;
(b) sales, transfers or other dispositions of assets with a fair market value not in
excess of $25.0 million in any transaction or series of related transactions;
(c) any sale, transfer, assignment or other disposition of any property equipment that
has become damaged, worn out, obsolete or otherwise unsuitable for use in connection with
the business of the Company or its Restricted Subsidiaries;
(d) the sale or discount of accounts receivable, but only in connection with the
compromise or collection thereof, or the disposition of assets in connection with a
foreclosure or transfer in lieu of a foreclosure or other exercise of remedial action;
(e) any exchange of like property similar to (but not limited to) those allowable under
Section 1031 of the Internal Revenue Code;
4
(f) sales or grants of licenses to use the Company’s or any Restricted Subsidiary’s
patents, trade secrets, know-how and technology to the extent that such license does not
prohibit the licensor from using the patent, trade secret, know-how or technology;
(g) transactions permitted under Section 5.01;
(h) sales in connection with a Permitted Securitization or a Permitted Factoring
Program;
(i) dispositions of property to the extent that (i) such property is exchanged for
credit against the purchase price of similar replacement property or (ii) the proceeds of
such disposition are promptly applied to the purchase price of such replacement property;
(j) dispositions constituting leases, subleases, licenses or sublicenses of property
(including intellectual property) in the ordinary course of business and which do not
materially interfere with the business of the Company and its Subsidiaries (for the
avoidance of doubt, other than any perpetual licenses of any material intellectual
property); or
(k) a grant of options to purchase, lease or acquire real or personal property in the
ordinary course of business, so long as the disposition resulting from the exercise of such
option would not constitute an “Asset Sale” under clauses (1), (2) or (3) of this
definition, in each case, after giving effect to clauses (a) through (j) above.
“Average Life” means, at any date of determination with respect to any debt security,
the quotient obtained by dividing (1) the sum of the products of (a) the number of years from such
date of determination to the dates of each successive scheduled principal payment of such debt
security and (b) the amount of such principal payment by (2) the sum of all such principal
payments.
“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for
the relief of debtors.
“Board of Directors” means, with respect to any Person, the Board of Directors of such
Person, any duly authorized committee of such Board of Directors or any Person to which the Board
of Directors has properly delegated authority with respect to any particular matter. Unless
otherwise indicated, the “Board of Directors” refers to the Board of Directors of the Company.
“Business Day” means a day other than a Saturday, Sunday or other day on which banking
institutions are authorized or required by law to close in New York State.
“Capital Stock” means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated, whether voting or non-voting) in equity of
such Person, whether outstanding on the Closing Date or issued thereafter, including, without
limitation, all common stock and preferred stock.
5
“Capitalized Lease” means, as applied to any Person, any lease of any property
(whether real, personal or mixed) of which the discounted present value of the rental obligations
of such Person as lessee, in conformity with GAAP, is required to be capitalized on the balance
sheet of such Person.
“Capitalized Lease Obligations” means all monetary obligations of any Person and its
Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, should be
classified as Capitalized Leases and the Stated Maturity thereof shall be the date that the last
payment of rent or any other amount due under such Capitalized Lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a premium or penalty is due
thereunder.
“Change of Control” means such time as:
(1) the adoption of a plan relating to the liquidation or dissolution of the Company;
(2) a “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) becomes the ultimate “beneficial owner” (as defined in Rule 13d 3 under the
Exchange Act) of more than 50% of the total voting power of the Voting Stock of the Company
on a fully diluted basis;
(3) during any period of 24 consecutive months, individuals who at the beginning of
such period constituted the Board of Directors of the Company (together with any new
directors whose election to such Board or whose nomination for election by the stockholders
of the Company was approved by a vote of a majority of the directors then still in office
who were either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a majority of
the Board of Directors of the Company then in office; or
(4) the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries taken as a
whole to any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act).
“Clearstream” means Clearstream Banking, S.A.
“Closing Date” means the date on which the Notes are originally issued under this
Supplemental Indenture.
“Commodity Agreement” means any forward contract, commodity swap agreement, commodity
option agreement or other similar agreement or arrangement.
“Consolidated EBITDA” means, for any period, Adjusted Consolidated Net Income for such
period plus, to the extent such amount was deducted in calculating such Adjusted Consolidated Net
Income:
6
(1) Fixed Charges;
(2) amounts shown under the item “Taxes” on the Company’s income statement;
(3) depreciation expense;
(4) amortization expense;
(5) (a) non-cash compensation expense, or other non-cash expenses or charges, arising
from the sale of stock, the granting of stock options, the granting of stock appreciation
rights and similar arrangements (including any repricing, amendment, modification,
substitution or change of any such stock, stock option, stock appreciation rights or similar
arrangements), (b) any fees and expenses incurred by the Company and its Restricted
Subsidiaries in connection with the Transactions, including without limitation, any cash
expenses incurred in connection with the termination or modification of any Hedging
Obligations in connection with the Transactions, (c) to the extent non-recurring and not
capitalized, any financial advisory fees, accounting fees, legal fees and similar advisory
and consulting fees and related costs and expenses of the Company and its Restricted
Subsidiaries incurred as a result of Asset Acquisitions, Investments, Asset Sales permitted
under this Supplemental Indenture and the issuance of Capital Stock or Indebtedness
permitted hereunder, all determined in accordance with GAAP and in each case eliminating any
increase or decrease in income resulting from non-cash accounting adjustments made in
connection with the related Asset Acquisition, Investment or Asset Sale, (d) to the extent
the related loss is not added back pursuant to the definition of Adjusted Consolidated Net
Income, all proceeds of business interruption insurance policies, (e) expenses incurred by
the Company or any Restricted Subsidiary to the extent reimbursed in cash by a third party,
and (f) extraordinary, unusual or non-recurring cash charges not to exceed $10.0 million in
any Fiscal Year; minus
(6) to the extent included in determining such Adjusted Consolidated Net Income, the
sum of (a) reversals (in whole or in part) of any restructuring charges previously treated
as Non-Cash Restructuring Charges in any prior period, (b) all non cash items increasing
Adjusted Consolidated Net Income, other than (A) the accrual of revenue consistent with past
practice and (B) the reversal in such period of an accrual of, or cash reserve for, cash
expenses in a prior period, to the extent such accrual or reserve did not increase EBITDA in
a prior period;
all as determined on a consolidated basis for the Company and its Restricted Subsidiaries in
conformity with GAAP; provided that, if any Restricted Subsidiary is not a Wholly Owned
Restricted Subsidiary, Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in
accordance with GAAP) by an amount equal to (A) the amount of the Adjusted Consolidated Net Income
attributable to such Restricted Subsidiary multiplied by (B) the percentage ownership interest in
the income of such Restricted Subsidiary not owned on the last day of such period by the Company or
any of its Restricted Subsidiaries.
7
“Consolidated Interest Expense” means, for any period, the aggregate amount of
interest in respect of Indebtedness (including, without limitation, amortization of original issue
discount on any Indebtedness and the interest portion of any deferred payment obligation,
calculated in accordance with the effective interest method of accounting; all commissions,
discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance
financing; the net costs associated with Interest Rate Agreements; and Indebtedness that is
Guaranteed or secured by the Company or any of its Restricted Subsidiaries); and all but the
principal component of rentals in respect of Capitalized Lease Obligations paid, in each case,
accrued or scheduled to be paid or to be accrued by the Company and its Restricted Subsidiaries
during such period; excluding, however, (1) any amount of such interest of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded in the calculation of
Adjusted Consolidated Net Income pursuant to clause (3) of the definition thereof (but only in the
same proportion as the net income of such Restricted Subsidiary is excluded from the calculation of
Adjusted Consolidated Net Income pursuant to clause (3) of the definition thereof), (2) any
interest expense attributable to a Permitted Factoring Program, and (3) any premiums, fees and
expenses (and any amortization thereof) payable in connection with the offering of the Notes, all
as determined on a consolidated basis (without taking into account Unrestricted Subsidiaries) in
conformity with GAAP.
“Contingent Liability” means any agreement, undertaking or arrangement by which any
Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or
indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or
otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the Indebtedness
of any other Person (other than by endorsements of instruments in the course of collection), or
guarantees the payment of dividends or other distributions upon the capital securities of any other
Person. The amount of any Person’s obligation under any Contingent Liability shall (subject to any
limitation with respect thereto) be deemed to be the outstanding principal amount of the debt,
obligation or other liability guaranteed thereby.
“Corporate Trust Office of the Trustee” will be at the address of the Trustee
specified in Section 13.02 hereof or such other address as to which the Trustee may give notice to
the Company.
“Credit Agreement” means that certain Amended and Restated Credit Agreement, to be
dated on or about December 10, 2009, among the Company as borrower, the various financial
institutions and other persons from time to time party thereto as lenders, Barclays Bank PLC and
Goldman Sachs Credit Partners L.P., as the co-documentation agents, Bank of America, N.A. and HSBC
Securities (USA) Inc., as the co-syndication agents, JPMorgan Chase Bank, N.A., as the
administrative agent and the collateral agent, and JPMorgan Securities Inc., Banc of America
Securities LLC, HSBC Securities (USA) Inc. and Barclays Capital, as the joint lead arrangers and
joint bookrunners.
“Credit Facilities” means, with respect to the Company and its Restricted
Subsidiaries, one or more debt facilities (including the Credit Agreement), commercial paper
facilities, or indentures providing for revolving credit loans, term loans, notes or other
financings or letters of credit, or other credit facilities, in each case, as amended, modified,
renewed, refunded, replaced or refinanced from time to time.
8
“Currency Agreement” means any foreign exchange contract, currency swap agreement or
other similar agreement or arrangement.
“Custodian” means the Trustee, as custodian with respect to the Notes in global form,
or any successor entity thereto.
“Default” means any event that is, or after notice or passage of time or both would
be, an Event of Default.
“Definitive Notes” means certificated Notes registered in the name of the Holder
thereof, issued in accordance with Section 2.01 hereof.
“Depositary” means, with respect to the Notes issuable or issued in whole or in part
in global form, the Person specified in Section 2.05 hereof as the Depositary with respect to the
Notes, and any and all successors thereto appointed as depositary hereunder and having become such
pursuant to the applicable provision of the Indenture.
“Disqualified Stock” means any class or series of Capital Stock of any Person that by
its terms or otherwise is (1) required to be redeemed prior to the date that is 91 days after the
Stated Maturity of the Notes, (2) redeemable at the option of the holder of such class or series of
Capital Stock at any time prior to the date that is 91 days after the Stated Maturity of the Notes
or (3) convertible into or exchangeable for Capital Stock referred to in clause (1) or (2) above or
Indebtedness having a scheduled maturity prior to the date that is 91 days after the Stated
Maturity of the Notes; provided that only the portion of such Capital Stock which is so
required to be redeemed, redeemable or convertible or exchangeable prior to such date will be
deemed to be Disqualified Stock; provided further that any Capital Stock that would
not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to
require such Person to repurchase or redeem such Capital Stock upon the occurrence of an “asset
sale” or “change of control” occurring prior to the date that is 91 days after the Stated Maturity
of the Notes shall not constitute Disqualified Stock if the “asset sale” or “change of control”
provisions applicable to such Capital Stock are no more favorable to the holders of such Capital
Stock than the provisions contained in Section 4.10 and Section 4.15 and such Capital Stock
specifically provides that such Person will not repurchase or redeem any such stock pursuant to
such provision prior to the Company’s repurchase of such Notes as are required to be repurchased
pursuant to Section 4.10 and Section 4.15 provided further that, any class or
series of Capital Stock of such Person that by its terms or otherwise, authorizes such Person to
satisfy in full its obligations with respect to the payment of dividends or upon maturity,
redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the
delivery of any Capital Stock that is not Disqualified Stock, will not be deemed to be Disqualified
Stock so long as such Person satisfies its obligations with respect thereto solely by delivery of
such Capital Stock.
“DTC” means The Depository Trust Company, a New York corporation.
“Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
9
“Existing Notes” means the Company’s Floating Rate Senior Notes due 2014 outstanding
on the Closing Date.
“Existing Notes Indenture” means the indenture dated as of December 14, 2006, with
respect to the Existing Notes.
“fair market value” means the price that would be paid in an arm’s-length transaction
between an informed and willing seller under no compulsion to sell and an informed and willing
buyer under no compulsion to buy, as determined in good faith by (i) for a transaction or series of
related transactions in excess of $50.0 million, the Board of Directors, whose determination shall
be conclusive if evidenced by a resolution of the Board of Directors or (ii) for a transaction or
series of related transactions involving $50.0 million or less, by the chief financial officer,
whose determination shall be conclusive if evidenced by a certificate to such effect.
“Fiscal Year” means any period of fifty-two or fifty-three consecutive calendar weeks
ending on the Saturday nearest to the last day of December; references to a Fiscal Year with a
number corresponding to any calendar year (e.g., the “2009 Fiscal Year”) refer to the Fiscal Year
ending on the Saturday nearest to the last day of December of such calendar year; provided
that in the event that the Company gives notice to the Trustee that it intends to change its Fiscal
Year, Fiscal Year will mean any period of fifty-two or fifty-three consecutive calendar weeks or
twelve consecutive calendar months ending on the date set forth in such notice.
“Fixed Charge Coverage Ratio” means, for any Person on any Transaction Date, the ratio
of (1) the aggregate amount of Consolidated EBITDA for the then most recent four fiscal quarters
prior to such Transaction Date for which reports have been filed with the SEC or provided to the
Trustee (the “Four Quarter Period”) to (2) the aggregate Fixed Charges during such Four Quarter
Period. In making the foregoing calculation:
(A) pro forma effect shall be given to any Indebtedness Incurred or repaid during the
period (the “Reference Period”) commencing on the first day of the Four Quarter Period and
ending on the Transaction Date, in each case, as if such Indebtedness had been Incurred or
repaid on the first day of such Reference Period;
(B) Consolidated Interest Expense attributable to interest on any Indebtedness (whether
existing or being Incurred) computed on a pro forma basis and bearing a floating interest
rate shall be computed as if the rate in effect on the Transaction Date (taking into account
any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement
has a remaining term in excess of 12 months or, if shorter, at least equal to the remaining
term of such Indebtedness) had been the applicable rate for the entire period;
(C) pro forma effect shall be given to Asset Dispositions and Asset Acquisitions
(including giving pro forma effect to the application of proceeds of any Asset Disposition)
that occur during such Reference Period as if they had occurred and such proceeds had been
applied on the first day of such Reference Period; and
(D) pro forma effect shall be given to asset dispositions and asset acquisitions
(including giving pro forma effect to the application of proceeds of any asset disposition)
10
that have been made by any Person that has become a Restricted Subsidiary or has been
merged with or into the Company or any Restricted Subsidiary during such Reference Period
and that would have constituted Asset Dispositions or Asset Acquisitions had such
transactions occurred when such Person was a Restricted Subsidiary as if such asset
dispositions or asset acquisitions were Asset Dispositions or Asset Acquisitions that
occurred on the first day of such Reference Period; provided that to the extent that
clause (C) or (D) of this paragraph requires that pro forma effect be given to an Asset
Acquisition or Asset Disposition, such pro forma calculation shall be based upon the four
full fiscal quarters immediately preceding the Transaction Date of the Person, or division
or line of business of the Person, that is acquired or disposed for which financial
information is available; and provided, further, that such pro forma calculation will take
into account all adjustments required by Article 11 of Regulation S-X to be reflected, any
adjustments permitted by Article 11 of Regulation S-X that the Company, in its reasonable
judgment, elects to make and any Pro Forma Cost Savings arising from such transaction.
“Fixed Charges” means, with respect to any Person for any period, the sum, without
duplication, of:
(1) Consolidated Interest Expense plus
(2) the product of (x) the amount of all dividend payments on any series preferred
stock of such Person or any of its Restricted Subsidiaries (other than dividends payable
solely in Capital Stock of such Person or such Restricted Subsidiary (other than
Disqualified Stock) or to such Person or a Restricted Subsidiary of such Person) paid,
accrued or scheduled to be paid or accrued during such period times (y) a fraction, the
numerator of which is one and the denominator of which is one minus the then current
effective consolidated federal, state and local income tax rate of such Person, expressed as
a decimal, as determined on a consolidated basis in accordance with GAAP.
“Foreign Subsidiary” means any Restricted Subsidiary of the Company that is an entity
which is a controlled foreign corporation under Section 957 of the Internal Revenue Code.
“GAAP” means generally accepted accounting principles in the United States of America
as in effect as of the Closing Date as determined by the Public Company Accounting Oversight Board.
All ratios and computations contained or referred to in the Indenture shall be computed in
conformity with GAAP applied on a consistent basis, except that calculations made for purposes of
determining compliance with the terms of the covenants and with other provisions of the Indenture
shall be made without giving effect to (1) the amortization of any expenses incurred in connection
with the offering of the Notes and (2) except as otherwise provided, the amortization of any
amounts required or permitted by Accounting Principles Board Opinion Nos. 16 and 17.
“Global Security” or “Global Securities” means a Note or Notes, as the case
may be, in the form established pursuant to Section 2.2 evidencing all or part of the Notes, issued
to the Depositary for such Series or its nominee, and registered in the name of such Depositary or
nominee.
11
“Governmental Authority” means the government of the United States, any other nation
or any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government.
“Guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality
of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (1)
to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are
on arm’s length terms and are entered into in the normal course of business), to take-or-pay, or to
maintain financial statement conditions or otherwise) or (2) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the normal course of
business. The term “Guarantee” used as a verb has a corresponding meaning.
“Hedging Obligations” means, with respect to any Person, all liabilities of such
Person under foreign exchange contracts, commodity hedging agreements, currency exchange
agreements, interest rate swap agreements, interest rate cap agreements and interest rate collar
agreements, and all other agreements or arrangements designed to protect such Person against
fluctuations in interest rates, currency exchange rates or commodity prices.
“Holder” means a holder of any Notes.
“Immaterial Subsidiary” shall mean, at any time, any Restricted Subsidiary of the
Company that is designated by the Company as an “Immaterial Subsidiary” if and for so long as such
Restricted Subsidiary, together with all other Immaterial Subsidiaries, has (i) total assets at
such time not exceeding 5% of the Company’s consolidated assets as of the most recent fiscal
quarter for which balance sheet information is available and (ii) total revenues and operating
profit for the most recent 12-month period for which income statement information is available not
exceeding 5% of the Company’s consolidated revenues and operating profit, respectively;
provided, that a Restricted Subsidiary will not be considered to be an Immaterial
Subsidiary if it guarantees or otherwise provides material credit support for any Indebtedness of
the Company.
“Incur” means, with respect to any Indebtedness, to incur, create, issue, assume,
Guarantee or otherwise become liable for or with respect to, or become responsible for, the payment
of, contingently or otherwise, such Indebtedness; provided that (1) any Indebtedness of a
Person existing at the time such Person becomes a Restricted Subsidiary will be deemed to be
incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary and (2)
neither the accrual of interest nor the accretion of original issue discount nor the payment of
interest in the form of additional Indebtedness (to the extent provided for when the Indebtedness
on which such interest is paid was originally issued) shall be considered an Incurrence of
Indebtedness.
12
“Indebtedness” means, with respect to any Person at any date of determination
(without duplication):
(1) the principal component of all indebtedness of such Person for borrowed money;
(2) the principal component of all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(3) the principal component of all obligations of such Person in respect of letters of
credit or other similar instruments (including reimbursement obligations with respect
thereto, but excluding obligations with respect to letters of credit (including trade
letters of credit) securing obligations (other than obligations described in (1) or (2)
above or (5), (6) or (7) below) entered into in the normal course of business of such Person
to the extent such letters of credit are not drawn upon or, if drawn upon, to the extent
such drawing is reimbursed no later than the third Business Day following receipt by such
Person of a demand for reimbursement);
(4) all obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the date of
placing such property in service or taking delivery and title thereto or the completion of
such services, except Trade Payables;
(5) all Capitalized Lease Obligations;
(6) the principal component of all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such Person;
provided that the amount of such Indebtedness shall be the lesser of (A) the fair
market value of such asset at such date of determination and (B) the amount of such
Indebtedness;
(7) the principal component of all Indebtedness of other Persons Guaranteed by such
Person to the extent such Indebtedness is Guaranteed by such Person;
(8) to the extent not otherwise included in this definition, obligations under
Commodity Agreements, Currency Agreements and Interest Rate Agreements (other than Commodity
Agreements, Currency Agreements and Interest Rate Agreements designed solely to protect the
Company or its Restricted Subsidiaries against fluctuations in commodity prices, foreign
currency exchange rates or interest rates and that do not increase the Indebtedness of the
obligor outstanding at any time other than as a result of fluctuations in commodity prices,
foreign currency exchange rates or interest rates or by reason of fees, indemnities and
compensation payable thereunder); and
(9) all Disqualified Stock issued by such Person with the amount of Indebtedness
represented by such Disqualified Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price, but excluding
accrued dividends, if any.
13
The amount of Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and, with respect to contingent
obligations, the maximum liability upon the occurrence of the contingency giving rise to the
obligation, provided that:
(A) the amount outstanding at any time of any Indebtedness issued with original issue
discount is the face amount of such Indebtedness less the remaining unamortized portion of
the original issue discount of such Indebtedness at such time as determined in conformity
with GAAP;
(B) money borrowed and set aside at the time of the Incurrence of any Indebtedness in
order to prefund the payment of the interest on such Indebtedness shall not be deemed to be
“Indebtedness” so long as such money is held to secure the payment of such interest; and
(C) Indebtedness shall not include:
(i) any liability for federal, state, local or other taxes;
(ii) obligations in respect of performance, bid and surety bonds and completion
guarantees in respect of activities being performed by, on behalf of or for the
benefit of the Company or its Restricted Subsidiaries;
(iii) agreements providing for indemnification, adjustment of purchase price
earn-out, incentive, non-compete, consulting, deferred compensation or similar
obligations, or Guarantees or letters of credit, surety bonds or performance bonds
securing any obligations of the Company or any of its Restricted Subsidiaries
pursuant to such agreements, in any case, Incurred in connection with the
acquisition or disposition of any business, assets or Restricted Subsidiary (other
than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion
of such business, assets or Restricted Subsidiary for the purpose of financing such
acquisition);
(iv) any liability for trade payables incurred in the ordinary course of
business; or
(v) any obligations (including letters of credit) incurred in the ordinary
course of business in connection with workers’ compensation claims, payment
obligations in connection with self-insurance or similar requirements of the Company
or any Restricted Subsidiary.
“Indenture” means the Base Indenture, as amended and supplemented by this Supplemental
Indenture, as it may be further amended or supplemented from time to time in accordance with the
terms hereof.
“Interest Period” means the period commencing on and including an interest payment
date and ending on and including the day immediately preceding the next succeeding interest
14
payment date, with the exception that the first Interest Period shall commence on and include
the date of this Supplemental Indenture and end on and include June 14, 2010.
“Interest Rate Agreement” means any interest rate protection agreement, interest rate
future agreement, interest rate option agreement, interest rate swap agreement (whether fixed to
floating or floating to fixed), interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar agreement or arrangement.
“Investment” in any Person means any direct or indirect advance, loan or other
extension of credit (including, without limitation, by way of Guarantee or similar arrangement, but
excluding advances to customers or suppliers in the ordinary course of business that are, in
conformity with GAAP, recorded as accounts receivable, prepaid expenses or deposits on the balance
sheet of the Company or its Restricted Subsidiaries and endorsements for collection or deposit
arising in the ordinary course of business) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, bonds, notes, debentures or other similar
instruments issued by, such Person and shall include (1) the designation of a Restricted Subsidiary
as an Unrestricted Subsidiary and (2) the retention of the Capital Stock (or any other Investment)
by the Company or any of its Restricted Subsidiaries of (or in) any Person that has ceased to be a
Restricted Subsidiary, including without limitation, by reason of any transaction permitted by
clause (3) or (4) of Section 4.16. For purposes of the definition of “Unrestricted Subsidiary” and
Section 4.07, (a) the amount of or a reduction in an Investment shall be equal to the fair market
value thereof at the time such Investment is made or reduced and (b) in the event the Company or a
Restricted Subsidiary makes an Investment by transferring assets to any Person and as part of such
transaction receives Net Cash Proceeds, the amount of such Investment shall be the fair market
value of the assets less the amount of Net Cash Proceeds so received, provided the Net Cash
Proceeds are applied in accordance with Section 4.10.
