Exhibit 10.43
EXECUTION COPY
AMENDMENT NO. 7
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 7 TO RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”), dated as of January 31, 2011, is entered into among HBI
RECEIVABLES LLC, as seller (“Seller”), HANESBRANDS INC., in its capacity as
servicer (in such capacity, the “Servicer”), the Committed Purchasers party
hereto, the Conduit Purchasers party hereto, the Managing Agents party hereto,
and HSBC SECURITIES (USA) INC. (“HSBC”), as assignee of JPMORGAN CHASE BANK,
N.A., as agent (in such capacity, the “Agent”). Capitalized terms used herein
without definition shall have the meanings ascribed thereto in the “Purchase
Agreement” referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of November 27, 2007 among Seller, Servicer, the Committed Purchasers,
the Conduit Purchasers, the Managing Agents and the Agent (as amended prior to
the date hereof and as the same may be further amended, restated, supplemented
or modified from time to time, the “Purchase Agreement”).
          B. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto have agreed to amend certain
provisions of the Purchase Agreement upon the terms and conditions set forth
herein.
     SECTION 1. Amendments. Subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof, the Purchase Agreement is hereby
amended in accordance with Annex I hereto: (a) by deleting each term thereof
which is lined out and (b) by inserting each term thereof which is double
underlined, in each case in the place where such term appears therein. Upon
giving effect to this Amendment, the document attached as Annex I hereto shall
constitute a conformed copy of the Purchase Agreement.
     SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) It has all necessary corporate or company power and authority to
execute and deliver this Amendment and to perform its obligations under the
Purchase Agreement as amended hereby, the execution and delivery of this
Amendment and the performance of its obligations under the Purchase Agreement as
amended hereby has been duly authorized by all necessary corporate or company
action on its part and this Amendment constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors’ rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

     
*
  PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST

 

--------------------------------------------------------------------------------

 

     (b) On the date hereof, before and after giving effect to this Amendment,
(i) no Amortization Event or Potential Amortization Event has occurred and is
continuing and (ii) the aggregate Purchaser Interests do not exceed 100%.
     SECTION 3. Conditions Precedent. This Amendment shall become effective on
the first Business Day (the “Effective Date”) on which the Agent or its counsel
has received five (5) counterpart signature pages to this Amendment executed by
each of the parties hereto.
     SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Purchase Agreement to “this Receivables Purchase Agreement”, “this Agreement”,
“hereunder”, “hereof”, “herein” or words of like import shall mean and be a
reference to the Purchase Agreement as amended or otherwise modified hereby, and
(ii) each reference to the Purchase Agreement in any other Transaction Document
or any other document, instrument or agreement executed and/or delivered in
connection therewith, shall mean and be a reference to the Purchase Agreement as
amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Purchase Agreement, of all other Transaction
Documents and any other documents, instruments and agreements executed and/or
delivered in connection therewith, shall remain in full force and effect and are
hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Agent, any Managing
Agent or any Purchaser under the Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein.
     SECTION 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile or other electronic format shall be effective as delivery
of a manually executed counterpart of this Amendment.
     SECTION 6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF NEW YORK.
     SECTION 7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
     SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to pay
on demand all reasonable costs and expenses of the Agent, the Managing Agents or
Purchasers in

2

--------------------------------------------------------------------------------

 

connection with the preparation, execution and delivery of this Amendment and
any of the other instruments, documents and agreements to be executed and/or
delivered in connection herewith, including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel to the Agent, Managing Agents or
Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

3

--------------------------------------------------------------------------------

 

          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

         
 
  HBI RECEIVABLES LLC, as Seller
 
       
 
  By:   /s/ James M. Schockett
 
       
 
      Name: James M. Schockett
Title: Vice President and Treasurer
 
       
 
  HANESBRANDS INC., as Servicer
 
       
 
  By:   /s/ Richard D. Moss
 
       
 
      Name: Richard D. Moss
Title: Chief Treasury and Tax Officer and Treasurer

Signature Page
to
Amendment No. 7 to RPA

 

--------------------------------------------------------------------------------

 

         
 
  BRYANT PARK FUNDING LLC, as a Conduit Purchaser
 
       
 
  By:   /s/ Damian Perez
 
       
 
      Name: Damian Perez
Title: Vice President
 
       
 
  HSBC SECURITIES (USA) Inc., as a Managing Agent and Agent
 
       
 
  By:   /s/ Laurie Lawler
 
       
 
      Name: Laurie Lawler
Title: Vice President
 
       
 
  HSBC BANK PLC, as a Committed Purchaser
 
       
 
  By:   /s/ David Harris
 
       
 
      Name: David Harris
Title: Associate Director

Signature Page
to
Amendment No. 7 to RPA

 

--------------------------------------------------------------------------------

 

         
 
  MARKET STREET FUNDING LLC, as a Conduit Purchaser
 
       
 
  By:   /s/ Doris J. Hearn
 
       
 
      Name: Doris J. Hearn
Title: Vice President
 
       
 
  PNC BANK, N.A., as a Committed Purchaser and as a
Managing Agent
 
       
 
  By:   /s/William P. Falcon
 
       
 
      Name: William P. Falcon
Title: Vice President

Signature Page
to
Amendment No. 7 to RPA

 

--------------------------------------------------------------------------------

 

ANNEX I

[See Attached]

 

--------------------------------------------------------------------------------

 

ANNEX I
CONFORMED COPY
RECEIVABLES PURCHASE AGREEMENT
dated as of November 27, 2007

AS MODIFIED BY
AMENDMENT NO. 1
Dated as of March 16, 2009,
AMENDMENT NO. 2
Dated as of April 13, 2009
AMENDMENT NO. 3
Dated as of August 14, 2009
AMENDMENT NO. 4
Dated as of December 10, 2009
AMENDMENT NO. 5
Dated as of December 21, 2009
and
AMENDMENT NO. 6
Dated as of December 17, 2010
and
AMENDMENT NO. 7
Dated as of January 31, 2011
Among
HBI RECEIVABLES LLC, as Seller,
HANESBRANDS INC., as Servicer,
THE COMMITTED PURCHASERS PARTY HERETO FROM TIME TO TIME,
THE CONDUIT PURCHASER PURCHASERS PARTY HERETO FROM TIME TO TIME,
THE MANAGING AGENTS PARTY HERETO FROM TIME TO TIME,
and

 

--------------------------------------------------------------------------------

 

Conformed Copy
HSBC SECURITIES (USA) INC.1
as Agent
 
 
 

1   Amendment No. 2 provided for each and every reference to “JPMorgan” and
“JPMorgan Chase Bank, N.A.”, insofar as such references are made to the Person
serving as the “Agent”, to replace such references with “HSBC” and “HSBC
Securities (USA) Inc.”, respectively, throughout the Purchase Agreement.

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

              Page  
ARTICLE I PURCHASE ARRANGEMENTS
    1  
Section 1.1 Purchase Facility
    1  
Section 1.2 Increases
    2  
Section 1.3 Decreases
    2  
Section 1.4 Payment Requirements
    3  
ARTICLE II PAYMENTS AND COLLECTIONS
    3  
Section 2.1 Payments
    3  
Section 2.2 Collections Prior to Amortization
    4  
Section 2.3 Collections Following Amortization
    4  
Section 2.4 Application of Collections
    4  
Section 2.5 Payment Rescission
    5  
Section 2.6 Maximum Purchaser Interests
    5  
ARTICLE III COMPANY FUNDING
    5  
Section 3.1 Yield
    6  
Section 3.2 Yield Payments
    6  
Section 3.3 Calculation of Yield
    6  
ARTICLE IV COMMITTED PURCHASER FUNDING
    6  
Section 4.1 Committed Purchaser Funding
    6  
Section 4.2 Yield Payments
    6  
Section 4.3 Selection and Continuation of Tranche Periods
    6  
Section 4.4 Committed Purchaser Discount Rates
    7  
Section 4.5 Suspension of the LIBO Rate
    7  
ARTICLE V REPRESENTATIONS AND WARRANTIES
    8  
Section 5.1 Representations and Warranties of The Seller Parties
    8  
Section 5.2 Committed Purchaser Representations and Warranties
    12  
Section 5.3 Representations and Warranties Regarding Conduit Purchasers
    12  
ARTICLE VI CONDITIONS OF PURCHASES
    13  
Section 6.1 Conditions Precedent to Initial Incremental Purchase
    13  
Section 6.2 Conditions Precedent to All Purchases and Reinvestments
    13  
ARTICLE VII COVENANTS
    14  
Section 7.1 Affirmative Covenants of The Seller Parties
    14  
Section 7.2 Negative Covenants of The Seller Parties
    22  
ARTICLE VIII ADMINISTRATION AND COLLECTION
    24  
Section 8.1 Designation of Servicer
    24  
Section 8.2 Duties of Servicer
    24  
Section 8.3 Collection Notices
    26  
Section 8.4 Responsibilities of Seller
    26  
Section 8.5 Reports
    26  
Section 8.6 Servicing Fees
    26  
Section 8.7 Servicer Default
    27  
ARTICLE IX AMORTIZATION EVENTS
    27  
Section 9.1 Amortization Events
    27  

i

--------------------------------------------------------------------------------

 

              Page  
Section 9.2 Remedies
    30  
ARTICLE X INDEMNIFICATION
    31  
Section 10.1 Indemnities by Seller
    31  
Section 10.2 Indemnities by Servicer
    33  
Section 10.3 Increased Cost and Reduced Return
    34  
Section 10.4 Other Costs and Expenses
    35  
Section 10.5 Accounting Based Consolidation Event
    35  
ARTICLE XI THE AGENT
    36  
Section 11.1 Authorization and Action
    36  
Section 11.2 Delegation of Duties
    37  
Section 11.3 Exculpatory Provisions
    37  
Section 11.4 Reliance by Agent
    37  
Section 11.5 Non-Reliance on Agent and Other Purchasers
    38  
Section 11.6 Reimbursement and Indemnification
    38  
Section 11.7 Agent in its Individual Capacity
    39  
Section 11.8 Successor Agent
    39  
ARTICLE XII ASSIGNMENTS; PARTICIPATIONS
    39  
Section 12.1 Assignments
    39  
Section 12.2 Participations
    41  
Section 12.3 Federal Reserve
    41  
ARTICLE XIV MISCELLANEOUS
    41  
Section 13.1 Waivers and Amendments
    41  
Section 13.2 Notices
    42  
Section 13.3 Ratable Payments
    42  
Section 13.4 Protection of Ownership Interests of the Purchasers
    43  
Section 13.5 Confidentiality
    43  
Section 13.6 Bankruptcy Petition
    45  
Section 13.7 Limited Recourse
    45  
Section 13.8 Limitation of Liability
    46  
Section 13.9 CHOICE OF LAW
    46  
Section 13.10 CONSENT TO JURISDICTION
    46  
Section 13.11 WAIVER OF JURY TRIAL
    46  
Section 13.12 Integration; Binding Effect; Survival of Terms
    47  
Section 13.13 Counterparts; Severability; Section References
    47  
Section 13.14 Agent Roles
    47  
Section 13.15 Characterization
    48  
Section 13.16 USA PATRIOT Act
    49  
Exhibits and Schedules
    i  

ii

--------------------------------------------------------------------------------

 

Exhibits and Schedules

     
Exhibit I
  Definitions
Exhibit II
  Form of Purchase Notice
Exhibit III
  Places of Business of the Seller Parties; Locations of Records; Federal
 
  Employer Identification Number(s)
Exhibit IV
  Form of Reduction Notice
Exhibit V
  Form of Compliance Certificate
Exhibit VI
  Form of Collection Account Agreement
Exhibit VII
  Form of Assignment Agreement
Exhibit VIII
  Credit and Collection Policy
Exhibit IX
  Form of Contract(s)
Exhibit X
  Form of Weekly Report
Exhibit XI
  Form of Settlement Report
Exhibit XII
  Financial Covenant Definitions[Reserved]
Exhibit XIII
  Form of Daily Report
 
   
Schedule A
  Commitments
Schedule B
  Closing Documents
Schedule C
  Special Concentration Limits
Schedule D
  Calendar Months

i

--------------------------------------------------------------------------------

 

HBI RECEIVABLES LLC
RECEIVABLES PURCHASE AGREEMENT
     This Receivables Purchase Agreement dated as of November 27, 2007 (this
“Agreement”) is among HBI Receivables LLC, a Delaware limited liability company
(“Seller”), Hanesbrands Inc., a Maryland corporation (“HBI”), as initial
Servicer (the Servicer together with Seller, the “Seller Parties” and each a
“Seller Party”), the entities listed on Schedule A to this Agreement as
Committed Purchasers (together with their respective successors and assigns
hereunder, the “Committed Purchasers”), the entities listed on Schedule A to
this Agreement as Conduit Purchasers (together with their respective successors
and assigns hereunder, the “Conduit Purchasers”), the entities listed on
Schedule A to this Agreement as Managing Agents (together with their respective
successors and assigns hereunder, the “Managing Agents”), and HSBC Securities
(USA) Inc., (“HSBC”), as agent for the Purchasers hereunder or any successor
agent hereunder (together with its successors and assigns hereunder, the
“Agent”). Unless defined elsewhere herein, capitalized terms used in this
Agreement shall have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
     Seller desires to transfer and assign Purchaser Interests to the Purchasers
from time to time.
     The Conduit Purchasers may, in their absolute and sole discretion, purchase
Purchaser Interests from Seller from time to time.
     In the event that a Conduit Purchaser declines to make any purchase, the
Committed Purchasers in its Purchase Group shall, at the request of Seller,
purchase Purchaser Interests from time to time.
     HSBC Securities (USA) Inc. has been requested and is willing to act as
Agent on behalf of the Purchasers in accordance with the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
          Section 1.1 Purchase Facility.
               (a) Upon the terms and subject to the conditions hereof, Seller
may, at its option, sell and assign Purchaser Interests to the Agent for the
benefit of the Purchasers during the period from the date hereof to but not
including the Facility Termination Date; provided that the aggregate Capital
outstanding at any time hereunder shall not exceed (i) in respect of all
Purchasers, an amount equal to the Purchase Limit at such time and (ii) in
respect of any Purchase Group, the applicable Group Purchase Limit at such time.
In accordance with the terms and conditions set forth herein, each Conduit
Purchaser may, at its option, instruct its Managing Agent to cause the Agent to
purchase on its behalf, or if any Conduit Purchaser shall decline to purchase,
its Managing Agent shall cause the Agent to

Page 1

--------------------------------------------------------------------------------

 

purchase, on behalf of the Committed Purchasers in its Purchase Group, the
applicable Purchase Group Share of such Purchaser Interests.
               (b) Seller may, upon at least 10 Business Days’ notice to each
Managing Agent and the Agent, terminate in whole or reduce in part, the unused
portion of the Purchase Limit. Upon any reduction in the Purchase Limit, the
Group Purchase Limits shall be permanently reduced by a corresponding amount
(ratably among the Purchase Groups in accordance with the Purchase Group Shares)
and the Commitments of each Committed Purchaser in each Purchase Group shall be
ratably reduced in accordance with their respective Pro Rata Share. Each partial
reduction of the Purchase Limit shall be in an amount equal to $1,000,000 or an
integral multiple thereof.
               (c) On the date of each Incremental Purchase made under Section
1.2 and on the date of each Reinvestment made under Section 2.2, Seller hereby
sells and assigns to the Agent (for the benefit of the Purchasers ratably among
the Purchase Groups, in accordance with each Purchase Group Share), and the
Agent hereby purchases, for the benefit of such Purchasers, a Purchaser Interest
in the Receivables, Related Security and Collections then existing and
thereafter arising or existing, subject only to the payment by such Purchasers
of the applicable Purchase Price therefor in accordance with the terms of this
Agreement.
          Section 1.2 Increases.
          Seller shall provide the Agent and each Managing Agent with at least
two (2) Business Days’ prior notice in a form set forth as Exhibit II hereto of
each Incremental Purchase (a “Purchase Notice”). Each Purchase Notice shall be
subject to Section 6.2 hereof and, except as set forth below, shall be
irrevocable and shall specify the requested Purchase Price (which shall not be
less than $1,000,000) and date of purchase and, in the case of an Incremental
Purchase to be funded by the Committed Purchasers, the requested Discount Rate
and Tranche Period. Following receipt of a Purchase Notice, each Managing Agent
will determine whether the Conduit Purchasers in its Purchase Group agree to
make the purchase of the applicable Purchase Group Share of such Incremental
Purchase. In the event that a Purchase Group has more than one Conduit
Purchaser, the related Managing Agent shall allocate the Incremental Purchases
among such Conduit Purchasers in its sole discretion. If the Conduit Purchasers
in any Purchase Group decline to make a proposed purchase, the Managing Agent
for the related Purchase Group shall notify Seller and Seller may cancel the
Purchase Notice. In the absence of such a cancellation, the applicable Purchase
Group Share of the requested Incremental Purchase will be made by the Committed
Purchasers in such Purchase Group ratably based on their Pro Rata Shares. The
Committed Purchasers in a Purchase Group will not fund any portion of an
Incremental Purchase unless the Conduit Purchasers in its Purchase Group have
declined to fund such portion. On the date of each Incremental Purchase, upon
satisfaction of the applicable conditions precedent set forth in Article VI, the
applicable Purchasers in each Purchase Group shall initiate a wire transfer of
immediately available funds to the account specified by Seller, no later than
12:00 noon (Chicago time), an amount equal to the applicable Purchase Group
Share of the applicable Purchase Price for such Incremental Purchase. There may
not be more than ten (10) Incremental Purchases during any calendar month.
          Section 1.3 Decreases. Seller shall provide the Agent and each
Managing Agent with prior written notice in a form set forth as Exhibit IV
hereto in conformity with the Required Notice Period (a “Reduction Notice”) of
any proposed reduction of Aggregate Capital

Page 2

--------------------------------------------------------------------------------

 

from Collections. Such Reduction Notice shall designate (i) the date (the
“Proposed Reduction Date”) upon which any such reduction of Aggregate Capital
shall occur (which date shall give effect to the applicable Required Notice
Period), and (ii) the amount of Aggregate Capital to be reduced (the “Aggregate
Reduction”) which shall be distributed ratably to each Purchase Group based on
the Purchase Group Share of the Aggregate Capital of each Purchase Group and
which shall be applied by each Managing Agent ratably to the Purchaser Interests
of the Purchasers in such Managing Agent’s Purchase Group ratably in accordance
with the amount of Capital (if any) owing to such Purchasers. Only one
(1) Reduction Notice shall be outstanding at any time.
          Section 1.4 Payment Requirements. All amounts to be paid or deposited
by any Seller Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (Chicago
time) on the day when due in immediately available funds, and if not received
before 11:00 a.m. (Chicago time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the applicable Managing Agent, for the account of such Purchaser, at
the account specified by such Managing Agent. All computations of Yield, per
annum fees hereunder and per annum fees under the Fee Letter shall be made on
the basis of a year of 360 days for the actual number of days elapsed. If any
amount hereunder shall be payable on a day which is not a Business Day, such
amount shall be payable on the next succeeding Business Day.
ARTICLE II
PAYMENTS AND COLLECTIONS
          Section 2.1 Payments. Notwithstanding any limitation on recourse
contained in this Agreement, Seller shall immediately pay when due to the Agent
or each Managing Agent, as applicable, for the account of the relevant
Purchasers, Funding Sources or Indemnified Parties on a full recourse basis, as
applicable, (i) such fees as set forth in the Fee Letter and in the Agent Fee
Letter2, (ii) all amounts payable as Yield, (iii) all amounts payable as Deemed
Collections (which shall be immediately due and payable by Seller and applied to
reduce outstanding Aggregate Capital hereunder in accordance with Sections 2.2
and 2.3), (iv) all amounts required pursuant to Section 2.6, (v) all amounts
payable pursuant to Article X, if any, (vi) all Servicer costs and expenses,
including the Servicing Fee, in connection with servicing, administering and
collecting the Receivables and (vii) all Broken Funding Costs (collectively, the
“Obligations”). If any Person fails to pay any of the Obligations when due, such
Person agrees to pay, on demand, interest thereon accruing at the Default Rate
until paid in full. Notwithstanding the foregoing, no provision of this
Agreement, the Fee Letter or the Agent Fee Letter shall require the payment or
permit the collection of any amounts hereunder in excess of the maximum
permitted by applicable law.3 If at any time Seller receives any Collections or
is deemed to receive any Collections, Seller shall immediately pay such
Collections or Deemed Collections to the Servicer for application in accordance
with the terms and conditions hereof and, at all times prior to such payment,
such Collections or Deemed Collections shall be held in trust by Seller for the
exclusive benefit of the Purchasers and the Agent.
 

2   Clause (i) of Section 2.1 was deleted and replaced in its entirety by
Amendment No. 1.   3   This sentence was deleted and replaced in its entirety by
Amendment No. 1.

Page 3

--------------------------------------------------------------------------------

 

          Section 2.2 Collections Prior to Amortization. (a) Prior to the
Amortization Date, any Collections and/or Deemed Collections received by the
Servicer shall be set aside and held in trust by the Servicer for the payment of
any accrued and unpaid Aggregate Unpaids, any Aggregate Reductions or for a
Reinvestment as provided in this Section 2.2. If at any time any Collections
and/or Deemed Collections are received by the Servicer prior to the Amortization
Date and such Collections and/or Deemed Collections are not so set aside or held
in trust for the payment of Aggregate Unpaids or Aggregate Reductions, Seller
hereby requests and the Purchasers hereby agree to make, simultaneously with
such receipt, but subject to the conditions precedent set forth herein, a
reinvestment (each a “Reinvestment”) with that portion of the balance of each
and every Collection and Deemed Collection received by the Servicer that is part
of any Purchaser Interest, such that after giving effect to such Reinvestment,
the amount of Capital of such Purchaser Interest immediately after such receipt
and corresponding Reinvestment shall be equal to the amount of Capital
immediately prior to such receipt.
          Section 2.3 Collections Following Amortization. On the Amortization
Date and on each day thereafter, the Servicer shall set aside and hold in trust,
for the holder of each Purchaser Interest, all Collections received on such day
and an additional amount for the payment of any accrued and unpaid Obligations
owed by Seller and not previously paid by Seller in accordance with Section 2.1.
          Section 2.4 Application of Collections. (i) Prior to the Amortization
Date, on each Settlement Date, and (ii) on and after the Amortization Date, on
each Settlement Date and on such additional dates as the Agent may request
(which may be each Business Day), the Servicer shall distribute the funds set
aside or held in trust pursuant to Section 2.2 or 2.3 (as applicable), in the
following priority:
     (i) first, to the payment of the Servicer’s reasonable out-of-pocket costs
and expenses in connection with servicing, administering and collecting the
Receivables, including the Servicing Fee, if an Originator or one of its
Affiliates is not then acting as the Servicer,
     (ii) second, to the Agent, for its own account, all accrued and unpaid fees
under the Agent Fee Letter, and to each Managing Agent, for its own account or
for the benefit of the Purchasers in its Purchase Group, all accrued and unpaid
fees under the Fee Letter and all Yield, ratably in accordance with such amounts
owed to such parties;4
     (iii) third, (to the extent applicable) to the Agent, to be distributed to
each Managing Agent, for the benefit of the Purchasers in its Purchase Group to
be applied to the reduction of the Aggregate Capital, ratably in accordance with
each Purchase Group Share,
     (iv) fourth, to the reimbursement of the Agent’s and the Managing Agents’
costs of collection and enforcement of the Facility documents ratably in
accordance with the costs owed to such parties,
 

4   Clause (ii) of Section 2.4 was deleted and replaced in its entirety by
Amendments No. 1 and No. 2.

Page 4

--------------------------------------------------------------------------------

 

     (v) fifth, for the ratable payment of all other unpaid Obligations,
provided that to the extent such Obligations relate to the payment of Servicer
costs and expenses, including the Servicing Fee, when an Originator or one of
its Affiliates is acting as the Servicer, such costs and expenses will not be
paid until after the payment in full of all other Obligations, and
     (vi) sixth, after the Aggregate Unpaids have been indefeasibly reduced to
zero, to Seller.
          Collections applied to the payment of Aggregate Unpaids shall be
distributed in accordance with the aforementioned provisions, and, giving effect
to each of the priorities set forth in this Section 2.4 above, shall be shared
ratably (within each priority) among the parties described in such priority of
application in accordance with the amount of such Aggregate Unpaids owing to
each of them in respect of each such priority unless otherwise specified. Each
Managing Agent shall distribute the amounts received pursuant to clauses (iii)
and (iv) above to the Purchasers in its Purchase Group ratably according to the
applicable amounts owed to such Purchasers. On and after the Amortization Date,
in the event that applications of Collections are made on a date other than a
Settlement Date, if any Managing Agent so directs the Agent, the Agent shall set
aside from Collections for distribution to such Managing Agent on the next
Settlement Date, the accrued and unpaid fees under the Fee Letter and accrued
and unpaid Yield which are (or will be) due and payable to the Managing Agents
and Purchasers in the related Purchase Group on the next Settlement Date.
          Section 2.5 Payment Rescission. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason to the extent such payment is returned or refunded by
any of the Agent, any Managing Agent, any Purchaser or any Indemnified Party.
Seller shall remain obligated for the amount of any payment or application so
rescinded, returned or refunded, and shall promptly pay to the Agent (for the
ratable application to the Person or Persons who suffered such rescission,
return or refund) the full amount thereof, plus interest thereon at the Default
Rate from the date of any such rescission, return or refunding.
          Section 2.6 Maximum Purchaser Interests. Prior to the Amortization
Date, the Seller shall ensure that the aggregate Purchaser Interests of the
Purchasers shall at no time exceed in the aggregate 100%. If prior to the
Amortization Date, the aggregate of the Purchaser Interests of the Purchasers
exceeds 100%, Seller shall pay within one (1) Business Day an amount to the
Managing Agents which shall be allocated to each Managing Agent based on each
Purchase Group Share to be applied to reduce the Aggregate Capital (as allocated
by each Managing Agent to each of the Purchasers in its related Purchaser Group
ratably based upon each such Purchaser’s Capital) such that after giving effect
to such payment (and the application thereof to reduce the Aggregate Capital)
the aggregate of the Purchaser Interests equals or is less than 100%.
ARTICLE III
CONDUIT PURCHASER FUNDING

Page 5

--------------------------------------------------------------------------------

 

          Section 3.1 Yield. The Capital associated with each Purchaser Interest
funded by a Conduit Purchaser shall accrue Yield at the CP Rate applicable to
such Conduit Purchaser for each day that any Capital in respect of such
Purchaser Interest is outstanding ; provided, that the Capital associated with
any Purchaser Interest, portion thereof or undivided interest therein which is
being funded by the Committed Purchasers in such Conduit Purchaser’s Purchase
Group pursuant to a Liquidity Agreement shall accrue Yield pursuant to
Article IV.
          Section 3.2 Yield Payments. On each Settlement Date Seller shall pay
to each Managing Agent for the benefit of each Conduit Purchaser in its Purchase
Group an aggregate amount equal to all accrued and unpaid Yield in respect of
the Capital associated with all Purchaser Interests of each Conduit Purchaser
for the immediately preceding Accrual Period in accordance with Article II.
          Section 3.3 Calculation of Yield. On or before the second Business Day
immediately preceding each Settlement Date, each Managing Agent shall calculate
the aggregate amount of Yield due and payable to each Conduit Purchaser in its
Purchase Group for the immediately preceding Accrual Period and shall notify
Seller of such aggregate amount.
ARTICLE IV
COMMITTED PURCHASER FUNDING
          Section 4.1 Committed Purchaser Funding. The Capital associated with
each Purchaser Interest funded by the Committed Purchasers shall accrue Yield
for each day during its Tranche Period at either the LIBO Rate or the Prime Rate
in accordance with the terms and conditions hereof. If any Committed Purchaser
acquires by assignment from the Conduit Purchaser in its Purchase Group all or
any portion of a Purchaser Interest (or an undivided interest therein) pursuant
to such Conduit Purchaser’s Liquidity Agreement, then (i) until Seller gives
notice to the applicable Managing Agent of another Discount Rate in accordance
with Section 4.4, the initial Discount Rate for any such Purchaser Interest (or
portion thereof or interest therein) so transferred to the Committed Purchasers
shall be the Prime Rate and (ii) until a new Tranche Period is selected in
accordance with Section 4.3, each such Purchaser Interest shall be deemed to
have a new Tranche Period commencing on the date of such transfer.
          Section 4.2 Yield Payments. On each Settlement Date, Seller shall pay
to each Managing Agent (for the benefit of the Committed Purchasers in its
Purchase Group) an aggregate amount equal to the accrued and unpaid Yield for
each Tranche Period in accordance with Article II.
          Section 4.3 Selection and Continuation of Tranche Periods.
               (a) With consultation from (and approval by) the related Managing
Agent, Seller shall from time to time request Tranche Periods for the Purchaser
Interests funded by the Committed Purchasers in each Purchase Group, provided
that, each Tranche Period shall end on a Settlement Date.
               (b) Seller, upon notice to and consent by the applicable Managing
Agent received at least three (3) Business Days prior to the end of a Tranche
Period (the

Page 6

--------------------------------------------------------------------------------

 

“Terminating Tranche”) for any Purchaser Interest, may, effective on the last
day of the Terminating Tranche: (i) divide any such Purchaser Interest funded by
the Committed Purchasers in the same Purchase Group into multiple Purchaser
Interests, (ii) combine any such Purchaser Interest with one or more other
Purchaser Interests of a Committed Purchaser in the same Purchase Group that
have a Terminating Tranche ending on the same day as such Terminating Tranche or
(iii) combine any such Purchaser Interest with a new Purchaser Interest to be
purchased by such Committed Purchaser on the day such Terminating Tranche ends,
provided, that in no event may a Purchaser Interest of any Conduit Purchaser be
combined with a Purchaser Interest of the Committed Purchasers in its Purchase
Group.
          Section 4.4 Committed Purchaser Discount Rates. Seller may select the
LIBO Rate or the Prime Rate for each Purchaser Interest funded by the Committed
Purchasers. Seller shall by 11:00 a.m. (Chicago time): (i) at least three
(3) Business Days prior to the expiration of any Terminating Tranche with
respect to which the LIBO Rate is being requested as a new Discount Rate and
(ii) no later than the Business Day of expiration of any Terminating Tranche
with respect to which the Prime Rate is being requested as a new Discount Rate,
give each Managing Agent irrevocable notice of the new Discount Rate requested
for the Purchaser Interest associated with such Terminating Tranche. Until
Seller gives notice to the Agent of another Discount Rate, the initial Discount
Rate for any Purchaser Interest transferred to the Committed Purchasers pursuant
to a Liquidity Agreement shall be the Prime Rate.
          Section 4.5 Suspension of the LIBO Rate.
          (a) If any Committed Purchaser notifies its related Managing Agent
that it has determined that funding its Pro Rata Share of the Purchaser
Interests of the Committed Purchasers at a LIBO Rate would violate any
applicable law, rule, regulation, or directive of any governmental or regulatory
authority, whether or not having the force of law, or that (i) deposits of a
type and maturity appropriate to match fund its Purchaser Interests at such LIBO
Rate are not available or (ii) such LIBO Rate does not accurately reflect the
cost of acquiring or maintaining a Purchaser Interest at such LIBO Rate, then
such Managing Agent shall suspend the availability of such LIBO Rate and require
Seller to select the Prime Rate for any Purchaser Interest accruing Yield at
such LIBO Rate.
          (b) If less than all of the Committed Purchasers in any Purchase Group
give a notice to the related Managing Agent pursuant to Section 4.5(a), each
Committed Purchaser which gave such a notice shall be obliged, at the request of
Seller or such Financing Institution’s Managing Agent, to assign all of its
rights and obligations hereunder to (i) another Committed Purchaser in its
Purchase Group or (ii) another funding entity nominated by Seller or the related
Managing Agent that is acceptable to the Agent, the applicable Managing Agent
and the related Conduit Purchasers and willing to participate in this Agreement
until the date described in clause (i) of the definition of Facility Termination
Date in the place of such notifying Committed Purchaser; provided that (i) the
notifying Committed Purchaser receives payment in full, pursuant to an
Assignment Agreement, of an amount equal to such notifying Committed Purchaser’s
share of the Capital and Yield and all accrued but unpaid fees and other costs
and expenses payable in respect of its share of the Purchaser Interests, and
(ii) the replacement Committed Purchaser otherwise satisfies the requirements of
Section 12.1(b).