“Leverage Ratio” means, as of any date, the ratio of
(a) Total Debt outstanding on the last day of the most recently ended fiscal quarter for which
reports have been filed with the SEC or provided to the Trustee;
to
(b) Consolidated EBITDA computed for the then most recent four fiscal quarters prior to such
date for which reports have been filed with the SEC or provided to the Trustee.
“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of
any kind (including, without limitation, any conditional sale or other title retention agreement or
lease in the nature thereof or any agreement to give any security interest).
“Material Adverse Effect” means a material adverse effect on (i) the business,
financial condition, operations, performance, or assets of the Company or the Company and its
Restricted Subsidiaries (other than a Receivables Subsidiary) taken as a whole, (ii) the rights and
remedies of any Holder under the Indenture or (iii) the ability of the Company or its Restricted
Subsidiaries to perform its obligations under the Indenture.
15
“Moody’s” means Moody’s Investors Service, Inc. and its successors and assigns.
“Net Cash Proceeds” means:
(a) with respect to any Asset Sale, the proceeds of such Asset Sale in the form of cash
or cash equivalents, including payments in respect of deferred payment obligations (to the
extent corresponding to the principal, but not interest, component thereof) when received in
the form of cash or cash equivalents and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of:
(1) brokerage commissions and other fees and expenses (including fees and
expenses of counsel and investment bankers) related to such Asset Sale;
(2) provisions for all taxes (whether or not such taxes will actually be paid
or are payable) as a result of such Asset Sale without regard to the consolidated
results of operations of the Company and its Restricted Subsidiaries, taken as a
whole;
(3) payments made to repay Indebtedness or any other obligation outstanding at
the time of such Asset Sale that either (x) is secured by a Lien on the property or
assets sold or (y) is required to be paid as a result of such sale;
(4) appropriate amounts to be provided by the Company or any Restricted
Subsidiary as a reserve against any liabilities associated with such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as determined in
conformity with GAAP; and
(5) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset Sale;
and
(b) with respect to any issuance or sale of Capital Stock, the proceeds of such
issuance or sale in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal, but not
interest, component thereof) when received in the form of cash or cash equivalents and
proceeds from the conversion of other property received when converted to cash or cash
equivalents, net of attorney’s fees, accountants’ fees, underwriters’ or placement agents’
fees, discounts or commissions and brokerage, consultant and other fees incurred in
connection with such issuance or sale and net of taxes paid or payable as a result thereof.
“Note Guarantee” means any Guarantee of the obligations of the Company under this
Supplemental Indenture and the Notes by any Subsidiary Guarantor.
“Notes” has the meaning assigned to it in the preamble to this Supplemental Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class for all purposes
under
16
the Indenture, and unless the context otherwise requires, all references to the Notes shall
include the Initial Notes and any Additional Notes.
“Obligors” means each of the Company and all Subsidiary Guarantors and “Obligor” means
each of the Company and each Subsidiary Guarantor individually.
“Offer to Purchase” means an offer to purchase Notes by the Company from the Holders
commenced by mailing a notice to the Trustee and each Holder stating:
(1) the provision of the Indenture pursuant to which the offer is being made and that
all Notes validly tendered will be accepted for payment on a pro rata basis;
(2) the purchase price and the date of purchase, which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed (the
“Payment Date”);
(3) that any Note not tendered will continue to accrue interest pursuant to its terms;
(4) that, unless the Company defaults in the payment of the purchase price, any Note
accepted for payment pursuant to the Offer to Purchase shall cease to accrue interest on and
after the Payment Date;
(5) that Holders electing to have a Note purchased pursuant to the Offer to Purchase
will be required to surrender the Note, together with the form entitled “Option of the
Holder to Elect Purchase” on the reverse side of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the third Business Day immediately
preceding the Payment Date, a telegram, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of Notes delivered for purchase and a statement
that such Holder is withdrawing his election to have such Notes purchased; and
(7) that Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered;
provided that each Note purchased and each new Note issued shall be in a principal
amount of $2,000 or integral multiples of $1,000 in excess thereof.
On the Payment Date, the Company shall (a) accept for payment on a pro rata basis Notes or
portions thereof tendered pursuant to an Offer to Purchase; (b) deposit with the Paying Agent money
sufficient to pay the purchase price of all Notes or portions thereof so accepted; and (c) deliver,
or cause to be delivered, to the Trustee all Notes or portions thereof so accepted together with an
Officers’ Certificate specifying the Notes or portions thereof accepted for payment by the Company.
The Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount
equal to the purchase price, and the Trustee shall promptly authenticate and mail to such Holders a
new Note equal in principal amount to any unpurchased portion of
17
the Note surrendered; provided that each Note purchased and each new Note issued shall
be in a principal amount of $2,000 or integral multiples of $1,000 in excess thereof. The Company
will publicly announce the results of an Offer to Purchase as soon as practicable after the Payment
Date. The Trustee shall act as the Paying Agent for an Offer to Purchase. The Company will comply
with Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder, to
the extent such laws and regulations are applicable, in the event that the Company is required to
repurchase Notes pursuant to an Offer to Purchase. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of the Indenture relating to an Offer
to Purchase, the Company will comply with the applicable securities laws and regulations and will
not be deemed to have breached its obligations under such provisions of the Indenture by virtue of
such conflict.
“Officer” means, with respect to any Person, the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary, any
Senior Vice-President, any Vice-President or any Assistant Vice President of such Person.
“Officers’ Certificate” means a certificate signed on behalf of the Company by at
least two Officers of the Company, one of whom must be the principal executive officer, the
principal financial officer, the treasurer or the principal accounting officer of the Company, that
meets the requirements of Section 13.05 hereof.
“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable
to the Trustee, that meets the requirements of Section 13.05 hereof. The counsel may be an
employee of or counsel to the Company or any Subsidiary of the Company.
“Permitted Additional Restricted Payment” means, for any Fiscal Year set forth below,
Restricted Payments made by the Company in the amount set forth opposite such Fiscal Year:
| Fiscal Year | Cash Amount | |||
2009 |
$ | 57,300,000 | ||
2010 and thereafter |
$ | 48,000,000 | ||
; provided, to the extent that the amount of Permitted Additional Restricted Payments made
by the Company during any Fiscal Year is less than the aggregate amount permitted (including after
giving effect to this proviso) for such Fiscal Year, then such unutilized amount may be carried
forward and utilized by the Company to make Permitted Additional Restricted Payments in any
succeeding Fiscal Year or Years and provided further that, for each Fiscal Year,
the amounts set forth above in such Fiscal Years shall be increased by an additional $120.0 million
so long as both before and after giving effect to such Restricted Payment, the Leverage Ratio is
less than 3.75:1.00.
“Permitted Business” means the business of the Company and its Subsidiaries engaged in
on the Closing Date and any other activities that are reasonably related, supportive,
complementary, ancillary or incidental thereto or reasonable extensions thereof.
18
“Permitted Factoring Program” means any and all agreements or facilities entered into
by the Company or any of its Subsidiaries for the purpose of factoring its receivables or payables
for cash consideration.
“Permitted Investment” means:
(1) an Investment in the Company or any Restricted Subsidiary or a Person which will,
upon the making of such Investment, become a Restricted Subsidiary (including, if as a
result of such Investment, such Person is merged or consolidated with or into or transfers
or conveys all or substantially all its assets to the Company or any Restricted Subsidiary);
(2) Temporary Cash Investments;
(3) payroll, travel and similar advances to cover matters that are expected at the time
of such advances ultimately to be treated as expenses in accordance with GAAP;
(4) stock, obligations or securities received in satisfaction of judgments;
(5) an Investment in an Unrestricted Subsidiary consisting solely of an Investment in
another Unrestricted Subsidiary;
(6) Commodity Agreements, Interest Rate Agreements and Currency Agreements intended to
protect the Company or its Restricted Subsidiaries against fluctuations in commodity prices,
interest rates or foreign currency exchange rates or manage interest rate risk;
(7) loans and advances to employees and officers of the Company and its Restricted
Subsidiaries made in the ordinary course of business for bona fide business purposes not to
exceed $12.0 million in the aggregate at any one time outstanding;
(8) Investments in securities of trade creditors or customers received
(a) pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers, or
(b) in settlement of delinquent obligations of, and other disputes with,
customers, suppliers and others, in each case arising in the ordinary course of
business or otherwise in satisfaction of a judgment;
(9) Investments made by the Company or its Restricted Subsidiaries consisting of
consideration received in connection with an Asset Sale made in compliance with Section
4.10; or
(10) Investments of a Person or any of its Subsidiaries existing at the time such
Person becomes a Restricted Subsidiary of the Company or at the time such Person merges or
consolidates with the Company or any of its Restricted Subsidiaries, in either case, in
compliance with the Indenture; provided that such Investments were not made by
19
such Person in connection with, or in anticipation or contemplation of, such Person
becoming a Restricted Subsidiary of the Company or such merger or consolidation;
(11) Investments in a Receivables Subsidiary or any Investment by a Receivables
Subsidiary in any other Person under a Permitted Securitization or a Permitted Factoring
Program; provided that any Investment in a Receivables Subsidiary is in the form of
a Purchase Money Note, contribution of additional receivables and related assets or any
equity interests;
(12) Investments to the extent made in exchange for the Issuance of Capital Stock
(other than Disqualified Stock) of the Company;
(13) any Investment made within 90 days after the date of the commitment to make the
Investment, that when such commitment was made, would have complied with the terms of the
Indenture;
(14) repurchases of the Notes or any other outstanding senior indebtedness;
(15) other Investments made since the Closing Date that do not exceed, at any one time
outstanding, $100.0 million;
(16) Investments in any Person engaged primarily in one or more Permitted Businesses
and supporting ongoing business operations of the Company or its Restricted Subsidiaries
(including, without limitation, Unrestricted Subsidiaries, and Persons that are not
Subsidiaries of the Company) that do not exceed, at any one time outstanding, $100.0
million; and
(17) any Investments existing on the Closing Date and any amendment, modification,
restatement, extension, renewal, refunding, replacement or refinancing, in whole or in part,
thereof; provided that the principal amount of any Investment following any such amendment,
modification, restatement, extension, renewal, refunding, replacement or refinancing
pursuant to this clause (17) shall not exceed the principal amount of such Investment on the
Closing Date.
“Permitted Liens” means:
(1) Liens in connection with a Permitted Securitization or a Permitted Factoring
Program;
(2) Liens existing as of the Closing Date and securing Indebtedness existing as of the
Closing Date and any refinancings, refundings, reallocations, renewals or extensions of such
Indebtedness; provided that, no such Lien shall encumber any additional property
(except for accessions to such property and the products and proceeds thereof) and the
amount of Indebtedness secured by such Lien is not increased from that existing on the
Closing Date;
(3) Liens securing Indebtedness of the type permitted by clause (7) of Section 4.09
that, (i) such Lien is granted within 365 days after such Indebtedness is incurred, (ii)
20
the Indebtedness secured thereby does not exceed the lesser of the cost or the fair
market value of the applicable property, improvements or equipment at the time of such
acquisition (or construction) and (iii) such Lien secures only the assets that are the
subject of the Indebtedness referred to in such clause;
(4) Liens securing Indebtedness permitted by under clause (9) of Section 4.09; provided
that, such Liens existed prior to such Person becoming a Restricted Subsidiary, were not
created in anticipation thereof and attach only to specific tangible assets of such Person;
(5) Liens in favor of carriers, warehousemen, mechanics, repairmen, materialmen,
customs and revenue authorities and landlords and other similar statutory Liens and Liens in
favor of suppliers (including sellers of goods pursuant to customary reservations or
retention of title, in each case) granted in the ordinary course of business for amounts not
overdue for a period of more than 60 days or are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books or with respect to which the failure to make payment could not
reasonably be expected to have a Material Adverse Effect;
(6) Liens incurred or deposits made in the ordinary course of business in connection
with worker’s compensation, unemployment insurance or other form of govermental insurance or
benefits, or to secure performance of tenders, statutory obligations, bids, leases, trade
contracts or other similar obligations (other than for borrowed money) entered into in the
ordinary course of business or to secure obligations on surety and appeal bonds or
performance bonds performance and completion guarantee and other obligations of a like
nature (including those to secure health, safety and environmental obligations) incurred in
the ordinary course of business; and (ii) obligations in respect of letters of credit or
bank guarantees that have been posted to support payment of the items set forth in the
immediately preceding clause (i);
(7) judgment Liens that are being appealed in good faith or with respect to which
execution has been stayed or the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance companies and which do not
otherwise result in an Event of Default;
(8) easements, rights-of-way covenants, conditions, building codes, restrictions,
reservations, minor defects or irregularities in title and other similar encumbrances and
matters that would be disavowed by a full survey of real property not interfering in any
material respect with the value or use of the affected or encumbered real property to which
such Lien is attached;
(9) Liens securing Indebtedness permitted by clause (8) of Section 4.09;
(10) Liens arising solely by virtue of any statutory or common law provision relating
to banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts
or other funds maintained with a creditor depository institution and Liens
21
attaching to commodity trading accounts or other commodities brokerage accounts
incurred in the ordinary course of business;
(11) (i) licenses, sublicenses, leases or subleases granted to third Persons in the
ordinary course of business not interfering in any material respect with the business of the
Company or any of its Restricted Subsidiaries, (ii) other agreements with respect to the use
and occupancy of real property entered into in the ordinary course of business or in
connection with an Asset Sale permitted by Section 4.10 or (iii) the rights reserved or
vested in any Person by the terms of any lease, license, franchise, grant or permit held by
the Company or any of its Restricted Subsidiaries or by a statutory provision, to terminate
any such lease, license, franchise, grant or permit, or to require annual or periodic
payments as a condition to the continuance thereof;
(12) Liens on the property of the Company or any of its Restricted Subsidiaries
securing (i) the non-delinquent performance of bids, trade contracts (other than for
borrowed money), leases, licenses and statutory obligations, (ii) Contingent Liabilities on
surety and appeal bonds, and (iii) other non-delinquent obligations of a like nature; in
each case, incurred in the ordinary course of business;
(13) Liens on Receivables transferred to a Receivables Subsidiary under a Permitted
Securitization or a Permitted Factoring Program;
(14) Liens upon specific items or inventory or other goods and proceeds of the Company
or any of its Restricted Subsidiaries securing such Person’s obligations in respect of
bankers’ acceptances or documentary letters of credit issued or created for the account of
such Person to facilitate the shipment or storage of such inventory or other goods;
(15) Liens (i) (A) on advances of cash or Cash Equivalents in favor of the seller of
any property to be acquired as a Permitted Investment to be applied against the purchase
price for such Permitted Investment and (B) consisting of an agreement involving an Asset
Sale permitted by Section 4.10, in each case under this clause (i), solely to the extent
such Permitted Investment or Asset Sale, as the case may be, would have been permitted on
the date of the creation of such Lien and (ii) on earnest money deposits of cash or Cash
Equivalents made by the Company or any of its Restricted Subsidiaries in connection with any
letter of intent or purchase agreement permitted hereunder;
(16) Liens arising from precautionary Uniform Commercial Code financing statement
filings (or similar filings under other applicable Law);
(17) Liens (i) arising out of conditional sale, title retention, consignment or similar
arrangements for sale of goods (including under Article 2 of the UCC) and Liens that are
contractual rights of set-off relating to purchase orders and other similar agreements
entered into by the Company or any of its Restricted Subsidiaries and (ii) relating to the
establishment of depository relations with banks not given in connection with the issuance
of Indebtedness and (iii) relating to pooled deposit or sweep accounts of
22
the Company or any Restricted Subsidiary to permit satisfaction of overdraft or similar
obligations in each case in the ordinary course of business and not prohibited by this
Agreement;
(18) ground leases in respect of real property on which facilities owned or leased by
the Company or any of its Restricted Subsidiaries are located or any Liens senior to any
lease, sub-lease or other agreement under which the Company or any of its Restricted
Subsidiaries uses or occupies any real property;
(19) Liens constituting security given to a public or private utility or any
Governmental Authority as required in the ordinary course of business;
(20) pledges or deposits of cash and Cash Equivalents securing deductibles,
self-insurance, co-payment, co-insurance, retentions and similar obligations to providers of
insurance in the ordinary course of business;
(21) Liens on (A) incurred premiums, dividends and rebates which may become payable
under insurance policies and loss payments which reduce the incurred premiums on such
insurance policies and (B) rights which may arise under State insurance guarantee funds
relating to any such insurance policy, in each case securing Indebtedness permitted to be
incurred pursuant to clause (12)(i) of Section 4.09;
(22) Liens for taxes not at the time delinquent or thereafter payable without penalty
or being diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its books or with
respect to which the failure to make payment could not reasonably be expected to have a
Material Adverse Effect; and
(23) Liens in respect of Hedging Obligations.
“Permitted Securitization” means any sale, transfer or other disposition by the
Company or any of its Restricted Subsidiaries of Receivables and related collateral, credit support
and similar rights and any other assets that are customarily transferred in a securitization of
receivables, pursuant to one or more securitization programs, to a Receivables Subsidiary or a
Person who is not an Affiliate of the Company; provided that (i) the consideration to be
received by the Company and its Restricted Subsidiaries other than a Receivables Subsidiary for any
such disposition consists of cash, a promissory note or a customary contingent right to receive
cash in the nature of a “hold-back” or similar contingent right, (ii) no Default shall have
occurred and be continuing or would result therefrom, and (iii) the aggregate outstanding balance
of the Indebtedness in respect of all such programs at any point in time is not in excess of $500.0
million.
“Person” means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability company or government or
other entity.
“Pro Forma Cost Savings” means with respect to any acquisition or disposition
transaction, cost savings reasonably expected to be realized in connection with that transaction,
23
as determined in good faith by the Board of Directors, whose determination shall be conclusive
and evidenced by a resolution of the Board of Directors, in consultation with a nationally
recognized accounting firm (regardless of whether those cost savings could then be reflected in pro
forma financial statements under GAAP, Regulation S-X promulgated by the SEC or any other
regulation or policy of the SEC).
“Prospectus” means the final prospectus supplement dated December 3, 2009 relating to
the Initial Notes.
“Purchase Money Note” means a promissory note evidencing a line of credit, or
evidencing other Indebtedness owed to the Company or any Restricted Subsidiary in connection with a
Permitted Securitization or a Permitted Factoring Program, which note shall be repaid from cash
available to the maker of such note, other than amounts required to be established as reserves,
amounts paid to investors in respect of interest, principal and other amounts owing to such
investors and amounts paid in connection with the purchase of newly generated accounts receivable.
“Receivable” shall mean a right to receive payment arising from a sale or lease of
goods or the performance of services by a Person pursuant to an arrangement with another Person
pursuant to which such other Person is obligated to pay for goods or services under terms that
permit the purchase of such goods and services on credit and shall include, in any event, any items
of property that would be classified as an “account,” “chattel paper,” “payment intangible” or
“instrument” under the UCC and any supporting obligations.
“Receivables Subsidiary” shall mean any Wholly Owned Restricted Subsidiary of the
Company (or another Person in which the Company or any Restricted Subsidiary makes an Investment
and to which the Company or one or more of its Restricted Subsidiaries transfer Receivables and
related assets) which engages in no activities other than in connection with the financing of
Receivables and which is designated by the Board of Directors of the applicable Restricted
Subsidiary (as provided below) as a Receivables Subsidiary and which meets the following
conditions:
(a) no portion of the Indebtedness or any other obligations (contingent or otherwise)
of which:
(i) is guaranteed by the Company or any Restricted Subsidiary (that is not a
Receivables Subsidiary);
(ii) is recourse to or obligates the Company or any Restricted Subsidiary (that
is not a Receivables Subsidiary); or
(iii) subjects any property or assets of the Company or any Restricted
Subsidiary (that is not a Receivables Subsidiary), directly or indirectly,
contingently or otherwise, to the satisfaction thereof;
(b) with which neither the Company nor any Restricted Subsidiary (that is not a
Receivables Subsidiary) has any material contract, agreement, arrangement or understanding
(other than Standard Securitization Undertakings); and
24
(c) to which neither the Company nor any Restricted Subsidiary (that is not a
Receivables Subsidiary) has any obligation to maintain or preserve such entity’s financial
condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Board of Directors of the applicable Restricted Subsidiary shall be
evidenced by a certified copy of the resolution of the Board of Directors of such Restricted
Subsidiary giving effect to such designation and an officers certificate certifying, to the best of
such officer’s knowledge and belief, that such designation complies with the foregoing conditions.
“Replacement Assets” means, on any date, property or assets (other than current
assets) of a nature or type or that are used in a Permitted Business (or an Investment in a
Permitted Business).
“Responsible Officer,” when used with respect to the Trustee, means any officer within
the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the administration of the
Indenture.
“Restricted Subsidiary” means any Subsidiary of the Company other than an Unrestricted
Subsidiary. For the avoidance of doubt, as of the Closing Date, all of the Company’s Subsidiaries
will be Restricted Subsidiaries.
“Rule 144A” means Rule 144A promulgated under the Securities Act.
“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies,
and its successors.
“Sale and Leaseback Transaction” means a transaction whereby a Person sells or
otherwise transfers assets or properties and then or thereafter leases such assets or properties or
any part thereof or any other assets or properties which such Person intends to use for
substantially the same purpose or purposes as the assets or properties sold or otherwise
transferred.
“SEC” means the Securities and Exchange Commission or any successor agency.
“Securities Act” means the Securities Act of 1933, as amended.
“Significant Subsidiary” means, any Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the
Securities Act, as such regulation is in effect on the Closing Date.
“Standard Securitization Undertakings” shall mean representations, warranties,
covenants and indemnities entered into by the Company or any Restricted Subsidiary which are
reasonably customary in a securitization of Receivables.
25
“Stated Maturity” means, (1) with respect to any debt security, the date specified in
such debt security as the fixed date on which the final installment of principal of such debt
security is due and payable and (2) with respect to any scheduled installment of principal of or
interest on any debt security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
“Subsidiary” means, with respect to any Person, any corporation, association or other
business entity of which more than 50% of the voting power of the outstanding Voting Stock is
owned, directly or indirectly, by such Person and one or more other Subsidiaries of such Person.
“Subsidiary Guarantor” means each Restricted Subsidiary of the Company that provides a
Note Guarantee in accordance with the provisions of the Indenture and its respective successors and
assigns, in each case, until the Note Guarantee of such Person has been released in accordance with
the provisions of the Indenture. For the avoidance of doubt, (i) HBI Playtex BATH LLC, (ii) HBI
Receivables LLC, (iii) any Foreign Subsidiary and (iv) any Immaterial Subsidiary shall not be
Subsidiary Guarantors.
“Temporary Cash Investment” means any of the following:
(a) any direct obligation of (or unconditionally guaranteed by) the United States or a State
thereof (or any agency or political subdivision thereof, to the extent such obligations are
supported by the full faith and credit of the United States or a State thereof) maturing not more
than one year after such time;
(b) commercial paper maturing not more than 270 days from the date of issue, which is issued
by (i) a corporation (other than an Affiliate of the Company or any Subsidiary of the Company)
organized under the laws of any State of the United States or of the District of Columbia and rated
A-1 or higher by S&P or P-1 or higher by Moody’s;
(c) any certificate of deposit, time deposit or bankers acceptance, maturing not more than one
year after its date of issuance, which is issued by any bank organized under the laws of the United
States (or any State thereof) and which has (A) a credit rating of A2 or higher from Moody’s or A
or higher from S&P and (B) a combined capital and surplus greater than $500.0 million;
(d) any repurchase agreement having a term of 30 days or less entered into with any commercial
banking institution satisfying the criteria set forth in clause (c) which (i) is secured by a fully
perfected security interest in any obligation of the type described in clause (a), and (ii) has a
market value at the time such repurchase agreement is entered into of not less than 100% of the
repurchase obligation of such commercial banking institution thereunder;
(e) with respect to any Foreign Subsidiary, non-Dollar denominated (i) certificates of deposit
of, bankers acceptances of, or time deposits with, any commercial bank which is organized and
existing under the laws of the country in which such Person maintains its chief executive office or
principal place of business or is organized provided such country is a member of the Organization
for Economic Cooperation and Development, and which has a short-term commercial paper rating from
S&P of at least “A-1” or the equivalent thereof or from Moody’s of at least “P-1” or the equivalent
thereof (any such bank being an “Approved Foreign Bank”)
26
and maturing within one year of the date of acquisition and (ii) equivalents of demand deposit
accounts which are maintained with an Approved Foreign Bank; or
(f) readily marketable obligations issued or directly and fully guaranteed or insured by the
government or any agency or instrumentality of any member nation of the European Union whose legal
tender is the Euro and which are denominated in Euros or any other foreign currency comparable in
credit quality and tenor to those referred to above and customarily used by corporations for cash
management purposes in any jurisdiction outside the United States to the extent reasonably required
in connection with any business conducted by any Foreign Subsidiary organized in such jurisdiction,
having (i) one of the three highest ratings from either Moody’s or S&P and (ii) maturities of not
more than one year from the date of acquisition thereof; provided that the full faith and
credit of any such member nation of the European Union is pledged in support thereof.
“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect
on the date on which this Supplemental Indenture is qualified thereunder, as may be amended from
time to time.
“Total Assets” means the total consolidated assets of the Company and its Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the most
recent balance sheet of the Company filed with the SEC or delivered to the Trustee.
“Total Debt” means, on any date, the outstanding principal amount of all:
(1) obligations of such Person for borrowed money or advances and all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments;
(2) monetary obligations, contingent or otherwise, relative to the face amount of all
letters of credit, whether or not drawn, and banker’s acceptances issued for the account of
such Person;
(3) all Capitalized Lease Obligations of such Person; and
(4) the full outstanding balance of trade receivables, notes or other instruments sold
with full recourse (and the portion thereof subject to potential recourse, if sold with
limited recourse), other than in any such case any thereof sold solely for purposes of
collection of delinquent accounts and other than in connection with any Permitted
Securitization or Permitted Factoring Program, of the Company and its Subsidiaries (other
than a Receivables Subsidiary), in each case exclusive of intercompany Indebtedness between
the Company and its Subsidiaries and any Contingent Liability in respect of any of the
foregoing.
“Trade Payables” means, with respect to any Person, any accounts payable or any other
indebtedness or monetary obligation to trade creditors created, assumed or Guaranteed by such
Person or any of its Subsidiaries arising in the ordinary course of business in connection with the
acquisition of goods or services.
27
“Transaction Date” means, with respect to the Incurrence of any Indebtedness, the date
such Indebtedness is to be Incurred and, with respect to any Restricted Payment, the date such
Restricted Payment is to be made.
“Transactions” means, collectively, (i) the issuance of the Notes, (ii) the entering
into of the documents governing the Credit Agreement and the making of the loans thereunder, (iii)
the repayment of all borrowings and termination of certain credit facilities of the Company
concurrent with the closing of the offering of the Notes, and (iv) the payment of fees and expenses
in connection and in accordance with the foregoing.
“Trustee” means the party named as such in the preamble to this Supplemental Indenture
until a successor replaces it in accordance with the applicable provisions of the Indenture and
thereafter means the successor serving hereunder.
“Treasury Rate” means, as of any redemption date, the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519) which has become
publicly available at least two Business Days prior to the redemption date (or, if such Statistical
Release is no longer published, any publicly available source of similar market data)) most nearly
equal to the period from the redemption date to December 15, 2013; provided, however, that
if the period from the redemption date to December 15, 2013 is not equal to the constant maturity
of a United States Treasury security for which a weekly average yield is given, the Treasury Rate
shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from
the weekly average yields of United States Treasury securities for which such yields are given,
except that if the period from the redemption date to December 15, 2013 is less than one year, the
weekly average yield on actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used. The Company will (a) calculate the Treasury Rate as of the
second Business Day preceding the applicable redemption date and (b) prior to such redemption date
file with the Trustee an Officers’ Certificate setting forth the Applicable Premium and the
Treasury Rate and showing the calculation of each in reasonable detail.
“Unrestricted Subsidiary” means (1) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the
manner provided below and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors
may designate any Restricted Subsidiary (including any newly acquired or newly formed Subsidiary of
the Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or
owns or holds any Lien on any property of, the Company or any Restricted Subsidiary;
provided that (A) any Guarantee by the Company or any Restricted Subsidiary of any
Indebtedness of the Subsidiary being so designated shall be deemed an “Incurrence” of such
Indebtedness and an “Investment” by the Company or such Restricted Subsidiary (or both, if
applicable) at the time of such designation; (B) either (I) the Subsidiary to be so designated has
total assets of $2.0 million or less or (II) if such Subsidiary has assets greater than $2.0
million such designation would be permitted under Section 4.07 and (C) if applicable, the
Incurrence of Indebtedness and the Investment referred to in clause (A) of this proviso would be
permitted under Section 4.07 and Section 4.09. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that (a) no Default or
Event of Default shall have occurred and be continuing at the time of or after giving effect to
28
such designation and (b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation would, if Incurred at such time, have been permitted
to be Incurred (and shall be deemed to have been Incurred) for all purposes of the Indenture. Any
such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing
with the Trustee a copy of the resolution of the Board of Directors giving effect to such
designation and an Officers’ Certificate certifying that such designation complied with the
foregoing provisions.
“U.S. Government Obligations” means securities that are (1) direct obligations of the
United States of America for the payment of which its full faith and credit is pledged or (2)
obligations of a Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are not callable or
redeemable at the option of the Company thereof at any time prior to the Stated Maturity of the
Notes, and shall also include a depository receipt issued by a bank or trust company as custodian
with respect to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S. Government Obligation or
the specific payment of interest on or principal of the U.S. Government Obligation evidenced by
such depository receipt.
“Voting Stock” means with respect to any Person, Capital Stock of any class or kind
ordinarily having the power to vote for the election of directors, managers or other voting members
of the governing body of such Person.
“Wholly Owned” of any specified Person as of any date means the Capital Stock of such
Person (other than directors’ and foreign nationals’ qualifying shares) that is at the time
entitled to vote in the election of the Board of Directors of such Person is owned by the referent
Person.
SECTION 1.02 Other Definitions.
| Defined in | ||||
| Term | Section | |||
“Additional Notes” |
Preamble | |||
“Authentication Order” |
2.02 | |||
“Change of Control Offer” |
4.15 | |||
“Change of Control Payment” |
4.15 | |||
“Change of Control Payment Date” |
4.15 | |||
“Covenant Defeasance” |
8.03 | |||
“Event of Default” |
6.01 | |||
“Excess Proceeds” |
4.10 | |||
“Initial Notes” |
Preamble | |||
“Legal Defeasance” |
8.02 | |||
29
| Defined in | ||||
| Term | Section | |||
“Paying Agent” |
2.05 | |||
“Redemption Date” |
3.07 | |||
“Registrar” |
2.05 | |||
“Restricted Payments” |
4.07 | |||
SECTION 1.03 Incorporation by Reference of Trust Indenture Act. Whenever
this Supplemental Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Supplemental Indenture.
The following TIA terms used in this Supplemental Indenture have the following meanings:
“indenture securities” means the Notes;
“indenture security Holder” means a Holder of a Note;
“indenture to be qualified” means the Indenture;
“indenture trustee” or “institutional trustee” means the Trustee; and
“obligor” on the Notes and the Note Guarantees means the Company and the Subsidiary
Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees,
respectively.
All other terms used in the Indenture that are defined by the TIA, defined by TIA reference to
another statute or defined by SEC rule under the TIA have the meanings so assigned to them.
SECTION 1.04 Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
(3) “or” is not exclusive;
(4) words in the singular include the plural, and in the plural include the singular;
(5) “will” shall be interpreted to express a command;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the Securities Act will be deemed to
include substitute, replacement of successor sections or rules adopted by the SEC from time
to time.
30
SECTION 1.05 Conflicts with Base Indenture. In the
event that any provision of this Supplemental Indenture limits, qualifies or conflicts
with a provision of the Base Indenture, such provision of this Supplemental Indenture shall control
with respect to the Notes and the Note Guarantees (but not with respect to any other Securities
issued under the Base Indenture).
ARTICLE 2
THE NOTES
THE NOTES
SECTION 2.01 Form and Dating. There
is hereby created and designated a series of Securities under the Base Indenture: the
title of the Notes shall be “8.000% Senior Notes Due 2016”. The changes, modifications and
supplements to the Base Indenture effected by this Supplemental Indenture shall be applicable only
with respect to, and govern the terms of, the Notes and shall not apply to any other series of
Securities that may be issued under the Base Indenture unless a supplemental indenture with respect
to such other series of Securities specifically incorporates such changes, modifications and
supplements.
The Stated Maturity of the Notes shall be December 15, 2016. The Notes shall be payable and
may be presented for payment, redemption, registration of transfer and exchange, without service
charge, at the Corporate Trust Office.
The Notes shall bear interest at the rate of 8.000% per annum from and including the Closing
Date, or from the most recent date to which interest has been paid or duly provided for, as further
provided in the form of Note annexed hereto as Exhibit A. Interest shall be computed on the basis
of a 360-day year composed of twelve 30-day months. The dates on which such interest shall be
payable (each, an “Interest Payment Date”) shall be June 15 and December 15 of each year, beginning
on June 15, 2010, and the record date for any interest payable on each such Interest Payment Date
shall be the close of business on the immediately preceding June 1 and December 1, respectively,
whether or not a Business Day.
The Notes will be issued in the form of one or more Global Securities substantially in the
form of Exhibit A hereto, duly executed by the Company and authenticated by the Trustee as provided
in the Indenture and deposited with the Trustee as custodian for the Depositary or its nominee.
Except as provided below, owners of beneficial interests in Global Securities will not be
entitled to receive Definitive Notes. If required to do so pursuant to any applicable law or
regulation, beneficial owners may obtain Definitive Notes in exchange for their beneficial
interests in a Global Security upon written request in accordance with the Applicable Procedures.
In addition, Definitive Notes shall be transferred to all beneficial owners in exchange for their
beneficial interests in a Global Security if (A) the Company advises the Trustee in writing that
DTC is no longer willing or able to discharge its responsibilities properly or that DTC is no
longer a registered clearing agency under the Exchange Act, at a time when DTC is required to be so
registered in order to act as Depositary, and in each case a successor depositary is not appointed
by the Company within 90 days of such notice, (B) an Event of Default has occurred and is
continuing and DTC has notified the Company and the Trustee of its desire to exchange the Global
Securities for Definitive Notes, or (C) subject to DTC’s rules, the Company executes and delivers
to the Trustee and Registrar an Officers’ Certificate stating that the Company has
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elected to terminate the book-entry system through DTC with respect to such Global Securities.
In the event of the occurrence of any of the events specified in this paragraph, the Company shall
promptly make available to the Trustee an adequate supply of Definitive Notes in the form
consistent with Exhibit A hereto.
At such time as all beneficial interests in a particular Global Security have been exchanged
for a Global Security or Definitive Notes or all Notes represented by a particular Global Security
has been redeemed, repurchased or canceled in whole and not in part, each such Global Security will
be returned to or retained and canceled by the Trustee. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global Security or for
Definitive Notes, the principal amount of Notes represented by such Global Security will be reduced
accordingly and an endorsement will be made on such Global Security by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Security, such other Global Security will be
increased accordingly and an endorsement will be made on such Global Security by the Trustee or by
the Depositary at the direction of the Trustee to reflect such increase. All Global Securities and
Definitive Notes issued upon any registration of transfer or exchange of Global Securities or
Definitive Notes will be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under the Indenture, as the Global Securities or Definitive Notes
surrendered upon such registration of transfer or exchange.
The Trustee will authenticate Global Securities and Definitive Notes, if any, in accordance
with the provisions of Section 2.02 hereof. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage. Each Note will be dated the date of its
authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in
excess thereof.
The terms and provisions contained in the Notes will constitute, and are hereby expressly
made, a part of this Supplemental Indenture and the Company, the Subsidiary Guarantors and the
Trustee, by their execution and delivery of this Supplemental Indenture, expressly agree to such
terms and provisions and to be bound thereby. However, to the extent any provision of any Note
conflicts with the express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling.
SECTION 2.02 Execution and Authentication. At
least two Officers must sign the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of the Trustee. The
signature will be conclusive evidence that the Note has been authenticated under this Supplemental
Indenture.
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The Trustee will, upon receipt of a written order of the Company signed by two Officers (an
“Authentication Order”), authenticate Notes for original issue up to the aggregate
principal amount stated on the face of the Notes.
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate
Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Supplemental Indenture to authentication by the Trustee includes authentication
by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
The Company may, from time to time, subject to compliance with all other applicable provisions
of the Indenture, without notice to or consent of the Holders of the Notes, create and issue
pursuant to the Indenture Additional Notes having terms and conditions identical to the Notes
issued on the date hereof, except that Additional Notes may:
(1) have a different issue date than other outstanding Notes;
(2) have a different issue price than other outstanding Notes; and
(3) have a different amount of interest payable on the first Interest Payment
Date after issuance than is payable on other outstanding Notes;
provided, no Additional Notes shall be issued unless such Additional Notes will be fungible
for U.S. federal income tax and securities law purposes with Notes issued on the Closing Date; and
provided further, the Additional Notes have the same CUSIP number as the Notes issued on
the date hereof. No Additional Notes may be issued if on the issue date therefor, any Event of
Default has occurred and is continuing.
The Initial Notes and any Additional Notes shall be treated as a single class for all purposes
under the Indenture, including waivers, amendments and United States federal tax purposes.
With respect to any issuance of Additional Notes, the Company shall deliver to the Trustee a
resolution of the Board of Directors or, if applicable, a certificate signed by a Designated
Officer (as defined in the applicable resolutions of the Board of Directors of the Company) and an
Officers’ Certificate in respect of such Additional Notes, which shall together provide the
following information:
(1) the aggregate principal amount of such Additional Notes to be authenticated
and delivered pursuant to the Indenture; and
(2) the issue date, issue price, amount of interest accrued and payable on the
first Interest Payment Date, the first Interest Payment Date and the CUSIP number of
such Additional Notes.
SECTION 2.03 Outstanding Notes. The
Notes outstanding at any time are all the Notes authenticated by the Trustee except for
those canceled by it, those delivered to it for cancellation, those reductions in the interest in a
Global Security effected by the Trustee in
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accordance with the provisions hereof, and those described in this Section 2.03 or Sections 8.02 or
8.03 hereof or Article II of the Base Indenture as not outstanding. Except as set forth in
Sections 2.9 and 2.10 of the Base Indenture, a Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note; however, Notes held by the Company or a
Subsidiary of the Company shall not be deemed to be outstanding for purposes of Section 3.07(a)
hereof.
If a Note is replaced pursuant to Section 2.8 of the Base Indenture, it ceases to be
outstanding.
If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to
be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof)
holds, on a Redemption Date or maturity date, money sufficient to pay Notes payable on that date,
then on and after that date such Notes will be deemed to be no longer outstanding and will cease to
accrue interest.
SECTION 2.04 Defaulted Interest. If the
Company defaults in a payment of interest on the Notes, it will pay the defaulted
interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in each case at the
rate provided in the Notes and in Section 4.01 hereof. The Company will notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and the date of the
proposed payment. The Company will fix or cause to be fixed each such special record date and
payment date, provided that no such special record date may be less than 10 days prior to
the related payment date for such defaulted interest. At least 15 days before the special record
date, the Company (or, upon the written request of the Company, the Trustee in the name and at the
expense of the Company) will mail or cause to be mailed to Holders a notice that states the special
record date, the related payment date and the amount of such interest to be paid.
SECTION 2.05 Registrar and Paying Agent. The Company
will maintain an office or agency where Notes may be presented for registration
of transfer or for exchange (“Registrar”) and an office or agency where Notes may be
presented for payment (“Paying Agent”). The Registrar will keep a register of the Notes
and of their transfer and exchange. The Company may appoint one or more co-registrars and one or
more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying
Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company will notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints DTC or its nominee to act as Depositary with respect to the
Global Securities.
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The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act
as Custodian with respect to the Global Securities.
ARTICLE 3
REDEMPTION AND PREPAYMENT
REDEMPTION AND PREPAYMENT
SECTION 3.01 Notices to Trustee. If the
Company elects to redeem Notes pursuant to the optional redemption provisions of Section
3.07 hereof, it must furnish to the Trustee, at least 30 days but not more than 60 days before a
Redemption Date, an Officers’ Certificate setting forth:
(1) the clause of this Supplemental Indenture pursuant to which the redemption shall
occur,
(2) the Redemption Date;
(3) the principal amount of Notes to be redeemed;
(4) the redemption price; and
(5) applicable CUSIP numbers.
SECTION 3.02 Selection of Notes to Be Redeemed or Purchased. If the
Company is redeeming or purchasing less than all of the Notes, the Trustee will select
Notes for redemption or purchase as follows:
(1) if the Notes are listed on any national securities exchange, in compliance with the
requirements of the principal national securities exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national securities exchange, then on a
pro rata basis, by lot or by such method as the Trustee deems fair and
appropriate.
In the event of partial redemption or purchase the particular Notes to be redeemed or
purchased will be selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption or purchase date by the Trustee from the outstanding Notes not
previously called for redemption or purchase.
The Trustee will promptly notify the Company in writing of the Notes selected for redemption
or purchase and, in the case of any Note selected for partial redemption or purchase, the principal
amount thereof to be redeemed or purchased. Notes and portions of Notes selected will be in
amounts of $2,000 or whole multiples of $1,000 in excess thereof. No notes of $2,000 or less in
original principal amount shall be redeemed in part. Except as provided in the preceding sentence,
provisions of the Indenture that apply to Notes called for redemption or purchase also apply to
portions of Notes called for redemption or purchase.
SECTION 3.03 Notice of Redemption. At least 30
days but not more than 60 days before a Redemption Date, the Company will mail or
cause to be mailed, by first class mail, a
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notice of redemption to each Holder whose Notes are to be redeemed at its registered address,
except that redemption notices may be mailed more than 60 days prior to a Redemption Date if the
notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of
this Supplemental Indenture pursuant to Articles 8 or 12 of this Supplemental
Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the Redemption Date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the principal amount of such
Note to be redeemed and that, after the Redemption Date upon surrender of such Note, a new
Note or Notes in principal amount equal to the unredeemed portion will be issued in the name
of the holder thereof upon cancellation of the partially redeemed Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;
(6) that, unless the Company defaults in making such redemption payment, interest on
Notes called for redemption ceases to accrue on and after the Redemption Date;
(7) the paragraph of the Notes and/or Section of the Indenture pursuant to which the
Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy of the CUSIP
number, if any, listed in such notice or printed on the Notes.
At the Company’s request, the Trustee will give the notice of redemption in the Company’s name
and the Company’s expense; provided, however, that the Company has delivered to the
Trustee, at least 40 days (unless a shorter time shall be acceptable to the Trustee) prior to the
Redemption Date, an Officers’ Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding paragraph.
SECTION 3.04 Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the Redemption Date at the redemption price. A
notice of redemption may not be conditional.
SECTION 3.05 Deposit of Redemption or Purchase Price. One Business
Day prior to the redemption or purchase date, the Company will deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and
accrued interest on all Notes to be redeemed or purchased on that date. The Trustee or the Paying
Agent will promptly return to the Company any money deposited with the Trustee or the Paying Agent
by the
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Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued
interest on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph, on and after the
redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes
called for redemption or purchase. If a Note is redeemed or purchased on or after an interest
record date but on or prior to the related interest payment date, then any accrued and unpaid
interest shall be paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is not so paid upon
surrender for redemption or purchase because of the failure of the Company to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or
purchase date until such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06 Notes Redeemed or Purchased in Part. Upon surrender
of a Note that is redeemed or purchased in part, the Company will issue and, upon
receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of
the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the
Note surrendered.
SECTION 3.07 Optional Redemption. (a) At
any time prior to December 15, 2012, the Company may, on one or more occasions, redeem up
to 35% of the aggregate principal amount of Notes (including any Additional Notes) with the Net
Cash Proceeds of one or more sales of Capital Stock (other than Disqualified Stock) of the Company
at a redemption price equal to 108.000% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the Redemption Date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date); provided that
at least 65% of the original aggregate principal amount of the Notes issued on the Closing Date
remains outstanding after each such redemption and the redemption occurs within 180 days after the
closing of the related sale of Capital Stock.
(b) On and after December 15, 2013, the Company may redeem all or, from time to time, a part
of the Notes upon not less than 30 nor more than 60 days’ notice, at the following redemption
prices (expressed as a percentage of principal amount of the Notes), plus accrued and unpaid
interest on the Notes, if any, to the applicable redemption date (subject to the right of holders
of record on the relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the twelve-month period beginning on December 15 of the years indicated
below:
| Year | Percentage | |||
2013 |
104.000 | % | ||
2014 |
102.000 | % | ||
2015 and thereafter |
100.000 | % | ||
(c) At any time prior to December 15, 2013, the Company may also redeem all or a part of the
Notes upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each
Holder’s registered address at a redemption price equal to 100% of the principal
37
amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest to, the date of redemption (the “Redemption Date”), subject to the rights of
Holders of Notes on the relevant record date to receive interest due on the relevant interest
payment date.
(d) All redemptions of the Notes will be made upon not less than 30 days’ nor more than 60
days’ prior notice mailed by first class mail to each Holder’s registered address as provided in
Section 3.03. Unless the Company defaults in the payment of the redemption price, interest will
cease to accrue on the Notes or portions thereof called for redemption on the applicable Redemption
Date.
(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of
Section 3.01 through 3.06 hereof.
SECTION 3.08 Mandatory Redemption. The Company
is not required to make mandatory redemption or sinking fund payments with respect
to the Notes.
ARTICLE 4
COVENANTS
COVENANTS
SECTION 4.01 Payment of Notes. The Company will
pay or cause to be paid the principal of, premium, if any, and interest on the
Notes on the dates and in the manner provided in Section 2.01 hereof and in the Notes. Principal,
premium, if any, and interest will be considered paid on the date due if the Paying Agent, if other
than the Company or a Subsidiary thereof, holds as of 10:00 a.m. New York City on the due date
money deposited by the Company in immediately available funds and designated for and sufficient to
pay all principal, premium, if any, and interest then due.
The Company will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal, interest and premium, if any, at the rate set forth in
Section 2.01 hereof, to the extent lawful.
SECTION 4.02 Maintenance of Office or Agency. The Company will
maintain an office or agency (which may be an office of the Trustee or an
affiliate or an agent of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or upon the Company in
respect of the Notes and the Indenture may be served. The Company will give prompt written notice
to the Trustee of the location, and any change in the location, of such office or agency. If at
any time the Company fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other office or agency.
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The Company hereby designates the Corporate Trust Office of the Trustee as one such office or
agency of the Company.
SECTION 4.03 SEC Reports and Reports to Holders.
(a) Whether or not required by the SEC’s rules and regulations, so long as any Notes
are outstanding, the Company will furnish to the Holders or cause the Trustee to furnish to
the Holders, within the time periods specified in the SEC’s rules and regulations:
(1) all quarterly and annual reports that would be required to be filed with
the SEC on Forms 10-Q and 10-K if the Company were required to file such reports;
and
(2) all current reports that would be required to be filed with the SEC on Form
8-K if the Company were required to file such reports.
All such reports will be prepared in all material respects in accordance with the rules and
regulations applicable to such reports. Each annual report on Form 10-K will include a
report on the Company’s consolidated financial statements by the Company’s certified
independent accountants. Notwithstanding the foregoing, the furnishing or filing of such
reports with the SEC on EDGAR (or any successor system thereto) shall be deemed to
constitute furnishing of such reports with the Trustee.
(b) In addition, the Company will file a copy of each of the reports referred to in
clauses (1) and (2) above with the SEC for public availability within the time periods
specified in the rules and regulations applicable to such reports (unless the SEC will not
accept such a filing) and will post the reports on its website within those time periods.
(c) If the Company is no longer subject to the periodic reporting requirements of the
Exchange Act for any reason, the Company will nevertheless continue filing the reports
specified in the preceding paragraphs of this covenant with the SEC within the time periods
specified above unless the SEC will not accept such a filing. The Company will not take any
action for the purpose of causing the SEC not to accept any such filings. If,
notwithstanding the foregoing, the SEC will not accept the Company’s filings for any reason,
the Company will post the reports referred to in the preceding paragraphs on its website
within the time periods that would apply to a non-accelerated filer if the Company were
required to file those reports with the SEC.
(d) In addition, the Company and the Subsidiary Guarantors agree that, for so long as
any Notes remain outstanding, if at any time they are not required to file with the SEC the
reports required by the preceding paragraphs, they will furnish to the Holders and to
securities analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
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SECTION 4.04 Compliance Certificate.