Page 7

--------------------------------------------------------------------------------

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES
          Section 5.1 Representations and Warranties of The Seller Parties. Each
Seller Party hereby represents and warrants to the Agent, the Managing Agents
and the Purchasers, as to itself, as of the date hereof and as of the date of
each Incremental Purchase and the date of each Reinvestment that:
          (a) Corporate Existence and Power. Such Seller Party is a corporation
or limited liability company duly organized, validly existing and in good
standing under the laws of its state of incorporation or formation, as
applicable, identified in the Preamble to this Agreement. Such Seller Party is
duly qualified to do business and is in good standing as a foreign entity, and
has and holds all corporate or limited liability company power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is conducted, except
in each case, where a failure to do so could not reasonably be expected to have
a Material Adverse Effect.
          (b) Power and Authority; Due Authorization, Execution and Delivery.
The execution and delivery by such Seller Party of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and, in the case of Seller, Seller’s use of
the proceeds of purchases made hereunder, are within its corporate powers and
authority and have been duly authorized by all necessary corporate or limited
liability company action on its part. This Agreement and each other Transaction
Document to which such Seller Party is a party has been duly executed and
delivered by such Seller Party.
          (c) No Conflict. The execution and delivery by such Seller Party of
this Agreement and each other Transaction Document to which it is a party, and
the performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate or articles of incorporation or formation, as
applicable or by-laws or operating agreement, as applicable, (ii) any law, rule
or regulation applicable to it, (iii) any restrictions under any agreement,
contract or instrument to which it is a party or by which it or any of its
property is bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of such Seller Party or
its Subsidiaries (except as created hereunder), except in the case of clauses
(ii), (iii) or (iv), where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect; and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law.
          (d) Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by such Seller Party of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder except where the failure
to obtain such authorization or approval or take such action or make such notice
or filing could not reasonably be expected to have a Material Adverse Effect.
          (e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Seller Party’s knowledge, threatened, against or
affecting such Seller Party, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be

Page 8

--------------------------------------------------------------------------------

 

expected to have a Material Adverse Effect. Seller is not in default with
respect to any order of any court, arbitrator or governmental body. Servicer is
not in default with respect to any order of any court, arbitrator or
governmental body other than such default which could not reasonably be expected
to have a Material Adverse Effect.
          (f) Binding Effect. This Agreement and each other Transaction Document
to which such Seller Party is a party constitute the legal, valid and binding
obligations of such Seller Party enforceable against such Seller Party in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors’ rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
          (g) Accuracy of Information. All written information heretofore
furnished by such Seller Party or any of its Affiliates to the Agent, the
Managing Agents or the Purchasers for purposes of or in connection with this
Agreement, any of the other Transaction Documents or any transaction
contemplated hereby or thereby is, and all such information hereafter furnished
by such Seller Party or any of its Affiliates to the Agent, the Managing Agents
or the Purchasers, taken as a whole, does not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein not materially misleading as of the date such
information was furnished.
          (h) Use of Proceeds. No proceeds of any purchase hereunder will be
used (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction which is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.
          (i) Good Title. Immediately prior to each purchase hereunder, Seller
shall be the legal and beneficial owner of the Receivables and Related Security
with respect thereto, free and clear of any Adverse Claim, except as created by
the Transaction Documents. There have been duly filed all financing statements
or other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Seller’s ownership
interest in each Receivable, its Collections and the Related Security.
          (j) Perfection. Seller is an organization organized solely under the
laws of the state identified in the Preamble to this Agreement. This Agreement,
together with the filing of the financing statements contemplated hereby, is
effective to, and shall, upon each purchase hereunder, transfer to the Agent for
the benefit of the relevant Purchaser or Purchasers (and the Agent for the
benefit of such Purchaser or Purchasers shall acquire from Seller) a valid and
perfected first priority undivided percentage ownership or security interest in
each Receivable existing or hereafter arising and in the Related Security and
Collections with respect thereto, free and clear of any Adverse Claim, except as
created by the Transactions Documents. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect the Agent’s (on
behalf of the Purchasers) ownership or security interest in the Receivables, the
Related Security and the Collections.

Page 9

--------------------------------------------------------------------------------

 

          (k) Places of Business and Locations of Records. The principal places
of business and chief executive office of such Seller Party and the principal
offices where it keeps the Records necessary to identify, collect and enforce
the Receivables are located at the address(es) listed on Exhibit III or such
other locations of which the Managing Agents have been notified in accordance
with Section 7.2(a) in jurisdictions where all action required by
Section 13.4(a) has been taken and completed. Seller’s Federal Employer
Identification Number is correctly set forth on Exhibit III.
          (l) Collections. The conditions and requirements set forth in Sections
7.1(j) and 8.2 have at all times been satisfied and duly performed. The names
and addresses of all Collection Banks, together with the account numbers of the
Collection Accounts of Seller at each Collection Bank and the post office box
number of each Lock-Box, are listed on Schedule II to the Fee Letter. Seller has
not granted any Person, other than the Agent as contemplated by this Agreement,
dominion and control of any Lock-Box or Collection Account, or the right to take
dominion and control of any such Lock-Box or Collection Account at a future time
or upon the occurrence of a future event.
          (m) Material Adverse Effect. (i) The initial Servicer represents and
warrants that since December 30, 2006,January 2, 2010, no event has occurred
that would have a material adverse effect on the financial condition or
operations of the initial Servicer and its Subsidiaries taken as a whole or the
ability of the initial Servicer to perform its obligations under this Agreement,
and (ii) Seller represents and warrants that since the date of this Agreement,
no event has occurred that would have a material adverse effect on (A) the
financial condition or operations of Seller, (B) the ability of Seller to
perform its obligations under the Transaction Documents, or (C) the
collectibility of the Receivables generally or any material portion of the
Receivables, other than due to the insolvency, bankruptcy or creditworthiness of
an Obligor.
          (n) No Amortization Event or Servicer Default. No event has occurred
and is continuing that constitutes an Amortization Event, a Potential
Amortization Event, a Servicer Default or a Potential Servicer Default.
          (o) Names. Seller has not used any corporate names, trade names or
assumed names other than the name in which it has executed this Agreement.
          (p) Ownership of Seller. OriginatorHBI owns, directly or indirectly,
100% of the issued and outstanding equity interests of Seller, free and clear of
any Adverse Claim. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Seller.
          (q) Not an Investment Company. Such Seller Party is not an “investment
company” within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
          (r) Compliance with Law. Such Seller Party has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject except where the
failure to comply could not reasonably be expected to have a Material Adverse
Effect. Each Receivable, together with the Contract related thereto and
the applicable Credit and Collection Policy, does not contravene or violate

Page 10

--------------------------------------------------------------------------------

 

any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth-in-lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) except where such contravention or violation
could not reasonably be expected to have a Material Adverse Effect.
          (s) Compliance with Credit and Collection Policy. Such Seller Party
has complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract, and has not made any
material change to such Credit and Collection Policy, except as to which the
Managing Agents have been notified and any necessary consents have been obtained
in accordance with Section 7.1(a)(vii).
          (t) Payments to OriginatorOriginators. With respect to each Receivable
transferred to Seller under the Receivables Sale Agreement, Seller has given
reasonably equivalent value to the applicable Originator in consideration
therefor and such transfer was not made for or on account of an antecedent debt.
No transfer by an Originator of any Receivable under the Receivables Sale
Agreement is or may be voidable under any section of the Bankruptcy Reform Act
of 1978 (11 U.S.C. §§ 101 et seq.), as amended.
          (u) Enforceability of Contracts. Each Contract with respect to each
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors’ rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
          (v) Eligible Receivables. Each Receivable identified by Seller or the
Servicer as an Eligible Receivable in any report, statement or other information
delivered pursuant to any Transaction Document was an Eligible Receivable as of
the date so identified.
          (w) Net Receivables Balance. Seller has determined that, immediately
after giving effect to each Incremental Purchase and Reinvestment hereunder, the
Net Receivables Balance is at least equal to the sum of (i) the Aggregate
Capital, plus (ii) the Aggregate Reserves.
          (x) Solvency. After giving effect to the sale or contribution of
Receivables and the Incremental Purchase and Reinvestments, as applicable, to be
made on such date and to the application of the proceeds therefrom, Seller is
and will be Solvent.
          (y) Taxes. Servicer has filed all material tax returns and reports
required by law to have been filed by it and has paid all taxes thereby shown to
be due and owing, except any such taxes which 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 except to the
extent such failure could not reasonably be expected to result in a Material
Adverse Effect. Seller has filed all tax returns and reports required by law to
be filed by it and has paid all taxes and governmental charges at any time
owing, except any such taxes which are not yet delinquent or are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set

Page 11

--------------------------------------------------------------------------------

 

aside on its books. Seller has paid when due any taxes payable in connection
with the Receivables.
     (z) ERISA. During the twelve-consecutive-month period prior to the date
hereof and prior to the date of any Incremental Purchase or Reinvestment
hereunder, no steps have been taken to terminate any Pension Plan which has
caused or could reasonably be expected to cause Servicer or any Subsidiary to
incur any liability, and no contribution failure has occurred with respect to
any Pension Plan sufficient to give rise to an Adverse Claim under Section
302(f) of ERISA with respect to any assets of Servicer or any Subsidiary. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which might result in the incurrence by the Servicer of any
material liability, fine or penalty. Seller does not participate in any Pension
Plan.
          Section 5.2 Committed Purchaser Representations and Warranties. Each
Committed Purchaser hereby represents and warrants to the Managing Agent, each
Conduit Purchaser in its Purchase Group and each Seller Party that:
          (a) Existence and Power. Such Committed Purchaser is a corporation or
a banking association duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, and has all
corporate power and authority to perform its obligations hereunder.
          (b) No Conflict. The execution and delivery by such Committed
Purchaser of this Agreement and the performance of its obligations hereunder are
within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any Adverse
Claim on its assets. This Agreement has been duly authorized, executed and
delivered by such Committed Purchaser.
          (c) Governmental Authorization. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Committed
Purchaser of this Agreement and the performance of its obligations hereunder.
          (d) Binding Effect. This Agreement constitutes the legal, valid and
binding obligation of such Committed Purchaser enforceable against such
Committed Purchaser in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors’ rights generally and by general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).
          Section 5.3 Representations and Warranties Regarding Conduit
Purchasers. Each Managing Agent hereby represents and warrants to the each
Seller Party that, with respect to each Conduit Purchaser in its Purchase Group:

Page 12

--------------------------------------------------------------------------------

 

          (a) Existence and Power. Such Conduit Purchaser is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, and has all corporate power and authority to
perform its obligations hereunder.
          (b) No Conflict. The execution and delivery by such Conduit Purchaser
of this Agreement and the performance of its obligations hereunder are within
its organizational powers, have been duly authorized by all necessary corporate
or limited liability company action, do not contravene or violate (i) its
certificate or articles of incorporation or formation, by-laws or limited
liability company agreement, (ii) any law, rule or regulation applicable to it,
(iii) any restrictions under any agreement, contract or instrument to which it
is a party or any of its property is bound, or (iv) any order, writ, judgment,
award, injunction or decree binding on or affecting it or its property, and do
not result in the creation or imposition of any Adverse Claim on its assets.
This Agreement has been duly authorized, executed and delivered by such Conduit
Purchaser.
          (c) Governmental Authorization. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Conduit
Purchaser of this Agreement and the performance of its obligations hereunder.
          (d) Binding Effect. This Agreement constitutes the legal, valid and
binding obligation of such Conduit Purchaser enforceable against such Conduit
Purchaser in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors’ rights generally and by general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
          Section 6.1 Conditions Precedent to Initial Incremental Purchase. The
initial Incremental Purchase of a Purchaser Interest under this Agreement is
subject to the conditions precedent that (a) the Agent and the Managing Agents
shall have received on or before the date of such purchase those documents
listed on Schedule B, (b) the Agent shall have received evidence of a marking by
each Originator and Seller of their respective master data processing records
evidencing the applicable Receivables to reflect the sales thereof contemplated
by the Transaction Documents, (c) Bryant Park Funding LLC shall have received
letters from each of S&P and Moody’s which confirm the short-term debt ratings
of its Commercial Paper, and (d) the Agent and the Managing Agents shall have
received all fees and expenses required to be paid on such date pursuant to the
terms of this Agreement, the Fee Letter and the letter agreement dated as of
August 14, 2007 between HBI and J.P. Morgan Securities Inc.
          Section 6.2 Conditions Precedent to All Purchases and Reinvestments.
Each Incremental Purchase of a Purchaser Interest and each Reinvestment shall be
subject to the further conditions precedent that (a) in the case of each such
Incremental Purchase or Reinvestment: (i) the Servicer shall have delivered to
the Agent and each Managing Agent on

Page 13

--------------------------------------------------------------------------------

 

or prior to the date of such Incremental Purchase or Reinvestment, in form and
substance satisfactory to the Agent and each Managing Agent, all Weekly Reports
and Settlement Reports as and when due under Section 8.5 except to the extent
that any failure has been waived by the Agent and each Managing Agent and
(ii) upon the Agent’s or any Managing Agent’s request, the Servicer shall have
delivered to the Agent and each Managing Agent at least three (3) Business Days
prior to such Incremental Purchase or Reinvestment an interim Settlement Report
showing the amount of Eligible Receivables; (b) the Facility Termination Date
shall not have occurred; (c) the Agent and each Managing Agent shall have
received such other approvals, opinions or documents as it may reasonably
request within three (3) Business Days of such request if such Managing Agent or
the Agent, as applicable, reasonably believes that there has been (i) an adverse
change with respect to the Agent’s first priority perfected security interest in
the Receivables, Related Security and Collections (due to a change in Seller’s
or any Originator’s jurisdiction of organization or for any other reason) or
(ii) a material adverse change with respect to the enforceability of the rights
and remedies of the Agent, the Managing Agents and the Purchasers under the
Transaction Documents and (d) on the date of each such Incremental Purchase or
Reinvestment, the following statements shall be true (and acceptance of the
proceeds of such Incremental Purchase or Reinvestment shall be deemed a
representation and warranty by Seller that such statements are then true):
               (i) the representations and warranties set forth in Section 5.1
are true and correct on and as of the date of such Incremental Purchase or
Reinvestment as though made on and as of such date;
               (ii) no event has occurred and is continuing, or would result
from such Incremental Purchase or Reinvestment, that constitutes an Amortization
Event, a Potential Amortization Event, a Servicer Default or a Potential
Servicer Default; and
               (iii) the Aggregate Capital does not exceed the Purchase Limit
and the aggregate Purchaser Interests do not exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised (and shall be exercised at the direction of
the Required Committed Purchasers) at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent for the
benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII
COVENANTS
          Section 7.1 Affirmative Covenants of The Seller Parties. Until the
date on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:

Page 14

--------------------------------------------------------------------------------

 

          (a) Financial Reporting. Such Seller Party will maintain, for itself
and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent (which the Agent shall forward to each Managing Agent):
               (i) Annual Reporting. (A) In the case of the Servicer, within 90
days after the close of each of its fiscal years, audited, unqualified
consolidated financial statements (which shall include balance sheets,
statements of income and retained earnings and a statement of cash flows) for
the Servicer for such fiscal year certified in a manner acceptable to the Agent
and the Managing Agents by independent public accountants and (B) in the case of
the Seller, within 120 days after the close of each of its fiscal years,
unaudited unqualified financial statements (which shall include balance sheets,
statements of income and retained earnings and a statement of cash flows) for
such fiscal year, with respect to which the Seller may omit all footnotes,
certified by its Authorized Officer, provided that such reports and
certifications shall be deemed to be delivered under this Section 7.1(a)(i) upon
the document being made available on the SEC’s EDGAR website.
               (ii) Quarterly Reporting. In the case of Servicer, within 45 days
after the close of the first three (3) quarterly periods of each of its fiscal
years, and in the case of Seller, within 60 days after the close of the first
three (3) quarterly periods of each of its fiscal years, balance sheets of each
of the Servicer and Seller as at the close of each such period and statements of
income and a statement of cash flows for each such Person for the period from
the beginning of such fiscal year to the end of such quarter and with respect to
which the Seller may omit all footnotes, all certified by its respective
Authorized Officer, provided that such reports and certifications shall be
deemed to be delivered under this Section 7.1(a)(ii) upon the document being
made available on the SEC’s EDGAR website.
               (iii) Compliance Certificate. Together with, and at or before the
time, the financial statements required hereunder to be delivered by the Seller,
a compliance certificate in substantially the form of Exhibit V prepared for
both Seller Parties and signed by each Seller Party’s Authorized Officer and
dated the date of such annual financial statement or such quarterly financial
statement, as the case may be.
               (iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of the OriginatorHBI copies of all
financial statements, reports and proxy statements so furnished, provided that
such statements and/or reports shall be deemed to be delivered under this
Section 7.1(a)(iv) upon the document being made available on the SEC’s EDGAR
website.
               (v) S.E.C. Filings. Promptly upon the filing thereof, copies of
all registration statements and annual, quarterly, monthly or other regular
reports which any Originator or any of its Subsidiaries files with the
Securities and Exchange Commission, provided that such reports shall be deemed
to be delivered under this Section 7.1(a)(v) upon the document being made
available on the SEC’s EDGAR website.
               (vi) Copies of Notices under the Transaction Documents. Promptly
upon its receipt of any notice, request for consent, financial statements,
certification,

Page 15

--------------------------------------------------------------------------------

 

report or other communication under or pursuant to any Transaction Document from
any Person other than the Agent, any Managing Agent or any Purchaser, copies of
the same.
               (vii) Change in Credit and Collection Policy. At least thirty
(30) days prior to the effectiveness of any material change in or material
amendment to the Credit and Collection Policy of any Originator, a copy of the
Credit and Collection Policy then in effect and a notice (A) indicating such
change or amendment, and (B) if such proposed change or amendment would be
reasonably likely to materially and adversely affect the collectibility of the
Receivables or materially decrease the credit quality of any newly created
Receivables, requesting the Required Committed Purchasers’ consent thereto.
               (viii) Other Information. Promptly, from time to time, such other
information, documents, records or reports relating to the Receivables or the
condition or operations, financial or otherwise, of such Seller Party as the
Agent or any Managing Agent may from time to time reasonably request in order to
protect the interests of the Agent, the Managing Agents and the Purchasers under
or as contemplated by this Agreement.
          (b) Notices. Such Seller Party will notify the Agent and each Managing
Agent in writing of any of the following promptly upon learning of the
occurrence thereof, describing the same and, if applicable, the steps being
taken with respect thereto:
               (i) Amortization Events, Potential Amortization Events, Servicer
Default or Potential Servicer Default. The occurrence of each Amortization
Event, Potential Amortization Event, Servicer Default or Potential Servicer
Default by a statement of an Authorized Officer of such Seller Party describing
the nature of such occurrence and the actions being taken or to be taken by
Seller or Servicer in connection therewith.
               (ii) Judgment and Proceedings. (A) (1) The entry of any judgment
or decree against the Servicer or any of its Subsidiaries if the aggregate
amount of all judgments and decrees then outstanding against the Servicer and
its Subsidiaries exceeds $50,000,000 and (2) the institution of any litigation,
arbitration proceeding or governmental proceeding against the Servicer, which,
if adversely determined, could reasonably be expected to have a Material Adverse
Effect; (B) the entry of any judgment or decree or the institution of any
litigation, arbitration proceeding or governmental proceeding against Seller;
and (C) any material litigation or judgments with respect to any Material
Obligor which would materially and adversely impact the collection of such
Obligor’s Receivables.
               (iii) Material Adverse Effect. The occurrence of any event or
condition that has had, or could reasonably be expected to have, a Material
Adverse Effect.
               (iv) Termination Date. The occurrence of the “Termination Date”
under and as defined in the Receivables Sale Agreement.
               (v) Defaults Under Other Agreements. The occurrence of a default
or an event of default under any financing arrangement of the Seller involving
Indebtedness of any amount pursuant to which Seller is a debtor, an obligor or a
guarantor.

Page 16

--------------------------------------------------------------------------------

 

               (vi) Credit Agreements. Any amendment, restatement, waiver of the
occurrence of an “Event of Default” under, or replacement of either the First
Lien Credit Agreement or the Second Lien the Credit Agreement, together with a
copy of the same.
          (c) Compliance with Laws and Preservation of Corporate Existence.
               (i) Such Seller Party will comply in all respects with all
applicable laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject except, in each case, where a
failure to comply could not reasonably be expected to have a Material Adverse
Effect.
               (ii) Such Seller Party will preserve and maintain its corporate
existence, rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where its business is conducted except, in each
case, where a failure to do so could not reasonably be expected to have a
Material Adverse Effect.
          (d) Audits. Such Seller Party will furnish to the Agent and each
Managing Agent from time to time such information with respect to it and the
Receivables as the Agent or any Managing Agent may reasonably request. Such
Seller Party will, from time to time during regular business hours as requested
by the Agent or any Managing Agent upon reasonable notice and at the sole cost
of such Seller Party, permit the Agent and the Managing Agents, or their agents
or representatives (and shall cause each Originator to permit the Agent, the
Managing Agents or their agents or representatives), (i) to examine and make
copies of and abstracts from all Records in the possession or under the control
of such Person relating to the Receivables and the Related Security, including,
without limitation, the related Contracts, and (ii) to visit the offices and
properties of such Person for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to such Person’s financial
condition or the Receivables and the Related Security or any Person’s
performance under any of the Transaction Documents or any Person’s performance
under the Contracts and, in each case, with any of the officers or employees of
Seller or the Servicer having knowledge of such matters; provided that unless
either (i) an Amortization Event shall have occurred and be continuing at the
time any such audit is requested by the Agent or any Managing Agent, or (ii) the
audits previously conducted at the expense of the Seller and the Servicer during
such calendar year have not produced audit results reasonably satisfactory to
the Agent or any Managing Agent, neither Seller nor Servicer shall be required
to reimburse the Agent or any Managing Agent for the costs or expenses in
respect of more than one audit by a third party accounting or auditing firm
engaged by the Agent or any Managing Agent or any examinations or visits by the
Agent, Managing Agents or any of their Agents or representative during any
calendar year.
          (e) Keeping and Marking of Records and Books.
               (i) The Servicer will (and will cause each sub-servicer and each
Originator to, with respect to the Receivables originated by such Originator)
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Receivables in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without limitation,

Page 17

--------------------------------------------------------------------------------

 

records adequate to permit the prompt identification of each new Receivable and
all Collections of and adjustments to each existing Receivable). The Servicer
will (and will cause each sub-servicer and each Originator to) give the Agent
and each Managing Agent notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
               (ii) Such Seller Party will (and will cause each Originator to,
with respect to the Receivables originated by such Originator) (A) on or prior
to the date hereof, mark its master data processing records and other books and
records relating to the Purchaser Interests with a legend, acceptable to the
Agent, describing the Purchaser Interests and (B) upon the request of the Agent
(x) mark each related Contract constituting an instrument, chattel paper, or a
certificated security under the UCC with a legend describing the Purchaser
Interests and (y) deliver to the Agent all Contracts (including, without
limitation, all multiple originals of any such Contract) relating to the
Receivables of such Originator to the extent any such Contract constitutes an
instrument, chattel paper or a certificated security under the UCC.
          (f) Compliance with Contracts and Credit and Collection Policy. Such
Seller Party will (and will cause each Originator to, with respect to the
Receivables originated by such Originator) timely and fully (i) perform and
comply in all material respects with all provisions, covenants and other
promises required to be observed by it under the Contracts related to the
Receivables, and (ii) comply in all material respects with the applicable Credit
and Collection Policy in regard to each Receivable and the related Contract.
          (g) Performance and Enforcement of Receivables Sale Agreement. Seller
will, and will require each Originator to, perform each of their respective
obligations and undertakings under and pursuant to the Receivables Sale
Agreement, will purchase Receivables thereunder in compliance with the terms
thereof and will enforce the rights and remedies accorded to Seller under the
Receivables Sale Agreement. Seller will take all actions to perfect and enforce
its rights and interests (and the rights and interests of the Agent, the
Managing Agents and the Purchasers as assignees of Seller) under the Receivables
Sale Agreement as the Agent or any Managing Agent may from time to time
reasonably request, including, without limitation, making claims to which it may
be entitled under any indemnity, reimbursement or similar provision contained in
the Receivables Sale Agreement.
          (h) Ownership. Seller will (or will cause each Originator to, with
respect to the Receivables originated by such Originator) take all necessary
action to (i) vest legal and equitable title to the Receivables, the Related
Security and the Collections purchased under the Receivables Sale Agreement
irrevocably in Seller, free and clear of any Adverse Claims other than Adverse
Claims in favor of the Agent and the Purchasers (including, without limitation,
the filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Seller’s interest in such Receivables, Related Security and
Collections and such other action to perfect, protect or more fully evidence the
interest of Seller therein as the Agent or any Managing Agent may reasonably
request), and (ii) establish and maintain, in favor of the Agent, for the
benefit of the Purchasers, a valid and perfected first priority undivided
percentage ownership interest (and/or a valid and perfected first priority
security interest) in all Receivables, Related Security and Collections to the
full extent contemplated herein, free and clear of any Adverse Claims other than
Adverse Claims in favor of the Agent for the benefit of the Purchasers
(including, without limitation, the filing of all financing statements or other
similar instruments or documents