(a) The Company and each Subsidiary Guarantor (to the extent that such Subsidiary
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each Fiscal Year, an Officers’ Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding Fiscal Year has been
made under the supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under the Indenture, and
further stating, as to each such Officer signing such certificate, that to the best of his
or her knowledge the Company has kept, observed, performed and fulfilled each and every
covenant contained in the Indenture and is not in default in the performance or observance
of any of the terms, provisions and conditions of the Indenture (or, if a Default or Event
of Default has occurred, describing all such Defaults or Events of Default of which he or
she may have knowledge and what action the Company is taking or proposes to take with
respect thereto).
(b) So long as any of the Notes are outstanding, the Company will deliver to the
Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default that
has not been cured, an Officers’ Certificate specifying such Default or Event of Default and
what action the Company is taking or proposes to take with respect thereto.
SECTION 4.05 Taxes. The Company will
pay, and will cause each of its Subsidiaries to pay, prior to delinquency, all
material taxes, assessments, and governmental levies except such as are contested in good faith and
by appropriate proceedings or where the failure to effect such payment is not adverse in any
material respect to the Holders of the Notes.
SECTION 4.06 Stay, Extension and Usury Laws. The Company and
each of the Subsidiary Guarantors covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of the Indenture; and the
Company and each of the Subsidiary Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it will not, by
resort to any such law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.07 Restricted Payments.
(a) The Company will not, and will not permit any Restricted Subsidiary to, directly or
indirectly:
(1) declare or pay any dividend or make any distribution on or with respect to
its Capital Stock (other than (x) dividends or distributions payable solely in
shares of Capital Stock (other than Disqualified Stock) of the Company or in
options, warrants or other rights to acquire shares of such Capital Stock and (y)
pro rata dividends or distributions on equity securities of Restricted
40
Subsidiaries held by minority stockholders) held by Persons other than the
Company or any of its Restricted Subsidiaries;
(2) purchase, call for redemption or redeem, retire or otherwise acquire for
value any shares of Capital Stock (including options, warrants or other rights to
acquire such shares of Capital Stock) of the Company;
(3) make any voluntary or optional principal payment, or voluntary or optional
redemption, repurchase, defeasance, or other acquisition or retirement for value, of
Indebtedness of the Company that is expressly subordinated in right of payment to
the Notes or any Indebtedness of a Subsidiary Guarantor that is expressly
subordinated in right of payment to a Note Guarantee, in each case, prior to the
date that is one year before the Stated Maturity of such subordinated Indebtedness;
or
(4) make any Investment, other than a Permitted Investment, in any Person;
(such payments or any other actions described in clauses (1) through (4) above being collectively
“Restricted Payments”) if, at the time of, and after giving effect to, the proposed Restricted
Payment:
(A) a Default or Event of Default shall have occurred and be continuing,
(B) the Company could not Incur at least $1.00 of Indebtedness under the first
paragraph of part (a) of Section 4.09, or
(C) the aggregate amount of all Restricted Payments made after the Closing Date
would exceed the sum of:
(1) 50% of the aggregate amount of the Adjusted Consolidated Net
Income (or, if the Adjusted Consolidated Net Income is a loss,
minus 100% of the amount of such loss) less the amount of any
net reduction in Investments included pursuant to clause (3) below
that would otherwise be included in Adjusted Consolidated Net Income
accrued on a cumulative basis during the period (taken as one
accounting period) beginning on October 1, 2006 and ending on the
last day of the last fiscal quarter preceding the Transaction Date
for which reports have been filed with the SEC or provided to the
Trustee, plus
(2) the aggregate Net Cash Proceeds received by the Company
after the Closing Date as a capital contribution or from the issuance
and sale of its Capital Stock (other than Disqualified Stock) to a
Person who is not a Subsidiary of the Company, including the Net Cash
Proceeds received by the Company from any issuance or sale permitted
by the Indenture of convertible
41
Indebtedness of the Company subsequent to the Closing Date but
only upon the conversion of such Indebtedness into Capital Stock
(other than Disqualified Stock) of the Company, or from the issuance
to a Person who is not a Subsidiary of the Company of any options,
warrants or other rights to acquire Capital Stock of the Company (in
each case, exclusive of any Disqualified Stock or any options,
warrants or other rights that are redeemable at the option of the
holder, or are required to be redeemed, prior to the Stated Maturity
of the Notes) plus
(3) an amount equal to the net reduction in Investments in any
Person resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances, or other transfers of
assets, in each case, to the Company or any Restricted Subsidiary or
from the Net Cash Proceeds from the sale of any such Investment
(whether or not any such payment or proceeds are included in the
calculation of Adjusted Consolidated Net Income) or from
redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of
“Investments”), not to exceed, in each case, the aggregate amount of
all Investments previously made by the Company or any Restricted
Subsidiary in such Person or Unrestricted Subsidiary.
(b) The provisions of Section 4.07(a) hereof will not prohibit:
(1) the payment of any dividend or redemption of any Capital Stock within 60
days after the related date of declaration or call for redemption if, at said date
of declaration or call for redemption, such payment or redemption would comply with
the preceding paragraph;
(2) the redemption, repurchase, defeasance or other acquisition or retirement
for value of Indebtedness that is subordinated in right of payment to the Notes or
any Note Guarantee with the proceeds of, or in exchange for, Indebtedness Incurred
under clause (3) of the second paragraph of part (a) of Section 4.09;
(3) the repurchase, redemption or other acquisition of Capital Stock of the
Company or a Restricted Subsidiary (or options, warrants or other rights to acquire
such Capital Stock) in exchange for, or out of the proceeds of a capital
contribution or a substantially concurrent offering of, shares of Capital Stock
(other than Disqualified Stock) of the Company (or options, warrants or other rights
to acquire such Capital Stock); provided that such new options, warrants or
other rights are not redeemable at the option of the holder, or required to be
redeemed, prior to the Stated Maturity of the Notes;
(4) the making of any principal payment or the repurchase, redemption,
retirement, defeasance or other acquisition for value of Indebtedness
42
which is subordinated in right of payment to the Notes or any Note Guarantee in
exchange for, or out of the proceeds of a capital contribution or a substantially
concurrent offering of, shares of the Capital Stock (other than Disqualified Stock)
of the Company (or options, warrants or other rights to acquire such Capital Stock);
provided that such new options, warrants or other rights are not redeemable
at the option of the holder, or required to be redeemed, prior to the Stated
Maturity of the Notes;
(5) payments or distributions, to dissenting stockholders required by
applicable law, pursuant to or in connection with a consolidation, merger or
transfer of assets of the Company that complies with the provisions of this
Supplemental Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the property and assets of the Company;
(6) Investments acquired as a capital contribution to, or in exchange for, or
out of the proceeds of a substantially concurrent offering of, Capital Stock (other
than Disqualified Stock) of the Company;
(7) the repurchase of Capital Stock deemed to occur upon the exercise of
options or warrants if such Capital Stock represents all or a portion of the
exercise price thereof or payments in lieu of the issuance of fractional shares of
Capital Stock or withholding to pay for taxes payable by such employee upon such
grant or award;
(8) Investments by any Foreign Subsidiary in any other Foreign Subsidiary;
(9) the repurchase, redemption, retirement or otherwise acquisition of Capital
Stock required by the employee stock ownership programs of the Company or required
or permitted under employee agreements;
(10) other Investments in an amount not to exceed $200.0 million at any time
outstanding;
(11) Permitted Additional Restricted Payments;
(12) the purchase, redemption, cancellation or other retirement for a nominal
value per right of any rights granted to all the holders of common stock of the
Company pursuant to any shareholder rights plan adopted for the purpose of
protecting shareholders from takeover tactics;
(13) the repurchase, redemption or other acquisition of Disqualified Stock of
the Company or its Restricted Subsidiaries in exchange for, or out of the proceeds
of a capital contribution or a substantially concurrent offering of, shares of
Disqualified Stock of the Company (or options, warrants or other rights to acquire
such Disqualified Stock); or
43
(14) the purchase or redemption of any Indebtedness which is subordinated in
right of payment to the Notes or any Note Guarantee (i) at a purchase price not
greater than 101% of the principal amount of such Indebtedness in the event of a
“Change of Control” in accordance with provisions similar to those described in
Section 4.15 or (ii) at a purchase price not greater than 100% of the principal
amount thereof in accordance with the provisions similar to those described in
Section 4.10; provided that, prior to or simultaneously with such purchase
or redemption, the Company has made an Offer to Purchase as provided in such
covenants with respect to the Notes and has completed the repurchase or redemption
of the Notes validly tendered for payment in connection with such Offer to Purchase
in accordance with Section 4.15 and Section 4.10, as applicable
provided that, in the case of clauses (2), (4), (11), (13) and (14) no Default (of the type
described in clauses (1), (2), (9) or (10) under Section 6.01) or Event of Default shall have
occurred and be continuing or occur as a consequence of the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph (other than the
Restricted Payment referred to in clause (2), (7) or (11) thereof or an exchange of Capital Stock
for Capital Stock or Indebtedness referred to in clause (3) or (4) thereof or an Investment
acquired as a capital contribution or in exchange for Capital Stock referred to in clause (6)
thereof) shall be included in calculating whether the conditions of clause (C) of the first
paragraph of this Section 4.07 have been met with respect to any subsequent Restricted Payments,
and the Net Cash Proceeds from any issuance of Capital Stock referred to in clause (3), (4) or (6)
of the preceding paragraph shall not be included in such calculation. In the event the proceeds of
an issuance of Capital Stock of the Company are used for the redemption, repurchase or other
acquisition of the Notes, or Indebtedness that is pari passu with the Notes or any Note Guarantee,
then the Net Cash Proceeds of such issuance shall be included in clause (C) of the first paragraph
of this Section 4.07 only to the extent such proceeds are not used for such redemption, repurchase
or other acquisition of Indebtedness.
For purposes of determining compliance with this Section 4.07, (x) (i) for a Restricted
Payment or series of related Restricted Payments involving in excess of $50.0 million, the amount,
if other than in cash, of any Restricted Payment shall be determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a resolution of the Board of
Directors or (ii) for a Restricted Payment or series of related Restricted Payments involving $50.0
million or less, the amount, if other than in cash, of any Restricted Payment shall be determined
in good faith by the chief financial officer, whose determination shall be conclusive and evidenced
by a certificate to such effect and (y) in the event that a Restricted Payment meets the criteria
of more than one of the types of Restricted Payments described in the above clauses, including the
first paragraph of this Section 4.07, the Company, in its sole discretion, may order and classify,
and from time to time may reclassify, such Restricted Payment if it would have been permitted at
the time such Restricted Payment was made and at the time of such reclassification.
44
SECTION 4.08 Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries
(a) The Company will not, and will not permit any Restricted Subsidiary to, create or
otherwise cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Restricted Subsidiary (other than a
Receivables Subsidiary) to:
(1) pay dividends or make any other distributions permitted by applicable law
on any Capital Stock of such Restricted Subsidiary owned by the Company or any other
Restricted Subsidiary (it being understood that the priority of any preferred stock
in receiving dividends or liquidating distributions prior to the dividends or
liquidating distributions being paid on common stock shall not be deemed a
restriction on the ability to make distributions on Capital Stock);
(2) make loans or advances to the Company or any other Restricted Subsidiary
(it being understood that the subordination of loans or advances made to the Company
or any Restricted Subsidiary to other Indebtedness Incurred by
the Company or any Restricted Subsidiary shall not be deemed a restriction on
the ability to make loans or advances); or
(3) repay any Indebtedness owed to the Company or any other Restricted
Subsidiary or transfer any of its property or assets to the Company or any other
Restricted Subsidiary (it being understood that such transfers shall not include any
type of transfer described in clauses (1) or (2) above or in this clause (3)).
(b) The foregoing provisions shall not restrict any encumbrances or restrictions:
(1) existing on the Closing Date in the Credit Agreement, the Indenture, the
Existing Notes Indenture or any other agreements in effect on the Closing Date, and
any extensions, refinancings, renewals or replacements of such agreements;
provided that the encumbrances and restrictions in any such extensions,
refinancings, renewals or replacements taken as a whole are no less favorable in any
material respect to the Holders than those encumbrances or restrictions that are
then in effect and that are being extended, refinanced, renewed or replaced;
(2) existing under or by reason of applicable law or any applicable rule,
regulation or order;
(3) that are customary non-assignment provisions in contracts, agreements,
leases, permits and licenses;
(4) that are purchase money obligations for property acquired and Capitalized
Lease Obligations that impose restrictions on the property purchased or leased;
45
(5) existing with respect to any Person or the property or assets of such
Person acquired by the Company or any Restricted Subsidiary, existing at the time of
such acquisition and not incurred in contemplation thereof, which encumbrances or
restrictions are not applicable to any Person or the property or assets of any
Person other than such Person or the property or assets of such Person so acquired
and any extensions, refinancings, renewals or replacements thereof; provided
that the encumbrances and restrictions in any such extensions, refinancings,
renewals or replacements taken as a whole are no less favorable in any material
respect to the Holders than those encumbrances or restrictions that are then in
effect and that are being extended, refinanced, renewed or replaced;
(6) in the case of clause (3) of the first paragraph of this Section 4.08:
(A) that restrict in a customary manner the subletting, assignment or
transfer of any property or asset that is a lease, license, conveyance or
contract or similar property or asset,
(B) existing by virtue of any transfer of, agreement to transfer,
option or right with respect to, or Lien on, any property or assets of the
Company or any Restricted Subsidiary not otherwise prohibited by the
Indenture,
(C) arising or agreed to in the normal course of business, not relating
to any Indebtedness, and that do not, individually or in the aggregate,
detract from the value of property or assets of the Company or any
Restricted Subsidiary in any manner material to the Company or any
Restricted Subsidiary; or
(D) pursuant to customary provisions restricting dispositions of real
property interests set forth in any reciprocal easement agreements of the
Company or any Restricted Subsidiary;
(7) with respect to a Restricted Subsidiary and imposed pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or property and assets of, such
Restricted Subsidiary;
(8) relating to a Subsidiary Guarantor and contained in the terms of any
Indebtedness or any agreement pursuant to which such Indebtedness was issued if:
(A) the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary in comparable
financings (as determined by the Company in good faith); and
(B) the Company determines that any such encumbrance or restriction
will not materially affect the Company’s ability to make principal or
interest payments on the Notes;
46
(9) arising from customary provisions in joint venture agreements and other
similar agreements;
(10) existing in the documentation governing any Permitted Securitization or
Permitted Factoring Program; or;
(11) contained in any agreement governing Indebtedness permitted under
clause (8) of the second paragraph of part (a) of Section 4.09.
Nothing contained in this Section 4.08 shall prevent the Company or any Restricted Subsidiary
from (1) creating, incurring, assuming or suffering to exist any Liens otherwise permitted in
Section 4.12 or (2) restricting the sale or other disposition of property or assets of the Company
or any of its Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 4.09 Limitation on Incurrence of Indebtedness
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to,
Incur any Indebtedness (other than the Notes, the Note Guarantees and other Indebtedness
existing on the Closing Date (other than Indebtedness described in clause (1) below, the
incurrence of which will be governed by such clause (1))) and the Company will not permit
any of its Restricted Subsidiaries to issue any Disqualified Stock; provided,
however, that the Company or any Subsidiary Guarantor may Incur Indebtedness
(including, without limitation, Acquired Indebtedness) if, after giving effect to the
Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom,
the Fixed Charge Coverage Ratio would be greater than 2.0:1.0.
Notwithstanding the foregoing, the Company and any Restricted Subsidiary (except as specified
below) may Incur each and all of the following:
(1) the incurrence by the Company and any Subsidiary Guarantor of additional
Indebtedness and letters of credit under Credit Facilities in an aggregate principal
amount at any one time outstanding under this clause (1) (with letters of credit
being deemed to have a principal amount equal to the maximum potential liability of
the Company and such Subsidiary Guarantor thereunder) (together with refinancings
thereof) not to exceed the greater of (A) $1,700.0 million less any amount of such
Indebtedness permanently repaid with the Net Proceeds of Asset Sales as provided
under Section 4.10 and (B) the sum of (i) 85% of the net book value of the inventory
of the Company and its Restricted Subsidiaries and (ii) 85% of the net book value of
the accounts receivable of the Company and its Restricted Subsidiaries, in each
case, determined in accordance with GAAP;
(2) Indebtedness owed to the Company or any Restricted Subsidiary;
provided that (x) any event which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or another Restricted Subsidiary) shall be
deemed, in each case, to constitute an Incurrence of such Indebtedness not
47
permitted by this clause (2) and (y) if the Company or any Subsidiary Guarantor is the obligor
on such Indebtedness, such Indebtedness shall be deemed to be subordinated in right
of payment to the Notes, in the case of the Company, or the Note Guarantee, in the
case of a Subsidiary Guarantor;
(3) Indebtedness issued in exchange for, or the net proceeds of which are used
to refinance or refund, then outstanding Indebtedness including, without limitation,
the Notes and the Existing Notes (other than Indebtedness outstanding under clauses
(1), (2), (5), (6), (7), (8), (9) and (13) and any refinancings thereof) in an
amount not to exceed the amount so refinanced or refunded (plus premiums, accrued
interest, fees and expenses); provided that (a) Indebtedness the proceeds of
which are used to refinance or refund the Notes or Indebtedness that is pari
passu with, or subordinated in right of payment to, the Notes or a Note
Guarantee shall only be permitted under this clause (3) if (x) in case the Notes are
refinanced in part or the Indebtedness to be refinanced is pari passu with the Notes
or a Note Guarantee, such new Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such new Indebtedness is outstanding, is
pari passu with, or expressly subordinate in right of payment to, the remaining
Notes or the Note Guarantee, or (y) in case the Indebtedness to be refinanced is
subordinated in right of payment to the Notes or a Note Guarantee, such new
Indebtedness, by its terms or by the terms of any agreement or instrument pursuant
to which such new Indebtedness is issued or remains outstanding, is expressly made
subordinate in right of payment to the Notes or the Note Guarantee on terms not
materially less favorable in the aggregate to the subordination provisions of the
Indebtedness to be refinanced or refunded, (b) the Average Life of such new
Indebtedness is at least equal to the remaining Average Life of the Indebtedness to
be refinanced or refunded and (c) such new Indebtedness shall not include (i)
Indebtedness of a Subsidiary of the Company that is not a Subsidiary Guarantor that
refinances or refunds Indebtedness of the Company or a Subsidiary Guarantor and (ii)
Indebtedness of the Company or a Restricted Subsidiary that refinances or refunds
Indebtedness of an Unrestricted Subsidiary;
(4) Indebtedness of the Company, to the extent the net proceeds thereof are
(A) used to purchase Notes tendered in an Offer to Purchase made as a result of a
Change in Control or an Optional Redemption or (B) promptly deposited to defease the
Notes as described under Article 8 and Article 12;
(5) Guarantees of Indebtedness of the Company or any Restricted Subsidiary of
the Company by any other Restricted Subsidiary of the Company; provided the
Guarantee of such Indebtedness is permitted by and made in accordance with Section
4.18;
(6) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary course
of
48
business provided, however, that such Indebtedness is
extinguished within five Business Days of Incurrence;
(7) Indebtedness (i) in respect of industrial revenue bonds or other similar
governmental or municipal bonds, (ii) evidencing the deferred purchase price of
newly acquired property or incurred to finance the acquisition of property, plant or
equipment of the Company and its Restricted Subsidiaries (pursuant to purchase money
mortgages or otherwise, whether owed to the seller or a third party)
(provided that, such Indebtedness is incurred within 365 days of the
acquisition of such property, plant or equipment) and (iii) in respect of
Capitalized Lease Obligations; provided that, the aggregate amount of all
Indebtedness outstanding pursuant to this clause shall not at any time exceed the
greater of (x) $200.0 million and (y) 5.0% of Total Assets;
(8) Indebtedness of Foreign Subsidiaries and Guarantees thereof in an aggregate
outstanding principal amount not to exceed $500.0 million at any one time
outstanding;
(9) Indebtedness of a Person existing at the time such Person became a
Restricted Subsidiary, but only if such Indebtedness was not created or incurred in
contemplation of such Person becoming a Restricted Subsidiary;
(10) Indebtedness incurred in the ordinary course of business in connection
with cash pooling arrangements, cash management and other Indebtedness incurred in
the ordinary course of business in respect of netting services, overdraft
protections and similar arrangements in each case in connection with cash management
and deposit accounts;
(11) (x) Permitted Securitization and Standard Securitization Undertakings and
(y) a Permitted Factoring Program;
(12) Indebtedness consisting of (i) the financing of insurance premiums or (ii)
take or pay obligations in supply agreements, in each case in the ordinary course of
business;
(13) Hedging Obligations entered into in the ordinary course of business and
not for speculative purposes;
(14) Indebtedness of the Company and its Subsidiaries representing the
obligation of such Person to make payments with respect to the cancellation or
repurchase of Capital Stock of officers, employees or directors (or their estates)
of the Company or such Subsidiaries pursuant to the terms of employment, severance
or termination agreements, benefit plans or similar documents; and
(15) additional Indebtedness of the Company or any Subsidiary Guarantor (in
addition to Indebtedness permitted under clauses (1) through (14) above) in an
aggregate principal amount outstanding at any time (together with refinancings
thereof) not to exceed $250.0 million.
49
(b) Notwithstanding any other provision of this Section 4.09, the maximum amount of
Indebtedness that may be Incurred pursuant to this Section 4.09 will not be deemed to be
exceeded, with respect to any outstanding Indebtedness due solely to the result of
fluctuations in the exchange rates of currencies. The amount of any particular Indebtedness
incurred in a foreign currency will be calculated based on the exchange rate for such
currency vis-à-vis the U.S. dollar on the date of such incurrence.
(c) For purposes of determining any particular amount of Indebtedness under this
Section 4.09, (x) Indebtedness outstanding under the Credit Agreement on the Closing Date
shall be treated as Incurred pursuant to clause (1) of the second paragraph of part (a) of
this Section 4.09, (y) Guarantees, Liens or obligations with respect to letters of credit
supporting Indebtedness otherwise included in the determination of such particular amount
shall not be included and (z) any Liens granted pursuant to the equal
and ratable provisions referred to in Section 4.12 shall not be treated as
Indebtedness. For purposes of determining compliance with this Section 4.09, in the event
that an item of Indebtedness meets the criteria of more than one of the types of
Indebtedness described above (other than Indebtedness referred to in clause (x) of the
preceding sentence), including under the first paragraph of clause (a), the Company, in its
sole discretion, may classify, and from time to time may reclassify, all or any portion of
such item of Indebtedness.
(d) The Company and the Subsidiary Guarantors will not Incur any Indebtedness if such
Indebtedness is subordinate in right of payment to any other Indebtedness unless such
Indebtedness is also subordinate in right of payment to the Notes (in the case of the
Company) or the Note Guarantees (in the case of any Subsidiary Guarantor), in each case, at
least to the same extent. For purposes of the foregoing, no Indebtedness will be deemed
subordinate in right of payment to any other Indebtedness by virtue of being unsecured.
SECTION 4.10 Limitation on Asset Sales. The Company will not, and will not permit any Restricted Subsidiary to, consummate any Asset
Sale unless:
(1) the consideration received by the Company or such Restricted Subsidiary is at least
equal to the fair market value of the assets sold or disposed of; and
(2) at least 75% of the consideration received consists of (a) cash or Temporary Cash
Investments, (b) the assumption of Indebtedness of the Company or any Restricted Subsidiary
(in each case, other than Indebtedness owed to the Company or any Affiliate of the Company),
provided that the Company or such Restricted Subsidiary is
irrevocably released in writing from all liability under such Indebtedness,
(c) Replacement Assets or (d) a combination of the foregoing.
The Company will, or will cause the relevant Restricted Subsidiary to:
(1) within twelve months after the date of receipt of any Net Cash Proceeds from an
Asset Sale:
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(A) apply an amount equal to such Net Cash Proceeds to permanently repay
Indebtedness under any Credit Facility or other unsubordinated secured Indebtedness
of the Company or any Subsidiary Guarantor or Indebtedness of any other Restricted
Subsidiary, in each case, owing to a Person other than the Company or any Affiliate
of the Company (and to cause a corresponding permanent reduction in commitments if
such repaid Indebtedness was outstanding under the revolving portion of a Credit
Facility); or
(B) invest an equal amount, or the amount not so applied pursuant to clause (A)
(or enter into a definitive agreement committing to so invest within 12 months after
the date of such agreement) in Replacement Assets; and
(2) apply (no later than the end of the 12-month period referred to in clause (1)) any
excess Net Cash Proceeds (to the extent not applied pursuant to clause (1)) as provided in
the following paragraphs of this Section 4.10.
The amount of such excess Net Cash Proceeds required to be applied (or to be committed to be
applied) during such 12-month period as set forth in clause (1) of the preceding sentence and not
applied as so required by the end of such period shall constitute “Excess Proceeds.”
If, as of the first day of any calendar month, the aggregate amount of Excess Proceeds not
theretofore subject to an Offer to Purchase pursuant to this Section 4.10 totals at least $50.0
million, the Company must commence, not later than the last Business Day of such month, and
consummate an Offer to Purchase from the Holders (and, if required by the terms of any Indebtedness
that is pari passu with the Notes (“Pari Passu Indebtedness”), from the holders of such
Pari Passu Indebtedness) on a pro rata basis an aggregate principal amount of Notes (and Pari Passu
Indebtedness) equal to the Excess Proceeds on such date, at a purchase price equal to 100% of their
principal amount, plus, in each case, accrued interest (if any) to the Payment Date. To the extent
that any Excess Proceeds remain after consummation of an Offer to Purchase pursuant to this Section
4.10, the Company may use those Excess Proceeds for any purpose not otherwise prohibited by the
Indenture and the amount of Excess Proceeds shall be reset to zero.
Pending the final application of any Net Proceeds, the Company may temporarily reduce
revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not
prohibited by the Indenture.
SECTION 4.11 Limitation on Transactions with Shareholders and Affiliates
(a) The Company will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into, renew or extend any transaction (including, without limitation, the
purchase, sale, lease or exchange of property or assets, or the rendering of any service)
with any Affiliate of the Company or any Restricted Subsidiary, except upon terms not
materially less favorable to the Company or such Restricted Subsidiary than could be
obtained, at the time of such transaction or, if such transaction is pursuant to a written
agreement, at the time of the execution of the agreement providing therefor, in a comparable
arm’s-length transaction with a Person that is not such a holder or an Affiliate.
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(b) The foregoing limitation does not limit, and shall not apply to:
(1) transactions (A) approved by a majority of the disinterested members of the
Board of Directors or (B) for which the Company or a Restricted Subsidiary delivers
to the Trustee a written opinion of a nationally recognized investment banking,
accounting, valuation or appraisal firm stating that the transaction is fair to the
Company or such Restricted Subsidiary from a financial point of view;
(2) any transaction solely between the Company and any of its Restricted
Subsidiaries or solely among Restricted Subsidiaries;
(3) the payment of regular fees to directors of the Company who are not
employees of the Company and director and officer indemnification arrangements
entered into by the Company in the ordinary course of business of the Company;
(4) transactions with a Person that is an Affiliate of the Company solely
because the Company owns, directly or through a Restricted Subsidiary, an Equity
Interest in, or controls, such Person;
(5) transactions in connection with a Permitted Securitization including
Standard Securitization Undertakings or a Permitted Factoring Program;
(6) any sale of shares of Capital Stock (other than Disqualified Stock) of the
Company, and the granting of registration and other customary rights in connection
therewith;
(7) any Permitted Investments or any Restricted Payments not prohibited by
Section 4.07;
(8) any agreement as in effect or entered into as of the Closing Date (as
disclosed in the Prospectus) or any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) and any
replacement agreement thereto so long as any such amendment or replacement agreement
is not more disadvantageous to the Holders in any material respect than the original
agreement as in effect on the Closing Date;
(9) any employment agreement, change in control/severance agreement, employee
benefit plan (including retirement, health and other benefit plans), officer or
director indemnification agreement or any similar arrangement or compensation
(including bonuses and equity compensation) entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and payments pursuant
thereto;
(10) any tax sharing agreement or payment pursuant thereto, between the Company
and/or one or more Subsidiaries on the one hand, and any other Person with which the
Company or such Subsidiaries are required or permitted to
52
file consolidated tax return or with which the Company or such Subsidiaries are part of a consolidated
group for tax purposes on the other hand, which payments by the Company and the
Restricted Subsidiaries are not in excess of the tax liabilities that would have
been payable by them on a stand-alone basis; and
(11) transactions with customers, suppliers or purchasers or sellers of goods
or services, in each case, in the ordinary course of business of the Company and its
Restricted Subsidiaries and otherwise in compliance with the terms of the Indenture;
provided, that, in the reasonable determination of the Board of
Directors or senior management of the Company, such transactions are on terms
that are no less favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the Company or
such Restricted Subsidiary with an unrelated Person.
(c) Notwithstanding the foregoing, any transaction or series of related transactions
covered by the first paragraph of this Section 4.11 and not covered by clauses (2) through
(10) of this paragraph, (a) the aggregate amount of which exceeds $50.0 million in value,
must be approved or determined to be fair in the manner provided for in clause (1)(A) or (B)
above and (b) the aggregate amount of which exceeds $100.0 million in value, must be
determined to be fair in the manner provided for in clause (1)(B) above.
SECTION 4.12 Limitation on Liens. The Company will not, and will not permit any Restricted Subsidiary to, create, incur, assume or
suffer to exist any Lien on any of its assets or properties of any character (including any shares
of Capital Stock or Indebtedness of any Restricted Subsidiary), which Lien is securing any
Indebtedness, without making effective provision for all of the Notes and all other amounts due
under the Indenture to be directly secured equally and ratably with (or, if the obligation or
liability to be secured by such Lien is subordinated in right of payment to the Notes, prior to)
the obligation or liability secured by such Lien.
The foregoing limitation does not apply to:
(1) Liens existing on the Closing Date;
(2) Liens granted on or after the Closing Date on any assets or Capital Stock
of the Company or its Restricted Subsidiaries created in favor of the Holders;
(3) Liens in connection with a Permitted Securitization or a Permitted
Factoring Program;
(4) Liens securing Indebtedness which is Incurred to refinance secured
Indebtedness which is permitted to be Incurred under clause (3) of the second
paragraph of part (a) of Section 4.09; provided that such Liens do not
extend to or cover any property or assets of the Company or any Restricted
Subsidiary other than the property or assets securing the Indebtedness being
refinanced;
53
(5) Liens to secure Indebtedness permitted under clause (1) of the second
paragraph of part (a) of Section 4.09;
(6) Liens (including extensions and renewals thereof) securing Indebtedness
permitted under clause (7) of the second paragraph of part (a) of Section 4.09;
provided that, (i) such Lien is granted within 365 days after such
Indebtedness is incurred, (ii) the Indebtedness secured thereby does not exceed the
lesser of the cost or the fair market value of the applicable property,
improvements or equipment at the time of such acquisition (or construction) and
(iii) such Lien secures only the assets that are the subject of the Indebtedness
referred to in such clause;
(7) Liens on cash set aside at the time of the Incurrence of any Indebtedness,
or government securities purchased with such cash, in either case, to the extent
that such cash or government securities pre-fund the payment of interest on such
Indebtedness and are held in a collateral or escrow account or similar arrangement
to be applied for such purpose;
(8) Lien on any assets or properties of Foreign Subsidiaries to secure
Indebtedness permitted under clause (8) of the second paragraph of part (a) of
Section 4.09;
(9) Liens on (A) incurred premiums, dividends and rebates which may become
payable under insurance policies and loss payments which reduce the incurred
premiums on such insurance policies and (B) rights which may arise under State
insurance guarantee funds relating to any such insurance policy, in each case
securing Indebtedness permitted to be incurred pursuant to clause (12) of the second
paragraph of part (a) of Section 4.09;
(10) other Liens securing Indebtedness or other obligations permitted under
this Supplemental Indenture and outstanding in an aggregate principal amount not to
exceed $200.0 million; or
(11) Permitted Liens.
SECTION 4.13 Business Activities. The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any
business other than Permitted Businesses.
SECTION 4.14 Corporate Existence. Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect:
(1) its corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents (as the same
may be amended from time to time) of the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and franchises of the Company and its
Subsidiaries; provided, however, that the Company shall not be required to
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preserve any such right, license or franchise, or the corporate, partnership or other
existence of any of its Subsidiaries, if at least two Officers of the Company, one of which
is the Chief Executive Officer or the Chief Financial Officer of the Company, shall
determine that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders.
SECTION 4.15 Repurchase of Notes Upon a Change of Control.
(a) Upon the occurrence of a Change of Control, unless the Company has exercised its right to
redeem all of the Notes in accordance with Section 3.07 hereof, each Holder shall have the right to
require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of
$1,000 in excess thereof) of such Holder’s Notes at a purchase price in cash equal to 101% of the
aggregate principal amount of Notes repurchased plus accrued and unpaid interest, if any, on the
Notes repurchased to the date of purchase (subject to the rights of Holders of Notes on the
relevant record date to receive interest due on the relevant interest payment date) (the
“Change of Control Payment”). Notwithstanding the foregoing, the Company may make its
offer to purchase the Notes as described in this section in advance of a Change of Control,
conditioned upon consummation of such Change of Control, if a definitive agreement in respect of
such anticipated Change of Control is in place as of the time of such offer.
Within 30 days following any Change of Control, unless the Company has exercised its right to
redeem all of the Notes in accordance with Section 3.07 hereof, the Company will mail a notice (the
“Change of Control Offer”) to each Holder, with a copy to the Trustee, describing the
transaction or transactions that constitute the Change of Control and stating:
(1) that a Change of Control has occurred (or, if applicable, that a definitive
agreement in respect of such Change of Control is in place) and that such holder has the
right to require the Company to purchase such holder’s Notes at a purchase price in
cash equal to the Change of Control Payment and that all Notes tendered will be accepted for
payment;
(2) the purchase price and the purchase date, which shall be no earlier than 30 days
and no later than 60 days from the date such notice is mailed (the “Change of Control
Payment Date”);
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of Control Payment,
all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue
interest after the Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to a Change of Control
Offer will be required to transfer the Notes by book-entry transfer to the Paying Agent (or
in the case of any Definitive Notes, to surrender the Notes, with the form entitled “Option
of Holder to Elect Purchase” attached to the Notes completed) at the
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address specified in
the notice prior to the close of business on the third Business Day preceding the Change of
Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day preceding the
Change of Control Payment Date, a facsimile transmission or letter setting forth the name of
the Holder, the principal amount of Notes delivered for purchase, and a statement that such
Holder is withdrawing his election to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of
$1,000.
(b) On the Change of Control Payment Date, the Company will, to the extent lawful:
(1) accept for payment all Notes or portions of Notes (in integral multiples of $1,000)
properly tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions of Notes properly tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officers’ Certificate stating the aggregate principal amount of Notes or
portions of Notes being purchased by the Company.
The Paying Agent will promptly mail to each holder of Notes so tendered the Change of Control
Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be
transferred by book entry) to each holder a new Note equal in principal amount to
any unpurchased portion of the Notes surrendered, if any; provided that each such new Note
will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.
If the Change of Control Payment Date is on or after an interest record date and on or before
the related interest payment date, any accrued and unpaid interest, if any, will be paid to the
Person in whose name a Note is registered at the close of business on such record date, and no
additional interest will be payable to holders who tender pursuant to the Change of Control Offer.
(c) Notwithstanding anything to the contrary in this Section 4.15, the Company will not be
required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.15 applicable to a Change of Control Offer made by the
Company and purchases all Notes properly tendered and not withdrawn under the Change of Control
Offer, or (2) an irrevocable notice of redemption in respect of all of the outstanding Notes has
been given pursuant to Section 3.07 hereof, unless and until there is a default in payment of the
applicable redemption price.
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(d) If holders of not less than 90% in aggregate principal amount of the outstanding Notes
validly tender and do not withdraw such Notes in a Change of Control Offer and the Company, or any
third party making a Change of Control Offer in lieu of the Company as described above, purchases
all of the Notes validly tendered and not withdrawn by such holders,
the Company will have the right, upon not less than 30 nor more than 60 days’ prior notice, given
not more than 30 days following such purchase pursuant to the Change of Control Offer described
above, to redeem all Notes that remain outstanding following such purchase at a redemption price in
cash equal to the applicable Change of Control Payment plus, to the extent not included in the
Change of Control Payment, accrued and unpaid interest, if any, to the date of redemption.
(e) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a Change of Control. To
the extent that the provisions of any securities laws or regulations conflict with this Section
4.15, the Company will comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 4.15 by virtue of such compliance.
SECTION 4.16 Limitation on the Issuances and Sale of Capital Stock of Restricted
Subsidiaries. The Company will not sell, and will not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell, any shares of Capital Stock of a Restricted Subsidiary (including
options, warrants or other rights to purchase shares of such Capital Stock) except:
(1) to the Company or a Wholly Owned Restricted Subsidiary;
(2) issuances of director’s qualifying shares or sales to foreign nationals or
other persons of shares of Capital Stock of foreign Restricted Subsidiaries, in each
case, to the extent required by applicable law;
(3) if, immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary and any
Investment in such Person remaining after giving effect to such issuance or sale
would have been permitted to be made under Section 4.07 if made on the date of such
issuance or sale; or
(4) sales of Capital Stock (other than Disqualified Stock) (including options,
warrants or other rights to purchase shares of such Capital Stock) of a Restricted
Subsidiary, provided that the Company or such Restricted Subsidiary either
(a) applies the Net Cash Proceeds of any such sale in accordance with Section 4.10
or (b) to the extent such sale is of preferred stock, such sale is permitted under
Section 4.09.
SECTION 4.17 Payments for Consent. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder for or as
an inducement to any consent, waiver or amendment of any of the terms or provisions of the
Indenture or the Notes unless such
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consideration is offered to be paid and is paid to all Holders
that consent, waive or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
SECTION 4.18 Limitation on Issuance of Guarantees by Restricted Subsidiaries. The Company will cause each Restricted Subsidiary other than HBI Playtex BATH LLC, HBI
Receivables LLC, and other than any Restricted Subsidiary that is a Foreign Subsidiary or an
Immaterial Subsidiary to execute and deliver a supplemental indenture to the Indenture providing
for a Guarantee (a “Subsidiary Guarantee”) of payment of the Notes by such Restricted
Subsidiary.
The Company will not permit any Restricted Subsidiary which is not a Subsidiary Guarantor,
directly or indirectly, to Guarantee any Indebtedness (“Guaranteed Indebtedness”) of the
Company or any other Restricted Subsidiary (other than a Foreign Subsidiary or an Immaterial
Subsidiary), unless (a) such Restricted Subsidiary promptly executes and delivers a supplemental
indenture to the Indenture providing for a Guarantee (also a “Subsidiary Guarantee”) of
payment of the Notes by such Restricted Subsidiary and (b) such Restricted Subsidiary waives and
will not in any manner whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company or any other
Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Subsidiary
Guarantee until the Notes have been paid in full.
If the Guaranteed Indebtedness is (A) pari passu in right of payment with the Notes or any
Note Guarantee, then the Guarantee of such Guaranteed Indebtedness shall be pari passu in right of
payment with, or subordinated to, the Subsidiary Guarantee or (B) subordinated in right
of payment to the Notes or any Note Guarantee, then the Guarantee of such Guaranteed
Indebtedness shall be subordinated in right of payment to the Subsidiary Guarantee to an extent
that is not materially less favorable than that the Guaranteed Indebtedness is subordinated to the
Notes or the Note Guarantee.
Notwithstanding the foregoing, any Note Guarantee by any Subsidiary Guarantor may provide by
its terms that it shall be automatically and unconditionally released and discharged upon:
(1) any sale, exchange or transfer, to any Person not an Affiliate of the Company, of
Capital Stock of such Subsidiary Guarantor after which such Subsidiary Guarantor no longer
is a Restricted Subsidiary of the Company, or the sale of all or substantially all the
assets of such Subsidiary Guarantor (which sale, exchange or transfer is not prohibited by
the Indenture), in each case, so long as such entity does not guarantee any other
Indebtedness of the Company or any of its Restricted Subsidiaries following such sale,
exchange or transfer;
(2) the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in
accordance with the terms of the Indenture; or
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(3) the release or discharge of the Guarantee which resulted in the creation of such
Subsidiary Guarantee, except a discharge or release by or as a result of payment under such
Guarantee.
SECTION 4.19 Changes in Covenants when Notes Rated Investment Grade.
(a) If on any date following the Closing Date: (i) the Notes are rated Baa3 or better
by Moody’s and BBB- or better by S&P (or, if either such entity ceases to rate the Notes for
reasons outside of the control of the Company, the equivalent investment grade credit rating
from any other “nationally recognized statistical rating organization” within the meaning of
Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a replacement
agency); and (ii) no Default or Event of Default shall have occurred and be continuing,
then, beginning on that day and subject to the provisions of the following paragraph, the
covenants specifically listed under the following sections in this Supplemental Indenture
will be suspended:
(1) Section 4.07;
(2) Section 4.08;
(3) Section 4.09;
(4) Section 4.10;
(5) Section 4.11; and
(6) clause (3) of Section 5.01(a).
(b) During any period that the foregoing covenants have been suspended, the Company’s
Board of Directors may not designate any of its Subsidiaries as Unrestricted Subsidiaries.
(c) Notwithstanding the foregoing, if the rating assigned by either such rating agency
should subsequently decline to below Baa3 or BBB-, respectively, the foregoing covenants
will be reinstituted as of and from the date of such rating decline. Calculations under the
reinstated Section 4.07 or Section 4.09 covenants will be made as if Section 4.07 or Section
4.09, as the case may be, had been in effect since the Closing Date except that no Default
will be deemed to have occurred solely by reason of a Restricted Payment or incurrence of
Indebtedness made while such relevant covenant was suspended and it being understood that no
actions taken by (or omissions of) the Company or any of its Restricted Subsidiaries during
the suspension period shall constitute a Default or an Event of Default under the covenants
listed in Section 4.19(a)(1) through (6) above.
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ARTICLE 5
SUCCESSORS
SUCCESSORS
SECTION 5.01 Consolidation, Merger and Sale of Assets.
(a) The Company will not (1), directly or indirectly, consolidate or merge with or into
another Person (whether or not the Company is the surviving corporation), or (2) sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all of the
property or assets of the Company and its Restricted Subsidiaries taken as a whole, in one
or more related transactions, to another Person, unless:
(1) it shall be the continuing Person, or the Person (if other than it) formed
by such consolidation or into which it is merged or that acquired or leased such
property and assets (the “Surviving Person”) shall be a corporation, limited
partnership, limited liability company or other entity organized and validly
existing under the laws of the United States of America or any jurisdiction thereof
and shall expressly assume, by a supplemental indenture, executed and delivered to
the Trustee, all of the Company’s obligations under the Indenture and the Notes;
provided, however , that if the Surviving Person is not a corporation, a
corporation that has no material assets or liabilities other than the Notes shall
become a co-issuer of the Notes pursuant to a supplemental indenture duly executed
by the Trustee;
(2) immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction on a pro forma basis
either (a) the Company (or the Surviving Person, if applicable) could Incur at least
$1.00 of Indebtedness under the first paragraph of part (a) of Section 4.09 or (b)
the Company’s (or the Surviving Person’s, if applicable) Fixed Charge Coverage Ratio
is greater than that of the Company prior to the consummation of such transaction;
provided, however, that this clause (a)(3) does not apply if, in the good
faith determination of the Board of Directors, whose determination shall be
evidenced by a resolution of the Board of Directors, the principal purpose of such
transaction is to change the state of incorporation of the Company and any such
transaction shall not have as one of its purposes the evasion of the foregoing
limitations; and
(4) the Company will have delivered to the Trustee an Officers’ Certificate
(attaching the arithmetic computations to demonstrate compliance with clause (3) of
this paragraph) and an Opinion of Counsel, each stating that such transaction and,
if a supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of the Indenture, that
all conditions precedent in the Indenture relating to such transaction have been
satisfied and that supplemental indenture is enforceable;
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(b) No Subsidiary Guarantor will consolidate with, merge with or into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its property and assets
(as an entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into it unless:
(1) it shall be the continuing Person, or the Person (if other than it) formed
by such consolidation or into which it is merged or that acquired or leased such
property and assets shall expressly assume, by a supplemental indenture, executed
and delivered to the Trustee, all of such Subsidiary Guarantor’s obligations under
its Note Guarantee;
(2) immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing; and
(3) the Company will have delivered to the Trustee an officers’ certificate and
an opinion of counsel, each stating that such transaction and such supplemental
indenture comply with the applicable provisions of the Indenture, that all
conditions precedent in the Indenture relating to such transaction have been
satisfied and that such supplemental indenture is enforceable;
provided that the foregoing requirements of this Section 5.01(b) shall not apply to
a consolidation or merger of any Subsidiary Guarantor with and into the Company or any other
Subsidiary Guarantor, so long as the Company or such Subsidiary Guarantor survives such
consolidation or merger.
SECTION 5.02 Successor Corporation Substituted. Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in a transaction that is
subject to, and that complies with the provisions of, Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to,
and be substituted for (so that from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of the Indenture referring to the “Company” shall
refer instead to the successor corporation and not to the Company), and may exercise every right
and power of the Company under the Indenture with the same effect as if such successor Person had
been named as the Company herein; provided, however, that the predecessor Company
shall not be relieved from the obligation to pay the principal of and interest on the Notes except
in the case of a sale or other disposition of all or substantially all of the properties or assets
of the Company (determined on a consolidated basis for the Company and its Subsidiaries), in one or
more related transactions subject to, and in compliance with the provisions of, Section 5.01
hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default. Each of the following is an “Event of Default:”
(1) default for 30 days in the payment when due of interest on the Notes;
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(2) default in the payment when due (at maturity, upon redemption or otherwise) of the
principal of, or premium, if any, on the Notes;
(3) (A) failure by the Company or any of its Restricted Subsidiaries for 30 days after
notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding voting as a single class to comply with the provisions
of Section 4.15 or (B) failure by the Company or any of its Restricted Subsidiaries to
comply with the provisions of Section 5.01 hereof;
(4) failure by the Company or any of its Restricted Subsidiaries for 30 days after
notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding voting as a single class to comply with the provisions
of Section 4.07, Section 4.09 or Section 4.10;
(5) failure by the Company or any of its Restricted Subsidiaries for 60 days after
notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding voting as a single class to comply with any of the
other agreements in the Indenture;
(6) default under any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or Guarantee now exists or is created after the Closing Date, if that default:
(A) is caused by a failure to pay principal of, or interest or premium, if any,
on, such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default; or
(B) results in the acceleration of such Indebtedness prior to its express
maturity,
and, in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness or the maturity of which has been so
accelerated, aggregates $100 million or more;
(7) failure by the Company or any of its Restricted Subsidiaries to pay final judgments
entered by a court or courts of competent jurisdiction aggregating in excess of $100
million, which judgments are not paid, discharged or stayed for a period of 60 days;
(8) except as permitted by the Indenture, any Note Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full force and
effect or any Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor denies or disaffirms its obligations under its Note Guarantee;
(9) the Company or any of its Restricted Subsidiaries that would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:
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(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an involuntary
case,
(C) consents to the appointment of a custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors; and
(10) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:
(A) is for relief against the Company or any of its Restricted Subsidiaries
that is a Significant Subsidiary in an involuntary case;
(B) appoints a custodian of the Company or any of its Restricted Subsidiaries
that is a Significant Subsidiary or for all or substantially all of the property of
the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary;
or
(C) orders the liquidation of the Company or any of its Restricted Subsidiaries
that is a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days.
SECTION 6.02 Acceleration. In the case of an Event of Default specified in clause (9) or (10) of Section 6.01 hereof that
occurs with respect to the Company, the principal of, premium, if any, and accrued interest on the
Notes then outstanding shall automatically become due and payable immediately without any
declaration or other act on the part of the Trustee or any Holder. If any other Event of Default
occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes, then outstanding, by written notice to the Company (and to
the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such
Holders shall, declare the principal of, premium, if any, and accrued interest on the Notes to be
immediately due and payable. Upon a declaration of acceleration, such principal of, premium, if
any, and accrued interest shall be immediately due and payable. In the event of a declaration of
acceleration because an Event of Default set forth in clause (6) above has occurred and is
continuing, such declaration of acceleration shall be automatically rescinded and annulled if the
event of default triggering such Event of Default pursuant to clause (6) shall be remedied or cured
by the Company or the relevant Restricted Subsidiary or waived by the holders of the relevant
Indebtedness within 60 days after the declaration of acceleration with respect thereto.
SECTION 6.03 Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to
collect the payment of principal, premium and interest on the Notes or to enforce the performance
of any provision of the Notes or the Indenture.