Page 18

--------------------------------------------------------------------------------

 

necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect the Agent’s (for the benefit of the Purchasers) interest in such
Receivables, Related Security and Collections and such other action to perfect,
protect or more fully evidence the interest of the Agent for the benefit of the
Purchasers as the Agent or any Managing Agent may reasonably request).
          (i) Purchasers’ Reliance. Seller acknowledges that the Purchasers are
entering into the transactions contemplated by this Agreement in reliance upon
Seller’s identity as a legal entity that is separate from any other Person.
Therefore, from and after the date of execution and delivery of this Agreement,
Seller shall take all reasonable steps, including, without limitation, all steps
that the Agent, any Managing Agent or any Purchaser may from time to time
reasonably request, to maintain Seller’s identity as a separate legal entity and
to make it manifest to third parties that Seller is an entity with assets and
liabilities distinct from those of any Originator and any Affiliates thereof
(each an “HBI Party”) and not just a division of an HBI Party. Without limiting
the generality of the foregoing and in addition to the other covenants set forth
herein, Seller will:
               (A) conduct its own business in its own name and require that all
full-time employees of Seller, if any, identify themselves as such and not as
employees of any HBI Party (including, without limitation, by means of providing
appropriate employees with business or identification cards identifying such
employees as Seller’s employees);
               (B) compensate all employees, consultants and agents directly,
from Seller’s own funds, for services provided to Seller by such employees,
consultants and agents and, to the extent any employee, consultant or agent of
Seller is also an employee, consultant or agent of any HBI Party thereof,
allocate the compensation of such employee, consultant or agent between Seller
and such HBI Party, on a basis that reflects the services rendered to Seller and
such HBI Party;
               (C) clearly identify its offices (by signage or otherwise) as its
offices and, if such office is located in the offices of any HBI Party, Seller
shall lease such office at a fair market rent;
               (D) have a separate telephone number, which will be answered only
in its name and separate stationery, invoices and checks in its own name;
               (E) conduct all transactions with any Originator and the Servicer
(including, without limitation, any delegation of its obligations hereunder as
Servicer) strictly on an arm’s-length basis, allocate all overhead expenses
(including, without limitation, telephone and other utility charges) for items
shared between Seller and any Originator on the basis of actual use to the
extent practicable and, to the extent such allocation is not practicable, on a
basis reasonably related to actual use;
               (F) at all times have a Board of Directors or Managers consisting
of three (3) members, at least one (1) member of which is an Independent
Director or Manager, as applicable;
               (G) observe all corporate formalities as a distinct entity, and
ensure that all corporate actions relating to (A) the selection, maintenance or
replacement of the

Page 19

--------------------------------------------------------------------------------

 

Independent Director, (B) the dissolution or liquidation of Seller or (C) the
initiation of, participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving Seller, are duly
authorized by unanimous vote of its Board of Directors (including the
Independent Director);
               (H) maintain Seller’s books and records separate from those of
any HBI Party and otherwise readily identifiable as its own assets rather than
assets of any HBI Party;
               (I) prepare its financial statements separately from those of any
Originator and insure that any consolidated financial statements of any HBI
Party that include Seller and that are filed with the Securities and Exchange
Commission or any other governmental agency have notes clearly stating that
Seller is a separate corporate entity and that its assets will be available
first and foremost to satisfy the claims of the creditors of Seller;
               (J) except as herein specifically otherwise provided, maintain
the funds or other assets of Seller separate from, and not commingled with,
those of any HBI Party and only maintain bank accounts or other depository
accounts to which Seller alone is the account party, into which Seller alone
makes deposits and from which Seller alone (or the Agent hereunder) has the
power to make withdrawals;
               (K) pay all of Seller’s operating expenses from Seller’s own
assets (except for certain payments by an Originator or other Persons pursuant
to allocation arrangements that comply with the requirements of this
Section 7.1(i));
               (L) operate its business and activities such that: it does not
engage in any business or activity of any kind, or enter into any transaction or
indenture, mortgage, instrument, agreement, contract, lease or other
undertaking, other than the transactions contemplated and authorized by this
Agreement and the Receivables Sale Agreement; and does not create, incur,
guarantee, assume or suffer to exist any indebtedness or other liabilities,
whether direct or contingent, other than (1) as a result of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (2) the incurrence of obligations under this
Agreement, (3) the incurrence of obligations, as expressly contemplated in the
Receivables Sale Agreement, to make payment to any Originator thereunder for the
purchase of Receivables from such Originator under the Receivables Sale
Agreement, and (4) the incurrence of operating expenses in the ordinary course
of business of the type otherwise contemplated by this Agreement;
               (M) maintain its corporate charter in conformity with this
Agreement, such that it does not amend, restate, supplement or otherwise modify
its Limited Liability Company Agreement in any respect that would impair its
ability to comply with the terms or provisions of any of the Transaction
Documents, including, without limitation, Section 7.1(i) of this Agreement;
               (N) maintain the effectiveness of, and continue to perform under
the Receivables Sale Agreement and the Performance Undertaking, such that it
does not amend, restate, supplement, cancel, terminate or otherwise modify the
Receivables Sale Agreement or the Performance Undertaking, or give any consent,
waiver, directive or approval thereunder or waive any default, action, omission
or breach under the Receivables Sale

Page 20

--------------------------------------------------------------------------------

 

Agreement or the Performance Undertaking or otherwise grant any indulgence
thereunder, without (in each case) the prior written consent of the Agent and
the Required Committed Purchasers;
               (O) maintain its corporate separateness such that it does not
merge or consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of transactions, and
except as otherwise contemplated herein) all or substantially all of its assets
(whether now owned or hereafter acquired) to, or acquire all or substantially
all of the assets of, any Person, nor at any time create, have, acquire,
maintain or hold any interest in any Subsidiary.
               (P) maintain at all times the Required Capital Amount (as defined
in the Receivables Sale Agreement) and refrain from making any dividend,
distribution, redemption of capital stock or payment of any subordinated
indebtedness which would cause the Required Capital Amount to cease to be so
maintained; and
               (Q) take such other actions as are necessary on its part to
ensure that the facts and assumptions set forth in the opinion issued by
Kirkland & Ellis LLP, as counsel for Seller, in connection with the closing or
initial Incremental Purchase under this Agreement and relating to substantive
consolidation issues, and in the certificates accompanying such opinion, remain
true and correct in all material respects at all times.
          (j) Collections. Such Seller Party will (1) direct all Obligors to
remit Collections directly to a Lock-Box or a Collection Account, (2) cause all
proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into
a Collection Account and (3) cause each Lock-Box and Collection Account to be
subject at all times to a Collection Account Agreement that is in full force and
effect (except for the Bank of America Accounts, until the New Originators
Eligibility Date). In the event any payments relating to Receivables are
remitted directly to Seller or any Affiliate of Seller, Seller will remit (or
will cause all such payments to be remitted) directly to a Collection Bank and
deposited into a Collection Account within one (1) Business Day following
receipt thereof, and, at all times prior to such remittance, Seller will itself
hold or, if applicable, will cause such payments to be held in trust for the
exclusive benefit of the Agent, the Managing Agents and the Purchasers. Seller
will maintain exclusive ownership, dominion and control (subject to the terms of
this Agreement) of each Lock-Box and Collection Account and shall not grant the
right to take dominion and control of any Lock-Box or Collection Account at a
future time or upon the occurrence of a future event to any Person, except to
the Agent as contemplated by this Agreement (except for the Bank of America
Accounts, until the New Originators Eligibility Date).
          (k) Taxes. The Seller will file all tax returns and reports required
by law to be filed by it and will promptly pay all taxes and governmental
charges at any time owing, except any such taxes which are not yet delinquent 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. Seller will pay when due any taxes payable in connection with the
Receivables.
          (l) Payment to OriginatorOriginators. With respect to any Receivable
purchased by Seller from an Originator, such sale shall be effected under, and
in compliance with the terms of, the Receivables Sale Agreement, including,
without limitation, the terms

Page 21

--------------------------------------------------------------------------------

 

relating to the amount and timing of payments to be made to such Originator in
respect of the purchase price for such Receivable.
          (m) National Textiles Merger. Seller and Servicer shall provide the
Agent and each Managing Agent no later than ten (10) Business Days prior to the
merger of National Textiles, L.L.C. into HBI, (i) written notice of such merger
and (ii) a written description of the method Seller and Servicer will use to
identify all Excluded Receivables on its respective systems, books and records.
          (n) Covenant to Amend Definition of Eligible Receivables. Each of the
Seller and the Servicer hereby covenants and agrees that the definition of
“Eligible Receivables” shall be amended, in form and substance mutually
satisfactory to the Seller, Servicer, each Managing Agent and the Agent, no
later than 30 days following the date on which the Managing Agents complete
their review of the results of the Post-Closing Field Examination if such
amendment is deemed necessary or desirable by each of the Managing Agents in
their sole, reasonable discretion (it being understood that any such amendment
shall not affect the status of any Receivable as an Eligible Receivable prior to
the effective date of such amendment).
          For purposes of this paragraph (n), “Post-Closing Field Examination”
shall mean the field examination designated as such by, and performed by
representatives of, the Managing Agents, following April 13, 2009, of the
Servicer’s collection, operating and reporting systems, the Credit and
Collection PolicyPolicies of the OriginatorOriginators, and historical
receivables, data and accounts. The Managing Agents agree to provide a copy of
the results of the Post-Closing Field Examination to Servicer, each other
Managing Agent and the Agent within 5 Business Days of its receipt thereof.5
          Section 7.2 Negative Covenants of The Seller Parties. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
          (a) Name Change, Offices and Records. Such Seller Party will not
change its sole jurisdiction of organization, name, identity or corporate
structure (within the meaning of Section 9-402(7) of any applicable enactment of
the UCC) or relocate its chief executive office or any office where Records are
kept unless it shall have: (i) given the Agent at least fifteen (15) days’ prior
written notice thereof and (ii) delivered to the Agent all financing statements,
instruments, legal opinions and other documents requested by the Agent in
connection with such change or relocation.
          (b) Change in Payment Instructions to Obligors. Except as may be
required by the Agent pursuant to Section 8.2(b), such Seller Party will not add
or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
provided, however, that the Servicer may make
 

5   Paragraph (n) was added by Amendment No. 2.

Page 22

--------------------------------------------------------------------------------

 

changes in instructions to Obligors regarding payments if such new instructions
require such Obligor to make payments to another existing Collection Account.
          (c) Modifications to Contracts and Credit and Collection
PolicyPolicies. Such Seller Party will not, and will not permit any Originator
to, make any change to theits Credit and Collection Policy that could reasonably
be expected to materially and adversely affect the collectibility of the
Receivables or materially decrease the credit quality of any newly created
Receivables (it being understood that the replacement of the Credit and
Collection Policy of any Originator (other than HBI) with the Credit and
Collection Policy of HBI upon prior written notice to Agent shall not be
reasonably expected to have such a material and adverse effect). Except as
provided in Section 8.2(c), the Servicer will not, and will not permit any
Originator to (with respect to the Receivables originated by such Originator),
extend, amend or otherwise modify the terms of any Receivable or any Contract
related thereto other than in accordance with the applicable Credit and
Collection Policy.
          (d) Sales, Liens. Seller will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any Receivable,
Related Security or Collections, or upon or with respect to any Contract under
which any Receivable arises, or any Lock-Box or Collection Account, or assign
any right to receive income with respect thereto (other than, in each case, the
creation of the interests therein in favor of the Agent and the Purchasers
provided for herein), and Seller will defend the right, title and interest of
the Agent and the Purchasers in, to and under any of the foregoing property,
against all claims of third parties claiming through or under Seller or any
Originator. Seller will not create or suffer to exist any mortgage, pledge,
security interest, encumbrance, lien, charge or other similar arrangement on any
of its inventory.
          (e) Net Receivables Balance. At no time prior to the Amortization Date
shall Seller permit the Net Receivables Balance to be less than an amount equal
to the sum of (i) the Aggregate Capital plus (ii) the Aggregate Reserves.
          (f) Termination Date Determination. Seller will not designate the
Termination Date (as defined in the Receivables Sale Agreement), or send any
written notice to any Originator in respect thereof, without the prior written
consent of the Agent and the Required Committed Purchasers, except with respect
to the occurrence of such Termination Date arising pursuant to Section 5.1(d) of
the Receivables Sale Agreement.
          (g) Restricted Junior Payments. From and after the occurrence of any
Amortization Event, Seller will not make any Restricted Junior Payment if, after
giving effect thereto, Seller would fail to meet its obligations set forth in
Section 7.2(e).
          (h) Excluded Receivables. Such Seller Party will not, and will not
permit any Originator to, change the method of identification of any Excluded
Receivables on its systems, books or records from the method specified pursuant
to Section 7.1(m) (or any subsequent method used in compliance with this
subsection (h)) without ten (10) Business Days’ prior written notice to Agent
and each Managing Agent.

Page 23

--------------------------------------------------------------------------------

 

ARTICLE VIII
ADMINISTRATION AND COLLECTION
          Section 8.1 Designation of Servicer.
          (a) The servicing, administration and collection of the Receivables
shall be conducted by such Person (the “Servicer”) so designated from time to
time in accordance with this Section 8.1. HBI is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Servicer pursuant to
the terms of this Agreement. The Agent, with the consent or at the direction of
the Required Committed Purchasers, may at any time after the occurrence and
during the continuance of a Servicer Default designate as Servicer any Person to
succeed HBI or any successor Servicer.
          (b) Without the prior written consent of the Agent and the Required
Committed Purchasers, HBI shall not be permitted to delegate any of its duties
or responsibilities as Servicer to any Person other than (i) Selleran Originator
with respect to the Receivables originated by such Originator and (ii) with
respect to certain Charged-Off Receivables, outside collection agencies in
accordance with its customary practices. SellerNone of the Originators shall not
be permitted to further delegate to any other Person any of the duties or
responsibilities of the Servicer delegated to it by HBI and any such further
delegation by an Originator shall constitute a covenant breach by the Servicer
hereunder. The Agent may with the consent of, and shall at the direction of the
Required Committed Purchasers, at any time following the occurrence of a
Servicer Default, designate as Servicer any Person other than HBI, whereupon all
duties and responsibilities of HBI as Servicer hereunder shall cease and all
duties and responsibilities theretofore delegated by HBI to Sellerany Originator
as sub-servicer may, at the discretion of the Agent, be terminated forthwith on
notice given by the Agent to HBI and to Seller.
          (c) Notwithstanding the foregoing subsection (b), unless and until HBI
is replaced as Servicer, (i) HBI shall be and remain primarily liable to the
Agent, the Managing Agents and the Purchasers for the full and prompt
performance of all duties and responsibilities of the Servicer hereunder and
(ii) the Managing Agents, the Agent and the Purchasers shall be entitled to deal
exclusively with HBI in matters relating to the discharge by the Servicer of its
duties and responsibilities hereunder. The Managing Agents, the Agent and the
Purchasers shall not be required to give notice, demand or other communication
to any Person other than HBI in order for communication to the Servicer and its
sub-servicer or other delegate with respect thereto to be accomplished. HBI, at
all times that it is the Servicer, shall be responsible for providing any
sub-servicer or other delegate of the Servicer with any notice given to the
Servicer under this Agreement and, if HBI is no longer the Servicer hereunder,
any replacement Servicer shall be responsible for providing any such notice to
any sub-servicer or delegate.
          Section 8.2 Duties of Servicer.
               (a) The Servicer shall take or cause to be taken all such actions
as may be necessary or advisable to collect each Receivable from time to time,
all in accordance with applicable laws, rules and regulations, with reasonable
care and diligence, and in accordance with the applicable Credit and Collection
Policy.

Page 24

--------------------------------------------------------------------------------

 

               The Servicer will instruct all Obligors to pay all Collections
directly to a Lock-Box or Collection Account. The Servicer shall effect a
Collection Account Agreement substantially in the form of Exhibit VI with each
Collection Bank. In the case of any remittances received in any Lock-Box or
Collection Account that shall have been identified, to the satisfaction of the
Servicer, to not constitute Collections or other proceeds of the Receivables or
the Related Security, the Servicer shall promptly remit such items to the Person
identified to it as being the owner of such remittances. From and after the date
the Agent delivers to any Collection Bank a Collection Notice pursuant to
Section 8.3, the Agent may request that the Servicer, and the Servicer thereupon
promptly shall instruct all Obligors with respect to the Receivables, to remit
all payments thereon to a new depositary account specified by the Agent and, at
all times thereafter, Seller and the Servicer shall not deposit or otherwise
credit, and shall not permit any other Person to deposit or otherwise credit to
such new depositary account any cash or payment item other than Collections.
               (b) The Servicer shall administer the Collections in accordance
with the procedures described herein and in Article II. The Servicer shall set
aside and hold in trust for the account of Seller and the Purchasers their
respective shares of the Collections in accordance with Article II. The Servicer
shall, upon the request of the Agent, segregate, in a manner acceptable to the
Agent, all cash, checks and other instruments received by it from time to time
constituting Collections from the general funds of the Servicer or Seller prior
to the remittance thereof in accordance with Article II. If the Servicer shall
be required to segregate Collections pursuant to the preceding sentence, the
Servicer shall segregate and deposit with a bank designated by the Agent such
allocable share of Collections of Receivables set aside for the Purchasers on
the first Business Day following receipt by the Servicer of such Collections,
duly endorsed or with duly executed instruments of transfer.
               (c) The Servicer may, in accordance with the applicable Credit
and Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; provided, however, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable, Defaulted Receivable or Charged-Off Receivable or limit
the rights of the Agent, the Managing Agents or the Purchasers under this
Agreement. At any time after the occurrence of an Amortization Event,
notwithstanding anything to the contrary contained herein, the Agent shall have
the absolute and unlimited right to direct the Servicer to commence or settle
any legal action with respect to any Delinquent Receivable, Defaulted Receivable
or Charged-Off Receivable or to foreclose upon or repossess any Related
Security.
               (d) The Servicer shall hold in trust for Seller and the
Purchasers all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Security or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent, deliver or make available to the Agent all such Records, at
a place selected by the Agent. The Servicer shall, from time to time at the
request of the Agent or any Managing Agent, furnish to the Agent or such
Managing Agent (promptly after any such request) a calculation of the amounts
set aside for the Purchasers pursuant to Article II.
               (e) Any payment by an Obligor in respect of any indebtedness owed
by it to an Originator or Seller shall, except as otherwise specified by such
Obligor or

Page 25

--------------------------------------------------------------------------------

 

otherwise required by contract or law and unless otherwise instructed by the
Agent, be applied as a Collection of any Receivable of such Obligor and such
Originator (starting with the oldest such Receivable) to the extent of any
amounts then due and payable thereunder before being applied to any other
receivable or other obligation of such Obligor.
          Section 8.3 Collection Notices. At any time after the occurrence of an
Amortization Event, the Agent is authorized at any time to date and to deliver
to the Collection Banks the Collection Notices. Seller hereby transfers to the
Agent for the benefit of the Purchasers, effective when the Agent delivers such
notice, the exclusive ownership and control of each Lock-Box and the Collection
Accounts. In case any authorized signatory of Seller whose signature appears on
a Collection Account Agreement shall cease to have such authority before the
delivery of such notice, such Collection Notice shall nevertheless be valid as
if such authority had remained in force. Seller hereby authorizes the Agent, and
agrees that the Agent shall be entitled to (i) endorse Seller’s name on checks
and other instruments representing Collections, (ii) enforce the Receivables,
the related Contracts and the Related Security and (iii) take such action as
shall be necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of the Agent
rather than Seller.
          Section 8.4 Responsibilities of Seller and Servicer. Anything herein
to the contrary notwithstanding, the exercise by the Agent, the Managing Agents
and the Purchasers of their rights hereunder shall not release the Servicer, any
Originator or Seller from any of their duties or obligations with respect to any
Receivables or under the related Contracts. None of the Agent, the Managing
Agents and the Purchasers shall have any obligation or liability with respect to
any Receivables or related Contracts, nor shall any of them be obligated to
perform the obligations of Seller.
          Section 8.5 Reports. The Servicer shall prepare and forward to each
Managing Agent and the Agent (i) at any time during which a Downgrade Event has
occurred and is continuing, on each Business Day, a Daily Report which will
include information regarding the Receivables as of the previous Business Day,
(ii) on Wednesday of each week (or if such Wednesday is not a Business Day, on
the immediately preceding Business Day), a Weekly Report which will include
information regarding the Receivables for the seven (7)-day period ending (and
including) the immediately preceding Friday, (iii) (x) prior to May 2009, on the
third Thursday of each month (or, if such day is not a Business Day, on the next
succeeding Business Day) and (y) commencing in May 2009, on the 23rd day of each
month (or, if such day is not a Business Day, on the next succeeding Business
Day), and at such other additional times as the Agent or any Managing Agent
shall request, a Settlement Report which will include information regarding the
Receivables for the most recently ended Calendar Month and (iv) at such times as
the Agent or any Managing Agent shall request, a listing by Obligor of all
Receivables together with an aging of such Receivables.6
          Section 8.6 Servicing Fees. In consideration of HBI’s agreement to act
as Servicer hereunder, the Purchasers hereby agree that, so long as HBI shall
continue to perform as Servicer hereunder, Seller shall pay over to HBI a fee
(the “Servicing Fee”) on each Settlement Date, in arrears for the immediately
preceding month, equal to 1.0% per annum of
 

6   Section 8.5 was deleted in its entirety and replaced by Amendments No. 1 and
No. 2.

Page 26

--------------------------------------------------------------------------------

 

the average aggregate Outstanding Balance of all Receivables during such period,
as compensation for its servicing activities.
          Section 8.7 Servicer Default. The occurrence of any of the following
shall constitute a “Servicer Default”.
               (a) any Amortization Event in respect of the Servicer, other than
the Amortization Events described in Sections 9.1(e) and (f); or
               (b) any collection, billing or accounting systems failure which
has a Material Adverse Effect on the Servicer’s ability to either collect the
Receivables or perform its obligations under this Agreement.
ARTICLE IX
AMORTIZATION EVENTS
          Section 9.1 Amortization Events. The occurrence of any one or more of
the following events shall constitute an Amortization Event:
               (a) (i) Any Seller Party or theany Originator shall fail to make
any payment or deposit required hereunder or under any other Transaction
Document when due and, in the case of a payment or deposit in respect of
Capital, Yield or any fees due under the Fee Letter or the Agent Fee Letter,
such failure continues for two (2) Business Days and, in the case of any such
payment or deposit which is not in respect of Capital, Yield or fees due under
the Fee Letter or the Agent Fee Letter, such failure continues for five
(5) Business Days;7
               (ii) Any Seller Party or theany Originator shall fail to perform
or observe any term, covenant or agreement contained in Sections 7.1(a)
(Financial Reporting), 7.1(b) (Notices) , 7.1(c)(ii) (Preservation of Limited
Liability Company or Corporate Existence), 7.1(d) (Audits), 7.1(e) (Keeping and
Marking of Records and Books), 7.1(f) (Compliance with Contracts and Credit and
Collection Policy), 7.1(g) (Performance and Enforcement of Receivables Sale
Agreement), 7.1(h) (Ownership), 7.1(i) (Purchasers’ Reliance), 7.1(j)
(Collections), 7.1(l) (Payment to Originator), 7.2 (Negative Covenants of the
Seller Parties) or 8.5 (Reports) and any such failure continues for three
(3) Business Days;
               (iii) Seller or any Originator shall fail to perform or observe
any other term, covenant or agreement contained herein or in any other
Transaction Document not otherwise specifically described in this Section 9.1
and such failure shall remain unremedied for five (5) Business Days; or
               (iv) the Servicer shall fail to perform or observe any other
term, covenant or agreement contained herein or in any other Transaction
Document not otherwise specifically described in this Section 9.1 and such
failure shall remain unremedied for ten (10) Business Days.
               (b) Any representation, warranty, certification or statement made
by any Seller Party or theany Originator in this Agreement, any other
Transaction Document or
 

7   Paragraph (a)(i) of Section 9.1 was deleted in its entirety and replaced by
Amendment No. 1.

Page 27

--------------------------------------------------------------------------------

 

in any other document delivered pursuant hereto or thereto shall prove to have
been incorrect when made or deemed made.
               (c) Failure of Seller to pay any Indebtedness when due or the
failure of any other Seller Party or theany Originator to pay Indebtedness when
due in excess of $50,000,000 in the aggregate, or the default by any Seller
Party or theany Originator in the performance of any term, provision or
condition contained in any agreement under which any such Indebtedness was
created or is governed, the effect of which is to cause, or to permit the holder
or holders of such Indebtedness to cause, such Indebtedness to become due prior
to its stated maturity; or any such Indebtedness of any Seller Party or theany
Originator shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the date of maturity
thereof.
               (d) (i) Any Seller Party, theany Originator or, to the extent
that it could reasonably be expected to have a Material Adverse Effect, any of
their Subsidiaries shall generally not pay its debts as such debts become due or
shall admit in writing its inability to pay its debts generally or shall make a
general assignment for the benefit of creditors; or (ii) any proceeding shall be
instituted by or against any Seller Party, theany Originator or, to the extent
that it could reasonably be expected to have a Material Adverse Effect, any of
their Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property and, if any such
proceeding is not commenced by a Seller Party, theany Originator or any of their
Subsidiaries, such proceeding shall result in the entry of an order for relief
or shall remain for 60 days undismissed, undischarged, unstayed or unbonded
pending appeal or (iii) any Seller Party, theany Originator or, to the extent
that it could reasonably be expected to have a Material Adverse Effect, any of
their Subsidiaries shall take any corporate action to authorize any of the
actions set forth in clauses (i) or (ii) above in this subsection (d).
               (e) Seller shall fail to comply with the terms of Section 2.6.
               (f)8 As at the end of any Calendar Month:

        (i) the average of the Delinquency Ratios as of the end of such Calendar
Month and the two preceding Calendar Months shall exceed 4.75%;     (ii) the
average of the Loss-to-Liquidation Ratios as of the end of such Calendar Month
and the two preceding Calendar Months shall exceed 2.75%; or     (iii) the
average of the Dilution Ratios as of the end of such Calendar Month and the two
preceding Calendar Months shall exceed 14.25%.