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The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note
in exercising any right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04 Waiver of Past Defaults. The Holders of at least a majority in principal amount of the outstanding Notes by written
notice to the Company and to the Trustee may waive all past defaults and rescind and annul a
declaration of acceleration and its consequences if (x) all existing Events of Default, other than
the nonpayment of the principal of, premium, if any, and accrued interest on the Notes that have
become due solely by such declaration of acceleration, have been cured or waived and (y) the
rescission would not conflict with any judgment or decree of a court of competent jurisdiction.
Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of the Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05 Control by Majority. The Holders of at least a majority in aggregate principal amount of the outstanding Notes may
direct the time, method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse
to follow any direction that conflicts with law or the Indenture or that may involve the Trustee
in personal liability and may take any other action it deems proper that is not inconsistent with
any such direction received from Holders of Notes.
SECTION 6.06 Limitation on Suits. Except to enforce the right to receive payment of principal, premium, if any, or interest when
due, no Holder may pursue any remedy with respect to the Indenture or the Notes unless:
(1) the Holder gives the Trustee written notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of outstanding Notes make
a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer the Trustee indemnity satisfactory to the Trustee
against any costs, liability or expense;
(4) the Trustee does not comply with the request within 60 days after receipt of the
request and the offer of indemnity; and
(5) during such 60-day period, the Holders of a majority in aggregate principal amount
of the outstanding Notes do not give the Trustee a direction that is inconsistent with the
request.
A Holder of a Note may not use the Indenture to prejudice the rights of another Holder of a
Note or to obtain a preference or priority over another Holder of a Note.
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SECTION 6.07 Rights of Holders of Notes to Receive Payment. Notwithstanding any
other provision of the Indenture, the right of any Holder of a Note to receive payment of
principal, premium, if any and interest, on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.08 Collection Suit by Trustee. If an Event of Default specified in Section
6.01(1) or (2) occurs and is continuing, the Trustee is authorized to recover judgment in its own
name and as Trustee of an express trust against the Company for the whole amount of principal of,
premium, if any, and interest remaining unpaid on the Notes and interest on overdue principal and,
to the extent lawful, interest and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim. The Trustee is authorized to file
such proofs of claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any
judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors
or its property and shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the
event that the Trustee shall consent to the making of such payments directly to the Holders, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 of the Base Indenture. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts
due the Trustee under Section 7.7 of the Base Indenture out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any
Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10 Priorities. If the Trustee collects any money pursuant to this
Article 6, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under Section 7.7 of
the Base Indenture, including payment of all compensation, reasonable expenses and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of collection;
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Second: to Holders for amounts due and unpaid on the Notes for principal, premium, if
any, and interest, ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium, if any, and interest, respectively; and
Third: to the Company or to such party as a court of competent jurisdiction shall
direct.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this
Section 6.10.
SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of any right or
remedy under the Indenture or in any suit against the Trustee for any action taken or omitted by it
as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the
then outstanding Notes.
ARTICLE 7
[RESERVED]
[RESERVED]
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance. The Company
may, any time, at the option of its Board of Directors evidenced by a resolution set forth in an
Officers’ Certificate, elect to have either Section 8.02 or 8.03 hereof be applied to all
outstanding Notes and the Note Guarantees upon compliance with the conditions set forth below in
this Article 8.
SECTION 8.02 Legal Defeasance and Discharge. Upon the Company’s exercise under
Section 8.01 hereof of the option applicable to this Section 8.02, the Company and each of the
Subsidiary Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from their obligations with respect to all outstanding
Notes (including the Note Guarantees) on the date the conditions set forth below are satisfied
(hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the
Company and the Subsidiary Guarantors will be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will
thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other
Sections of this Supplemental Indenture referred to in clauses (1) and (2) below, and to have
satisfied all their other obligations under such Notes, the Note Guarantees and the Indenture (and
the Trustee, on demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which will survive until otherwise
terminated or discharged hereunder:
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(1) the rights of Holders of outstanding Notes to receive payments in respect of the
principal of, or interest or premium, if any, on such Notes when such payments are due from
the trust referred to in Section 8.04 hereof;
(2) the Company’s obligations with respect to such Notes under Article 2 and Section
4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company’s and the Subsidiary Guarantors’ obligations in connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.
SECTION 8.03 Covenant Defeasance. Upon the Company’s exercise under Section 8.01
hereof of the option applicable to this Section 8.03, the provisions of this Supplemental Indenture
will no longer be in effect with respect to clause (3) of the first paragraph under Section 5.01(a)
and all the covenants described herein under Article 4 (hereinafter “Covenant Defeasance”)
and clause (3) under Section 6.01 with respect to such clause (3) of the first paragraph under
Section 5.01(a), clauses (4) and (5) under Section 6.01 with respect to such other covenants and
clauses (6) and (7) under Section 6.01 shall be deemed not to be Events of Default upon, among
other things, the deposit with the Trustee, in trust, of money and/or U.S. Government Obligations
that through the payment of interest and principal in respect thereof in accordance with their
terms will provide money in an amount sufficient to pay the principal of, premium, if any, and
accrued interest on the Notes on the Stated Maturity of such payments in accordance with the terms
of the Indenture and the Notes, the satisfaction of the provisions described in clauses 2(B), (3)
and (7) of Section 8.04 and the delivery by the Company to the Trustee of an Opinion of Counsel to
the effect that, among other things, the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance of certain covenants and
Events of Default and will be subject to federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit and defeasance had not
occurred. Upon such an occurrence the Notes will thereafter be deemed not “outstanding” for the
purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences
of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for
all other purposes hereunder (it being understood that such Notes will not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes and Note Guarantees, the Company and the Subsidiary Guarantors may omit to comply
with and will have no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any
such covenant or by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply will not constitute a Default or an Event of
Default under Section 6.01 hereof, but, except as specified above, the remainder of the Indenture
and such Notes and Note Guarantees will be unaffected thereby.
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In the event that the Company exercises its option to omit compliance with certain covenants
and provisions of the Indenture with respect to the Notes as described in the immediately preceding
paragraph and the Notes are declared due and payable because of the occurrence of an Event of
Default that remains applicable, the amount of money and/or U.S. Government Obligations on deposit
with the Trustee will be sufficient to pay amounts due on the Notes at the time of their Stated
Maturity but may not be sufficient to pay amounts due on the Notes at the time of the acceleration
resulting from such Event of Default. However, the Company will remain liable for such payments and
the Company’s obligations or any Subsidiary Guarantor’s Note Guarantee with respect to such
payments will remain in effect.
SECTION 8.04 Conditions to Legal or Covenant Defeasance. In order to exercise either
Legal Defeasance or Covenant Defeasance under either Section 8.02 or 8.03:
(1) The Company must deposit with the Trustee, in trust, money and/or U.S. Government
Obligations that through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay the principal
of, premium, if any, and accrued interest on the Notes on the Stated Maturity of such
payments in accordance with the terms of the Indenture and the Notes;
(2) The Company must have delivered to the Trustee
(A) either (x) an Opinion of Counsel to the effect that Holders will not
recognize income, gain or loss for federal income tax purposes as a result of the
Company’s exercise of its option under this Article 8 and will be subject to federal
income tax on the same amount and in the same manner and at the same times as would
have been the case if such deposit, Defeasance and discharge had not occurred, which
Opinion of Counsel must be based upon (and accompanied by a copy of) a ruling of the
Internal Revenue Service to the same effect unless there has been a change in
applicable federal income tax law after the Closing Date such that a ruling is no
longer required or (y) a ruling directed to the Trustee received from the Internal
Revenue Service to the same effect as the aforementioned Opinion of Counsel and (B)
an officer’s certificate to the effect that the deposit was not made with the intent
of preferring holders of the Notes over any other creditors with the intent of
defeating, hindering, delaying or defrauding creditors of the Company or others;
(3) immediately after giving effect to such deposit on a pro forma basis, no Event of
Default, or event that after the giving of notice or lapse of time or both would become an
Event of Default, shall have occurred and be continuing on the date of such deposit, and
such deposit shall not result in a breach or violation of, or constitute a default under,
any other agreement or instrument to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries is bound;
(4) such Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under, any material agreement or instrument (other
than the Indenture) to which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries is bound;
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(5) the Company must deliver to the Trustee an Officers’ Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders of Notes over
the other creditors of the Company with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others;
(6) the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance have been complied with; and
(7) if at such time the Notes are listed on a national securities exchange, the Company
must deliver to the Trustee an Opinion of Counsel to the effect that the Notes will not be
delisted as a result of such deposit, Defeasance and discharge.
provided, that notwithstanding the foregoing, in order to exercise Covenant Defeasance under
Section 8.03, the Company must only satisfy those conditions of this Section 8.04 that are
specifically identified in Section 8.03 hereof and such other conditions required by Section 8.03.
SECTION 8.05 Deposited Money and U.S. Government to Obligations be Held in Trust; Other
Miscellaneous Provisions. Subject to Section 8.06 hereof, all money and non-callable U.S.
Government Obligations (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant
to Section 8.04 hereof in respect of the outstanding Notes will be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and the Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee
may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, but such money need not be segregated from other funds
except to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against the cash or non-callable U.S. Government Obligation deposited pursuant to
Section 8.04 hereof or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to
the Company from time to time upon the request of the Company any money or non-callable U.S.
Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof),
are in excess of the amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06 Repayment to Company. Any money deposited with the Trustee or any
Paying Agent, or then held by the Company, in trust pursuant to Section 8.04 or Section 12.01 for
the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed
for two years after such principal, premium, if any, or interest has become due and payable shall
be paid to the Company on its request or (if then held by the Company) will be
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discharged from such trust; and the Holder of such Note will thereafter be permitted to look
only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee thereof, will thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to be published once,
in The New York Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which will not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 8.07 Reinstatement. If the Trustee or Paying Agent is unable to apply any
United States dollars or non-callable U.S. Government Obligations in accordance with Section 8.02
or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then the Company’s and
the Subsidiary Guarantors’ obligations under the Indenture and the Notes and the Note Guarantees
will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however,
that, if the Company makes any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Company will be subrogated to the rights of the
Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01 Without Consent of Holders of Notes. Notwithstanding Section 9.02 of
this Supplemental Indenture, without the consent of any Holder of Notes, the Company, the
Subsidiary Guarantors and the Trustee may amend or supplement the Indenture, the Notes or the Note
Guarantees:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of certificated
Notes;
(3) to conform the text of the Indenture to any provisions of the “Description of
notes” section of the Prospectus to the extent that a portion of that “Description of notes”
section of the Prospectus was intended to be a verbatim recitation of the Indenture or the
Notes;
(4) to provide for the issuance of additional Notes under the Indenture to the extent
otherwise so permitted under the terms of the Indenture;
(5) to comply with the provisions of Section 4.18 and Article 5 hereof;
(6) to comply with any requirements of the SEC in connection with the qualification of
the Indenture under the Trust Indenture Act;
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(7) to evidence and provide for the acceptance of appointment by a successor Trustee;
(8) to add a Subsidiary Guarantor; or
(9) to make any change that, in the good faith opinion of the Board of Directors, does
not materially and adversely affect the rights of any Holder.
Upon the request of the Company and upon receipt by the Trustee of the documents described in
Section 13.04 hereof, the Trustee will join with the Company and the Subsidiary Guarantors in the
execution of any such amended or supplemental indenture, but the Trustee will not be obligated to
enter into such amended or supplemental indenture that affects its own rights, duties or immunities
under the Indenture or otherwise.
SECTION 9.02 With Consent of Holders of Notes. Except as provided below in this
Section 9.02, the Company, the Subsidiary Guarantors and the Trustee may amend or supplement the
Indenture (including, without limitation, Section 4.10 and 4.15 hereof), the Note Guarantees and
the Notes with the consent of the Holders of at least a majority in aggregate principal amount of
the Notes (including, without limitation, Additional Notes, if any) then outstanding (including,
without limitation, consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the principal of,
premium, if any, or interest on the Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of the Indenture or the Note Guarantees
or the Notes may be waived with the consent of the Holders of a majority in aggregate principal
amount of the then outstanding Notes (including, without limitation, Additional Notes, if any)
voting as a single class (including, without limitation, consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes). Section 2.03 hereof shall
determine which Notes are considered to be “outstanding” for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental indenture, and upon the filing with
the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section 13.04 hereof, the
Trustee will join with the Company and the Subsidiary Guarantors in the execution of such amended
or supplemental indenture unless such amended or supplemental indenture directly affects the
Trustee’s own rights, duties or immunities under the Indenture or otherwise, in which case the
Trustee may in its discretion, but will not be obligated to, enter into such amended or
supplemental Indenture.
It is not necessary for the consent of the Holders of Notes under this Section 9.02 to approve
the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such
consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the
Company will mail to the Holders of Notes affected thereby a notice briefly describing the
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amendment, supplement or waiver. Any failure of the Company to mail such notice, or any
defect therein, will not, however, in any way impair or affect the validity of any such amendment,
supplement or waiver. However, without the consent of each Holder affected, an amendment,
supplement or waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) change the Stated Maturity of the principal of, or any installment of interest on,
any Note;
(2) reduce the principal amount of or premium, if any, or interest on, any Note;
(3) change the optional Redemption Dates or optional redemption prices of the Notes
from that stated under Section 3.07;
(4) change the place or currency of payment of principal of, or premium, if any, or
interest on, any Note;
(5) impair the right to institute suit for the enforcement of any payment on or after
the Stated Maturity (or, in the case of a redemption, on or after the Redemption Date) of
any Note;
(6) waive a default in the payment of principal of, premium, if any, or interest on the
Notes (other than a rescission of acceleration of the Notes to the extent that such
acceleration was initially instituted pursuant to a vote of the Holders);
(7) release any Subsidiary Guarantor from its Note Guarantee, except as provided in the
Indenture;
(8) amend or modify any of the provisions of the Indenture in any manner which
subordinates the Notes issued thereunder in right of payment to any other Indebtedness of
the Company or which subordinates any Note Guarantee in right of payment to any other
Indebtedness of the Subsidiary Guarantor issuing any such Note Guarantee; or
(9) reduce the percentage or aggregate principal amount of outstanding Notes the
consent of whose Holders is necessary for waiver of compliance with certain provisions of
the Indenture or for waiver of certain defaults.
SECTION 9.03 Compliance with Trust Indenture Act. Every amendment or supplement to
the Indenture or the Notes will be set forth in an amended or supplemental indenture that complies
with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents. Until an amendment, supplement or
waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note.
However, any such Holder of a Note or subsequent Holder of a Note may revoke the
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consent as to its Note if the Trustee receives written notice of revocation before the date
the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
For purposes of the Indenture, the consent of the Holder of a Global Security shall be deemed
to include any consent delivered by any member of, or participant in, any Depositary or DTC, any
nominees thereof and their respective successors and assigns, or such other depository institution
hereinafter appointed by the Company (“Depository Entity”) by electronic means in accordance with
the Automated Tender Offer Procedures system or other customary procedures of, and pursuant to
authorization by, such Depository Entity.
The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to give their consent or take any other action required or
permitted to be taken pursuant to the Indenture. If a record date is fixed, then notwithstanding
the first paragraph of this Section 9.04, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to give such consent or
to revoke any consent previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall become valid or effective
more than 120 days after such record date.
Any Holder entitled hereunder to give, make or take any action under the Indenture with regard
to any particular Note may do so, or duly appoint any Person or Persons as its agent or agents to
do so, with regard to all or any part of the principal amount of such Note.
SECTION 9.05 Notation on or Exchange of Notes. The Trustee may place an appropriate
notation about an amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.
Any consent of any Holder of Notes may include, without limitation, any consent obtained in
connection with a tender offer or exchange offer for, or purchase of, Notes.
Failure to make the appropriate notation or issue a new Note will not affect the validity and
effect of such amendment, supplement or waiver.
SECTION 9.06 Trustee to Sign Amendments, etc. The Trustee will sign any amended or supplemental indenture authorized pursuant to this
Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. The Company may not sign an amended or supplemental indenture until
its Board of Directors approves it. In executing any amended or supplemental indenture, the
Trustee will be provided with and (subject to Section 7.1 of the Base Indenture) will be fully
protected in relying upon, in addition to the documents required by Section 13.04 hereof, an
Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or
supplemental indenture is authorized or permitted by the Indenture.
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ARTICLE 10
[RESERVED]
[RESERVED]
ARTICLE 11
NOTE GUARANTEES
NOTE GUARANTEES
SECTION 11.01 Guarantee.
(a) Subject to this Article 11, each of the Subsidiary Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of the Indenture, the Notes or the obligations of the Company
hereunder or thereunder, that:
(1) the principal of, premium, if any, and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on the Notes, if
any, if lawful, and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, that same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Subsidiary Guarantors will be jointly and severally obligated to pay the same
immediately. Each Subsidiary Guarantor agrees that this is a guarantee of payment and not a
guarantee of collection.
(b) The Subsidiary Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the Notes or
the Indenture, the absence of any action to enforce the same, any waiver or consent by any
Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of a Subsidiary
Guarantor. Each Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenant that this Note Guarantee will not be discharged except
by complete performance of the obligations contained in the Notes and the Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to return to the
Company, the Subsidiary Guarantors or any custodian, trustee, liquidator or other
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similar
official acting in relation to either the Company or the Subsidiary Guarantors, any amount
paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore
discharged, will be reinstated in full force and effect.
(d) Each Subsidiary Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. Each Subsidiary Guarantor further
agrees that, as between the Subsidiary Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed hereby, and (2) in the event of any declaration of
acceleration of such obligations as provided in Article 6 hereof, such obligations (whether
or not due and payable) will forthwith become due and payable by the Subsidiary Guarantors
for the purpose of this Note Guarantee, in each case subject to any rescission of any such
acceleration pursuant to Section 6.04. The Subsidiary Guarantors will have the right to
seek contribution from any non-paying Subsidiary Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Note Guarantee.
SECTION 11.02 Intentionally Omitted
SECTION 11.03 Limitation on Subsidiary Guarantor Liability. Each Subsidiary
Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of
all such parties that the Note Guarantee of such Subsidiary Guarantor not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Subsidiary
Guarantors hereby irrevocably agree that the obligations of such Subsidiary Guarantor will be
limited to the maximum amount that will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Subsidiary Guarantor that are relevant under such laws,
and after giving effect to any collections from, rights to receive contribution from or payments
made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under this Article 11, result in the obligations of such Subsidiary Guarantor
under its Note Guarantee not constituting a fraudulent transfer or conveyance.
SECTION 11.04 Execution and Delivery of Note Guarantee. To evidence its Note
Guarantee set forth in Section 11.01 hereof, each Subsidiary Guarantor hereby agrees that a
notation of such Note Guarantee substantially in the form attached as Exhibit B hereto will
be endorsed by an Officer of such Subsidiary Guarantor on each Note authenticated and delivered by
the Trustee and that the Indenture will be executed on behalf of such Subsidiary Guarantor by one
of its Officers.
Each Subsidiary Guarantor hereby agrees that its Note Guarantee set forth in Section 11.01
hereof will remain in full force and effect notwithstanding any failure to endorse on each Note a
notation of such Note Guarantee.
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If an Officer whose signature is on the Indenture or on the Note Guarantee no longer holds
that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed,
the Note Guarantee will be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof hereunder, will
constitute due delivery of the Note Guarantee set forth in the Indenture on behalf of the
Subsidiary Guarantors.
SECTION 11.05 Subsidiary Guarantors May Consolidate, etc., on Certain Terms. Except
as otherwise provided in this Section 11.05, no Subsidiary Guarantor will consolidate with, merge
with or into, or sell, convey, transfer, lease or otherwise dispose of all or substantially all of
its property and assets (as an entirety or substantially an entirety in one transaction or a series
of related transactions) to, any Person or permit any Person to merge with or into it unless:
(1) it shall be the continuing Person, or the Person (if other than it) formed by such
consolidation or into which it is merged or that acquired or leased such property and assets
shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee,
all of such Subsidiary Guarantor’s obligations under its Note Guarantee;
(2) immediately after giving effect to such transaction, no Default or Event of Default
shall have occurred and be continuing; and
(3) the Company will have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such transaction and such supplemental indenture
comply with the applicable provisions of the Indenture, that all conditions precedent in the
Indenture relating to such transaction have been satisfied and that such supplemental
indenture is enforceable.
In case of any such consolidation, merger, sale or disposition and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the Trustee and
substantially in the form of Exhibit C hereto, of the Note Guarantee endorsed upon the
Notes and the due and punctual performance of all of the covenants and conditions of the Indenture
to be performed by the Subsidiary Guarantor, such successor Person will succeed to and be
substituted for the Subsidiary Guarantor with the same effect as if it had been named herein as a
Subsidiary Guarantor. Such successor Person thereupon may cause to be signed any or all of the
Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note Guarantees so issued
will in all respects have the same legal rank and benefit under the Indenture as the Note
Guarantees theretofore and thereafter issued in accordance with the terms of the Indenture as
though all of such Note Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses (1), (2) and (3)
above, the foregoing requirements of this Section 11.05 shall not apply to a consolidation or
merger of any Subsidiary Guarantor with and into the Company or any other Subsidiary
Guarantor, so long as the Company or such Subsidiary Guarantor survives such consolidation or
merger.
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SECTION 11.06 Releases.
The Note Guarantee of a Subsidiary Guarantor will be released, and such Subsidiary Guarantor
will be released from and relieved of all of its obligations under its Note Guarantee and the
Indenture:
| (1) | in connection with any sale, exchange, disposition or transfer of a majority of the Capital Stock of that Subsidiary Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, if the sale, disposition or transfer does not violate the first paragraph of Section 4.10 and so long as such entity does not guarantee any other Indebtedness of the Company or any of its Restricted Subsidiaries following such sale, exchange or transfer; | ||
| (2) | if the Company designates any Restricted Subsidiary that is a Subsidiary Guarantor to be an Unrestricted Subsidiary in accordance with the applicable provisions of the Indenture; or | ||
| (3) | upon Legal Defeasance in accordance with Article 8 hereof or satisfaction and discharge of the Indenture in accordance with Article 12 hereof. |
Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of
Counsel to the effect that a release of a Subsidiary Guarantor in accordance with this Section
11.06 is authorized or permitted by the Indenture, Trustee will, upon the request and at the
expense of the Company, execute any documents reasonably requested by the Company in order to
evidence the release of such Subsidiary Guarantor from its obligations under its Note Guarantee and
the Indenture.
ARTICLE 12
SATISFACTION AND DISCHARGE
SATISFACTION AND DISCHARGE
SECTION 12.01 Satisfaction and Discharge. The Indenture will be discharged and will
cease to be of further effect as to all Notes issued hereunder when:
(1) either
(a) all of the Notes theretofore authenticated and delivered (except lost,
stolen or destroyed Notes which have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust by the Company and thereafter
repaid to the Company) have been delivered to the Trustee for cancellation; or
(b) all Notes not theretofore delivered to the Trustee for cancellation have
become due and payable pursuant to an optional redemption notice or otherwise or
will become due and payable within one year, and the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount sufficient
to pay and discharge the entire indebtedness on the Notes not theretofore delivered
to the Trustee for cancellation for principal of, premium, if
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any, and interest on
the Notes to the date of deposit together with irrevocable instructions from the
Company directing the Trustee to apply such funds to the payment thereof at maturity
or on the Redemption Date, as the case may be; and
(2) no Default or Event of Default has occurred and is continuing on the date of the
deposit (other than a Default or Event of Default resulting from the borrowing of funds to
be applied to such deposit) and the deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or any Subsidiary
Guarantor is a party or by which the Company or any Subsidiary Guarantor is bound; and
(3) the Company has paid all other sums payable under the Indenture by the Company.
In addition, the Company must deliver an Officers’ Certificate and an Opinion of Counsel to the
Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
Upon satisfaction of the conditions set forth in this Section 12.01, and the receipt of such
Officers’ Certificate and Opinion of counsel, the Trustee, upon request and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and discharge of the
Indenture.
Notwithstanding the satisfaction and discharge of the Indenture, if money has been deposited
with the Trustee pursuant to subclause (b) of clause (1) of this Section, the provisions of
Sections 12.02 and 8.06 will survive. In addition, nothing in this Section 12.01 will be deemed to
discharge those provisions of Section 7.7 of the Base Indenture that, by their terms, survive the
satisfaction and discharge of the Indenture.