 

8   Paragraph (f) in Section 9.1 was deleted and replaced in its entirety by
Amendments No. 1 and No. 2.

Page 28

--------------------------------------------------------------------------------

 

               (g) A Change of Control shall occur.
               (h)9 (i) As of the last day of any Fiscal Quarter occurring
during any period set forth below, HBI permits the Leverage Ratio to be greater
than the ratio set forth opposite such period:

      Period   Leverage Ratio
Each Fiscal Quarter ending between October 16, 2009 and July 15, 2010
  4.50:1.00
Each Fiscal Quarter ending between July 16, 2010 and October 15, 2010
  4.25:1.00
Each Fiscal Quarter ending between October 16, 2010 and April 15, 2011
  4:00:1.00
Each Fiscal Quarter ending April 16, 2011 and thereafter
  3.75:1.00

          ; orHBI shall fail to maintain the “Leverage Ratio” (as defined in the
Credit Agreement) in accordance with Section 7.2.4(a) of the Credit Agreement or
the “Interest Coverage Ratio” (as defined in the Credit Agreement) in accordance
with Section 7.2.4(b) of the Credit Agreement or shall fail to observe any other
financial covenant under Section 7.2.4 of the Credit Agreement.
                    (ii) As of the last day of any Fiscal Quarter occurring
during any period set forth below, HBI permits the Interest Coverage Ratio to be
less than the ratio set forth opposite such period:

      Period   Interest Coverage Ratio
Each Fiscal Quarter ending between October 16, 2009 and July 15, 2010
  2.50:1.00
Each Fiscal Quarter ending between July 16, 2010 and October 15, 2010
  2.75:1.00
Each Fiscal Quarter ending between October 16, 2010 and July 15, 2011
  3.00:1.00
Each Fiscal Quarter ending July 16, 2011 and thereafter
  3.25:1.00

          ; or
               (i) The Agent, for the benefit of the Purchasers, shall at any
time for any reason fail to have a valid and perfected first priority undivided
percentage ownership interest (and/or a valid and perfected first priority
security interest) in all Receivables, Related Security Collections and
Collection Accounts, free and clear of any Adverse Claims other than Adverse
Claims in favor of the Agent for the benefit of the Purchasers.
               (j) (i) One or more final judgments for the payment of money
shall be entered against Seller or (ii) any (A) judgment or order for the
payment of money individually or in the aggregate in excess of $50,000,000
(exclusive of any amounts fully covered by insurance (less any applicable
deductible) or an indemnity by any other third party
 

9   Paragraph (h) in Section 9.1 was deleted and replaced in its entirety by
Amendments No. 1 and No. 4.

Page 29

--------------------------------------------------------------------------------

 

Person and as to which the insurer or such Person has acknowledged its
responsibility to cover such judgment or order not denied in writing) shall be
rendered against Servicer, any Originator or any of their respective
Subsidiaries and such judgment shall not have been vacated or discharged or
stayed or bonded pending appeal within 45 days after the entry thereof or
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (B) non-monetary judgment or order shall be rendered
against Servicer, any Originator or any of their respective Subsidiaries that
has had, or could reasonably be expected to have, a Material Adverse Effect.
               (k) (i) a “Termination Event” under and as defined in the
Receivables Sale Agreement shall occur under the Receivables Sale Agreement or
(ii) any Originator shall for any reason cease to transfer, or cease to have the
legal capacity to transfer, or otherwise be incapable of transferring
Receivables to Seller under the Receivables Sale Agreement.
               (l) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Seller or Servicer, or either
Seller Party or any Originator shall directly or indirectly contest in any
manner such effectiveness, validity, binding nature or enforceability of this
Agreement.
               (m) A Servicer Default occurs.
               All capitalized terms used in clause (h) above shall have the
meaning assigned to such terms in Exhibit XII hereto.(n) HBI shall fail to
perform or observe any term, covenant or agreement required to be performed by
it under the Performance Undertaking, or the Performance Undertaking shall cease
to be effective or to be the legally valid, binding and enforceable obligation
of HBI, or HBI shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability.
          Section 9.2 Remedies. Upon the occurrence and during the continuation
of an Amortization Event, the Agent may, or upon the direction of the Required
Committed Purchasers shall, take any of the following actions: (i) declare the
Amortization Date to have occurred, whereupon the Amortization Date shall
forthwith occur, without demand, protest or further notice of any kind, all of
which are hereby expressly waived by each Seller Party; provided, however, that
upon the occurrence of an Amortization Event described in Section 9.1(d)(ii), or
of an actual or deemed entry of an order for relief with respect to any Seller
Party under the Federal Bankruptcy Code, the Amortization Date shall
automatically occur, without demand, protest or any notice of any kind, all of
which are hereby expressly waived by each Seller Party, (ii) to the fullest
extent permitted by applicable law, declare that interest at the Default Rate
shall accrue with respect to any of the Aggregate Unpaids outstanding at such
time, (iii) deliver the Collection Notices to the Collection Banks, and
(iv) notify Obligors of the Purchasers’ interest in the Receivables. The
aforementioned rights and remedies shall be without limitation, and shall be in
addition to all other rights and remedies of the Agent, the Managing Agents and
the Purchasers otherwise available under any other provision of this Agreement,
by operation of law, at equity or otherwise, all of which are hereby expressly
preserved, including, without limitation, all rights and remedies provided under
the UCC, all of which rights shall be cumulative.

Page 30

--------------------------------------------------------------------------------

 

ARTICLE X
INDEMNIFICATION
          Section 10.1 Indemnities by Seller. Without limiting any other rights
that the Agent, the Managing Agents or any Purchaser may have hereunder or under
applicable law, Seller hereby agrees to indemnify (and pay upon demand to) the
Agent, each Managing Agent and each Purchaser and their respective assigns,
officers, directors, agents and employees (each an “Indemnified Party”) from and
against any and all damages, losses, claims, taxes, liabilities, out-of-pocket
costs, expenses and for all other amounts payable, including reasonable
attorneys’ fees (which attorneys may be employees of the Agent, such Managing
Agent or such Purchaser) and disbursements (all of the foregoing being
collectively referred to as “Indemnified Amounts”) awarded against or incurred
by any of them arising out of or as a result of this Agreement or the
acquisition, either directly or indirectly, by a Purchaser of an interest in the
Receivables, excluding, however:
               (a) Indemnified Amounts to the extent a final judgment of a court
of competent jurisdiction holds that such Indemnified Amounts resulted from
gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
               (b) Indemnified Amounts to the extent the same include losses in
respect of Receivables that are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor;
               (c) taxes imposed by the jurisdiction in which such Indemnified
Party’s principal executive office is located, on or measured by the overall net
income of such Indemnified Party to the extent that the computation of such
taxes is consistent with the characterization for income tax purposes of the
acquisition by the Purchasers of Purchaser Interests as a loan or loans by the
Purchasers to Seller secured by the Receivables, the Related Security, the
Collection Accounts and the Collections; or
               (d) Indemnified Amounts to the extent they resulted from an
action brought by any Indemnified Party against any other Indemnified Party not
involving any Seller Party, any Originator or any Subsidiary of any Seller Party
or any Originator;
provided, however, that nothing contained in this sentence shall limit the
liability of Seller or limit the recourse of the Indemnified Parties to Seller
for amounts otherwise specifically provided to be paid by Seller under the terms
of this Agreement. Without limiting the generality of the foregoing
indemnification, Seller shall indemnify each Indemnified Party for Indemnified
Amounts (including, without limitation, losses in respect of uncollectible
receivables, regardless of whether reimbursement therefor would constitute
recourse to Seller) relating to or resulting from:
                    (i) any representation or warranty made by Seller (or any
officers of Seller) under or in connection with this Agreement, any other
Transaction Document or any other information or report delivered by any such
Person pursuant hereto or thereto, which shall have been false or incorrect when
made or deemed made;
                    (ii) the failure by Seller to comply with any applicable
law, rule or regulation with respect to any Receivable or Contract related
thereto, or the

Page 31

--------------------------------------------------------------------------------

 

nonconformity of any Receivable or Contract included therein with any such
applicable law, rule or regulation or any failure of any Originator to keep or
perform any of its obligations, express or implied, with respect to any
Contract;
                    (iii) any failure of Seller to perform its duties, covenants
or other obligations in accordance with the provisions of this Agreement or any
other Transaction Document;
                    (iv) any products liability, personal injury or damage suit,
or other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any Receivable;
                    (v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on such Receivable or
the related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or service related to such Receivable
or the furnishing or failure to furnish such merchandise or services;
                    (vi) the commingling of Collections of Receivables at any
time with other funds;
                    (vii) any investigation, litigation or proceeding related to
or arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, the use of the proceeds of an Incremental
Purchase or a Reinvestment, the ownership of the Purchaser Interests or any
other investigation, litigation or proceeding relating to Seller in which any
Indemnified Party becomes involved as a result of any of the transactions
contemplated hereby;
                    (viii) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of such Obligor being immune
from civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
                    (ix) any failure of Seller to acquire and maintain legal and
equitable title to, and ownership of any Receivable and the Related Security and
Collections with respect thereto from any Originator, free and clear of any
Adverse Claim (other than as created hereunder); or any failure of Seller to
give reasonably equivalent value to any Originator under the Receivables Sale
Agreement in consideration of the transfer by such Originator of any Receivable,
or any attempt by any Person to void such transfer under statutory provisions or
common law or equitable action;
                    (x) any failure to vest and maintain vested in the Agent for
the benefit of the Purchasers, or to transfer to the Agent for the benefit of
the Purchasers, legal and equitable title to, and ownership of, a first priority
perfected undivided percentage ownership interest (to the extent of the
Purchaser Interests contemplated hereunder) or security interest in the
Receivables, the Related Security, the Collections and the Collection Accounts,
free and clear of any Adverse Claim (except as created by the Transaction
Documents);

Page 32

--------------------------------------------------------------------------------

 

                    (xi) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Receivable, the Related Security and Collections with respect thereto, and the
proceeds of any thereof, whether at the time of any Incremental Purchase or
Reinvestment or at any subsequent time;
                    (xii) any action or omission by the Seller which reduces or
impairs the rights of the Agent, the Managing Agents or the Purchasers with
respect to any Receivable or the value of any such Receivable;
                    (xiii) any attempt by any Person to void any Incremental
Purchase or Reinvestment hereunder under statutory provisions or common law or
equitable action; or
                    (xiv) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible Receivable to be an
Eligible Receivable at the time so included.
          Section 10.2 Indemnities by Servicer. Without limiting any other
rights that the Agent, the Managing Agents or any Purchaser may have hereunder
or under applicable law, the Servicer hereby agrees to indemnify (and pay upon
demand to) each Indemnified Party for Indemnified Amounts awarded against or
incurred by any of them relating to or resulting from:
                    (i) any representation or warranty made by the Servicer (or
any officers of Servicer) under or in connection with this Agreement, any other
Transaction Document or any other information or report delivered by Servicer
pursuant hereto or thereto, which shall have been false or incorrect when made
or deemed made;
                    (ii) the failure by Servicer to comply with any applicable
law, rule or regulation with respect to any Receivable or Contract related
thereto;
                    (iii) any failure of Servicer to perform its duties,
covenants or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
                    (iv) the commingling of Collections of Receivables at any
time with other funds;
                    (v) any investigation, litigation or proceeding relating to
Servicer in which any Indemnified Party becomes involved as a result of any of
the transactions contemplated hereby;
                    (vi) any action or omission by the Servicer which reduces or
impairs the rights of the Agent, the Managing Agents or the Purchasers with
respect to any Receivable or the value of any such Receivable; or

Page 33

--------------------------------------------------------------------------------

 

                     (vii) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible Receivable to be an
Eligible Receivable at the time so included.
                      Notwithstanding the foregoing, Servicer shall not have any
liability under this Section 10.2 for:
                (a) Indemnified Amounts to the extent a final judgment of a
court of competent jurisdiction holds that such Indemnified Amounts resulted
from gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
                (b) Indemnified Amounts to the extent the same include losses in
respect of Receivables that are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor;
                (c) taxes imposed by the jurisdiction in which such Indemnified
Party’s principal executive office is located, on or measured by the overall net
income of such Indemnified Party to the extent that the computation of such
taxes is consistent with the characterization for income tax purposes of the
acquisition by the Purchasers of Purchaser Interests as a loan or loans by the
Purchasers to Seller secured by the Receivables, the Related Security, the
Collection Accounts and the Collections; or
                (d) Indemnified Amounts to the extent they resulted from an
action brought by any Indemnified Party against any other Indemnified Party not
involving any Seller Party, any Originator or any Subsidiary of any Seller Party
or any Originator;
                     provided, however, that nothing contained in this sentence
shall limit the liability of Servicer or limit the recourse of the Indemnified
Parties to Servicer for amounts otherwise specifically provided to be paid by
Servicer under the terms of this Agreement.
          Section 10.3 Increased Cost and Reduced Return.
          If after the date hereof, any Funding Source shall be charged any fee,
expense or increased cost on account of the adoption of any applicable law, rule
or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency (a “Regulatory Change”):
(i) that subjects any Funding Source to any charge or withholding on or with
respect to any Funding Agreement or a Funding Source’s obligations under a
Funding Agreement, or on or with respect to the Receivables, or changes the
basis of taxation of payments to any Funding Source of any amounts payable under
any Funding Agreement (except for changes in the rate of tax on the overall net
income of a Funding Source or taxes excluded by Section 10.1) or (ii) that
imposes, modifies or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for
the account of a Funding Source, or credit extended by a Funding Source pursuant
to a Funding Agreement or (iii) that imposes any other condition the result of
which is to increase the cost to a Funding Source of performing its

Page 34

--------------------------------------------------------------------------------

 

obligations under a Funding Agreement, or to reduce the rate of return on a
Funding Source’s capital as a consequence of its obligations under a Funding
Agreement, or to reduce the amount of any sum received or receivable by a
Funding Source under a Funding Agreement or to require any payment calculated by
reference to the amount of interests or loans held or interest received by it,
then, within five (5) Business Days after demand by the applicable Managing
Agent, Seller shall pay to the applicable Managing Agent, for the benefit of the
relevant Funding Source, such amounts charged to such Funding Source or such
amounts to otherwise compensate such Funding Source for such increased cost or
such reduction, in each case, solely to the extent that such increased cost or
such reduction is attributable to the financing, ownership, commitment to fund,
funding or maintenance of any Purchaser Interest (as opposed to the assets
generally held by the Indemnified Parties and not related to this Agreement, the
Transaction Documents and the transactions contemplated thereby).
          Section 10.4 Other Costs and Expenses. Seller shall pay to the Agent,
the Managing Agents and the Purchasers within five (5) Business Days after
demand all reasonable costs and out-of-pocket expenses in connection with the
preparation, execution, delivery and administration of this Agreement, the
transactions contemplated hereby and the other documents to be delivered
hereunder, including without limitation, the cost of the Conduit Purchasers’
auditors auditing the books, records and procedures of Seller (subject to the
limitation set forth in Section 7.1(d)), reasonable fees of the ratings
agencies, reasonable fees and out-of-pocket expenses of legal counsel for each
Conduit Purchaser, each Managing Agent and the Agent (which such counsel may be
employees of such Conduit Purchaser, such Managing Agent or the Agent) with
respect thereto and with respect to advising each Conduit Purchaser, each
Managing Agent and the Agent as to their respective rights and remedies under
this Agreement; provided that in connection with the preparation, execution and
delivery of this Agreement, Seller shall be responsible for the reasonable fees
and out-of-pocket expenses of only one legal counsel for the Agent, the Managing
Agent and the Purchasers party hereto on the date hereof, provided further that
Seller shall not be responsible for the legal fees and expenses of more than one
outside counsel (in addition to any local counsel) for all Persons entitled to
payment of such fees and expenses under this Section 10.4 unless, as reasonably
determined by such Person or its counsel, representation of all such Persons by
the same counsel would be inappropriate due to actual or potential differing
interests among them. Seller shall pay to the Agent, each Managing Agent and
each Purchaser within five (5) Business Days after demand any and all costs and
expenses of the Agent, such Managing Agent and the Purchasers, if any, including
reasonable counsel fees and expenses in connection with the enforcement of this
Agreement and the other documents delivered hereunder and in connection with any
restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following an Amortization Event.
          Section 10.5 Accounting Based Consolidation Event. If an Accounting
Based Consolidation Event shall at any time occur then, upon demand by the Agent
or the applicable Managing Agent, the Seller shall pay to the Agent or such
applicable Managing Agent, for the benefit of the relevant Affected Entity, such
amounts as such Affected Entity reasonably determines will compensate or
reimburse such Affected Entity for any resulting (i) fee, expense or increased
cost charged to, incurred or otherwise suffered by such Affected Entity,
(ii) reduction in the rate of return on such Affected Entity’s capital or
reduction in the amount of any sum received or receivable by such Affected
Entity or (iii) internal capital charge or other imputed cost determined by such
Affected Entity to be allocable to the Seller or the transactions contemplated
in this Agreement in connection therewith. Amounts under this

Page 35

--------------------------------------------------------------------------------

 

Section 10.5 may be demanded at any time without regard to the timing of
issuance of any financial statement by any Conduit or by any Affected Entity;
provided, however, that in no event may any Affected Entity (or the applicable
Agent or Managing Agent on its behalf) claim or receive reimbursement or
compensation for amounts under this Section 10.5 that would exceed 2.00% per
annum on the Group Purchase Limit for the related Purchaser Group from the date
such Accounting Based Consolidation Event occurs. If the Agent or any Managing
Agent becomes or reasonably believes that it will become entitled to claim any
additional amounts pursuant to this subsection, it shall promptly notify the
Borrower of the event by reason of which it has become or will become so
entitled; provided that any failure to give such notice shall not affect the
rights to demand payment under this section.
          If any Affected Entity (or the applicable Agent or Managing Agent on
its behalf) requests compensation under this Section 10.5, then the Seller may,
at its sole expense and effort, upon notice to such Affected Entity and its
related Managing Agent, require the entire related Purchaser Group (but may not
require less than all of the Purchasers and the Managing Agent in such Purchaser
Group) to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 12.1), all of their interests, rights
and obligations under this Agreement to assignees that shall assume such
obligations (which assignees may be other Purchasers if such Purchasers accept
such assignment); provided that each such assigning Purchaser and Managing Agent
receives payment in full, pursuant to an Assignment Agreement, of an amount
equal to such Person’s share of the Aggregate Capital and Yield owing to such
Purchaser and all accrued but unpaid fees and other costs and expenses payable
in respect of such Purchaser Group’s share of the Purchaser Interests.10
ARTICLE XI
THE AGENT
          Section 11.1 Authorization and Action. Each Purchaser hereby
designates and appoints (i) HSBC to act as its Agent hereunder and under each
other Transaction Document, and (ii) the Managing Agent in its Purchase Group to
act as its Managing Agent hereunder and under each other Transaction Document,
and authorizes the Agent and such Purchaser’s Managing Agent, as the case may
be, to take such actions as agent on its behalf and to exercise such powers as
are delegated to the Agent or such Managing Agent by the terms of this Agreement
and the other Transaction Documents together with such powers as are reasonably
incidental thereto. Neither the Agent nor the Managing Agents shall have any
duties or responsibilities, except those expressly set forth herein or in any
other Transaction Document, or any fiduciary relationship with any Purchaser,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent or the Managing Agents shall be read into
this Agreement or any other Transaction Document or otherwise exist for the
Agent or the Managing Agents. In performing their functions and duties hereunder
and under the other Transaction Documents, (i) the Agent shall act solely as
agent for the Purchasers, (ii) each Managing Agent shall act solely as managing
agent for the Conduit Purchasers and Committed Purchasers in its Purchase Group,
and (iii) neither the Agent nor any Managing Agent shall be deemed to have
assumed any obligation or relationship of trust or agency with or for any Seller
Party or any of such Seller Party’s successors or assigns. Neither the Agent nor
any Managing Agent shall be required to take any action that exposes the Agent
 

10   Section 10.5 was added by Amendment No. 1.

Page 36

--------------------------------------------------------------------------------

 

or such Managing Agent to personal liability or that is contrary to this
Agreement, any other Transaction Document or applicable law. The appointment and
authority of the Agent and the Managing Agents hereunder shall terminate upon
the indefeasible payment in full of all Aggregate Unpaids. Each Purchaser hereby
authorizes the Agent to file each of the Uniform Commercial Code financing
statements on behalf of such Purchaser (the terms of which shall be binding on
such Purchaser).
          Section 11.2 Delegation of Duties. The Agent and the Managing Agents
may execute any of their respective duties under this Agreement and each other
Transaction Document by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Neither the Agent nor any Managing Agent shall be responsible for the negligence
or misconduct of any agents or attorneys-in-fact selected and maintained by it
with reasonable care.
          Section 11.3 Exculpatory Provisions. None of the Agent, the Managing
Agents or any of their respective directors, officers, agents or employees shall
be (i) liable for any action lawfully taken or omitted to be taken by it or them
under or in connection with this Agreement or any other Transaction Document
(except for its, their or such Person’s own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Purchasers for any
recitals, statements, representations or warranties made by any Seller Party
contained in this Agreement, any other Transaction Document or any certificate,
report, statement or other document referred to or provided for in, or received
under or in connection with, this Agreement, or any other Transaction Document
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, or any other Transaction Document or any other
document furnished in connection herewith or therewith, or for any failure of
any Seller Party to perform its obligations hereunder or thereunder, or for the
satisfaction of any condition specified in Article VI, or for the perfection,
priority, condition, value or sufficiency of any collateral pledged in
connection herewith. Neither the Agent nor any Managing Agent shall be under any
obligation to any Purchaser to ascertain or to inquire as to the observance or
performance of any of the agreements or covenants contained in, or conditions
of, this Agreement or any other Transaction Document, or to inspect the
properties, books or records of the Seller Parties. Neither the Agent nor any
Managing Agent shall be deemed to have knowledge of any Amortization Event or
Potential Amortization Event unless the Agent or such Managing Agent, as
applicable, has received notice from Seller or a Purchaser. No Managing Agent
shall have any responsibility hereunder to any Purchaser other than the
Purchasers in its Purchase Group.
          Section 11.4 Reliance by Agent.
          (a) The Agent shall in all cases be entitled to rely, and shall be
fully protected in relying, upon any document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to Seller), independent accountants and other
experts selected by the Agent. The Agent shall in all cases be fully justified
in failing or refusing to take any action under this Agreement or any other
Transaction Document unless it shall first receive such advice or concurrence of
the Managing Agents, the Required Committed Purchasers or all of the Purchasers,
as applicable, as it deems appropriate and it shall first be indemnified to its
satisfaction by the Purchasers, provided that unless and until the Agent shall
have received such advice, the Agent may take or refrain from taking any action,
as the Agent

Page 37

--------------------------------------------------------------------------------

 

shall deem advisable and in the best interests of the Purchasers. The Agent
shall in all cases be fully protected in acting, or in refraining from acting,
in accordance with a request of the Managing Agents, the Required Committed
Purchasers or all of the Purchasers, as applicable, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Purchasers.
          (b) Each Managing Agent shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to Seller), independent accountants and
other experts selected by such Managing Agent. Each Managing Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence or the Purchasers in its related Purchase Group, as it
deems appropriate and it shall first be indemnified to its satisfaction by such
Purchasers, provided that unless and until such Managing Agent shall have
received such advice, such Managing Agent may take or refrain from taking any
action, as such Managing Agent shall deem advisable and in the best interests of
the Purchasers in its related Purchase Group. Each Managing Agent shall in all
cases be fully protected in acting, or in refraining from acting, in accordance
with a request of the Purchasers in its related Purchase Group, and such request
and any action taken or failure to act pursuant thereto shall be finding upon
all such Purchasers.
          Section 11.5 Non-Reliance on Agents and Other Purchasers. Each
Purchaser expressly acknowledges that none of the Agent, the Managing Agents or
any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Agent or any Managing Agent hereafter taken, including,
without limitation, any review of the affairs of any Seller Party, shall be
deemed to constitute any representation or warranty by the Agent or such
Managing Agent. Each Purchaser represents and warrants to the Agent and the
Managing Agents that it has and will, independently and without reliance upon
the Agent, any Managing Agent or any other Purchaser and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of Seller and made its own decision to
enter into this Agreement, the other Transaction Documents and all other
documents related hereto or thereto.
          Section 11.6 Reimbursement and Indemnification. The Committed
Purchasers agree to reimburse and indemnify the Agent, and the Committed
Purchasers in each Purchase Group agree to reimburse the Managing Agent for such
Purchase Group, and their officers, directors, employees, representatives and
agents ratably according to their (a) Pro Rata Shares (in the case of any
reimbursement any indemnity obligations owing to its Managing Agent) or
(b) ratable shares of the Purchase Limit (in the case of any reimbursement and
indemnity obligations owing to the Agent), to the extent not paid or reimbursed
by the Seller Parties (i) for any amounts for which the Agent, in its capacity
as Agent, or any Managing Agent, acting in its capacity as a Managing Agent, is
entitled to reimbursement by the Seller Parties hereunder and (ii) for any other
expenses incurred by the Agent, in its capacity as Agent, or any Managing Agent,
acting in its capacity as a Managing Agent, and acting on behalf of its related
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.

Page 38

--------------------------------------------------------------------------------

 

          Section 11.7 Agents in their Individual Capacity. The Agent, each
Managing Agent and each of their respective Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with Seller or any
Affiliate of Seller as though it were not the Agent or a Managing Agent
hereunder. With respect to the acquisition of Purchaser Interests pursuant to
this Agreement, the Agent and each Managing Agent shall have the same rights and
powers under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent or a Managing Agent, and the
terms “Committed Purchaser,” “Purchaser,” “Committed Purchasers” and
“Purchasers” shall include the Agent and each Managing Agent in its individual
capacity.
          Section 11.8 Successor Agent. The Agent may, upon five (5) days’ prior
notice to Seller and the Purchasers, and the Agent will, upon the direction of
all of the Purchasers (other than the Agent, in its individual capacity) resign
as Agent. Each Managing Agent may, upon five (5) days’ prior notice to Seller,
the Agent, the Purchasers in its Purchase Group, and each Managing Agent will,
upon the direction of all of the Purchasers in its Purchase Group (other than
the Managing Agent, in its individual capacity), resign as a Managing Agent. If
the Agent shall resign, then the Required Committed Purchasers during such
five-day period shall appoint from among the Purchasers a successor Agent. If a
Managing Agent shall resign, then the Required Committed Purchasers in its
Purchase Group shall appoint a successor managing agent during such five-day
period. If for any reason no successor Agent or Managing Agent is so appointed
during such five-day period, then effective upon the termination of such
five-day period, the Purchasers shall perform all of the duties of the Agent or
the Purchasers in the applicable Purchase Group shall perform all of the duties
of such Managing Agent, as applicable, hereunder and under the other Transaction
Documents and Seller and the Servicer (as applicable) shall make all payments in
respect of the Aggregate Unpaids directly to the applicable Purchasers and for
all purposes shall deal directly with the Purchasers. After the effectiveness of
any retiring Managing Agent’s or any Agent’s resignation hereunder as Managing
Agent or Agent, the retiring Managing Agent or Agent shall be discharged from
its duties and obligations hereunder and under the other Transaction Documents
and the provisions of this Article XI and Article X shall continue in effect for
its benefit with respect to any actions taken or omitted to be taken by it while
it was Managing Agent or Agent under this Agreement and under the other
Transaction Documents.
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
          Section 12.1 Assignments.
          (a) Seller and each Committed Purchaser hereby agree and consent to
the complete or partial assignment by each Conduit Purchaser of all or any
portion of its rights under, interest in, title to and obligations under this
Agreement (i) to the Committed Purchasers pursuant to this Agreement or pursuant
to a Liquidity Agreement, (ii) to any other Purchaser, any Managing Agent or the
Agent or any of their respective Affiliates, (iii) to any other issuer of
commercial paper notes or other entity which obtains funds from such an issuer
of commercial paper notes, which in either case is sponsored or administered by
the Managing Agent of such Conduit Purchaser’s Purchase Group or administered by
any Affiliate of such Managing Agent or (iv) to any other Person; provided that,
prior to the occurrence of an Amortization Event, such Conduit Purchaser may not
make any such assignment pursuant to

Page 39

--------------------------------------------------------------------------------

 

this clause (iv) without the consent of the Seller (which consent shall not be
unreasonably withheld or delayed). Upon any such assignment, any such Conduit
Purchaser shall be released from its obligations so assigned. Further, Seller
and each Committed Purchaser hereby agree that any assignee of any Conduit
Purchaser of this Agreement or all or any of the Purchaser Interests of any
Conduit Purchaser shall have all of the rights and benefits under this Agreement
as if the term “Conduit Purchaser” explicitly referred to such party, and no
such assignment shall in any way impair the rights and benefits of any Conduit
Purchaser hereunder. Neither Seller nor the Servicer shall have the right to
assign its rights or obligations under this Agreement.
          (b) Any Committed Purchaser may at any time and from time to time
assign to one or more Persons (“Purchasing Committed Purchasers”) all or any
part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
(the “Assignment Agreement”) executed by such Purchasing Committed Purchaser and
such selling Committed Purchaser; provided that the Seller’s consent (which
consent shall not be unreasonably withheld or delayed) shall be required for any
such assignment unless: (i) such assignment is to any other Purchaser, any
Managing Agent or the Agent or any of their respective Affiliates, (iii) such
assignment is to any issuer of commercial paper notes or other entity which
obtains funds from such an issuer of commercial paper notes, which in either
case is sponsored or administered by the Managing Agent of such Committed
Purchaser’s Purchase Group or administered by any Affiliate of such Managing
Agent or (iv) an Amortization Event has occurred. In addition, the consent of
the Managing Agent for such Committed Purchaser’s Purchase Group shall be
required prior to the effectiveness of any such assignment. Each assignee of a
Committed Purchaser must (i) have a short-term debt rating of A-1 or better by
Standard & Poor’s Ratings Group and P-1 by Moody’s Investor Service, Inc. and
(ii) agree to deliver to the Agent, promptly following any request therefor by
the Agent or any Conduit Purchaser in its Purchase Group, an enforceability
opinion in form and substance satisfactory to the Agent and such Conduit
Purchaser. Upon delivery of the executed Assignment Agreement to the Agent and
the related Managing Agent, such selling Committed Purchaser shall be released
from its obligations hereunder to the extent of such assignment. Thereafter the
Purchasing Committed Purchaser shall for all purposes be a Committed Purchaser
party to this Agreement and shall have all the rights and obligations of a
Committed Purchaser under this Agreement to the same extent as if it were an
original party hereto and no further consent or action by Seller, the
Purchasers, the related Managing Agent or the Agent shall be required.
          (c) Each of the Committed Purchasers agrees that in the event that it
shall cease to have a short-term debt rating of A-1 or better by Standard &
Poor’s Ratings Group and P-1 by Moody’s Investor Service, Inc. (an “Affected
Committed Purchaser”), such Affected Committed Purchaser shall be obliged, at
the request of any Conduit Purchaser in its Purchase Group or the related
Managing Agent, to assign all of its rights and obligations hereunder to
(x) another Committed Purchaser or (y) subject to Seller’s consent rights in
paragraph (b) above, another funding entity nominated by its Managing Agent and
acceptable to such Conduit Purchaser, and willing to participate in this
Agreement until the date described in clause (i) of the definition of Facility
Termination Date in the place of such Affected Committed Purchaser; provided
that the Affected Committed Purchaser receives payment in full, pursuant to an
Assignment Agreement, of an amount equal to such Committed Purchaser’s share of
the Aggregate Capital and Yield owing to the Committed Purchasers and all
accrued but unpaid fees and other costs and expenses payable in respect of its
share of the Purchaser Interests.