SECTION 12.02 Application of Trust Money. Subject to the provisions of Section 8.06
hereof, all money deposited with the Trustee pursuant to Section 12.01 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Notes and the Indenture, to the
payment, either directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited with the Trustee; but
such money need not be segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government Securities in
accordance with Section 12.01 hereof by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company’s and any Subsidiary Guarantor’s obligations under the Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 12.01 hereof; provided that if the Company has made any payment of
principal of, premium, if any, or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive
such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE 13
MISCELLANEOUS
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls. If any provision of this Supplemental
Indenture limits, qualifies or conflicts with the duties imposed by TIA § 318(c), the imposed
duties will control.
SECTION 13.02 Notices. Any notice or communication by the Company, any Subsidiary
Guarantor or the Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested), telex, telecopier
or overnight air courier guaranteeing next day delivery, to the others’ address:
If to the Company and/or any Subsidiary Guarantor:
| Hanesbrands Inc. 1000 East Hanes Mill Road Winston Salem, North Carolina 27105 Attention: Richard D. Moss |
||
| With a copy to: | ||
| Kirkland & Ellis LLP 300 North LaSalle Chicago, Illinois 60654 Attention: Gerald T. Nowak |
||
| If to the Trustee: | ||
| Branch Banking and Trust Company 223 West Nash Street Wilson, North Carolina 27893 Attention: Corporate Trust Administration |
The Company, any Subsidiary Guarantor or the Trustee, by notice to the others, may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) will be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed, when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to
its address shown on the register kept by the Registrar. Any notice or communication will also be
so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Holder or any defect in it will not affect its sufficiency with
respect to other Holders.
79
If a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it will mail a copy to the Trustee
and each Agent at the same time.
Where the Indenture provides for notice in any manner, such notice may be waived in writing by
the Person entitled to receive such notice, either before or after the event, and such waiver shall
be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any action taken in reliance
upon such waiver.
Where the Indenture provides for notice of any event to a Holder of a Global Security, such
notice shall be sufficiently given if given to the Depositary for such Global Security (or its
designee), pursuant to the Applicable Procedures, not later than the latest date (if any), and not
earlier than the earliest date (if any), prescribed for the giving of such notice.
SECTION 13.03 Communication by Holders of Notes with Other Holders of Notes. Holders
may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under the
Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA § 312(c).
SECTION 13.04 Certificate and Opinion as to Conditions Precedent. Upon any request
or application by the Company to the Trustee to take any action under the Indenture, the Company
shall furnish to the Trustee (except that the Opinion of Counsel referred to in Section 13.04(2)
hereof shall not be required in connection with the Authentication Order):
(1) an Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee (which must include the statements set forth in Section 13.05 hereof) stating that,
in the opinion of the signers, all conditions precedent and covenants, if any, provided for
in the Indenture relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which must include the statements set forth in Section 13.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants have been satisfied.
In any case where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only
one document, but one such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an Officer of the Company or any Subsidiary Guarantor may be
based, insofar as it relates to legal matters, upon a certificate of opinion of, or representations
by, counsel, unless such Officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of
80
Counsel may be based, and may
state that it is so based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an Officer or Officers of the Company or such Subsidiary Guarantor
stating that the information with respect to such factual matters is in possession of the Company
or such Subsidiary Guarantor, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate of opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under the Indenture, they may,
but need not, be consolidated and form one instrument.
SECTION 13.05 Statements Required in Certificate or Opinion. Each certificate or
opinion with respect to compliance with a condition or covenant provided for in the Indenture
(other than a certificate provided pursuant to TIA § 314(a)(4)) must comply with the provisions of
TIA § 314(e) and must include:
(1) a statement that the Person making such certificate or opinion has read such
covenant or condition;
(2) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him or her to express an informed
opinion as to whether or not such covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been satisfied.
SECTION 13.06 Rules by Trustee and Agents. The Trustee may make reasonable rules for
action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 13.07 No Personal Liability of Incorporators, Stockholders, Officers, Directors
or Employees. No recourse for the payment of the principal of, premium, if any, or interest on
any of the Notes or for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company or any Subsidiary Guarantor in
the Indenture, or in any of the Notes or Note Guarantees or because of the creation of any
Indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer, director, employee or controlling person of the Company or any
Subsidiary Guarantor or of any successor Person thereof. Each Holder, by accepting the Notes,
waives and releases all such liability. The waiver and release are part of the consideration for
the issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws.
SECTION 13.08 Governing Law. THE INDENTURE AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO AND THERETO, INCLUDING THE INTERPRETATION, CONSTRUCTION, VALIDITY AND ENFORCEABILITY
THEREOF,
81
SHALL BE GOVERNED BY AND SHALL BE CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
SECTION 13.09 No Adverse Interpretation of Other Agreements. The Indenture may not
be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries
or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret
the Indenture.
SECTION 13.10 Successors. All agreements of the Company in the Indenture and the
Notes will bind its successors. All agreements of the Trustee in the Indenture will bind its
successors. All agreements of each Subsidiary Guarantor in the Indenture will bind its successors,
except as otherwise provided in Section 11.06.
SECTION 13.11 Severability. In case any provision in the Indenture or in the Notes
is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.
SECTION 13.12 Counterpart Originals. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy will be an original, but all of them together
represent the same agreement.
SECTION 13.13 Table of Contents, Headings, etc. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this
Supplemental Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Supplemental Indenture and will in no way modify or restrict any of the
terms or provisions hereof.
SECTION 13.14 Confirmation of Indenture; Benefits of Indenture. The Base Indenture,
as supplemented and amended by this Supplemental Indenture and all other indentures supplemental
thereto, is in all respects ratified and confirmed, and the Base Indenture, this Supplemental
Indenture and all indentures supplemental thereto shall be read, taken and construed as one and the
same instrument. Nothing in the Indenture or in the Notes or Note Guarantees, express or implied,
shall give to any Person, other than the parties hereto and their successors hereunder and the
Holders of Notes, any benefit or any legal or equitable right, remedy or claim under the Indenture,
the Notes or the Note Guarantees.
[Signatures on following pages]
82
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed
as of the day and year first above written.
| HANESBRANDS INC. |
||||
| By: | /s/ E. Lee Wyatt Jr. | |||
| Name: E. Lee Wyatt Jr. | ||||
| Title: Executive Vice President, Chief Financial Officer | ||||
| On behalf of each of the Guarantors listed below: BA INTERNATIONAL, L.L.C. CARIBESOCK, INC. CARIBETEX, INC. CASA INTERNATIONAL, LLC CEIBENA DEL, INC. HANES MENSWEAR, LLC HANES 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/ Richard D. Moss | |||
| Name: Richard D. Moss | ||||
| Title: Treasurer | ||||
EXHIBIT A
[Face of Note]
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREIN. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN. TRANSFER OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO HEREIN.
CUSIP: 410345 AF9
ISIN: US410345AF99
ISIN: US410345AF99
8.000% Senior Notes due 2016
| No.[ ] | $[ ] |
HANESBRANDS INC.
promises to pay to Cede & Co. or registered assigns, the principal sum of [ ] DOLLARS on December 15, 2016.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
A-1
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by manual or
facsimile signature.
| Dated: | HANESBRANDS INC. |
|||
| By: | ||||
| Name: | ||||
| Title: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture:
BRANCH BANKING AND TRUST COMPANY, as Trustee |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
A-3
[Back of Note]
8.000% Senior Notes due 2016
8.000% Senior Notes due 2016
This Note is one of a duly authorized issue of debentures, notes or other debt instruments of
Hanesbrands Inc., a Maryland corporation (the “Company”), issued and to be issued in one or
more series under an indenture, dated as of August 1, 2008 (the “Base Indenture”), between
the Company and the Trustee. The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may be denominated in different
currencies, may mature at different times, may bear interest (if any) at different rates (which
rates may be fixed or variable), may be subject to different redemption provisions (if any), may be
subject to different sinking, purchase, or analogous funds (if any), may be subject to different
covenants and Events of Default, and may otherwise vary as provided in the Indenture.
This Note is a series of Securities of the Company (herein called the “Notes”), initially
limited in aggregate principal amount to $500,000,000, designated pursuant to Base Indenture, as
amended an supplemented by the First Supplemental Indenture, dated as of December 10, 2009 (the
“Supplemental Indenture”), among the Company, the Subsidiary Guarantors and the Trustee
(Base Indenture, as amended and supplemented by the Supplemental Indenture is referred to herein as
the “Indenture”).
Capitalized terms used herein have the meanings assigned to them in the Indenture unless otherwise
indicated.
1. Interest.
The Company promises to pay interest on the principal amount of this Note at the rate per annum
equal to 8.000%. The Company will pay interest semi-annually in arrears on June 15 and December 15
of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each,
an “ Interest Payment Date ”). Interest on the Notes will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from the date of issuance;
provided that the first Interest Payment Date shall be June 15, 2010. The Company will pay
interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal, interest and premium, if any, at the above rate, to the extent lawful. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
The interest rate on the Notes will in no event be higher than the maximum rate permitted by
applicable law.
2. Method of Payment.
The Company will pay interest on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes at the close of business on the June 1 or December 1 next preceding the
Interest Payment Date, even if such Notes are canceled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.04 of the Supplemental Indenture with
respect to defaulted interest. The Notes will be payable as to principal, premium and interest at
the office or agency of the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders; provided
that payment by wire transfer of immediately available funds will be required
A-4
with respect to principal of, interest, and premium, if any, on all Global Securities and all other
Notes the Holders of which will have provided wire transfer instructions to the Company or the
Paying Agent. Such payment will be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar.
Initially, Branch Banking and Trust Company, the Trustee under the Indenture, will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such capacity.
4. Indenture and the Trust Indenture Act.
The terms of the Notes include those stated in the Indenture and those made part of the Indenture
by reference to the TIA (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms,
and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent
any provision of this Note conflicts with the express provisions of the Indenture, the provisions
of the Indenture shall govern and be controlling. The Notes are unsecured obligations of the
Company. This Note is a “Global Security” and the Notes are “Global Securities” under the
Indenture.
5. Optional Redemption.
At any time prior to December 15, 2012, the Company may, at its option, on one or more occasions,
redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) with
the Net Cash Proceeds of one or more sales of Capital Stock (other than Disqualified Stock) of the
Company at a redemption price equal to 108.000% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment date);
provided that at least 65% of the original aggregate principal amount of the Notes issued
on the Closing Date remains outstanding after each such redemption and the redemption occurs within
180 days after the closing of the related sale of Capital Stock.
On and after December 15, 2013, the Company may, at its option, redeem all or, from time to time,
a part of the Notes upon not less than 30 nor more than 60 days’ notice, at the following
redemption prices (expressed as a percentage of principal amount of the Notes), plus accrued and
unpaid interest on the Notes, if any, to the applicable redemption date (subject to the right of
holders of record on the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the twelve-month period beginning on December 15 of the years
indicated below:
| Year | Percentage | |||
2013 |
104.000 | % | ||
2014 |
102.000 | % | ||
2015 and thereafter |
100.000 | % | ||
At any time prior to December 15, 2013, the Company may, at its option, also redeem all or a part
of the Notes upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail
to each Holder’s registered address at a redemption price equal to 100% of the principal
A-5
amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest to,
the date of redemption (the “Redemption Date”), subject to the rights of Holders of Notes
on the relevant record date to receive interest due on the relevant interest payment date.
Unless the Company defaults in the payment of the redemption price, interest will cease to accrue
on the Notes or portions thereof called for redemption on the applicable redemption date.
The Company may acquire Notes by means other than a redemption or required repurchase, whether by
tender offer, open market purchases, negotiated transactions or otherwise, in accordance with
applicable securities laws, so long as such acquisition does not otherwise violate the terms of the
Indenture.
6. Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking fund payments with respect to
the Notes.
7. Repurchase at the Option of Holder.
If a Change of Control occurs, the Company will make a Change of Control Offer to each Holder to
repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of
each Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest on the Notes repurchased, if any, to, but not including, the date
of purchase, subject to the rights of the Holders on the relevant record date to receive interest
due on the relevant interest payment date.
If the Company or a Restricted Subsidiary of the Company consummates any Asset Sales, in which the
aggregate amount of Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to
Section 4.10 of the Supplemental Indenture totals at least $50.0 million, the Company must
commence, not later than the last Business Day of the month in which such Excess Proceeds exceed
$50.0 million, and consummate an Offer to Purchase from the Holders (and, if required by the terms
of any Pari Passu Indebtedness, from the holders of such Pari Passu Indebtedness) on a pro rata
basis an aggregate principal amount of Notes (and Pari Passu Indebtedness) equal to the Excess
Proceeds on such date, at a purchase price equal to 100% of their principal amount, plus, in each
case, accrued interest (if any) to the Payment Date. To the extent that any Excess Proceeds remain
after consummation of an Offer to Purchase pursuant to Section 4.10 of the Supplemental Indenture,
the Company may use those Excess Proceeds for any purpose not otherwise prohibited by the Indenture
and the amount of Excess Proceeds shall be reset to zero. Pending the final application of any Net
Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise invest the
Net Proceeds in any manner that is not prohibited by the Indenture.
8. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date, the Company will mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address, except that redemption notices may be mailed more than 60 days
prior to a Redemption Date if the notice is issued in connection with a defeasance of the Notes or
a satisfaction and discharge of the Indenture pursuant to Articles 8 or 12 of the Supplemental
Indenture.
A-6
9. Denominations, Transfer, Exchange.
The Notes are issued in registered form without coupons in denominations of $2,000 and integral
multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents. No service charge will
be imposed by the Company, the Trustee or the registrar for any registration of transfer or
exchange of Notes, but the Company may require a holder to pay a sum sufficient to cover any
transfer tax or other governmental taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or portion of a Note selected
for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the
Company need not exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. Persons Deemed Owners.
The registered Holder of a Note may be treated as its owner for all purposes.
11. Amendment, Supplement and Waiver.
Subject to certain exceptions, the Company, the Subsidiary Guarantors and the Trustee may amend or
supplement the Indenture (including, without limitation, Section 4.10 and 4.15 of the Supplemental
Indenture), the Note Guarantees and the Notes with the consent of the Holders of at least a
majority in aggregate principal amount of the Notes (including, without limitation, Additional
Notes, if any) then outstanding (including, without limitation, consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections
6.04 and 6.07 of the Supplemental Indenture, any existing Default or Event of Default (other than a
Default or Event of Default in the payment of the principal of, premium, if any, or interest on the
Notes, except a payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of the Indenture or the Note Guarantees or the Notes may be waived
with the consent of the Holders of a majority in aggregate principal amount of the then outstanding
Notes (including, without limitation, Additional Notes, if any) voting as a single class
(including, without limitation, consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes). Section 2.03 of the Supplemental Indenture shall determine
which Notes are considered to be “outstanding”.
Without the consent of any Holder, the Company, the Subsidiary Guarantors and the Trustee may amend
or supplement the Indenture, the Notes or the Note Guarantees: to cure any ambiguity, defect or
inconsistency; to provide for uncertificated Notes in addition to or in place of certificated
Notes; to conform the text of the Indenture to any provisions of the “Description of notes” section
of the Prospectus to the extent that a portion of that “Description of notes” section of the
Prospectus was intended to be a verbatim recitation of the Indenture or the Notes; to provide for
the issuance of additional Notes under the Indenture to the extent otherwise so permitted under the
terms of the Indenture; to comply with the provisions described under Section 4.18 or Section 5.01
of the Supplemental Indenture; to comply with any requirements of the SEC in connection with the
qualification of the Indenture under the Trust Indenture Act; to evidence and provide for the
acceptance of appointment by a successor Trustee; to add a Subsidiary Guarantor; or to make any
change that, in the good faith opinion of the Board of Directors, does not materially and adversely
affect the rights of any Holder.
A-7
12. Defaults and Remedies.
Events of Default include: (i) default for 30 days in the payment when due of interest on the
Notes; (ii) default in the payment when due (at maturity, upon redemption or otherwise) of the
principal of, or premium, if any, on the Notes; (iii) (A) failure by the Company or any of its
Restricted Subsidiaries for 30 days after notice to the Company by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding voting as a single class to
comply with the provisions of Section 4.15 of the Supplemental Indenture or (B) failure by the
Company or any of its Restricted Subsidiaries to comply with the provisions of Section 5.01 of the
Supplemental Indenture; (iv) failure by the Company or any of its Restricted Subsidiaries for 30
days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding voting as a single class to comply with the
provisions of Section 4.07, Section 4.09 or Section 4.10 of the Supplemental Indenture; (v) failure
by the Company or any of its Restricted Subsidiaries for 60 days after notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding
voting as a single class to comply with any of the other agreements in the Indenture; (vi) default
under any mortgage, indenture or instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries), whether such Indebtedness or Guarantee now exists or is created after the date of
the Indenture, if that default: (A) is caused by a failure to pay principal of, or interest or
premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default; or (B) results in the acceleration of such Indebtedness
prior to its express maturity, and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness or the maturity of which has been
so accelerated, aggregates $100.0 million or more; (vii) failure by the Company or any of its
Restricted Subsidiaries to pay final judgments entered by a court or courts of competent
jurisdiction aggregating in excess of $100.0 million, which judgments are not paid, discharged or
stayed for a period of 60 days;(viii) except as permitted by the Indenture, any Note Guarantee is
held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in
full force and effect or any Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor denies or disaffirms its obligations under its Note Guarantee; (ix) the Company or any of
its Restricted Subsidiaries that would constitute a Significant Subsidiary pursuant to or within
the meaning of Bankruptcy Law: (A) commences a voluntary case; (B) consents to the entry of an
order for relief against it in an involuntary case; (C) consents to the appointment of a custodian
of it or for all or substantially all of its property; or (D) makes a general assignment for the
benefit of its creditors; and (x) court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (A) is for relief against the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary in an involuntary case; (B) appoints a custodian of
the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary; or (C) orders the liquidation of the Company or any
of its Restricted
Subsidiaries that is a Significant Subsidiary; and the order or decree remains unstayed and in
effect for 60 consecutive days.
In the case of an Event of Default specified in clause (9) or (10) of Section 6.01 of the
Supplemental Indenture that occurs with respect to the Company, the principal of, premium, if any,
and accrued interest on the Notes then outstanding shall automatically become due and
A-8
payable immediately without any declaration or other act on the part of the Trustee or any Holder.
If any other Event of Default occurs and is continuing under the Indenture, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes, then outstanding, by written
notice to the Company (and to the Trustee if such notice is given by the Holders), may, and the
Trustee at the request of such Holders shall, declare the principal of, premium, if any, and
accrued interest on the Notes to be immediately due and payable. Upon a declaration of
acceleration, such principal of, premium, if any, and accrued interest shall be immediately due and
payable. In the event of a declaration of acceleration because an Event of Default set forth in
clause (6) of Section 6.01 of the Supplemental Indenture has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the event of default
triggering such Event of Default pursuant to clause (6) of Section 6.01 of the Supplemental
Indenture shall be remedied or cured by the Company or the relevant Restricted Subsidiary or waived
by the holders of the relevant Indebtedness within 60 days after the declaration of acceleration
with respect thereto.
13. Trustee Dealings with Company.
The Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliates of the Company, with the same rights it would
have if it were not the Trustee.
14. No Recourse Against Others.
A director, officer, employee, incorporator or stockholder, of the Company or any Guarantor, as
such, will not have any liability for any obligations of the Company or the Guarantors under the
Notes, the Note Guarantees or the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for the issuance of the Notes.
15. Authentication.
This Note will not be valid until authenticated by the manual signature of the Trustee or an
authenticating agent.
16. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
17. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to
the accuracy of such numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers placed thereon.
A-9
18. Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust
pursuant to Section 8.04 or Section 12.01 of the Supplemental Indenture for the payment of the
principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after
such principal, premium, if any, or interest has become due and payable shall be paid to the
Company on its request or (if then held by the Company) will be discharged from such trust; and the
Holder of such Note will thereafter be permitted to look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, will thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in The New York Times and
The Wall Street Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which will not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining will be repaid to
the Company.
19. Governing Law.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO AND THERETO, INCLUDING THE
INTERPRETATION, CONSTRUCTION, VALIDITY AND ENFORCEABILITY THEREOF, SHALL BE GOVERNED BY AND SHALL
BE CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
The Company will furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to:
Hanesbrands Inc.
1000 East Hanes Mill Road
Winston-Salem, North Carolina 27105
Attention: Corporate Secretary
1000 East Hanes Mill Road
Winston-Salem, North Carolina 27105
Attention: Corporate Secretary
A-10
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
[PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]
[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]
the within Note and all rights thereunder, hereby irrevocably constituting and appointing
attorney to transfer such Note on the books of the Issuer, with full
power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name as written upon the face of
the within Note in every particular without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act.
A-11
[For Definitive Notes only]
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant to either Section 4.10 or
Section 4.15 of the Indenture, as applicable, check the corresponding box:
Section 4.10 o Section 4.15 o
If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section
4.10 or Section 4.15 of the Indenture, as applicable, state the amount in principal amount:
$
Date:
| Your Signature: | ||||
| (Sign exactly as your name appears on the other side of this Note.) | ||||
| Tax Identification No.: | ||||
Signature Guarantee*:
| * | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee) |
A-12
EXHIBIT B
FORM OF NOTATION OF GUARANTEE
For value received, each Subsidiary Guarantor (which term includes any successor Person under
the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in
the Indenture and subject to the provisions in the indenture, dated as of August 1, 2008 (the “
Base Indenture”), among Hanesbrands Inc. (the “Company ”), the Subsidiary
Guarantors party thereto and Branch Banking and Trust Company, as trustee (the “Trustee”),
as amended and supplemented by the First Supplemental Indenture, dated as of December 10, 2009 (the
“Supplemental Indenture”), among the Company, the Subsidiary Guarantors and the Trustee
(Base Indenture, as amended and supplemented by the Supplemental Indenture is referred to herein as
the “Indenture”) (a) the due and punctual payment of the principal of, premium, if any, and
interest on, the Notes, whether at maturity, by acceleration, redemption or otherwise, the due and
punctual payment of interest on overdue principal of and interest on the Notes, if any, if lawful,
and the due and punctual performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. The obligations of the Subsidiary
Guarantors to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and the
Indenture are expressly set forth in Article 11 of the Supplemental Indenture and reference is
hereby made to the Indenture for the precise terms of the Note Guarantee. Each Holder of a Note, by
accepting the same, (a) agrees to and shall be bound by such provisions and (b) appoints the
Trustee attorney-in-fact of such Holder for such purpose.
Capitalized terms used but not defined herein have the meanings given to them in the
Indenture.
| [NAME OF SUBSIDIARY GUARANTOR(S)] |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
B-1
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
THIS SUPPLEMENTAL INDENTURE (the “[ ] Supplemental Indenture”), dated as of
, 20___, among (the “Guaranteeing Subsidiary”), a
subsidiary of Hanesbrands Inc. (or its permitted successor), a Maryland corporation (the
“Company”), the Company, the other Subsidiary Guarantors (as defined in the Indenture
referred to herein) and Branch Banking and Trust Company, as trustee under the Indenture referred
to below (the “Trustee”).
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to the Trustee the indenture, dated
as of August 1, 2008 (the “ Base Indenture”), among Hanesbrands Inc. (the “Company
”), the Subsidiary Guarantors party thereto and the Trustee, as amended and supplemented by the
First Supplemental Indenture, dated as of December 10, 2009 (the “First Supplemental
Indenture”), among the Company, the Subsidiary Guarantors and the Trustee (Base Indenture, as
amended and supplemented by the First Supplemental Indenture is referred to herein as the
“Indenture”) providing for the issuance of the Company’s 8.000% Senior Notes due 2016 (the
“Notes”);
WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary
shall execute and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the
Notes and the Indenture on the terms and conditions set forth herein (the “ Note Guarantee ”); and
WHEREAS, pursuant to Section 9.01 of the First Supplemental Indenture, the Trustee is
authorized to execute and deliver this [___] Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the
Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes
as follows:
1. Capitalized Terms. Capitalized terms used herein without definition shall have the
meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees to provide an
unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee
and in the Indenture including but not limited to Article 11 of the Supplemental Indenture.
4. No Recourse Against Others. No director, officer, employee, incorporator or stockholder
of the Company or any Guarantor, as such, will have any liability for any obligations of the
Company or the Guarantors under the Notes, the Indenture, the Note Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes
by accepting a Note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under
the federal securities laws.