Page 40

--------------------------------------------------------------------------------

 

          Section 12.2 Participations. Any Committed Purchaser may, in the
ordinary course of its business at any time sell to one or more Persons (each a
“Participant”) participating interests in its share of the Purchaser Interests,
its Commitment or any other interest of such Committed Purchaser hereunder.
Notwithstanding any such sale by a Committed Purchaser of a participating
interest to a Participant, such Committed Purchaser’s rights and obligations
under this Agreement shall remain unchanged, such Committed Purchaser shall
remain solely responsible for the performance of its obligations hereunder, and
Seller, the Purchasers, the Managing Agents and the Agent shall continue to deal
solely and directly with such Committed Purchaser in connection with such
Committed Purchaser’s rights and obligations under this Agreement. Each
Committed Purchaser agrees that any agreement between such Committed Purchaser
and any such Participant in respect of such participating interest shall not
restrict such Committed Purchaser’s right to agree to any amendment, supplement,
waiver or modification to this Agreement, except for any amendment, supplement,
waiver or modification described in Section 13.1(b)(i).
          Section 12.3 Federal Reserve. Notwithstanding any other provision of
this Agreement to the contrary, any Committed Purchaser may at any time pledge
or grant a security interest in all or any portion of its rights (including,
without limitation, any Purchaser Interest and any rights to payment of Capital
and Yield) under this Agreement to secure obligations of such Committed
Purchaser to a Federal Reserve Bank, without notice to or consent of the Seller,
the Agent or any other Person; provided that no such pledge or grant of a
security interest shall release a Committed Purchaser from any of its
obligations hereunder, or substitute any such pledgee or grantee for such
Committed Purchaser as a party hereto.11
ARTICLE XIII
MISCELLANEOUS
          Section 13.1 Waivers and Amendments.
               (a) No failure or delay on the part of any Seller Party, the
Agent, any Managing Agent or any Purchaser in exercising any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any other
further exercise thereof or the exercise of any other power, right or remedy.
The rights and remedies herein provided shall be cumulative and nonexclusive of
any rights or remedies provided by law. Any waiver of this Agreement shall be
effective only in the specific instance and for the specific purpose for which
given.
               (b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with the provisions of this
Section 13.1(b). The Conduit Purchasers, Managing Agents, Servicer, Seller and
the Agent, at the direction of the Required Committed Purchasers, may enter into
written modifications or waivers of any provisions of this Agreement, provided,
however, that no such modification or waiver shall:
 

11   Section 12.3 was added by Amendment No. 1.

Page 41

--------------------------------------------------------------------------------

 

               (i) without the consent of each affected Purchaser, (A) extend
the date described in clause (i) of the definition of Facility Termination Date
or the date of any payment or deposit of Collections by Seller or the Servicer,
(B) reduce the rate or extend the time of payment of Yield (or any component of
Yield), (C) reduce any fee payable to any Managing Agent for the benefit of the
Purchasers, (D) except pursuant to Article XII hereof, change the amount of the
Capital of any Purchaser, any Committed Purchaser’s Pro Rata Share or any
Committed Purchaser’s Commitment, (E) amend, modify or waive any provision of
the definition of Required Committed Purchasers or this Section 13.1(b), (F)
consent to or permit the assignment or transfer by Seller of any of its rights
and obligations under this Agreement, (G) change the definition of “Delinquency
Ratio,” “Dilution Ratio,” “Dilution Reserve,” “Eligible Receivable,” “Loss
Reserve,” “Loss-to-Liquidation Ratio,” or “Yield and Servicing Fee Reserve” or
(H) amend or modify any defined term (or any defined term used directly or
indirectly in such defined term) used in clauses (A) through (G) above in a
manner that would circumvent the intention of the restrictions set forth in such
clauses; or
               (ii) without the written consent of any then Agent or Managing
Agents, amend, modify or waive any provision of this Agreement if the effect
thereof is to affect the rights or duties of such Agent or Managing Agent.
Notwithstanding the foregoing, without the consent of the Committed Purchasers,
but with the consent of Seller and the related Managing Agent, the Agent may
amend this Agreement solely to add additional Persons as Committed Purchasers
hereunder. Any modification or waiver made in accordance with this Section 13.1
shall apply to each of the Purchasers equally and shall be binding upon Seller,
the Servicer, the Purchasers, the Managing Agents and the Agent.
          Section 13.2 Notices. Except as provided in this Section 13.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission, electronic mail or
similar writing) and shall be given to the other parties hereto at their
respective addresses, telecopy numbers or email addresses set forth on the
signature pages hereof or at such other address, telecopy number or email
addresses as such Person may hereafter specify for the purpose of notice to each
of the other parties hereto. Each such notice or other communication shall be
effective (i) if given by telecopy or email, upon the receipt thereof, (ii) if
given by mail, three (3) Business Days after the time such communication is
deposited in the mail with first class postage prepaid or (iii) if given by any
other means, when received at the address specified in this Section 13.2. Seller
hereby authorizes the Agent and each Managing Agent to effect purchases and each
Managing Agent to make Tranche Period and Discount Rate selections based on
telephonic notices made by any Person whom the Agent or such Managing Agent in
good faith believes to be acting on behalf of Seller. Seller agrees to deliver
promptly to the Agent and each Managing Agent a written confirmation of each
telephonic notice signed by an authorized officer of Seller; provided, however,
the absence of such confirmation shall not affect the validity of such notice.
If the written confirmation differs from the action taken by the Agent or any
Managing Agent, the records of the Agent or such Managing Agent shall govern
absent manifest error.
          Section 13.3 Ratable Payments. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.3 or 10.4) in a greater

Page 42

--------------------------------------------------------------------------------

 

proportion than that received by any other Purchaser entitled to receive a
ratable share of such Aggregate Unpaids, such Purchaser agrees, promptly upon
demand, to purchase for cash without recourse or warranty a portion of such
Aggregate Unpaids held by the other Purchasers so that after such purchase each
Purchaser will hold its ratable proportion of such Aggregate Unpaids; provided
that if all or any portion of such excess amount is thereafter recovered from
such Purchaser, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.
          Section 13.4 Protection of Ownership Interests of the Purchasers.
               (a) Seller agrees that from time to time, at its expense, it
will, or will cause the Servicer to, promptly execute and deliver all
instruments and documents, and take all actions, that may be necessary or
desirable, or that any Managing Agent may reasonably request, to perfect,
protect or more fully evidence the Purchaser Interests, or to enable the Agent,
the Managing Agents or the Purchasers to exercise and enforce their rights and
remedies hereunder. At any time after the occurrence of an Amortization Event,
the Agent may, or the Agent may direct Seller or the Servicer to, notify the
Obligors of Receivables, at Seller’s expense, of the ownership or security
interests of the Purchasers under this Agreement and may also direct that
payments of all amounts due or that become due under any or all Receivables be
made directly to the Agent or its designee. Seller or the Servicer (as
applicable) shall, at any Purchaser’s request, withhold the identity of such
Purchaser in any such notification.
               (b) If any Seller Party fails to perform any of its material
obligations hereunder, the Agent, any Managing Agent or any Purchaser may (but
shall not be required to) perform, or cause performance of, such obligations,
and the Agent’s, such Managing Agent’s or such Purchaser’s out-of-pocket costs
and expenses incurred in connection therewith shall be payable by Seller as
provided in Section 10.4. Each Seller Party irrevocably authorizes the Agent at
any time and from time to time in the sole discretion of the Agent, and appoints
the Agent as its attorney-in-fact, to act on behalf of such Seller Party (i) to
file financing statements necessary or desirable in the Agent’s sole discretion
to perfect and to maintain the perfection and priority of the interest of the
Purchasers in the Receivables and (ii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Receivables as a financing statement in such offices as the Agent in its sole
discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of the interests of the Purchasers in the Receivables.
This appointment is coupled with an interest and is irrevocable.
          Section 13.5 Confidentiality.
               (a) Each of the Agent, the Managing Agents and the Purchasers
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement

Page 43

--------------------------------------------------------------------------------

 

containing provisions substantially the same as those of this Section, to any
assignee of or participant in, or any prospective assignee of or participant in,
any of its rights or obligations under this Agreement, (g) by the Agent, any
Managing Agent or any Purchaser to any rating agency, Commercial Paper dealer,
provider of credit enhancement or liquidity to any Conduit Purchaser or any
Person providing financing to, or holding equity interests in, any Conduit
Purchaser, and to any officers, directors, employees, outside accountants and
attorneys of any of the foregoing, and in each case, to the extent that such
Person reasonably requires such information, (h) with the consent of the Seller
or Servicer, or (i) to the extent such Information (A) becomes publicly
available other than as a result of a breach of this Section or (B) becomes
available to the Agent, any Managing Agent or any Purchaser on a nonconfidential
basis from a source other than a Seller Party or one of its Affiliates. For the
purposes of this Section, “Information” means all information received from a
Seller Party relating to any Seller Party or its business, other than any such
information that is available to the Agent, any Managing Agent or any Purchaser
on a nonconfidential basis prior to disclosure by such Seller Party; provided
that, in the case of information received from a Seller Party after the date
hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information. Each Person recognizes its responsibility for
compliance with United States federal securities laws, including insider
trading, in connection herewith.
               (b) Each Seller Party and each Purchaser shall maintain and shall
cause each of its employees and officers to maintain the confidentiality of the
Fee Letter, the Agent Fee Letter 12and the other confidential or proprietary
information with respect to the Agent, each Managing Agent, each Purchaser and
their respective businesses obtained by it or them in connection with the
structuring, negotiating and execution of the transactions contemplated herein,
except that information may be disclosed (a) to such Person’s and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, or
(d) to the extent such information (A) becomes publicly available other than as
a result of a breach of this Section or (B) becomes available to any Seller
Party or Purchaser on a nonconfidential basis from a source other than the
Agent, a Managing Agent or a Purchaser or one of its Affiliates. If, in the
reasonable judgment of any Seller Party, this Agreement or any Transaction
Document shall be required to be publicly filed with the SEC under any
applicable law, such Seller Party, or HBI on its behalf, may file any such
document as required under applicable law. Any Person required to maintain the
confidentiality of information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such information as such
Person would accord to its own confidential information. Anything herein to the
contrary notwithstanding, each Seller Party, each Purchaser, the Agent, each
Managing Agent, each Indemnified Party and any successor or assign of any of the
foregoing (and each employee, representative or other agent of any of the
foregoing) may disclose to any and all Persons, without limitation of any kind,
the
 
12 The second and third lines of paragraph (b) in Section 13.5 were amended to
include “, the Agent Fee Letter” by Amendment No. 1.

Page 44

--------------------------------------------------------------------------------

 

“tax treatment” and “tax structure” (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated herein
and all materials of any kind (including opinions or other tax analyses) that
are or have been provided to any of the foregoing relating to such tax treatment
or tax structure, and it is hereby confirmed that each of the foregoing have
been so authorized since the commencement of discussions regarding the
transactions.
          Section 13.6 Bankruptcy Petition. Seller, the Servicer, the Agent,
each Managing Agent and each Purchaser hereby covenants and agrees that, prior
to the date that is one (1) year and one (1) day after the payment in full of
all outstanding senior indebtedness of any Conduit Purchaser, it will not
institute against, or join any other Person in instituting against, such Conduit
Purchaser any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
     Section 13.7 Limited Recourse. Notwithstanding anything to the contrary
contained herein, the obligations of any Conduit Purchaser under this Agreement
are solely the obligations of such Conduit Purchaser and, in the case of
obligations of such Conduit Purchaser other than Commercial Paper, shall be
payable at such time as funds are received by or are available to such Conduit
Purchaser in excess of funds necessary to pay in full all outstanding Commercial
Paper of such Conduit Purchaser and, to the extent funds are not available to
pay such obligations, the claims relating thereto shall not constitute a claim
against such Conduit Purchaser but shall continue to accrue. Each party hereto
agrees that the payment of any claim (as defined in Section 101 of Title 11,
United States Code (Bankruptcy)) of any such party against a Conduit Purchaser
shall be subordinated to the payment in full of all Commercial Paper of such
Conduit Purchaser.
          No recourse under any obligation, covenant or agreement of any Conduit
Purchaser contained in this Agreement shall be had against any member, manager,
officer, director, employee or agent of such Conduit Purchaser, the Agent, the
Managing Agents, the Manager or any of their Affiliates (solely by virtue of
such capacity) by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is solely an obligation of such Conduit Purchaser
individually, and that no personal liability whatever shall attach to or be
incurred by any incorporator, stockholder, officer, director, member, employee
or agent of such Conduit Purchaser, the Agent, the Managing Agents, the Manager
or any of their Affiliates (solely by virtue of such capacity) or any of them
under or by reason of any of the obligations, covenants or agreements of such
Conduit Purchaser contained in this Agreement, or implied therefrom, and that
any and all personal liability for breaches by such Conduit Purchaser of any of
such obligations, covenants or agreements, either at common law or at equity, or
by statute, rule or regulation, of every such member, manager, officer,
director, employee or agent is hereby expressly waived as a condition of and in
consideration for the execution of this Agreement; provided that the foregoing
shall not relieve any such Person from any liability it might otherwise have as
a result of fraudulent actions taken or omissions made by them.
          The obligations of each Seller Party under this Agreement are solely
the corporate obligations of such Seller Party. No recourse under any
obligation, covenant or agreement of any Seller Party contained in this
Agreement shall be had against any member,

Page 45

--------------------------------------------------------------------------------

 

manager, officer, director, employee or agent of such Seller Party or any of
their Affiliates (solely by virtue of such capacity) by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise; it being expressly agreed and understood that this Agreement is
solely an obligation of such Seller Party individually, and that no personal
liability whatever shall attach to or be incurred by any incorporator,
stockholder, officer, director, member, employee or agent of such Seller Party
or any of their Affiliates (solely by virtue of such capacity) or any of them
under or by reason of any of the obligations, covenants or agreements of such
Seller Party contained in this Agreement, or implied therefrom, and that any and
all personal liability for breaches by such Seller Party of any of such
obligations, covenants or agreements, either at common law or at equity, or by
statute, rule or regulation, of every such member, manager, officer, director,
employee or agent is hereby expressly waived as a condition of and in
consideration for the execution of this Agreement; provided that the foregoing
shall not relieve any such Person from any liability it might otherwise have as
a result of fraudulent actions taken or omissions made by them.
          Section 13.8 Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of any Conduit
Purchaser, any Managing Agent, the Agent, any Seller Party or any Committed
Purchaser, no claim may be made by any Seller Party or any other Person against
any Conduit Purchaser, any Managing Agent, the Agent, any Seller Party or any
Committed Purchaser or their respective Affiliates, directors, officers,
employees, attorneys or agents for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement, or any act, omission or event occurring in connection
therewith; and each party hereto hereby waives, releases, and agrees not to sue
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
          Section 13.9 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF NEW YORK.
          Section 13.10 CONSENT TO JURISDICTION. EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH PARTY HERETO HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF ANY PARTY HERETO TO BRING PROCEEDINGS
AGAINST ANY OTHER PARTY HERETO IN THE COURTS OF ANY OTHER JURISDICTION.
          Section 13.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT,

Page 46

--------------------------------------------------------------------------------

 

CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY PARTY PURSUANT TO THIS AGREEMENT OR
THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
          Section 13.12 Integration; Binding Effect; Survival of Terms.
               (a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
               (b) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns
(including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii) the indemnification and payment provisions of
Article X, and Sections 13.5, 13.6, 13.7 and 13.8 shall be continuing and shall
survive any termination of this Agreement.
          Section 13.13 Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
          Section 13.14 Agent Roles.
          (a) HSBC Roles. Each of the Committed Purchasers acknowledges that
HSBC acts, or may in the future act, (i) as Agent for the Purchasers, (ii) as
managing agent for one or more Conduit Purchasers, (iii) as issuing and paying
agent for the Commercial Paper issued by one or more Conduit Purchasers, (iv) to
provide credit or liquidity enhancement for the timely payment for the
Commercial Paper of one or more Conduit Purchases and (v) to provide other
services from time to time for any of the Purchasers (collectively, the “HSBC
Roles”). Without limiting the generality of this Section 13.14, each Committed
Purchaser hereby acknowledges and consents to any and all HSBC Roles and agrees
that in connection with any HSBC Role, HSBC may take, or refrain from taking,
any action that it, in its discretion, deems appropriate, including, without
limitation, in its role as Agent hereunder.
          (b) Managing Agent Institution Roles. Each of the Committed Purchasers
acknowledges that each Person that serves as a Managing Agent hereunder (a

Page 47

--------------------------------------------------------------------------------

 

“Managing Agent Institution”) acts, or may in the future act, (i) as Managing
Agent for one or more Conduit Purchasers, (ii) as issuing and paying agent for
each such Conduit Purchaser’s Commercial Paper, (iii) to provide credit or
liquidity enhancement for the timely payment for each such Conduit Purchaser’s
Commercial Paper and (iv) to provide other services from time to time for some
or all of the Conduit Purchasers (collectively, the “Managing Agent’s
Institution Roles”). Without limiting the generality of this Section 13.14(b),
each Committed Purchaser hereby acknowledges and consents to any and all
Managing Agent Institution Roles and agrees that in connection with any Managing
Agent Institution Role, the applicable Managing Agent Institution may take, or
refrain from taking, any action that it, in its discretion, deems appropriate,
including, without limitation, in its role as administrative agent for the
related Conduit Purchaser.
          Section 13.15 Characterization.
               (a) It is the intention of the parties hereto that each purchase
hereunder shall constitute and be treated as an absolute and irrevocable sale,
which purchase shall provide the applicable Purchaser with the full benefits of
ownership of the applicable Purchaser Interest. Except as specifically provided
in this Agreement, each sale of a Purchaser Interest hereunder is made without
recourse to Seller; provided, however, that (i) Seller shall be liable to each
Purchaser, each Managing Agent and the Agent for all representations,
warranties, covenants and indemnities made by Seller pursuant to the terms of
this Agreement, and (ii) such sale does not constitute and is not intended to
result in an assumption by any Purchaser, any Managing Agent or the Agent or any
assignee thereof of any obligation of Seller or any Originator or any other
person arising in connection with the Receivables, the Related Security, or the
related Contracts, or any other obligations of Seller or any Originator.
               (b) In addition to any ownership interest which the Agent and the
Purchasers may from time to time acquire pursuant hereto, Seller hereby grants
to the Agent for the ratable benefit of the Purchasers and the other Indemnified
Parties a valid and perfected security interest in all of Seller’s right, title
and interest in, to and under the following assets, now existing or hereafter
arising: (i) all Receivables, (ii) the Collections, (iii) each Lock-Box,
(iv) each Collection Account, (v) all Related Security, (vi) all other rights
and payments relating to such Receivables, (vii) all of Seller’s rights, title,
and interest in, to and under the Performance Undertaking and the Sale
Agreements (including, without limitation, (a) all rights to indemnification
arising thereunder and (b) all UCC financing statements filed pursuant thereto),
(viii) all proceeds of any of the foregoing, and (ix) all other assets in which
the Agent has acquired, may hereafter acquire and/or purports to have acquired
an interest hereunder to secure the prompt and complete payment of the Aggregate
Unpaids, which security interest shall be prior to all other Adverse Claims
thereto. The Agent and the Purchasers shall have, in addition to the rights and
remedies that they may have under this Agreement, all other rights and remedies
provided to a secured creditor under the UCC and other applicable law, which
rights and remedies shall be cumulative. The Seller hereby authorizes the Agent,
within the meaning of 9-509 of any applicable enactment of the UCC, as secured
party for the benefit of itself and of the Indemnified Parties, to file, without
the signature of the Seller or any Transferor, as debtors, the UCC financing
statements contemplated herein and under the Receivables Sale Agreement.
               (c) In connection with Seller’s transfer of its right, title and
interest in, to and under the Receivables Sale Agreement, the Seller agrees that
the Agent shall

Page 48

--------------------------------------------------------------------------------

 

have the right to enforce the Seller’s rights and remedies under the Receivables
Sale Agreement, to receive all amounts payable thereunder or in connection
therewith, to consent to amendments, modifications or waivers thereof, and to
direct, instruct or request any action thereunder, but in each case without any
obligation on the part of the Agent, any Managing Agent or any Purchaser or any
of its or their respective Affiliates to perform any of the obligations of the
Seller under the Receivables Sale Agreement. To the extent that the Seller
enforces the Seller’s rights and remedies under the Receivables Sale Agreement,
from and after the occurrence of an Amortization Event, and during the
continuance thereof, the Agent shall have the exclusive right to direct such
enforcement by the Seller.
               (d) If, notwithstanding the intention of the parties expressed
above, any sale or transfer by Seller hereunder shall be characterized as a
secured loan and not a sale or such sale shall for any reason be ineffective or
unenforceable (any of the foregoing being a “Recharacterization”), then this
Agreement shall be deemed to constitute a security agreement under the UCC and
other applicable law. In the case of any Recharacterization, the Seller
represents and warrants that each remittance of Collections to the Agent or the
Purchasers hereunder will have been (i) in payment of a debt incurred in the
ordinary course of its business or financial affairs and (ii) made in the
ordinary course of its business or financial affairs.
          Section 13.16 USA PATRIOT Act. Each Committed Purchaser that is
subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”) hereby notifies the Seller
Parties that pursuant to the requirements of the Act, it is required to obtain,
verify and record information that identifies each Seller Party, which
information includes the name and address of the each Seller Party and other
information that will allow such Committed Purchaser to identify each Seller
Party in accordance with the Act.

Page 49

--------------------------------------------------------------------------------

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
hereof.

                      HBI RECEIVABLES LLC, as Seller    
 
               
 
  By:                               Name: Richard D. Moss         Title:
President and Chief Executive Officer         Address:    
 
          1000 East Hanes Mill Road     
 
          Winston-Salem, NC 27105    
 
          Attention: Chad L. KellerRichard D. Moss    
 
          Fax: (336) 714-3650-519-4667    
 
          Telephone: (336)-519-44774332    
 
          Email: rick.moss@hanesbrands.com    
 
                    HANESBRANDS INC., as Servicer    
 
               
 
  By:                               Name: Richard D. Moss         Title:
Treasurer         Address:    
 
          1000 East Hanes Mill Road     
 
          Winston-Salem, NC 27105    
 
          Attention: Chad L. KellerRichard D. Moss    
 
          Fax: (336) 714-3855-519-4667    
 
          Telephone: (336)-519-54784332    
 
          Email: rick.moss@hanesbrands.com    

Signature Page to Receivables Purchase Agreement

 

--------------------------------------------------------------------------------

 

                      BRYANT PARK FUNDING LLC, as a Conduit
Purchaser    
 
               
 
  By:                               Name:         Title:         Address: Bryant
Park Funding LLC    
 
          c/o Global Securitization Services, LLC    
 
          Attn: Tony Wong    
 
          445 Broad Hollow Road, Suite 239    
 
          Melville, NY 11747    
 
          Fax: 212-302-8767    
 
          Tel: 631-930-7207    
 
                    HSBC SECURITIES (USA) Inc., as a Managing Agent and as
Agent13    
 
               
 
  By:                               Name:         Title:         Address: HSBC
Securities (USA) Inc.    
 
          Attn: James Lees/Suzanna Baird    
 
          452 Fifth Avenue    
 
          New York, NY 10018    
 
          Tel: 212-525-5923/212-525-5478    
 
          Fax: 646-366-3299/646-366-3099    
 
                    HSBC BANK USA, NATIONAL ASSOCIATIONPLC,
as a Committed Purchaser    
 
               
 
  By:                               Name:         Title:         Address: HSBC
Bank USA, National Association    
 
          Attn: Rob Devir    
 
          452 Fifth Avenue    
 
          New York, NY 10018    
 
          Tel: 212-525-5726    
 
          Fax: 212-382-7583    

 

13   Title and address was revised to reflect Resignation and Appointment
Agreement.

Signature Page to Receivables Purchase Agreement

 

--------------------------------------------------------------------------------

 

EXHIBIT I
DEFINITIONS
     As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
     “Accounting Based Consolidation Event” means the consolidation, for
financial and/or regulatory accounting purposes, of all or any portion of the
assets and liabilities of any Conduit that are subject to this Agreement or any
other Transaction Document with all or any portion of the assets and liabilities
of an Affected Entity. An Accounting Based Consolidation Event shall be deemed
to occur on the date any Affected Entity shall acknowledge in writing that any
such consolidation of the assets and liabilities of such Conduit shall occur.14
     “Accrual Period” means each calendar month, provided that the initial
Accrual Period hereunder means the period from (and including) the date of the
initial Incremental Purchase hereunder to (and including) the last day of the
calendar month thereafter.
     “Additional Excluded Obligor” means the single Obligor specified in the
notice delivered in connection with the Additional Obligor Exclusion Date . For
the avoidance of doubt, Seller may designate only a single entity as an
Additional Excluded Obligor during the term of this Agreement.15
     “Additional Obligor Exclusion Date” means the date designated as the
“Additional Obligor Exclusion Date” in a notice from Seller to the Agent and
each Managing Agent, which notice is delivered at least three (3) Business Days
prior to such designated date, and which shall specify the name of the
Additional Excluded Obligor. For the avoidance of doubt, Seller may designate
only a single Additional Obligor Exclusion Date during the term of this
Agreement.16
     “Adverse Claim” means a lien, security interest, charge or encumbrance, or
other right or claim in, of or on any Person’s assets or properties in favor of
any other Person.
     “Affected Committed Purchaser” has the meaning specified in
Section 12.1(c).
     “Affected Entity” means (i) any Committed Purchaser, (ii) any insurance
company, bank or other funding entity providing liquidity, credit enhancement or
back-up purchase support or facilities to a Conduit, (iii) any agent,
administrator or manager of a Conduit, or (iv) any bank holding company in
respect of any of the foregoing.17
     “Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person or any Subsidiary of such Person. A Person shall be
deemed to control another Person if the
 

14   This definition was added by Amendment No. 1.   15   This definition was
added by Amendment No. 5.   16   This definition was added by Amendment No. 5.  
17   This definition was added by Amendment No. 1.

Exh. I-1

--------------------------------------------------------------------------------

 

controlling Person owns 15.0% or more of any class of voting securities of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
     “Agent” has the meaning set forth in the preamble to this Agreement.
     “Agent Fee Letter” means the letter agreement dated as of April 13, 2009,
between the Agent and Seller as the same may be amended, restated, supplemented
or otherwise modified from time to time.18
     “Aggregate Capital” means, on any date of determination, the aggregate
amount of Capital of all Purchaser Interests outstanding on such date.
     “Aggregate Reduction” has the meaning specified in Section 1.3.
     “Aggregate Reserves” means, on any date of determination, the sum of the
Loss Reserve, the Dilution Reserve and the Yield and Servicing Fee Reserve.
     “Aggregate Unpaids” means, at any time, an amount equal to the sum of all
Aggregate Capital and all unpaid Obligations (whether due or accrued) at such
time.
     “Agreement” means this Receivables Purchase Agreement, as it may be amended
or modified and in effect from time to time.
     “Alternate Base Rate” means, for any date, a rate per annum equal to the
greatest of (a) LIBO for a one month Tranche Period at approximately 11:00 a.m.
London time on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1.0%, (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1% and (c) the rate of interest per annum
publicly announced from time to time by HSBC as its prime rate in effect at its
principal office in New York City; each change in the rate described in this
clause (c) shall be effective from and including the date such change is
publicly announced as being effective. Any change in the Alternate Base Rate due
to a change in any rate described in clause (a), (b) or (c) above shall be
effective from and including the effective date of such change.19
     “Amortization Date” means the earliest to occur of (i) the day on which any
of the conditions precedent set forth in Section 6.2 are not satisfied, (ii) the
Business Day immediately prior to the occurrence of an Amortization Event set
forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written
notice from the Agent following the occurrence of any other Amortization Event,
(iv) the date which is 30 days after the Agent’s receipt of written notice from
Seller that it wishes to terminate the facility evidenced by this Agreement,
(v) the date described in clause (i) of the definition of Facility Termination
Date and (vi) the Termination Date under and as defined in the Receivables Sale
Agreement.
     “Amortization Event” has the meaning specified in Article IX.
 

18   This definition was added by Amendment No. 1 and later deleted and replaced
in its entirety by Amendment No. 2.   19   This definition was added by
Amendment No. 1.

Exh. I-2

--------------------------------------------------------------------------------

 

     “Applicable Margin” has the meaning set forth in the Fee Letter.
     “Assignment Agreement” has the meaning set forth in Section 12.1(b).
     “Authorized Officer” means, with respect to any Person, its president,
chief executive officer, treasurer, assistant treasurer, chief financial
officer, or controller.
     “Bank of America Accounts” means (i) each Collection Account in the name of
GFSI, Inc. and (ii) each Collection Account in the name of CC Products, Inc.,
maintained with Bank of America, N.A., as depository bank.
     “Broken Funding Costs” means for any Purchaser Interest which: (i) has its
Capital reduced without compliance by Seller with the notice requirements
hereunder, (ii) does not become subject to an Aggregate Reduction following the
delivery of any Reduction Notice, (iii) is assigned to the Committed Purchasers
pursuant to a Liquidity Agreement or (iv) otherwise is terminated prior to the
date on which it was originally scheduled to end; an amount equal to the excess,
if any, of (A) the Yield that would have accrued during the remainder of the
Tranche Periods or the tranche periods for Commercial Paper determined by the
applicable Managing Agent to relate to such Purchaser Interest subsequent to the
date of such reduction, assignment or termination (or in respect of clause
(ii) above, the date such Aggregate Reduction was designated to occur pursuant
to the Reduction Notice) of the Capital of such Purchaser Interest if such
reduction, assignment or termination had not occurred or such Reduction Notice
had not been delivered, over (B) the sum of (x) to the extent all or a portion
of such Capital is allocated to another Purchaser Interest, the amount of Yield
actually accrued during the remainder of such period on such Capital for the new
Purchaser Interest, and (y) to the extent such Capital is not allocated to
another Purchaser Interest, the income, if any, actually received during the
remainder of such period by the holder of such Purchaser Interest from investing
the portion of such Capital not so allocated. In the event that the amount
referred to in clause (B) exceeds the amount referred to in clause (A), the
relevant Purchaser or Purchasers agree to pay to Seller the amount of such
excess. All Broken Funding Costs shall be due and payable hereunder upon demand.
     “Business Day” means any day on which banks are not authorized or required
to close in New York, New York or Chicago, Illinois and The Depository Trust
Company of New York is open for business, and, if the applicable Business Day
relates to any computation or payment to be made with respect to the LIBO Rate,
any day on which dealings in dollar deposits are carried on in the London
interbank market.
     “Calendar Month” means each four or five week period as set forth on
Schedule D hereto.
     “Capital” of any Purchaser Interest means, at any time, (A) the Purchase
Price of such Purchaser Interest, minus (B) the sum of the aggregate amount of
Collections and other payments received by the Managing Agents which in each
case are applied to reduce such Capital in accordance with the terms and
conditions of this Agreement; provided that such Capital shall be restored (in
accordance with Section 2.5) in the amount of any Collections or other payments
so received and applied if at any time the distribution of such Collections or
payments are rescinded, returned or refunded for any reason.

Exh. I-3

--------------------------------------------------------------------------------

 

     “Capital Securities” means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person’s capital, whether now outstanding or
issued after the date hereof.
     “Change of Control” means:
          (i) any person or group (within the meaning of Sections 13(d) and
14(d) under the Exchange Act) shall become the ultimate “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of Capital Securities representing more than 35% of the Capital
Securities of HBI on a fully diluted basis;
          (ii) during any period of 24 consecutive months, individuals who at
the beginning of such period constituted the Board of Directors of HBI (together
with any new directors whose election to such Board or whose nomination for
election by the stockholders of HBI 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 HBI then in office;
          (iii) the occurrence of any “Change of Control” (or similar term)
under (and as defined in) any First Lien Loan Document, Second Lien Loan
Document or Senior Note Document; or
          (iv) OriginatorHBI shall for any reason cease to own and control all
of the outstanding equity interests of Seller; or
          (v) HBI shall for any reason cease to own and control all of the
outstanding equity interests of any Originator (other than HBI).
     “Charged-Off Receivable” means a Receivable: (i) as to which, to the
knowledge of the applicable Originator, the Obligor thereof has taken any
action, or suffered any event to occur, of the type described in Section 9.1(d)
(as if references to Seller Party therein refer to such Obligor); (ii) as to
which the Obligor thereof, if a natural person, is deceased, (iii) which,
consistent with the applicable Credit and Collection Policy, would be written
off Seller’s books as uncollectible or (iv) which has been identified by Seller
as uncollectible.
     “Collection Account” means each concentration account, depositary account,
lock-box account or similar account in which any Collections are collected or
deposited.
     “Collection Account Agreement” means an agreement substantially in the form
of Exhibit VI among an Originator, Seller, the Agent and a Collection Bank.
     “Collection Bank” means, at any time, any of the banks holding one or more
Collection Accounts.
     “Collection Notice” means a notice, in substantially the form of Exhibit A
to Exhibit VI, from the Agent to a Collection Bank.

Exh. I-4

--------------------------------------------------------------------------------

 

     “Collections” means, with respect to any Receivable, all cash collections
and other cash proceeds in respect of such Receivable, including, without
limitation, all yield, principal, Finance Charges, recoveries or other related
amounts accruing in respect thereof and all cash proceeds of Related Security
with respect to such Receivable and any Deemed Collections.
     “Commercial Paper” means promissory notes of a Conduit Purchaser issued by
such Conduit Purchaser in the commercial paper market.
     “Commitment” means, for each Committed Purchaser, the commitment of such
Committed Purchaser to purchase Purchaser Interests from Seller, in an amount
not to exceed in the aggregate, the amount set forth below such Committed
Purchaser’s name on Schedule A to this Agreement, as such amount may be modified
in accordance with the terms hereof.
     “Committed Purchasers” has the meaning set forth in the preamble in this
Agreement.
     “Concentration Limit” means, for any Obligor and its Affiliates, at any
time, the amount equal to the product of (a) either (i) 3.00% or (ii) such other
higher percentages (each, a “Special Concentration Percentage”) for such
Obligors and its Affiliates as are set forth on Schedule C, which Special
Concentration Percentage is subject to reduction or cancellation (1) by the
Agent with respect to any Obligor, or (2) by the Agent, upon written demand by
any Managing Agent, with respect to any Obligor whose short term debt ratings
are withdrawn or downgraded by S&P or Moody’s, in either case of (1) or (2),
upon five (5) Business Days’ prior notice to Seller, the other Managing Agents,
the Agent and the Servicer and (b) the aggregate Outstanding Balance of all
Eligible Receivables at such time.20
     “Conduit Purchaser” has the meaning set forth in the preamble to this
Agreement.
     “Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.
     “Contract” means, with respect to any Receivable, any and all instruments,
agreements, invoices or other writings pursuant to which such Receivable arises
or which evidences such Receivable; provided that the term “Contract” shall not
include any agreement or documents between an Obligor and an Originator or
delivered to an Obligor which relate to cooperative advertising arrangements,
discount arrangements or requirements of merchants of such Originator’s product
to the extent such agreements or documents do not evidence or give rise to any
Receivable and do not govern the origination, servicing or enforcement of any
Receivable.
     “Controlled Group” means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with Servicer, are treated as
a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of
ERISA.
 

20   This definition was deleted and replaced in its entirety by Amendments
No. 1 and No. 2.

Exh. I-5

--------------------------------------------------------------------------------

 

     “CP Costs”21
     “CP Rate” means:
     (a) with respect to any Conduit Purchaser for which HSBC or PNC is the
Managing Agent, for any Accrual Period for any Purchaser Interest, to the extent
such Conduit Purchaser funds such Purchaser Interest by issuing Commercial
Paper, a per annum rate equal to the weighted average of the rates (as
determined by the applicable Managing Agent and which shall include commissions
of placement agents and dealers, incremental carrying costs incurred with
respect to the commercial paper of such Person maturing on dates other than
those on which corresponding funds are received by such Conduit Purchaser, other
borrowings by such Conduit Purchaser and any other costs associated with the
issuance of commercial paper) payable by such Conduit Purchaser in respect of
its Commercial Paper outstanding during such Accrual Period that is allocated,
in whole or in part, to fund or maintain such Purchaser Interest during such
Accrual Period, converted (as necessary) to an annual yield equivalent rate
calculated on the basis of a 360-day year; and
     (b) for any Accrual Period for any Purchaser Interest funded by a Conduit
Purchaser that becomes a party to this Agreement pursuant to an Assignment
Agreement, to the extent such Conduit Purchaser funds such Purchaser Interest by
issuing Commercial Paper, the “CP Rate” set forth in such Assignment Agreement;
provided, that at all times after the occurrence and during the continuance of
an Amortization Event, the CP Rate shall mean the Default Rate.22
     “Credit Agreement” means that certain Amended and Restated Credit
Agreement, dated as of December 10, 2009, among HBI, the lenders from time to
time party thereto, the administrative agent party thereto, the collateral agent
party thereto and the other agents party thereto, as in effect on the date
hereof without giving effect to any amendments thereto unless either (i) each
Managing Agent has given written consent to such amendment or (ii) each Managing
Agent or any of its Affiliates is a lender under the Credit Agreement and each
such lender has agreed in writing to such amendment.
     “Credit and Collection Policy” means theeach Originator’s and the
Servicer’s credit and collection policies and practices relating to Contracts
and Receivables existing on the date hereof and summarized in Exhibit VIII
hereto, as modified from time to time in accordance with this Agreement;
provided, that upon prior written notice to the Agent, any Originator may adopt
the Credit and Collection Policy of HBI and such change in the applicable
Originator’s Credit and Collection Policy shall not be a violation of
Section 7.2(c) hereof.
     “Daily Report” means a report, in substantially the form of Exhibit XIII
hereto (appropriately completed), furnished by the Servicer to the Managing
Agents and the Agent pursuant to Section 8.5.
     “Dating Receivable” means a Receivable for which the related due date was
set by the applicable Originator prior to the origination of such Receivable.
 

21   This definition was deleted in its entirety by Amendment No. 2.   22   This
definition was deleted and replaced in its entirety by Amendment No. 2.

Exh. I-6

--------------------------------------------------------------------------------

 

     “Deemed Collections” means the aggregate of all amounts Seller shall have
been deemed to have received as a Collection of a Receivable. Seller shall be
deemed to have received a Collection (but only to the extent of the reduction or
cancellation identified below) of a Receivable if at any time (i) the
Outstanding Balance of any such Receivable is either (x) reduced as a result of
any defective or rejected goods or services, any discount, rebate or any
adjustment or otherwise (other than cash Collections on account of the
Receivables) or (y) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction) or (ii) any of the representations or
warranties regarding any Receivable in Article V are no longer true (in which
case, Seller shall be deemed to have received a Collection in an amount equal to
the Outstanding Balance of such Receivable).
     “Defaulted Receivable” means a Receivable as to which any payment, or part
thereof, remains unpaid for more than 90 days from the original due date for
such payment.
     “Default Rate” means a rate per annum equal to 3.00% above the Alternate
Base Rate.23
     “Default Ratio” means, at any time, a percentage equal to (i) the sum of
(a) the aggregate Outstanding Balance of all Receivables that became Charged-Off
Receivables (other than the Charged-Off Receivables as described in clause
(i) of the definition thereof) during the most recently ended Calendar Month
that were less than 61 days past the original due date and (b) the aggregate
Outstanding Balance of all Receivables as to which (A) any payment, or part
thereof, remains unpaid for 61 days to 90 days past the original due date as of
the last day of such Calendar Month and (B) did not become Charged-Off
Receivables (other than the Charged-Off Receivables as described in clause
(i) of the definition thereof) prior to the day that was 61 days past the
original due date, divided by (ii) the aggregate Original Balance of all
Receivables generated by Originatorall Originators during the Calendar Month
ending three (3) Calendar Months prior to such Calendar Month.24
     “Delinquency Ratio” means, at any time, a percentage equal to (i) the
aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables as of the last day of the most recently ended Calendar Month divided
by (ii) the aggregate Outstanding Balance of all Receivables as of the last day
of such Calendar Month.
     “Delinquent Receivable” means a Receivable as to which any payment, or part
thereof, remains unpaid for more than 60 days from the original due date for
such payment.
     “Dilution Ratio” means, at any time, a percentage equal to (i) the
aggregate amount of Dilutions which occurred during the most recently ended
Calendar Month, divided by (ii) the aggregate Original Balance of all
Receivables generated by Originatorall Originators during either (A) the most
recently ended Calendar Month or (B) such other period of time as specified by
any Managing Agent upon three (3) Business Days’ prior written notice to the
other parties hereto at any time within two (2) months after the date on which
the Managing Agents receive the results of any annual audit report prepared at
the request of any Managing Agent pursuant to Section 7.1(d), provided, that no
Managing Agent may specify any such other period of time
 

23   This definition was amended by Amendment No. 1.   24   This definition was
deleted and replaced in its entirety by Amendment No. 3.

Exh. I-7

--------------------------------------------------------------------------------

 

unless such other period of time is reasonably based upon and verified by the
results of any such annual audit report.
     “Dilution Reserve” means, at any time, an amount equal to the Dilution
Reserve Percentage at such time multiplied by the Net Receivables Balance at
such time.
     “Dilution Reserve Floor” means 23.0% .25
     “Dilution Reserve Percentage” means, at any time, the greater of (i) the
Dilution Reserve Floor and (ii) the amount expressed as a percentage and
calculated in accordance with the following formula:
     DRP = (SF x ED) + ((DS – ED) x (DS / ED)) x DHR
     where:

             
 
  SF   =   the Stress Factor at such time.
 
           
 
  ED   =   the average of the Dilution Ratios for the twelve months most
recently ended at such time.
 
           
 
  DS   =   the highest two (2) consecutive month average of the Dilution Ratios
during the immediately preceding twelve months.
 
           
 
  DHR   =   the aggregate Original Balance of all Receivables generated by
Originatorall Originators during the most recently ended one and one-half (1.5)
Calendar Month-period divided by the Net Receivables Balance as of the last day
of such Calendar Month; provided that any Managing Agent may specify such other
period of time for purposes of determining the numerator of DHR upon three
(3) Business Days’ prior written notice to the other parties hereto at any time
within two (2) months after the date on which the Managing Agents receive the
results of any annual audit report prepared at the request of any Managing Agent
pursuant to Section 7.1(d), provided, that no Managing Agent may specify any
such other period of time unless such other period of time is reasonably based
upon and verified by the results of any such annual audit report.26

     “Dilutions” means, at any time, the aggregate amount of reductions or
cancellations described in clause (i) of the definition of “Deemed Collections”.
     “Discount Rate” means, the LIBO Rate or the Prime Rate, as applicable, with
respect to each Purchaser Interest funded by the Committed Purchasers.
     “Downgrade Event” means the occurrence of any one or more of the following:
(i) HBI’s issuer rating is below B- by S&P, (ii) HBI’s senior unsecured
long-term debt rating is
 

25   This definition was amended by Amendments No. 1, No. 2 and No. 5.   26  
This definition was deleted and replaced in its entirety by Amendment No. 1.

Exh. I-8

--------------------------------------------------------------------------------

 

below B3 by Moody’s or (iii) HBI’s debt under the First Lien Credit Agreement is
rated below B3 by Moody’s.27
     “Eligible Receivable” means, at any time, a Receivable:
     (i) the Obligor of which is not an Affiliate of any of the parties hereto;
     (ii) the Obligor of which is not the Obligor of any Charged-Off Receivable;
     (iii) which is not a Charged-Off Receivable or a Delinquent Receivable;
     (iv) which, if not a Dating Receivable, by its terms is due and payable
within 120 days after the original billing date therefor and has not had its
original payment terms extended; provided that:
     (A) if such Receivable is due and payable by its terms within 31 to 60 days
after the original billing date therefor, the Outstanding Balance of such
Receivable when added to the aggregate Outstanding Balance of all other Eligible
Receivables due and payable within 31 to 60 days after the original billing date
therefor does not exceed 20.00% of the aggregate Outstanding Balance of all
Receivables at such time;
     (B) if such Receivable is due and payable by its terms within 61 to 90 days
after the original billing date therefor, the Outstanding Balance of such
Receivable, when added to the aggregate Outstanding Balance of all other
Eligible Receivables due and payable within 61 to 90 days after the original
billing date therefor does not exceed 3.00% of the aggregate Outstanding Balance
of all Receivables at such time; and
     (C) if such Receivable is due and payable by its terms within 91 to
120 days after the original billing date therefor, the Outstanding Balance of
such Receivable, when added to the aggregate Outstanding Balance of all other
Eligible Receivables due and payable within 91 to 120 days after the original
billing date therefor does not exceed 3.00% of the aggregate Outstanding Balance
of all Receivables at such time.
     (v) which, if a Dating Receivable, by its terms is due and payable within
180 days after the origination thereof and has not had its payment terms
extended; provided that the Outstanding Balance of such Dating Receivable when
added to the aggregate Outstanding Balance of all other Eligible Receivables
that are Dating Receivables does not exceed 3.00% of the aggregate Outstanding
Balance of all Receivables at such time;
     (vi) which is an “account” within the meaning of Section 9-102 of the UCC
of all applicable jurisdictions;
     (vii) which is denominated and payable only in United States dollars in the
United States;
 

27   This definition was added by Amendment No. 2.

Exh. I-9

--------------------------------------------------------------------------------

 

     (viii) which arises under a Contract in substantially the form of one of
the form contracts set forth on Exhibit IX hereto or otherwise approved by the
Agent in writing, which, together with such Receivable, is in full force and
effect and constitutes the legal, valid and binding obligation of the related
Obligor enforceable against such Obligor in accordance with its terms;
     (ix) which, other than a Receivable arising from the sale of products under
a Specified Agreement, is not evidenced by, governed by and does not arise under
any other agreement, document or writing other than a Contract in substantially
the form of one of the form contracts set forth on Exhibit IX hereto or
otherwise approved by the Agent in writing;
     (x) which arises under a Contract which Contract (a) does not require the
Obligor under such Contract to consent to the transfer, sale or assignment of
the rights and duties of the applicable Originator or any of its assignees under
such Contract and (b) does not contain a confidentiality provision that purports
to restrict the ability of any Purchaser to exercise its rights under this
Agreement, including, without limitation, its right to review the Contract;
     (xi) which arises under a Contract that contains an obligation to pay a
specified sum of money, contingent only upon the sale of goods or the provision
of services by the applicable Originator;
     (xii) which, together with the Contract related thereto, does not
contravene in any material respect any law, rule or regulation applicable
thereto (including, without limitation, any law, rule and regulation relating to
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to
which no part of the Contract related thereto is in violation in any material
respect of any such law, rule or regulation;
     (xiii) which satisfies all applicable requirements of the applicable
Originator’s Credit and Collection Policy;
     (xiv) which was generated in the ordinary course of the applicable
Originator’s business;
     (xv) which arises solely from the sale of goods or the provision of
services to the related Obligor by the applicable Originator, and not by any
other Person (in whole or in part);
     (xvi) as to which the Agent has not notified Seller that the Agent has
determined that such Receivable or class of Receivables is not acceptable as an
Eligible Receivable, including, without limitation, because such Receivable
arises under a Contract that is not acceptable to the Agent, such notice to be
provided at least ten (10) Business Days prior to such Receivable being
designated as unacceptable to the Managing Agent;
     (xvii) which is not subject to any dispute, right of rescission, set-off,
counterclaim, any other defense (including defenses arising out of violations of
usury

Exh. I-10

--------------------------------------------------------------------------------

 

laws) of the applicable Obligor against the applicable Originator or any other
Adverse Claim, and the Obligor thereon holds no right against such Originator to
cause such Originator to repurchase the goods or merchandise, the sale of which
shall have given rise to such Receivable (except with respect to sale discounts
effected pursuant to the Contract, or defective goods returned in accordance
with the terms of the Contract);
     (xviii) as to which the applicable Originator has satisfied and fully
performed all obligations on its part with respect to such Receivable required
to be fulfilled by it, and no further action is required to be performed by any
Person with respect thereto other than payment thereon by the applicable Obligor
and any obligations of thesuch Originator that relates to standard warranties
related to the goods sold which gave rise to such Receivable;
     (xix) all right, title and interest to and in which has been validly
transferred by the applicable Originator directly to Seller under and in
accordance with the Receivables Sale Agreement, and Seller has good and
marketable title thereto free and clear of any Adverse Claim; and
     (xx) if the Obligor of which is one of the 15 Obligors with the greatest
aggregate Outstanding Balance of Receivables at such time, such Obligor is not
the Obligor of Delinquent Receivables, the Outstanding Balance of which in the
aggregate constitute more than 25.0% of the aggregate Outstanding Balance of all
Receivables of such Obligor; and
     (xxi) for which, if originated by GFSI, Inc. or CC Products, Inc., the
Agent has given written notice to the Seller that such Receivables are eligible
(which notice shall be delivered by the Agent on the date the Bank of America
Accounts are subject to a Collection Account Agreement in form and substance
acceptable to the Agent).
     “ERISA” means the Employee Retirement Income Security Act of 1974 and any
regulations promulgated thereunder.
     “Excess Foreign Receivables Amount” means at any time, the amount, if
positive, equal to (a) the aggregate Outstanding Balance of all Eligible
Receivables which are Foreign Receivables at such time minus (b) the product of
(x) the Foreign Receivables Limit and (y) the aggregate Outstanding Balance of
all Eligible Receivables at such time.
     “Excess Government Receivables Amount” means at any time, the amount, if
positive, equal to (a) the aggregate Outstanding Balance of all Eligible
Receivables which are Government Receivables at such time minus (b) the product
of (x) the Government Receivables Limit and (y) the aggregate Outstanding
Balance of all Eligible Receivables at such time.
     “Excluded Receivable” means (i) any account receivable arising in
connection with the sale of goods by the business operations of HBI which were
the business operations of National Textiles, L.L.C. prior to the merger of
National Textiles, L.L.C. into HBI, and which account receivable is identified
on Seller’s and Servicer’s systems, books and records in the manner specified by
Seller pursuant to Section 7.1(m), (ii) at all times on and after the Additional
Obligor Exclusion Date, any account receivable for which the Obligor is the
Additional Excluded Obligor or any of its affiliates, and (iii) at all times on
and after the Wal-Mart

Exh. I-11

--------------------------------------------------------------------------------

 

Exclusion Date, any present or future account receivable for which the Obligor
is Wal-Mart Stores, Inc. or any of its affiliates.28
     “Facility Termination Date” means the earliest to occur of (i)
February 1,March 31, 201129 and (ii) the Amortization Date.
     “Federal Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as amended and any successor statute thereto.
     “Federal Funds Effective Rate” means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.30
     “Fee Letter” means that certain letter agreement dated as of April 13,
200931 among Seller, the Agent and the Managing Agents, as it may be amended,
restated, supplemented or otherwise modified and in effect from time to time.
     “Finance Charges” means, with respect to a Contract, any finance, interest,
late payment charges or similar charges owing by an Obligor pursuant to such
Contract.
     “First Lien Credit Agreement” means that certain First Lien Credit
Agreement, dated as of September 5, 2006, among HBI, the lenders from time to
time party thereto, the administrative agent party thereto, the collateral agent
party thereto and the other agents party thereto, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time and
includes any replacement thereof.
     “First Lien Loan Documents” means the First Lien Credit Agreement and the
related guarantees, pledge agreements, security agreements, mortgages, notes and
other agreements and instruments entered into in connection with the First Lien
Credit Agreement, in each case as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time in accordance with this
Agreement.
     “Foreign Receivable” means any Receivable, the Obligor of which, (i) if a
natural person, is not a resident of the United States or (ii) if a corporation
or other business organization, is neither organized under the laws of the
United States or any political subdivision thereof nor has its chief executive
office in the United States.
 

28   This definition was deleted and replaced in its entirety by Amendment
No. 5.   29   The date was changed from November 27, 2010 to March 15, 2010 by
Amendment No. 1, from March 15, 2010 to April 12, 2010 by Amendment No. 2, from
April 12, 2010 to December 20, 2010 by Amendment No. 5 and from December 20,
2010 to February 1, 2011 by Amendment No. 6.   30   This definition was added by
Amendment No. 1.   31   The date was changed from November 27, 2007 to March 16,
2009 by Amendment No. 1, and from March 16, 2009 to April 13, 2009 by Amendment
No. 2.

Exh. I-12

--------------------------------------------------------------------------------

 

     “Foreign Receivables Limit” means 1.00%; provided that the Agent upon the
direction of any Managing Agent may reduce such percentage to zero or any other
percentage less than 1.00% at any time upon five (5) Business Days’ prior notice
to Seller, the other Managing Agents and the Servicer.
     “Funding Agreement” means this Agreement and any agreement or instrument
executed by any Funding Source with or for the benefit of any Conduit Purchaser,
including, without limitation, any Liquidity Agreement.
     “Funding Source” means (i) any Committed Purchaser or (ii) any insurance
company, bank or other funding entity providing liquidity, credit enhancement or
back-up purchase support or facilities to any Conduit Purchaser.
     “GAAP” means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement.
     “Governmental Authority” means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, regulatory, public or statutory
instrumentality, authority, body, agency, bureau or entity (including any zoning
authority, the Federal Energy Regulatory Commission, the Comptroller of the
Currency or the Federal Reserve Board, any central bank or any comparable
authority).
     “Government Receivable” means any Receivable the Obligor of which is a
Governmental Authority.
     “Government Receivables Limit” means 2.00%; provided that the Agent upon
the direction of any Managing Agent may reduce such percentage to zero or any
other percentage less than 2.00% at any time upon five (5) Business Days’ prior
notice to Seller, the other Managing Agents and the Servicer.
     “Group Purchase Limit” means, for each Purchase Group, the sum of the
Commitments of the Committed Purchasers in such Purchase Group.
     “HBI” has the meaning set forth in the preamble to this Agreement.
     “HBI Party” has the meaning set forth in Section 7.1(i).
     “HSBC” means HSBC Securities (USA) Inc., and its successors and assigns.32
     “Incremental Purchase” means a purchase of one or more Purchaser Interests
which increases the total outstanding Aggregate Capital hereunder.
     “Indebtedness” of a Person means such Person’s (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of property or
services (other than accounts payable arising in the ordinary course of such
Person’s business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, secured by liens or payable
 

32   This definition was deleted and replaced in its entirety by Amendment
No. 2.

Exh. I-13

--------------------------------------------------------------------------------

 

out of the proceeds or production from property now or hereafter owned or
acquired by such Person, (iv) obligations which are evidenced by notes,
acceptances, or other instruments, (v) capitalized lease obligations, (vi) net
liabilities under interest rate swap, exchange or cap agreements, (vii)
Contingent Obligations and (viii) liabilities in respect of unfunded vested
benefits under plans covered by Title IV of ERISA.
     “Independent Director” shall mean a member of the Board of Directors of
Seller who is not at such time, and has not been at any time during the
preceding five (5) years, (A) a director, officer, employee or Affiliate of
Seller, any Originator, or any of their respective Subsidiaries or Affiliates,
or (B) the beneficial owner (at the time of such individual’s appointment as an
Independent Director or at any time thereafter while serving as an Independent
Director) of any of the outstanding common shares of Seller, any Originator, or
any of their respective Subsidiaries or Affiliates, having general voting
rights;
     “JPMorgan”33
     “LIBO “ means the rate per annum equal to (a) the rate appearing on Reuters
Screen LIBOR01 Page (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Agent from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of the relevant Tranche Period, as the rate for dollar deposits
with a maturity comparable to such Tranche Period; provided that, in the event
that such rate is not available at such time for any reason, then the rate for
the relevant Tranche Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Tranche Period are offered by
the principal London office of the Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two
(2) Business Days prior to the commencement of such Tranche Period, divided by
(b) one (1) minus the maximum aggregate reserve requirement (including all
basic, supplemental, marginal or other reserves) which is imposed against the
Agent in respect of Eurocurrency liabilities, as defined in Regulation D of the
Board of Governors of the Federal Reserve System as in effect from time to time
(expressed as a decimal) applicable to such Tranche Period.
     “LIBO Rate” means the rate per annum equal to the sum of (i) LIBO plus
(ii) the Applicable Margin; provided that at all times after the occurrence and
during the continuance of an Amortization Event, the LIBO Rate shall be the
Default Rate.
     “Liquidity Agreement” means an agreement entered into by a Conduit
Purchaser and the Committed Purchasers in its Purchase Group in connection
herewith for the purpose of providing liquidity with respect to the Capital
funded by such Conduit Purchaser.
     “Loan Documents” means the Credit Agreement and the related guarantees,
pledge agreements, security agreements, mortgages, notes and other agreements
and instruments entered into in connection with the Credit Agreement, in each
case as the same may be amended, supplemented, amended and restated or otherwise
modified from time to time in accordance with this Agreement.
 