C-1
5. Governing Law. THIS [___] SUPPLEMENTAL INDENTURE AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO AND THERETO, INCLUDING THE INTERPRETATION, CONSTRUCTION, VALIDITY AND ENFORCEABILITY
THEREOF, SHALL BE GOVERNED BY AND SHALL BE CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
6. Counterparts. The parties may sign any number of copies of this [___] Supplemental
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.
7. Effect of Headings. The Section headings herein are for convenience only and shall not
affect the construction hereof.
8. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this [___] Supplemental Indenture or for or in respect of
the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary
and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this [___] Supplemental Indenture to be duly
executed and attested, all as of the date first above written.
Dated: , 20___
| [GUARANTEEING SUBSIDIARY] |
|||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| HANESBRANDS INC. |
|||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| [EXISTING SUBSIDIARY GUARANTORS] |
|||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| [TRUSTEE] |
|||||
| By: | |||||
| Authorized Signatory | |||||
C-2
Exhibit 5.1
 |
750 E. Pratt Street, Suite 900 Baltimore, Maryland 21202 |
Telephone 410-244-7400 Facsimile 410-244-7742 |
www.venable.com |
December 10, 2009
Hanesbrands Inc.
1000 East Hanes Mill Road
Winston Salem, NC 27105
1000 East Hanes Mill Road
Winston Salem, NC 27105
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have served as Maryland counsel to Hanesbrands Inc., a Maryland corporation (the
“Company”), in connection with certain matters of Maryland law arising out of the registration by
the Company of $500,000,000 aggregate principal amount of the Company’s 8.00% Senior Notes due 2016
(the “Securities”), covered by the above-referenced Registration Statement and any amendments
thereto (collectively, the “Registration Statement”), filed by the Company with the U.S. Securities
and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the
“Securities Act”). The Securities will be issued by the Company pursuant to that certain
Underwriting Agreement, dated as of December 3, 2009 (the “Underwriting Agreement”), between J.P.
Morgan Securities Inc., as representative of the several underwriters named in Schedule 1 thereto
(together, the “Underwriters”), the Company and the guarantors named therein. Unless otherwise
defined herein, capitalized terms used herein shall have the meanings assigned to them in the
Underwriting Agreement.
In connection with our representation of the Company, and as a basis for the opinion
hereinafter set forth, we have examined originals, or copies certified or otherwise identified to
our satisfaction, of the following documents (hereinafter collectively referred to as the
“Documents”):
1. The Registration Statement and the related form of prospectus included therein in the form
in which it was transmitted to the Commission under the 1933 Act;
2. The charter of the Company, certified as of a recent date by the State Department of
Assessments and Taxation of Maryland (the “SDAT”);
3. The Bylaws of the Company, certified as of the date hereof by an officer of the Company;
Hanesbrands Inc.
December 10, 2009
Page 2
December 10, 2009
Page 2
4. A certificate of the SDAT as to the good standing of the Company, dated as of a recent
date;
5. The following documents (together, the “Note Documents”):
(a) The Underwriting Agreement;
(b) The Indenture, dated as of August 1, 2008, among the Company, the guarantors named therein
and Branch Banking & Trust Company, as trustee (the “Trustee”), as supplemented by the Supplemental
Indenture, dated December 10, 2009, by and between the Company, the guarantors named therein and
the Trustee with respect to the Securities (as so supplemented, the “Indenture”); and
(c) The Global Note evidencing the Securities;
6. Resolutions of the Board of Directors of the Company relating to, among other things, the
execution and delivery by the Company of the Note Documents and the issuance of the Securities,
certified as of the date hereof by an officer of the Company;
7. A certificate executed by an officer of the Company, dated as of the date hereof; and
8. Such other documents and matters as we have deemed necessary or appropriate to express the
opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or
another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party (other than the
Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the Documents has duly and
validly executed and delivered each of the Documents to which such
Hanesbrands Inc.
December 10, 2009
Page 3
December 10, 2009
Page 3
party is a signatory, and such
party’s obligations set forth therein are legal, valid and binding and are enforceable in
accordance with all stated terms.
4. All Documents submitted to us as originals are authentic. The form and content of all
Documents submitted to us as unexecuted drafts do not differ in any material respect relevant to
this opinion from the form and content of such Documents as executed and delivered. All
Documents submitted to us as certified or photostatic copies conform to the original documents.
All signatures on all Documents are genuine. All public records reviewed or relied upon by us or
on our behalf are true and complete. All representations, warranties, statements and information
contained in the Documents are true and complete. There has been no oral or written modification
of or amendment to any of the Documents, and there has been no waiver of any provision of any of
the Documents, by action or omission of the parties or otherwise.
Based upon the foregoing, and subject to the assumptions, limitations and qualifications
stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing under and by virtue of the
laws of the State of Maryland and is in good standing with the SDAT.
2. The Securities have been duly authorized by the Company for issuance and sale pursuant to
the Note Documents and the Registration Statement.
The foregoing opinion is limited to the substantive laws of the State of Maryland and we do
not express any opinion herein concerning any other law. We express no opinion as to the
applicability or effect of federal or state securities laws, including the securities laws of the
State of Maryland, or as to federal or state laws regarding fraudulent transfers. We note that
each of the Note Documents provides that it shall be governed by the laws of the State of New York.
To the extent that any matter as to which our opinion is expressed herein would be governed by the
laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such
matter. The opinion expressed herein is subject to the effect of judicial
decisions which may permit the introduction of parol evidence to modify the terms or the
interpretation of agreements.
The opinion expressed herein is limited to the matters specifically set forth herein and no
other opinion shall be inferred beyond the matters expressly stated. We assume no
Hanesbrands Inc.
December 10, 2009
Page 4
December 10, 2009
Page 4
obligation to
supplement this opinion if any applicable law changes after the date hereof or if we become aware
of any fact that might change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for submission to the Commission as an exhibit to the
Company’s Current Report on Form 8-K (the “Current Report”), which is incorporated by reference in
the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the
Current Report and the said incorporation by reference and to the use of the name of our firm
therein. In giving this consent, we do not admit that we are within the category of persons whose
consent is required by Section 7 of the Act.
| Very truly yours, |
||||
| Venable LLP | ||||
Exhibit 5.2
| 300 North LaSalle | ||||
| Chicago, Illinois 60654 | ||||
| (312) 862-2000 | Facsimile: | |||
| www.kirkland.com | (312) 862-2200 |
December 10, 2009
Hanesbrands Inc.,
and the Guarantors set forth on Exhibit A
1000 East Hanes Mill Road
Winston-Salem, North Carolina 27105
and the Guarantors set forth on Exhibit A
1000 East Hanes Mill Road
Winston-Salem, North Carolina 27105
| Re: | Registration Statement on Form S-3ASR (Registration No. 333-152733) |
Ladies and Gentlemen:
We are issuing this opinion letter in our capacity as special legal counsel to Hanesbrands
Inc., a Maryland corporation (the “Issuer”), and the guarantors set forth on Exhibit A hereto (the
“Guarantors” and, collectively with the Issuer, the “Registrants”). This opinion letter is being
delivered in connection with the issuance and sale by the Issuer of $500,000,000 in aggregate
principal amount of the Issuer’s 8.000% Senior Notes due 2016 (the “Notes”) pursuant to a
Registration Statement on Form S-3ASR (Registration No. 333-152733) as filed with the Securities
and Exchange Commission (the “Commission”) on August 1, 2008, under the Securities Act of 1933, as
amended (the “Act”) (such Registration Statement, as amended or supplemented, is hereinafter
referred to as the “Registration Statement”).
The obligations of the Issuer under the Notes will be guaranteed by, among others, the
Guarantors (the “Guarantees”). The Notes are to be issued pursuant to the Indenture (the “Base
Indenture”), dated as of August 1, 2008, between the Issuer and Branch Banking and Trust Company,
as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of
December 10, 2009, among the Issuer, the Guarantors, another guarantor named therein and the
Trustee (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”).
Pursuant to the Indenture, the Guarantors, along with another guarantor, will guarantee the
obligations of the Issuer under the Notes.
In connection with issuing this opinion letter, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents, corporate records and
other instruments as we have deemed necessary for the purposes of this opinion, including (i)
resolutions of the Registrants with respect to the issuance of the Notes and the Guarantees,
Hong Kong London Los Angeles Munich New York Palo Alto San Francisco Shanghai Washington, D.C.
Hanesbrands Inc.
December 10, 2009
Page 2
December 10, 2009
Page 2
(ii) organizational documents of the Registrants, (iii) the Indenture and (iv) the
Registration Statement.
For purposes of this opinion, we have assumed the authenticity of all documents submitted to
us as originals, the conformity to the originals of all documents submitted to us as copies and the
authenticity of the originals of all documents submitted to us as copies. We have also assumed the
genuineness of the signatures of persons signing all documents in connection with which this
opinion is rendered, the authority of such persons signing on behalf of the parties thereto and the
due authorization, execution and delivery of all documents by the parties thereto. As to any facts
material to the opinions expressed herein which we have not independently established or verified,
we have relied upon statements and representations of officers and other representatives of the
Registrants and others.
Our opinion expressed below is subject to the qualifications that we express no opinion as to
the applicability of, compliance with, or effect of (i) any bankruptcy, insolvency, reorganization,
fraudulent transfer, fraudulent conveyance, moratorium or other similar law affecting the
enforcement of creditors’ rights generally, (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at
law) and (iii) public policy
considerations which may limit the rights of parties to obtain certain remedies.
Based upon and subject to the assumptions, qualifications, exclusions and limitations and the
further limitations set forth below, we are of the opinion that when the Notes have been duly
executed and authenticated in accordance with the provisions of the Indenture, the Notes will be
binding obligations of the Issuer and the Guarantees will be binding obligations of the Guarantors.
We hereby consent to the filing of this opinion with the Commission to be incorporated by
reference into the Registration Statement. We also consent to the reference to our firm under the
heading “Legal Matters” in the Registration Statement. In giving this consent, we do not thereby
admit that we are in the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Commission.
Our advice on every legal issue addressed in this letter is based exclusively on the internal
law of the State of New York, the General Corporation Law and the
Limited Liability Company Act of the State of Delaware (including, in
each case, the
statutory provisions, all applicable provisions of the relevant state constitution and reported judicial
decisions interpreting the foregoing) or the federal securities laws
of the United States and represents our opinion as to how that issue would be
resolved were it to be considered by the highest court in the jurisdiction which enacted such law.
The manner in which any particular issue relating to the opinions would be
2
Hanesbrands Inc.
December 10, 2009
Page 3
December 10, 2009
Page 3
treated in any actual
court case would depend in part on facts and circumstances particular to the case and would also
depend on how the court involved chose to exercise the wide discretionary authority generally
available to it. This letter is not intended to guarantee the outcome
of any legal dispute which may arise in the future. We are not
qualified to practice law in the State of Maryland or the State of
Colorado and have, without conducting any research or investigation with respect thereto,
relied upon the opinion of Venable LLP for certain matters of Maryland law and upon the opinion of
Hogan & Hartson LLP for certain matters of Colorado law, and do not express or imply an opinion on
the laws of such states. We are not qualified to practice law in the State of Delaware and
our opinions herein regarding Delaware law are limited solely to our review of provisions of the
General Corporation Law and the Limited Liability Company Act of the State of Delaware (including the statutory provisions, all
applicable provisions of the Delaware constitution and reported judicial decisions interpreting the
foregoing) which we consider normally applicable to transactions of this type, without our having
made any special investigation as to the applicability of another statute, law, rule or regulation.
None of the opinions or other advice contained in this letter considers or covers any foreign or
state securities (or “blue sky”) laws or regulations.
This opinion is furnished to you in connection with the issuance and sale of the Notes and is
not to be used, circulated, quoted or otherwise relied upon for any other purpose.
Sincerely,
Kirkland & Ellis LLP
3
Exhibit A
| Name of Guarantor | Jurisdiction of Formation | |
BA International, L.L.C.
|
Delaware | |
Caribesock, Inc.
|
Delaware | |
Caribetex, Inc.
|
Delaware | |
CASA International, LLC
|
Delaware | |
Ceibena Del, Inc.
|
Delaware | |
Hanes Menswear, LLC
|
Delaware | |
Hanes Puerto Rico, Inc.
|
Delaware | |
Hanesbrands Distribution, Inc.
|
Delaware | |
HBI Branded Apparel Limited, Inc.
|
Delaware | |
HBI Branded Apparel Enterprises, LLC
|
Delaware | |
HbI International, LLC
|
Delaware | |
HBI Sourcing, LLC
|
Delaware | |
Inner Self LLC
|
Delaware | |
Jasper-Costa Rica, L.L.C.
|
Delaware | |
Playtex Dorado, LLC
|
Delaware | |
Playtex Industries, Inc.
|
Delaware | |
Seamless Textiles, LLC
|
Delaware | |
UPCR, Inc.
|
Delaware | |
UPEL, Inc.
|
Delaware |
Exhibit 5.3
Hogan & Hartson LLP
One Tabor Center, Suite 1500
1200 Seventeenth Street
Denver, CO 80202
+1.303.899.7300 Tel
+1.303.899.7333 Fax
One Tabor Center, Suite 1500
1200 Seventeenth Street
Denver, CO 80202
+1.303.899.7300 Tel
+1.303.899.7333 Fax
www.hhlaw.com
December 10, 2009
Board of Directors
Hanesbrands Inc.
1000 East Hanes Mill Road
Winston-Salem, NC 27105
Hanesbrands Inc.
1000 East Hanes Mill Road
Winston-Salem, NC 27105
Ladies and Gentlemen:
We are acting as special Colorado counsel to Hanesbrands Direct, LLC, a Colorado limited
liability company (the “Colorado Guarantor”), in connection with the proposed public offering by
Hanesbrands Inc., a Maryland corporation (the “Issuer”), of up to $500,000,000 in aggregate
principal amount of the Issuer’s 8.00% Senior Notes due 2016 (the “Notes”) pursuant to the Issuer’s
automatic shelf registration statement on Form S-3 (333-152733) (as amended or supplemented, the
“Registration Statement”) filed with the Securities and Exchange Commission (the “Commission”) on
August 1, 2008, under the Securities Act of 1933, as amended (the “Act”). The obligations of the
Issuer to pay the principal of, premium, if any, and interest on the Notes will be guaranteed on an
unsecured senior basis by the Colorado Guarantor (the “Colorado Guarantee”) and certain other
guarantors (such guarantees together with the Colorado Guarantee, the “Guarantees”). The Notes and
the Guarantees are to be issued pursuant to the Indenture, dated as of August 1, 2008 (the “Base
Indenture”), as supplemented by the Supplemental Indenture, dated as of December 10, 2009 (the
“Supplemental Indenture,” and together with the Base Indenture, the “Indenture”) by and among the
Issuer, the Colorado Guarantor and the other guarantors named therein, and Branch Banking and Trust
Company, as trustee (the “Trustee”).
This opinion letter is furnished to you at your request to enable you to fulfill the
requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. § 229.601(b)(5), in connection with the
Registration Statement.
For purposes of this opinion letter, we have examined copies of such agreements, instruments
and documents as we have deemed an appropriate basis on which to render the opinions hereinafter
expressed. In our examination of the aforesaid documents, we have
Board of Directors
Hanesbrands Inc.
December 10, 2009
Page 2
Hanesbrands Inc.
December 10, 2009
Page 2
assumed the genuineness of all signatures, the legal capacity of all natural persons, the
accuracy and completeness of all documents submitted to us, the authenticity of all original
documents, and the conformity to authentic original documents of all documents submitted to us as
copies (including telecopies, facsimiles and electronic copies). As to all matters of fact, we
have relied on the representations and statements of fact made in the documents so reviewed, and we
have not independently established the facts so relied on. This opinion letter is given, and all
statements herein are made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on Colorado Limited Liability Company
Act, as amended. We express no opinion in this letter as to any other laws, statutes, ordinances,
rules, or regulations. As used herein, the term “Colorado Limited Liability Company Act, as
amended” includes the statutory provisions contained therein, all applicable provisions of the
relevant state constitution and reported judicial decisions interpreting the foregoing.
Based on and subject to the foregoing, we are of the opinion that:
1. The Colorado Guarantor is a limited liability company validly existing and in good standing
under the laws of the State of Colorado.
2. The Colorado Guarantor has the limited liability company power to execute, deliver and
perform it obligations under the Indenture. The Indenture has been duly authorized, executed and
delivered by the Colorado Guarantor.
3. The Colorado Guarantee has been duly authorized and executed by the Colorado Guarantor.
This opinion letter has been prepared for your use in connection with the filing by the Issuer
of a Current Report on Form 8-K with the Commission on the date hereof, which Form 8-K will be
incorporated by reference into the Registration Statement and speaks as of the date hereof. We
assume no obligation to advise you of any changes in the foregoing subsequent to the delivery of
this opinion letter.
We hereby consent to the filing of this opinion letter as Exhibit 5.3 to the Registration
Statement and to the reference to this firm under the caption “Legal Matters” in the prospectus
constituting a part of the Registration Statement. In giving this consent, we do not thereby admit
that we are an “expert” within the meaning of the Act.
| Very truly yours, HOGAN & HARTSON L.L.P. |
||||
Exhibit 99.1
Hanesbrands
Inc.
1000 East Hanes Mill Road
Winston-Salem, NC 27105
(336) 519-4400
1000 East Hanes Mill Road
Winston-Salem, NC 27105
(336) 519-4400
news release
FOR
IMMEDIATE RELEASE |
||
News Media, contact:
|
Matt Hall, (336) 519-3386 | |
Analysts and Investors, contact:
|
Brian Lantz, (336) 519-7130 |
HANESBRANDS
INC. COMPLETES NEW GROWTH-FOCUSED DEBT STRUCTURE AND
REAFFIRMS 2010 SALES GROWTH GUIDANCE
REAFFIRMS 2010 SALES GROWTH GUIDANCE
WINSTON-SALEM, N.C. (Dec. 10, 2009) — Hanesbrands Inc. (NYSE: HBI), which is reaffirming its 2010
outlook for approximately $200 million in additional sales from net shelf-space gains, a 5 percent
increase, today completed a growth-focused debt refinancing that enables the company to
simultaneously reduce leverage and consider acquisition opportunities.
The refinancing, which was
positively received by the capital markets,
gives the company much more flexibility in its use of excess cash flow, allows continued debt
reduction, and provides a stable long-term capital structure with extended debt maturities at rates
slightly lower than previous effective rates.
The combined benefits of the expected sales increase from net shelf-space gains, reduced interest
expense through deleveraging, continued operating margin improvement from supply chain
globalization, and growth potential through acquisitions are contributing to positive momentum for
company earnings growth.
“We are focused on creating value in 2010 and beyond by taking market share and leveraging the
growth platform we have built,” said Hanesbrands Chairman and Chief Executive Officer Richard A.
Noll. “We have worked diligently over the past three years to create a new Hanesbrands, an apparel
essentials powerhouse with strong cash flow, flexible capital structure, re-energized brands and a
low-cost global supply chain. The combination of our brand power and supply-chain competitiveness
gives us the potential to expand market share around the world through organic growth, retailer
partnerships, enhanced shelf space, improved channel penetration, distribution expansion, and
acquisitions.”
Hanesbrands Growth Model
The company’s earnings growth potential is tied to its sales outlook, capital structure,
cost-reduction efforts and ability to take advantage of other growth opportunities, including
low-risk acquisitions.
Hanesbrands Inc. Completes New Growth-Focused Debt Structure and
Reaffirms 2010 Sales Growth Guidance— Page 2
Reaffirms 2010 Sales Growth Guidance— Page 2
Hanesbrands has secured significant additional net shelf space and new distribution for its
products across all core product segments, all brands and all channels of trade in 2010. The net
space gains are expected to add approximately $200 million, or approximately 5 percent, in sales
next year, independent of consumer spending levels.
Continued benefits from the company’s globalized supply chain may result in the company achieving
its goal to improve operating profit margin by 50 to 100 basis points in 2010, despite expected
minor increases in commodity costs.
In its refinancing completed today, Hanesbrands used the proceeds of the $500 million notes
offering and borrowings from its new $1.15 billion credit facilities to refinance its borrowings
under its former credit facility, to repay all of its borrowings under its second-lien credit
facility and to pay fees and expenses related to the notes offering and refinancing.
Credit rating agency Standard & Poor’s confirmed Hanesbrands’ corporate credit rating at BB-,
removed the company from CreditWatch, raised the company’s rating on its unsecured debt to B+ from
B, and gave the new notes the same B+ rating. Moody’s confirmed Hanesbrands’ corporate rating at
Ba3, upgraded the company’s outlook to stable, and assigned a B1
rating to the new senior unsecured notes.
“Our new debt structure is simpler and gives us greater flexibility to execute multiple strategies
for earnings growth,” Hanesbrands Executive Vice President and Chief Financial Officer E. Lee Wyatt
said. “We have the potential to sustain substantial growth momentum.”
The new debt structure has a less restrictive leverage ratio covenant of 4.5 times debt to EBITDA,
stepping down to 4.0 times by the end of 2010 and then 3.75 times in mid-2011. The company’s
target is to reduce leverage to 2 to 3 times debt to EBITDA, possibly as early as 2011.
The company’s goal is to reduce debt by $300 million in 2009, which would reduce interest expense
by approximately $20 million to $25 million next year. Another $300 million of debt reduction in
2010, a priority for the company, would deliver a similar interest expense reduction in 2011.
The new debt structure provides the company with significant additional flexibility to make
acquisitions. The company has the potential to use its excess cash flow to leverage its low-cost
production capability through small bolt-on acquisitions in the $200 million to $300 million range.
The company’s former financial covenants restricted the company
to acquisitions of $100 million annually. The company’s disciplined criteria for considering potential acquisitions would require
acquisitions to be in core apparel essentials categories, involve minimal integration risk,
generate cost synergies, provide revenue opportunities and deliver superior returns to
shareholders.
Also under
the new debt structure, the company has expanded capability to return cash to shareholders either through
share repurchases or dividends.
Hanesbrands Inc. Completes New Growth-Focused Debt Structure and
Reaffirms 2010 Sales Growth Guidance— Page 3
Reaffirms 2010 Sales Growth Guidance— Page 3
About Hanesbrands
Hanesbrands Inc. is a leading marketer of everyday apparel essentials under some of the world’s
strongest apparel brands, including Hanes, Champion, Playtex, Bali, JMS/Just My Size, barely there
and Wonderbra. The company sells T-shirts, bras, panties, men’s underwear, children’s underwear,
socks, hosiery, casualwear and activewear produced in the company’s low-cost global supply chain.
Hanesbrands has approximately 45,000 employees in more than 25 countries. More information about
the company may be found on the Hanesbrands Internet Web site at www.hanesbrands.com.
Cautionary Statement Concerning Forward-Looking Statements
Statements in this press release that are not statements of historical fact are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including those regarding our long-term goals and trends
associated with our business, our recently completed debt refinancing, and the net retail space
gains that have been secured for 2010 and the expected impact of the space gains. These
forward-looking statements are made only as of the date of this press release and are based on our
current intent, beliefs, plans and expectations. They involve risks and uncertainties that could
cause actual future results, performance or developments to differ materially from those described
in or implied by such forward-looking statements. These risks and uncertainties include the
following: our ability to execute our consolidation and globalization strategy, including migrating
our production and manufacturing operations to lower-cost locations around the world; our ability
to successfully manage social, political, economic, legal and other conditions affecting our
foreign operations and supply chain sources; current economic conditions; consumer spending levels;
the risk of inflation or deflation; financial difficulties experienced by, or loss of or reduction
in sales to, any of our top customers or groups of customers; gains and losses in the shelf space
that our customers devote to our products; our debt and debt service requirements that restrict our
operating and financial flexibility, and impose interest and financing costs; the financial ratios
that our debt instruments require us to maintain; failure to protect against dramatic changes in
the volatile market price of cotton; the impact of increases in prices of other materials used in
our products and increases in other costs; our ability to effectively manage our inventory and
reduce inventory reserves; retailer consolidation and other changes in the apparel essentials
industry; the highly competitive and evolving nature of the industry in which we compete; our
ability to keep pace with changing consumer preferences; costs and adverse publicity from
violations of labor or environmental laws by us or our suppliers; and other risks identified from
time to time in our most recent Securities and Exchange Commission reports, including the 2008
Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K,
registration statements, press releases and other communications. The company undertakes no
obligation to update or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating results over time.
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