33   This definition was deleted in its entirety by Amendment No. 2.

Exh. I-14

--------------------------------------------------------------------------------

 

     “Lock-Box” means each locked postal box with respect to which a bank who
has executed a Collection Account Agreement has been granted exclusive access
for the purpose of retrieving and processing payments made on the Receivables.
     “Loss Reserve” means, at any time, an amount equal to the Loss Reserve
Percentage multiplied by the Net Receivables Balance as of the close of business
of the Servicer at such time.
     “Loss Reserve Floor” means 15.0%.34
     “Loss Reserve Percentage” means, at any time, the greater of (i) the Loss
Reserve Floor and (ii) the amount expressed as a percentage and calculated in
accordance with the following formula:
     LRP = LR x LHR x SF
     where:

             
 
  LR   =   the greatest three-month average Default Ratio during the immediately
preceding 12-month period.
 
           
 
  LHR   =   the aggregate Original Balance of all Receivables generated by
Originatorall Originators during the three and one-half (3.5) Calendar Months
ending as of the last day of the most recently ended Calendar Month immediately
preceding such time divided by the Net Receivables Balance as of the last day of
the most recently ended Calendar Month.
 
           
 
  SF   =   the Stress Factor at such time.35

     “Loss-to-Liquidation Ratio” means, at any time, a percentage equal to
(i) the sum of (A) the aggregate Outstanding Balance of all Receivables that
became Charged-Off Receivables (other than the Charged-Off Receivables as
described in clause (i) of the definition thereof) during the most recently
ended Calendar Month that were not also Delinquent Receivables as of the date
that such Receivables became Charged-Off Receivables (other than the Charged-Off
Receivables as described in clause (i) of the definition thereof) and (B) the
aggregate Outstanding Balance of all Delinquent Receivables that were not also
Defaulted Receivables as of the last day of such Calendar Month divided by
(ii) the aggregate amount of Collections during such Calendar Month.36
     “Managing Agent” has the meaning set forth in the preamble to this
Agreement.
     “Managing Agent Institution” has the meaning specified in Section 13.14(b).
     “Managing Agent Institution Roles” has the meaning specified in Section
13.14(b).
 

34   This definition was deleted and replaced in its entirety by Amendments
No. 1 and No. 2.   35   The definition of this component was deleted and
replaced in its entirety by Amendment No. 1.   36   This definition was deleted
and replaced in its entirety by Amendment No. 3.

Exh. I-15

--------------------------------------------------------------------------------

 

     “Material Adverse Effect” means a material adverse effect on (i) the
financial condition or operations of any Seller Party and its Subsidiaries,
taken as a whole, (ii) the ability of any Seller Party to perform its respective
obligations under this Agreement, (iii) the legality, validity or enforceability
of this Agreement or any other Transaction Document, (iv) any Purchaser’s
interest in the Receivables generally or in any material portion of the
Receivables, the Related Security or the Collections with respect thereto, or
(v) the collectibility of the Receivables generally or of any material portion
of the Receivables, other than due to the insolvency, bankruptcy or
creditworthiness of an Obligor.
     “Material Obligor” means, at any time, an Obligor the Receivables of which
are greater than 4.0% of the aggregate Outstanding Balance of all Receivables at
such time.
     “Moody’s” means Moody’s Investors Service, Inc.
     “Net Receivables Balance” means, at any time, (i) the aggregate Outstanding
Balance of all Eligible Receivables at such time, minus (ii) the aggregate
amount by which the Outstanding Balance of the Eligible Receivables of each
Obligor and its Affiliates exceeds the Concentration Limit for such Obligor,
minus (iii) the Excess Government Receivables Amount, minus (iv) the Excess
Foreign Receivables Amount.
     “New Originators Eligibility Date” means, the date on which the Receivables
originated by GFSI, Inc. and CC Products, Inc. become Eligible Receivables under
clause (xxi) of the definition thereof.
     “Obligations” shall have the meaning set forth in Section 2.1.
     “Obligor” means a Person obligated to make payments pursuant to a Contract.
     “Original Balance” means, with respect to any Receivable, the original
outstanding balance of such Receivable on the date such Receivable was
originated.
     “Originator” means Hanesbrands Inc., in its capacity as sellereach of HBI,
GFSI, Inc., a Delaware corporation, and CC Products, Inc., a Delaware
corporation, and any other wholly-owned domestic Subsidiary of HBI which becomes
an Originator pursuant to Section 7.11 of the Receivables Sale Agreement with
the consent of the Agent and each Managing Agent, in each case, in their
capacities as the sellers under the Receivables Sale Agreement.
     “Outstanding Balance” of any Receivable at any time means the then
outstanding principal balance thereof.
     “Participant” has the meaning set forth in Section 12.2.
     “PBGC” means the Pension Benefit Guaranty Corporation.
     “Pension Plan” means a “pension plan”, as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which
Servicer or any corporation, trade or business that is, along with the Servicer,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063

Exh. I-16

--------------------------------------------------------------------------------

 

of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.
     “Performance Undertaking” means that certain Performance Undertaking, dated
as of January 31, 2011, executed by HBI, as the same may be further amended,
restated or otherwise modified from time to time.
     “Person” means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
     “PNC” means PNC Bank, N.A., and its successors and assigns.37
     “Pooled Commercial Paper” means Commercial Paper notes of a Conduit
Purchaser subject to any particular pooling arrangement by such Conduit
Purchaser, but excluding Commercial Paper issued by such Conduit Purchaser for a
tenor and in an amount specifically requested by any Person in connection with
any agreement effected by such Conduit Purchaser.
     “Potential Amortization Event” means an event which, with the passage of
time or the giving of notice, or both, would constitute an Amortization Event.
     “Potential Servicer Default” means an event which, with the passage of time
or the giving of notice, or both, would constitute a Servicer Default.
     “Prime Rate” means the rate of interest per annum publicly announced from
time to time by HSBC Bank USA, N.A. as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective;
provided that at all times after the occurrence and during the continuance of an
Amortization Event, the Prime Rate shall mean the Default Rate.38
     “Proposed Reduction Date” has the meaning set forth in Section 1.3.
     “Pro Rata Share” means, for each Committed Purchaser in a Purchase Group, a
percentage equal to (i) the Commitment of such Committed Purchaser, divided by
(ii) the aggregate amount of all Commitments of all Committed Purchasers in such
Purchase Group hereunder, adjusted as necessary to give effect to the
application of the terms of Section 1.1.
     “Purchase Group” means any Managing Agent and its related Conduit
Purchasers and Committed Purchasers.
     “Purchase Group Share” means, for any Purchase Group, the percentage
equivalent to a fraction (expressed out to five decimal places), the numerator
of which is the aggregate Commitments of all Committed Purchasers in such
Purchase Group and the denominator of which is Purchase Limit.
     “Purchase Limit” means $250,000,000.
 

37   This definition was added by Amendment No. 2.   38   This definition was
deleted and replaced in its entirety by Amendments No. 1 and No. 2.

Exh. I-17

--------------------------------------------------------------------------------

 

     “Purchase Notice” has the meaning set forth in Section 1.2.
     “Purchase Price” means, with respect to any Incremental Purchase of a
Purchaser Interest, the amount paid to Seller for such Purchaser Interest which
shall not exceed the least of (i) the amount requested by Seller in the
applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the
applicable purchase date and (iii) the excess, if any, of the Net Receivables
Balance (less the Aggregate Reserves) on the applicable purchase date over the
aggregate outstanding amount of Aggregate Capital determined as of the date of
the most recent Daily Report, Weekly Report or Settlement Report, as applicable,
taking into account such proposed Incremental Purchase.
     “Purchaser” means any Conduit Purchaser or Committed Purchaser, as
applicable, and “Purchasers” means all Conduit Purchasers and Committed
Purchasers.
     “Purchaser Interest” means, at any time, an undivided percentage ownership
interest (computed as set forth below) associated with a designated amount of
Capital, selected pursuant to the terms and conditions hereof in (i) each
Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Security with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:
          C / (NRB - AR)
     where:

             
 
  C   =   the Capital of such Purchaser Interest.
 
           
 
  NRB   =   the Net Receivables Balance.
 
           
 
  AR   =   the Aggregate Reserves.

     Such undivided percentage ownership interest shall be initially computed on
its date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
business day immediately preceding the Amortization Date shall remain constant
at all times thereafter.
     “Purchasing Committed Purchaser” has the meaning set forth in Section
12.1(b).
     “Receivable” means all indebtedness and other obligations owed to Seller or
an Originator (at the time it arises, and before giving effect to any transfer
or conveyance under the Receivables Sale Agreement or hereunder) or in which
Seller or an Originator has a security interest or other interest, including,
without limitation, any indebtedness, obligation or interest constituting an
account, chattel paper, instrument or general intangible, arising in connection
with the sale of goods or the rendering of services by an Originator in the
ordinary course of business and further includes, without limitation, the
obligation to pay any Finance Charges with respect thereto. Indebtedness and
other rights and obligations arising from any one transaction, including,
without limitation, indebtedness and other rights and obligations

Exh. I-18

--------------------------------------------------------------------------------

 

represented by an individual invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction; provided, that any indebtedness,
rights or obligations referred to in the immediately preceding sentence shall be
a Receivable regardless of whether the account debtor, applicable Originator or
Seller treats such indebtedness, rights or obligations as a separate payment
obligation. The term “Receivable” shall not include any Excluded Receivable.
     “Receivables Sale Agreement” means that certain Amended and Restated
Receivables Sale Agreement dated the date hereof between Originatoras of
January 31, 2011 among Originators and Seller, as the same may be amended,
restated or otherwise modified from time to time.
     “Records” means, with respect to any Receivable, all Contracts and other
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to such Receivable, any Related Security
therefor and the related Obligor.
     “Reduction Notice” has the meaning set forth in Section 1.3.
     “Regulatory Change” has the meaning set forth in Section 10.3.
     “Reinvestment” has the meaning set forth in Section 2.2.
     “Related Security” means, with respect to any Receivable:
     (i) all of Seller’s interest in the inventory and goods (including returned
or repossessed inventory or goods), if any, the sale of which by the applicable
Originator gave rise to such Receivable, and all insurance contracts with
respect thereto,
     (ii) all other security interests or liens and property subject thereto
from time to time, if any, purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
together with all financing statements and security agreements describing any
collateral securing such Receivable,
     (iii) all guaranties, letters of credit, letter of credit rights,
supporting obligations, insurance and other agreements or arrangements of
whatever character from time to time supporting or securing payment of such
Receivable whether pursuant to the Contract related to such Receivable or
otherwise,
     (iv) all service contracts and other contracts and agreements associated
with such Receivable; provided that this clause (iv) shall not include any
agreement or documents between an Obligor and an Originator or delivered to an
Obligor which relate to cooperative advertising arrangements, discount
arrangements or requirements of merchants of such Originator’s product to the
extent such agreements or documents do not evidence or give rise to any
Receivable and do not govern the origination, servicing or enforcement of any
Receivable,
     (v) all Records related to such Receivable,

Exh. I-19

--------------------------------------------------------------------------------

 

     (vi) all of Seller’s right, title and interest in, to and under the
Receivables Sale Agreement in respect of such Receivable,
     (vii) all of the Seller’s right, title and interest in, to and under the
Performance Undertaking, and
     (viiviii) all proceeds of any of the foregoing.
     “Required Committed Purchasers” means, at any time, Committed Purchasers
with Commitments in excess of 662/3% of the Purchase Limit.
     “Required Notice Period” means the number of days required notice set forth
below applicable to the Aggregate Reduction indicated below:

      Aggregate Reduction   Required Notice Period
≤$100,000,000
  Two (2) Business Days
>$100,000,000
  Five (5) Business Days

     “Restricted Junior Payment” means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of equity interests of
Seller now or hereafter outstanding, except a dividend payable solely in shares
of that class of equity interests or in any junior class of equity interests of
Seller, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of equity interests of Seller now or hereafter outstanding, (iii) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to the Subordinated Loans (as defined in the Receivables Sale
Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of equity interests of Seller now or hereafter
outstanding, and (v) any payment of management fees by Seller (except for
reasonable management fees to an Originator or its Affiliates in reimbursement
of actual management services performed).
     “S&P” means Standard & Poor’s Ratings Group.
     “Second Lien Credit Agreement” means the Second Lien Credit Agreement,
dated as of September 5, 2006, among the HBI Branded Apparel Limited, Inc., HBI,
the lenders from time to time party thereto, the administrative agent party
thereto, the collateral agent party thereto and the other agents party thereto,
as the same may be amended, supplemented, amended and restated or otherwise
modified from time to time and includes any replacement thereof.
     “Second Lien Loan Documents” means the Second Lien Credit Agreement and the
related guarantees, pledge agreements, security agreements, mortgages, notes and
other agreements and instruments entered into in connection with the Second Lien
Credit Agreement, in each case as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time.
     “Seller” has the meaning set forth in the preamble to this Agreement.

Exh. I-20

--------------------------------------------------------------------------------

 

     “Seller Parties” has the meaning set forth in the preamble to this
Agreement.
     “Senior Note Documents” means the Senior Notes, the Senior Note Indenture
and all other agreements, documents and instruments executed and delivered with
respect to the Senior Notes or the Senior Note Indenture, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with this Agreement.
     “Senior Note Indenture” means the Indenture dated as of December 14, 2006,
among HBI, the Person acting as trustee thereunder, and the guarantors named
therein, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time
     “Servicer” means at any time the Person (which may be the Agent) then
authorized pursuant to Article VIII to service, administer and collect
Receivables.
     “Servicer Default” has the meaning set forth in Section 8.7.
     “Servicing Fee” has the meaning set forth in Section 8.6.
     “Settlement Date” means (i) prior to May 2009, the date that is two
(2) Business Days after the third Thursday of each month (or, if such third
Thursday is not a Business Day, two (2) Business Days after the next succeeding
Business Day) and (ii) commencing in May 2009, the 15th day of each month (or,
if such day is not a Business Day, the next succeeding Business Day).39
     “Settlement Report” means a report, in substantially the form of Exhibit XI
hereto (appropriately completed), furnished by the Servicer to the Managing
Agents and the Agent pursuant to Section 8.5.
     “Solvent” means, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person;
(b) the present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay as such debts and liabilities mature; and (d) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person’s property would constitute
unreasonably small capital. The amount of contingent liabilities (such as
litigation, guaranties and pension plan liabilities) at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can reasonably be expected to
become an actual or matured liability.
     “Specified Agreement” means any agreement specified in Schedule III to the
Fee Letter.
     “Stress Factor” means, (i) at any time during which a Downgrade Event has
occurred and is continuing, 2.50, and (ii) at all other times, 2.25.40
 

39   This definition was deleted and replaced in its entirety by Amendment
No. 2.   40   This definition was added by Amendment No. 1 and deleted and
replaced in its entirety by Amendment No. 2.

Exh. I-21

--------------------------------------------------------------------------------

 

     “Subsidiary” of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, limited liability company, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a “Subsidiary”
shall mean a Subsidiary of Seller.
     “Terminating Tranche” has the meaning set forth in Section 4.3(b).
     “Tranche Period” means, with respect to any Purchaser Interest funded by a
Committed Purchaser, including any Purchaser Interest or undivided interest in a
Purchaser Interest assigned to a Committed Purchaser pursuant to a Liquidity
Agreement:
     (a) if Yield for such Purchaser Interest is calculated on the basis of the
LIBO Rate, a period of one (1) month, or such other period as may be mutually
agreeable to the applicable Managing Agent and Seller, commencing on a Business
Day selected by Seller or the applicable Managing Agent pursuant to this
Agreement. Such Tranche Period shall end on the day in the applicable succeeding
calendar month which corresponds numerically to the beginning day of such
Tranche Period, provided, however, that if there is no such numerically
corresponding day in such succeeding month, such Tranche Period shall end on the
last Business Day of such succeeding month; or
     (b) if Yield for such Purchaser Interest is calculated on the basis of the
Prime Rate, a period commencing on a Business Day selected by Seller and agreed
to by the applicable Managing Agent, provided no such period shall exceed one
(1) month.
     If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Purchaser Interest which commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortization Date. The duration of each Tranche Period
which commences after the Amortization Date shall be of such duration as
selected by the applicable Managing Agent.
     “Transaction Documents” means, collectively, this Agreement, each Purchase
Notice, the Receivables Sale Agreement, each Collection Account Agreement, the
Fee Letter, the Agent Fee Letter, the Subordinated Note (as defined in the
Receivables Sale Agreement), the Performance Undertaking and all other
instruments, documents and agreements executed and delivered in connection
herewith.41
     “Wal-Mart Exclusion Date” means December 21, 2009.42
 

41   This definition was amended to include “the Agent Fee Letter,” in the third
line by Amendment No. 1.   42   This definition was added by Amendment No. 5.

Exh. I-22

--------------------------------------------------------------------------------

 

     “Weekly Report” means a report, in substantially the form of Exhibit X
hereto (appropriately completed), furnished by the Servicer to the Managing
Agents and the Agent pursuant to Section 8.5.
     “UCC” means the Uniform Commercial Code as from time to time in effect in
the specified jurisdiction.
     “Yield” means:
     (a) for each respective Tranche Period relating to Purchaser Interests
funded by a Committed Purchaser, including any Purchaser Interest or undivided
interest in a Purchaser Interest assigned to a Committed Purchaser pursuant to a
Liquidity Agreement, an amount equal to the product of the applicable Discount
Rate for each Purchaser Interest multiplied by the Capital of such Purchaser
Interest for each day elapsed during such Tranche Period, annualized on a
360 day basis (or a 365 or 366 day basis, as applicable, in the case of the
Prime Rate); and
     (b) for each respective Accrual Period relating to Purchaser Interests
funded by a Conduit Purchaser, other than a Purchaser Interest which, or an
undivided interest in which, has been assigned by such Conduit Purchaser
pursuant to a Liquidity Agreement, an amount equal to the product of the CP Rate
multiplied by the Capital of such Purchaser Interest for each day elapsed during
such Accrual Period, annualized on a 360-day basis.
     “Yield and Servicing Fee Reserve” means, at any time, an amount equal to
1.50% multiplied by the Net Receivables Balance at such time.
     All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC in the State of New
York, and not specifically defined herein, are used herein as defined in such
Article 9.

Exh. I-23

--------------------------------------------------------------------------------

 

EXHIBIT II
FORM OF PURCHASE NOTICE
[Date]

HSBC Securities (USA) Inc., as
Agent and as a Managing Agent
452 Fifth Avenue, 5th Floor
New York, New York 10018
Attention: Suzanna Baird
PNC Bank, N.A., as a Managing Agent43
Re: PURCHASE NOTICE
Ladies and Gentlemen:
     Reference is hereby made to the Receivables Purchase Agreement, dated as of
November 27, 2007, by and among HBI Receivables LLC, a Delaware limited
liability company (the “Seller”), Hanesbrands Inc., as Servicer, the Purchasers
and Managing Agents party thereto, and HSBC Securities (USA) Inc., as Agent (the
“Receivables Purchase Agreement”). Capitalized terms used herein shall have the
meanings assigned to such terms in the Receivables Purchase Agreement.
     The Managing Agents are hereby notified of the following Incremental
Purchase:

     
Purchase Price:
  $[                    ] 
Date of Purchase:
  [                    ], 20[__] 
Requested Discount Rate:
  [LIBO Rate] [Prime Rate] [Pooled Commercial Paper
rate]

    Please wire transfer the Purchase Price in immediately available funds on
the above-specified date of purchase to:

[Account Name:                                         ]
[Account No. :                                         ]
[Bank Name & Address:                                         ]
[ABA #:                                         ]
Reference: [                                        ]
Telephone advice to: [Name] @ Tel. No. [(___) ___-____]]
 

43   Addressees changed to reflect Resignation and Appointment Agreement and
Amendment No. 2.

Exh. II-1

--------------------------------------------------------------------------------

 

     Please advise [Name] at telephone number [(___) ___-____] if none of the
Conduit Purchasers in your Purchase Group will be making this purchase.
     In connection with the Incremental Purchase to be made on the above listed
“Date of Purchase” (the “Purchase Date”), the Seller hereby certifies that the
following statements are true on the date hereof, and will be true on the
Purchase Date (before and after giving effect to the proposed Incremental
Purchase):
          (i) the representations and warranties of the Seller set forth in
Section 5.1 of the Receivables Purchase Agreement are true and correct on and as
of the Purchase Date as though made on and as of such date;
          (ii) no event has occurred and is continuing, or would result from the
proposed Incremental Purchase, that will constitute an Amortization Event or a
Potential Amortization Event;
          (iii) the Facility Termination Date has not occurred, the Aggregate
Capital does not exceed the Purchase Limit and the aggregate Purchaser Interests
do not exceed 100%; and
          (iv) the amount of Aggregate Capital is $[          ] after giving
effect to the Incremental Purchase to be made on the Purchase Date.

            Very truly yours,

HBI RECEIVABLES LLC
      By:         Name:           Title:          

Exh. II-2

--------------------------------------------------------------------------------

 

EXHIBIT III
PLACES OF BUSINESS OF THE SELLER PARTIES;
LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)

                      Hanesbrands Inc.   HBI Receivables LLC   GFSI, Inc CC
Products, Inc.
Federal Employer
Identification Number
  20-3552316    26-1347975    74-2810748   48-1244929
 
               
Principal Place of Business
  1000 East Hanes Mill Road
Winston-Salem
North Carolina 27105   1000 East Hanes Mill Road
Winston-Salem
North Carolina 27105   9700 Commerce Parkway
Lenexa, Kansas 66219   9700 Commerce Parkway
Lenexa, Kansas 66219
 
               
 
          1000 East Hanes Mill Road   1000 East Hanes Mill Road
 
          Winston-Salem   Winston-Salem
 
          North Carolina 27105   North Carolina 27105
 
               
Chief Executive Office
  1000 East Hanes Mill Road
Winston-Salem
North Carolina 27105   1000 East Hanes Mill Road
Winston-Salem
North Carolina 27105   9700 Commerce Parkway
Lenexa, Kansas 66219   9700 Commerce Parkway
Lenexa, Kansas 66219
 
               
 
          1000 East Hanes Mill Road   1000 East Hanes Mill Road
 
          Winston-Salem   Winston-Salem
 
          North Carolina 27105   North Carolina 27105
 
               
Offices Where Records are Kept
  1000 East Hanes Mill Road
Winston-Salem,
North Carolina 27105   1000 East Hanes Mill Road
Winston-Salem,
North Carolina 27105   9700 Commerce Parkway
Lenexa, Kansas 66219   9700 Commerce Parkway
Lenexa, Kansas 66219
 
               
 
  531 Northridge Park Drive
Rural Hall
North Carolina 27045   531 Northridge Park Drive
Rural Hall
North Carolina 27045   9700 Lackman Road
Lenexa, Kansas 66219   9700 Lackman Road
Lenexa, Kansas 66219
 
               
 
  Data Chambers
Records Management:   Data Chambers
Records Management:        
 
               
 
  3302 Old Lexington Road
Winston-Salem
North Carolina   3302 Old Lexington Road
Winston-Salem
North Carolina        

Exh. III-1

--------------------------------------------------------------------------------

 

                      Hanesbrands Inc.   HBI Receivables LLC   GFSI, Inc CC
Products, Inc.
 
  27105    27105         
 
               
 
  800 Chatham Road
Winston-Salem
North Carolina
27101   800 Chatham Road
Winston-Salem
North Carolina
27101        
 
               
 
  3929 West Point Blvd
Winston-Salem
North Carolina
27103   3929 West Point Blvd
Winston-Salem
North Carolina
27103        
 
               
 
  1401 Yanceyville Street
Greensboro, NC 27405   1401 Yanceyville Street
Greensboro, NC 27405        
 
               
 
  1435 Bethel Drive
High Point
North Carolina
7260   1435 Bethel Drive
High Point
North Carolina
7260        

Exh. III-2

--------------------------------------------------------------------------------

 

EXHIBIT IV
FORM OF REDUCTION NOTICE
[Date]
HSBC Securities (USA) Inc., as a Managing Agent
and as Agent
425 Fifth Avenue, 5th Floor
New York, New York 10018
Attention: Suzanna Baird44
     Re: Reduction Notice
Ladies and Gentlemen:
     Reference is hereby made to the Receivables Purchase Agreement, dated as of
November 27, 2007, by and among HBI Receivables LLC, a Delaware limited
liability company (the “Seller”), Hanesbrands Inc., as Servicer, the Purchasers
and Managing Agents party thereto, and HSBC Securities (USA) Inc., as Agent (the
“Receivables Purchase Agreement”). Capitalized terms used herein shall have the
meanings assigned to such terms in the Receivables Purchase Agreement.
     Pursuant to Section 1.3 of the Receivables Purchase Agreement, the Seller
hereby notifies the Agent of the following reduction of Aggregate Capital from
Collections. The proposed date of such reduction is [DATE] (the “Proposed
Reduction Date”).45 The amount of Aggregate Capital to be reduced on the
Proposed Reduction Date is $[          ].

            Very truly yours,

HBI RECEIVABLES LLC
      By:           Name:         Title:    

 

44   Address was amended pursuant to the Resignation and Appointment Agreement.
  45   Must be in compliance with the Required Notice Period Set forth in
Exhibit I to the Receivables Purchase Agreement.

Exh. IV-1

--------------------------------------------------------------------------------

 

EXHIBIT V
FORM OF COMPLIANCE CERTIFICATE
To: HSBC Securities (USA) Inc., as Agent and as a Managing Agent, PNC Bank,
N.A.46, as a Managing Agent, and each of the “Purchasers” party to the Agreement
defined below.
     This Compliance Certificate is furnished pursuant to that certain
Receivables Purchase Agreement dated as of November 27, 2007 among HBI
Receivables LLC (the “Seller”), Hanesbrands Inc. (the “Servicer”), the
Purchasers and Managing Agents party thereto and HSBC Securities (USA) Inc., as
Agent for such Purchasers (the “Agreement”). Terms used herein and not otherwise
defined herein shall have the meanings assigned in the Agreement.

    THE UNDERSIGNED HEREBY CERTIFIES THAT:

     1. I, [                     ], am the duly elected [                     ]
of Seller, and the duly elected [                     ] of Servicer.
     2. Attached hereto are copies of the financial statements of Seller,
including a balance sheet, [a] statement[s] of income [and retained earnings]
and a statement of cash flows) for the [fiscal year][quarterly period] ending
[____], which, in each case, are true, complete and correct in all material
respects.
     3. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of Seller and Servicer and its Subsidiaries during the accounting
period covered by the attached financial statements.
     4. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes an
Amortization Event or Potential Amortization Event, as each such term is defined
under the Agreement, during or at the end of the accounting period covered by
the attached financial statements or as of the date of this Certificate, except
as set forth in paragraph 5 below.
     5. Schedule I attached hereto sets forth financial data and computations
evidencing the compliance with Section 9.1(h) of the Agreement, all of which
data and computations are true, complete and correct.
     6. Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which Seller or Servicer, as applicable, has taken, is
taking, or proposes to take with respect to each such condition or event:
                                                                                
                                                                 
                                           
[                                                             
                                                              
                                                                
                                                                               
                                                                               
                             ].
 

46   Revised to reflect parties to Amendment No. 2.

Exh. V-1

--------------------------------------------------------------------------------

 

     The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this [                    ] day of
[                    ], 20[__].

             
 
  By:             [                     ] of Hanesbrands Inc.        
[                     ] of HBI Receivables LLC    

Exh. V-2

--------------------------------------------------------------------------------

 

SCHEDULE I TO COMPLIANCE CERTIFICATE

A.   Schedule of Compliance as of [                     ], 20[__] with
Section 7.1(a)(iii) of the Agreement. Unless otherwise defined herein, the terms
used in this Compliance Certificate have the meanings ascribed thereto in the
Agreement.

This schedule relates to the month ended: [                     ], 20[__]

Exh. V-3

--------------------------------------------------------------------------------

 

EXHIBIT VI
FORM OF COLLECTION ACCOUNT AGREEMENT
(Attached.)

Exh. VI-1

--------------------------------------------------------------------------------

 

(JPMORGANCHASE LOGO) [g25453g2545302.gif]
Blocked Account Control Agreement
(“Lockbox and Lockbox Account — Shifting Control”)     |     JPMORGAN CHASE
BANK, N.A.
V1.0_0705
Execution Copy
AGREEMENT dated as of November 27, 2007, by and among HBI Receivables LLC
(“Seller”), Hanesbrands Inc. (“HBI”), individually and as Servicer (“Servicer”),
JPMorgan Chase Bank, N.A., as Agent (“Agent”), and JPMorgan Chase Bank, N.A.
(“Depositary”).
The parties hereto refer to Schedule A for a list of the Post Office Box Numbers
(the “Lockboxes”) and Account Numbers (the “Accounts”) in the name of
Hanesbrands Inc. maintained at Depositary and hereby agree as follows:

1.   HBI, Seller, Servicer and Agent notify Depositary that pursuant to that
certain Receivables Sale Agreement, dated November 27, 2007 by and among HBI, as
the seller thereunder, and Seller, as the purchaser thereunder, HBI has
transferred all of its right, title and interest in and to, and exclusive
ownership and control of, the Lockboxes and Accounts to Seller. Seller, Servicer
and Agent notify Depositary that pursuant to that certain Receivables Purchase
Agreement, dated November 27, 2007, among Seller, Servicer, the “Purchasers”
party thereto, the “Managing Agents” party thereto and Agent, Seller has
transferred to, and granted Agent a security interest in, the Lockboxes and all
checks or other items deposited from time to time therein and in the Accounts
and all funds on deposit from time to time therein. Depositary acknowledges
being so notified. Depositary hereby agrees that as of the date hereof, the
title and account holder of each Lockbox and each Account shall “HBI Receivables
LLC”.   2.   (a) None of HBI, Seller or Servicer shall have any right to issue
withdrawal, delivery or other instructions which it otherwise would be entitled
to give under the Applicable Documentation (as hereinafter defined) with respect
to the Lockboxes (collectively, “lockbox instructions”), other than with respect
to routine administrative matters, or any other right or ability to control,
access, pick up, withdraw or transfer items from the Lockboxes without Agent’s
express written consent with respect thereto. On each business day (and without
HBI’s, Seller’s, Servicer’s or any other person’s consent), Depositary shall
open the mail delivered to the Lockboxes and deposit the checks and other items
contained therein into the Accounts.       (b) Prior to the Effective Time (as
defined below) Depositary shall honor all withdrawal, payment, transfer or other
fund disposition or other instructions which the Seller (or Servicer on Seller’s
behalf) is entitled to give under the Applicable Documentation (as hereinafter
defined) (collectively, “account instructions” and, together with lockbox
instructions, “instructions”) received from the Seller or Servicer concerning
the Accounts. On and after the Effective Time, Depositary shall exclusively
honor and comply with all instructions received from Agent (but not those from
HBI, Seller, Servicer or any other person) directing the disposition of the
funds on deposit in the Accounts and otherwise concerning the Accounts without
the consent of HBI, Seller, Servicer or any other person and none of HBI,
Seller, Servicer or any other person shall have any right or ability to access,
withdraw or transfer funds from the Accounts.       For the purposes hereof, the
“Effective Time” shall be the opening of business on the second business day
next succeeding the business day on which a notice purporting to be signed by
Agent in substantially the same form as Exhibit A, attached hereto, with a copy
of this Agreement attached thereto (a “Shifting Control Notice”), is actually
received by the individual employee of Depositary to whom the notice is required
hereunder to be addressed or any employee succeeding such employees duties and
responsibilities; provided, however, that if any such notice is so received
after 12:00 noon, New York City time, on any business day, the “Effective Time”
shall be the

Page 1 of 7

--------------------------------------------------------------------------------

 

    opening of business on the third business day next succeeding the business
day on which such receipt occurs; and, provided further, that a “business day”
is any day other than a Saturday, Sunday or other day on which Depositary is or
is authorized or required by law to be closed.       Notwithstanding the
foregoing: (i) all transactions involving or resulting in a transaction
involving the Accounts duly commenced by Depositary or any affiliate prior to
the Effective Time and so consummated or processed thereafter shall be deemed
not to constitute a violation of this Agreement; and (ii) Depositary and/or any
affiliate may (at its discretion and without any obligation to do so) (x) cease
honoring Seller’s instructions and/or commence honoring solely Agent’s
instructions concerning the Accounts at any time or from time to time after it
becomes aware that Agent has sent to it a Shifting Control Notice but prior to
the Effective Time therefor (including without limitation halting, reversing or
redirecting any transaction referred to in clause (i) above), or (y) deem a
Shifting Control Notice to be received by it for purposes of the foregoing
paragraph prior to the specified individual’s actual receipt if otherwise
actually received by Depositary (or if such Shifting Control Notice contains
minor mistakes or other irregularities but otherwise substantially complies with
the form attached hereto as Exhibit A or does not attach an appropriate copy of
this Agreement), with no liability whatsoever to Seller or any other party for
doing so.       HBI, Seller, Servicer, Agent and Depositary agree that
notwithstanding anything herein or elsewhere to the contrary, Agent, or any
party designated in writing by Agent, shall be irrevocably entitled to exercise
any and all rights in respect of, or in connection with, the Accounts without
HBI’s, Seller’s, Servicer’s or any of Seller’s affiliate’s consent, including,
without limitation, the right to give instructions directing the disposition of
the funds in the Accounts and Depositary agrees to comply with such
instructions. Each of HBI, Seller, Servicer and Agent agree that this Agreement
grants “control” of the Accounts to Agent within the meaning of Section 9-104 of
the UCC.   3.   This Agreement supplements, rather than replaces, Depositary’s
deposit account agreement, terms and conditions, lockbox agreement and other
standard documentation in effect from time to time with respect to the
Lockboxes, the Accounts or the services provided in connection therewith (the
“Applicable Documentation”), which Applicable Documentation will continue to
apply to the Lockboxes, the Accounts and such services, and the respective
rights, powers, duties, obligations, liabilities and responsibilities of the
parties thereto and hereto, to the extent not expressly conflicting with the
provisions of this Agreement (however, in the event of any such conflict, the
provisions of this Agreement shall control). Prior to issuing any instructions
on or after the Effective Time, Agent shall provide Depositary with such
documentation as Depositary may reasonably request to establish the identity and
authority of the individuals issuing instructions on behalf of Agent. Agent may
request the Depositary to provide other services with respect to the Lockboxes
or the Accounts on or after the Effective Time; however, if such services are
not authorized or otherwise covered under the Applicable Documentation,
Depositary’s decision to provide any such services shall be made in its sole
discretion (including without limitation being subject to Seller and/or Agent
executing such Applicable Documentation or other documentation as Depositary may
require in connection therewith).   4.   Depositary agrees not to exercise or
claim any right of offset, banker’s lien or other like right against the
Accounts for so long as this Agreement is in effect except with respect to
(i) returned or charged-back items, reversals or cancellations of payment orders
and other electronic fund transfers or other corrections or adjustments to the
Accounts or transactions therein, (ii) overdrafts in the Accounts or
(iii) Depositary’s charges, fees and expenses with respect to the Accounts or
the services provided hereunder. Depositary also acknowledges that it does not
have a security interest in the Accounts.   5.   Notwithstanding anything to the
contrary in this Agreement: (i) Depositary shall have only the duties and
responsibilities with respect to the matters set forth herein as is expressly
set forth in writing herein and shall not be deemed to be an agent, bailee or
fiduciary for any party hereto; (ii)

Page 2 of 7

--------------------------------------------------------------------------------

 

    Depositary shall be fully protected in acting or refraining from acting in
good faith without investigation on any notice (including without limitation a
Shifting Control Notice), instruction or request purportedly furnished to it by
Seller or Agent in accordance with the terms hereof, in which case the parties
hereto agree that Depositary has no duty to make any further inquiry whatsoever;
(iii) it is hereby acknowledged and agreed that Depositary has no knowledge of
(and is not required to know) the terms and provisions of the separate agreement
referred to in paragraph 1 above or any other related documentation or whether
any actions by Agent (including without limitation the sending of a Shifting
Control Notice), Seller or any other person or entity are permitted or a breach
thereunder or consistent or inconsistent therewith, (iv) Depositary shall not be
liable to any party hereto or any other person for any action or failure to act
under or in connection with this Agreement except to the extent such conduct
constitutes its own willful misconduct or gross negligence (and to the maximum
extent permitted by law, shall under no circumstances be liable for any
incidental, indirect, special, consequential or punitive damages); and
(v) Depositary shall not be liable for losses or delays caused by force majeure,
interruption or malfunction of computer, transmission or communications
facilities, labor difficulties, court order or decree, the commencement of
bankruptcy or other similar proceedings or other matters beyond Depositary’s
reasonable control.   6.   Seller hereby agrees to indemnify, defend and save
harmless Depositary against any loss, liability or expense (including reasonable
fees and disbursements of counsel who may be an employee of Depositary)
(collectively, “Covered Items”) incurred in connection with this Agreement, the
Lockboxes or the Accounts (except to the extent due to Depositary’s willful
misconduct or gross negligence) or any interpleader proceeding relating thereto
or incurred at Seller’s direction or instruction.   7.   Depositary may
terminate this Agreement (a) in its discretion upon the sending of at least
thirty (30) days’ advance written notice to the other parties hereto or
(b) because of a material breach by Seller or Agent of any of the terms of this
Agreement or the Applicable Documentation, upon the sending of at least ten
(10) days advance written notice to the other parties hereto. Agent may
terminate this Agreement in its discretion upon the sending of at least three
(3) days advance written notice to the other parties hereto. Any other
termination or any amendment or waiver of this Agreement shall be effected
solely by an instrument in writing executed by all the parties hereto. The
provisions of paragraphs 5 and 6 above shall survive any such termination.   8.
  Seller shall compensate Depositary for the opening and administration of the
Lockboxes and the Accounts and services provided hereunder in accordance with
Depositary’s fee schedules from time to time in effect. Payment will be effected
by a direct debit to the Accounts.   9.   Depositary hereby represents and
warrants:

                    (a) Depositary is a “bank” within the meaning of
Section 9-102(a)(8) of the Uniform Commercial Code in effect in the State of New
York (“UCC”); and
                    (b) That the Accounts are “deposit accounts” within the
meaning of Section 9-102(a)(29) of the UCC.

10.   This Agreement: (i) may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument; (ii) shall become effective when
counterparts hereof have been signed by the parties hereto; and (iii) shall be
governed by and construed in accordance with the laws of the State of New York.
The parties hereto agree that New York shall be the Bank’s jurisdiction for all
purposes of Article 9 of the UCC.       All parties hereby waive all rights to a
trial by jury in any action or proceeding relating to the

Page 3 of 7

--------------------------------------------------------------------------------

 

    Lockboxes, the Accounts or this Agreement. All notices under this Agreement
shall be in writing and sent (including via facsimile transmission) to the
parties hereto at their respective addresses or fax numbers set forth below (or
to such other address or fax number as any such party shall designate in writing
to the other parties from time to time).

Page 4 of 7

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.

                      HBI RECEIVABLES LLC       HANESBRANDS INC.      
By:
          By:        
 
 
 
Name:          
 
Name:    
 
  Title:           Title:    

                     
 
                   
Address for Notices:
1000 East Hanes Mill Road
Winston-Salem, NC 27105       Address for Notices 1000 East Hanes Mill Road
Winston-Salem, NC 27105    
 
                   
 
                   
Fax No.:
  (336) 714-3650       Fax No.:   (336) 714-3855    

                      JPMORGAN CHASE BANK, N.A. (“Depositary”)

               
By:
                   
 
 
 
Name:                
 
  Title:                

                     
Address For Notices:
  JPMorgan Chase Bank, N.A.                
 
  3475 Piedmont Road NE, 18th Floor                
 
  Atlanta, GA 30305-2954                
Fax:
  404-926-2579                
Attention:
  Treasury & Securities Services                

                      JPMORGAN CHASE BANK, N.A. (“Agent”)

               
By:
                   
 
 
 
Name: Adam J. Klimek
Title: Vice President                

                     
Address for Notices:
  JPMorgan Chase Bank, N.A.                
 
  Asset-Backed Securities Conduit Group                
 
  10 S. Dearborn                
 
  Mail Code IL1-0612                
 
  Chicago, Illinois 60603                
Fax No:
  (312) 732-3600                

Page 5 of 7

--------------------------------------------------------------------------------

 

Blocked Account Agreement | EXHIBIT A — SHIFTING CONTROL NOTICE
Date: [MM/DD/YYYY]
JPMorgan Chase Bank, N.A.
3475 Piedmont Road NE, 18th Floor
Atlanta, GA 30305-2954
Fax: 404-926-2579
Attention: Treasury & Securities Services
Re: Blocked Account Control Agreement dated as of November 27, 2007, by and
among HBI Receivables LLC (“Seller”), Hanesbrands Inc. (“HBI”), individually and
as Servicer (“Servicer”), JPMorgan Chase Bank, N.A. (“Agent”) and JPMorgan Chase
Bank, N.A. (“Depositary”).
Ladies and Gentlemen:
This constitutes a Shifting Control Notice as referred to in paragraph 2 of the
Agreement, a copy of which is attached hereto.

          JPMORGAN CHASE BANK, N.A., as Agent
      By:           Signature        Name:           Title:     

Page 6 of 7

--------------------------------------------------------------------------------

 

Blocked Account Agreement | SCHEDULE A — LIST OF LOCKBOXES AND ACCOUNTS

          Lock-Box(es)   Related Account   Account Title Holder

Page 7 of 7

--------------------------------------------------------------------------------

 

EXHIBIT VII
FORM OF ASSIGNMENT AGREEMENT
               THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”) is
entered into as of the [___] day of [___], 20[__], by and between
[                                        ] (“Assignor”) and
[                    ] (“Assignee”).
PRELIMINARY STATEMENTS
          A. This Assignment Agreement is being executed and delivered in
accordance with Section 12.1(b) of that certain Receivables Purchase Agreement
dated as of November 27, 2007 by and among HBI Receivables LLC, as Seller,
Hanesbrands Inc., as Servicer, the Purchasers and Managing Agents party thereto,
and HSBC Securities (USA) Inc., as Agent (as amended, modified or restated from
time to time, the “Purchase Agreement”) and Section [__] of that certain [APA]
among [___] (as amended, modified or restated from time to time, the “APA”).
Capitalized terms used and not otherwise defined herein are used with the
meanings set forth or incorporated by reference in the Purchase Agreement or the
APA, as applicable.
          B. Assignor is a Committed Purchaser party to the Purchase Agreement
and an APA Bank party to the APA, and Assignee wishes to become a Committed
Purchaser and APA Bank under the Purchase Agreement and the APA, respectively;
and
          C. Assignor is selling and assigning to Assignee an undivided [___]%
(the “Transferred Percentage”) interest in all of Assignor’s rights and
obligations under the Purchase Agreement, the APA and the Transaction Documents,
including, without limitation, Assignor’s Commitment and (if applicable) the
Capital of Assignor’s Purchaser Interests as set forth herein.
AGREEMENT
          The parties hereto hereby agree as follows:
          1. The sale, transfer and assignment effected by this Assignment
Agreement shall become effective (the “Effective Date”) two (2) Business Days
(or such other date selected by the Managing Agent for the Assignor in its sole
discretion) following the date on which a notice substantially in the form of
Schedule II to this Assignment Agreement (“Effective Notice”) is delivered by
such Managing Agent to the related Conduit Purchaser, the Agent, Assignor and
Assignee. From and after the Effective Date, Assignee shall be a Committed
Purchaser party to the Purchase Agreement and an APA Bank party to the APA for
all purposes thereof as if Assignee were an original party thereto and Assignee
agrees to be bound by all of the terms and provisions contained therein.
          2. If Assignor has no outstanding Capital under the Purchase
Agreement, on the Effective Date, Assignor shall be deemed to have hereby
transferred and assigned to Assignee, without recourse, representation or
warranty (except as provided in paragraph 6 below), and the Assignee shall be
deemed to have hereby irrevocably taken, received and

Exh. VII-1

--------------------------------------------------------------------------------

 

assumed from Assignor, the Transferred Percentage of Assignor’s Commitment and
all rights and obligations associated therewith under the terms of the Purchase
Agreement and the APA, including, without limitation, the Transferred Percentage
of Assignor’s future funding obligations under Section 1.1 of the Purchase
Agreement and Section 2.1 of the APA.
          3. If Assignor has any outstanding Capital under the Purchase
Agreement, at or before 12:00 noon, local time of Assignor, on the Effective
Date Assignee shall pay to Assignor, in immediately available funds, an amount
equal to the sum of (i) the Transferred Percentage of the outstanding Capital of
Assignor’s Purchaser Interests (such amount, being hereinafter referred to as
the “Assignee’s Capital”); (ii) all accrued but unpaid (whether or not then due)
Yield attributable to Assignee’s Capital; and (iii) accruing but unpaid fees and
other costs and expenses payable in respect of Assignee’s Capital for the period
commencing upon each date such unpaid amounts commence accruing, to and
including the Effective Date (the “Assignee’s Acquisition Cost”); whereupon,
Assignor shall be deemed to have sold, transferred and assigned to Assignee,
without recourse, representation or warranty (except as provided in paragraph 6
below), and Assignee shall be deemed to have hereby irrevocably taken, received
and assumed from Assignor, the Transferred Percentage of Assignor’s Commitment
and the Capital of Assignor’s Purchaser Interests (if applicable) and all
related rights and obligations under the Purchase Agreement and the Transaction
Documents, including, without limitation, the Transferred Percentage of
Assignor’s future funding obligations under Section 1.1 of the Purchase
Agreement and Section 2.1 of the APA.
          4. Concurrently with the execution and delivery hereof, Assignor will
provide to Assignee copies of all documents requested by Assignee which were
delivered to Assignor pursuant to the Purchase Agreement.
          5. Each of the parties to this Assignment Agreement agrees that at any
time and from time to time upon the written request of any other party, it will
execute and deliver such further documents and do such further acts and things
as such other party may reasonably request in order to effect the purposes of
this Assignment Agreement.
          6. By executing and delivering this Assignment Agreement, Assignor and
Assignee confirm to and agree with each other, the Agent, the Managing Agents
and the Committed Purchasers as follows: (a) other than the representation and
warranty that it has not created any Adverse Claim upon any interest being
transferred hereunder, Assignor makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made by any other Person in or in connection with the Purchase Agreement or the
Transaction Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of Assignee, the Purchase Agreement or any
other instrument or document furnished pursuant thereto or the perfection,
priority, condition, value or sufficiency of any collateral; (b) Assignor makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Seller, any Obligor, any Seller Affiliate or the
performance or observance by the Seller, any Obligor, any Seller Affiliate of
any of their respective obligations under the Transaction Documents or any other
instrument or document furnished pursuant thereto or in connection therewith;
(c) Assignee confirms that it has received a copy of the Purchase Agreement and
copies of such other Transaction Documents, and other documents and information
as it has requested and deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (d) Assignee will,
independently and without reliance upon the Agent, any Managing Agent, any

Exh. VII-2

--------------------------------------------------------------------------------

 

Conduit Purchaser, the Seller or any other Committed Purchaser or Purchaser and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Purchase Agreement and the Transaction Documents; (e) Assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Transaction Documents as are delegated to the
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; and (f) Assignee agrees that it will perform in accordance
with their terms all of the obligations which, by the terms of the Purchase
Agreement and the other Transaction Documents, are required to be performed by
it as a Committed Purchaser or, when applicable, as a Purchaser.
          7. Each party hereto represents and warrants to and agrees with the
Agent that it is aware of and will comply with the provisions of the Purchase
Agreement, including, without limitation, Sections 4.1, 13.6 and 13.7 thereof.
          8. Schedule I hereto sets forth the revised Commitment of Assignor and
the Commitment of Assignee, as well as administrative information with respect
to Assignee.
          9. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
          10. Assignee hereby covenants and agrees that, prior to the date which
is one (1) year and one (1) day after the payment in full of all senior
indebtedness for borrowed money of Conduit Purchaser, it will not institute
against, or join any other Person in instituting against, Conduit Purchaser any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States or any state of
the United States.
          IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective duly authorized officers of the
date hereof.

                  [ASSIGNOR]    
 
           
 
  By:        
 
  Title:  
 
   
 
                [ASSIGNEE]    
 
           
 
  By:        
 
  Title:  
 
   
 
                [Consented to by:         HBI RECEIVABLES LLC    
 
           
 
  By:        
 
  Title:]  
 
   

Exh. VII-3

--------------------------------------------------------------------------------

 

SCHEDULE I TO ASSIGNMENT AGREEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
Date: [                                        ], 20[__]
Transferred Percentage: [                     ]%

                                      A-l     A-2     B-l     B-2      
Commitment     Commitment                   (prior to giving     (after giving  
                effect to the     effect to the     Outstanding     Ratable
Share       Assignment     Assignment     Capital     of Outstanding   Assignor
  Agreement)     Agreement)     (if any)     Capital  
 
                               

                                              A-2     B-l     B-2      
Commitment     Commitment                   (prior to giving     (after giving  
                effect to the     effect to the     Outstanding     Ratable
Share       Assignment     Assignment     Capital     of Outstanding   Assignee
  Agreement)     Agreement)     (if any)     Capital  
 
                               

Address for Notices
[                                        ]
[                                        ]
Attention: [                    ]
Phone: [                    ]
Fax: [                    ]

Exh. VII-4

--------------------------------------------------------------------------------

 

SCHEDULE II TO ASSIGNMENT AGREEMENT
EFFECTIVE NOTICE

TO:   [                    ], Assignor
[                    ]
[                    ]
[                    ]

TO:   [                    ], Assignee
[                    ]
[                    ]
[                    ]

     The undersigned, as Agent and the Managing Agent for the Assignor’s
Purchase Group, respectively, under the Receivables Purchase Agreement dated as
of November 27, 2007 by and among HBI Receivables LLC, as Seller, Hanesbrands
Inc., as Servicer, the Purchasers and Managing Agents party thereto, and HSBC
Securities (USA) Inc., as Agent hereby acknowledges receipt of executed
counterparts of a completed Assignment Agreement dated as of
[                     ], 20[__] between [                     ], as Assignor,
and [                     ], as Assignee. Terms defined in such Assignment
Agreement are used herein as therein defined.
     1. Pursuant to such Assignment Agreement, you are advised that the
Effective Date will be [                     ], 20[__].
     2. The Managing Agent, on behalf of the affected Conduit Purchaser(s)
hereby consents to the Assignment Agreement as required by Section 12.1(b) of
the Receivables Purchase Agreement and Section [___] of the APA.

Exh. VII-5

--------------------------------------------------------------------------------

 

     [3. Pursuant to such Assignment Agreement, the Assignee is required to pay
$[___] to Assignor at or before 12:00 noon (local time of Assignor) on the
Effective Date in immediately available funds.]

                  Very truly yours,    
 
                HSBC SECURITIES (USA) INC.,         individually and as Agent  
 
 
           
 
  By:        
 
     
 
   
 
  Title:        
 
     
 
   

Exh. VII-6

--------------------------------------------------------------------------------

 

EXHIBIT VIII
CREDIT AND COLLECTION POLICY
See Exhibit V to Receivables Sale Agreement

Exh. VIII-1

--------------------------------------------------------------------------------

 

EXHIBIT IX
FORM OF CONTRACT(S)
(Attached.)

 

--------------------------------------------------------------------------------

 

(GRAPHIC) [g25453g2545311.gif]

--------------------------------------------------------------------------------

 

THE INVOICE ON THE REVERSE HEREOF FROM SELLER TO BUYER IS
EXPRESSLY SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:

1.   F.O.B. SHIPPING POINT. NO ANTICIPATION ALLOWED. DISCOUNT IS ALLOWED ON THE
MERCHANDISE TOTAL ONLY. THIS INVOICE FROM SELLER TO BUYER IS EXPRESSLY SUBJECT
TO THE TERMS AND CONDITIONS SET FORTH ON THE REVERSE HEREOF.   2.   SELLER
WARRANTS THAT THE GOODS ARE AS DESCRIBED ON THE REVERSE HEREOF AND FURTHER, THE
PRODUCTS COVERED BY THIS INVOICE ARE IN ACCORDANCE WITH THE PROVISIONS ON THE
FLAMMABLE FABRICS ACT AND THE TEXTILE FIBER PRODUCTS IDENTIFICATION ACT FILED
WITH THE FEDERAL TRADE COMMISSION. ADDITIONALLY, WE HEREBY CERTIFY THAT ALL
GOODS AND SERVICES COVERED BY THIS INVOICE WERE PRODUCED AND FURNISHED IN
COMPLIANCE WITH THE REQUIREMENTS OF THE FAIR LABOR STANDARDS ACT OF 1938 AS
AMENDED, AND ANY REGULATIONS AND ORDERS ISSUED THEREUNDER. NO OTHER EXPRESS
WARRANTY IS MADE IN RESPECT TO THE GOODS.   3.   ALL CLAIMS FOR ERRORS RELATING
TO GOODS DELIVERED BY SELLER TO BUYER UNDER THIS CONTRACT SHALL BE MADE BY BUYER
WITHIN A PERIOD OF FIVE(5) DAYS AFTER THE GOODS ARE DELIVERED TO BUYER. FAILURE
TO MAKE ANY CLAIM WITHIN FIVE(5) DAYS SHALL CONSTITUTE AN IRREVOCABLE ACCEPTANCE
OF THE GOODS AND AN ADMISSION THAT THEY FULLY COMPLY WITH ALL TERMS, CONDITIONS,
AND SPECIFICATIONS OF THIS CONTRACT.   4.   BUYER SHALL PAY THE PRICE WITHIN THE
TERM SPECIFICALLY SET FORTH ON THIS INVOICE FROM THE DATE OF THE INVOICE. SELLER
RESERVES THE RIGHT TO CHARGE BUYER REASONABLE FINANCE CHARGES ON PAST DUE
BALANCES OR ON PAYMENTS MADE NOT WITHIN THE SPECIFIED TERM. FURTHER, WHERE
PERMITTED BY APPLICABLE STATE LAW, BUYER SHALL PAY TO SELLER REASONABLE COST OF
COLLECTION OF MONEY DUE AND UNPAID INCLUDING REASONABLE ATTORNEY’S FEES.   5.  
MERCHANDISE CANNOT BE RETURNED WITHOUT WRITTEN PERMISSION.   6.   HANESBRANDS
INC. PRODUCTS IRREGULARS AND CLOSE-OUTS ARE SOLD ON THE CONDITION THAT ITS BRAND
NAME(S) WILL NOT BE USED IN ADVERTISING THEIR SALE. A DESCRIPTION SUCH AS
“FAMOUS BRAND” OR “GOODS OF NATIONALLY ADVERTISED BRAND” MAY BE USED.

--------------------------------------------------------------------------------

 

(GRAPHIC) [g25453g2545312.gif]

--------------------------------------------------------------------------------

 

(GRAPHIC) [g25453g2545313.gif]

--------------------------------------------------------------------------------

 

(GRAPHIC) [g25453g2545314.gif]

--------------------------------------------------------------------------------

 

(GRAPHIC) [g25453g2545315.gif]

--------------------------------------------------------------------------------

 

(GRAPHIC) [g25453g2545316.gif]

--------------------------------------------------------------------------------

 

(GRAPHIC) [g25453g2545317.gif]

--------------------------------------------------------------------------------

 

(INVOICE) [g25453g2545318.gif]

--------------------------------------------------------------------------------

 

(GRAPHIC) [g25453g2545319.gif]

--------------------------------------------------------------------------------

 

EXHIBIT X
FORM OF WEEKLY REPORT
(Attached.)

 

--------------------------------------------------------------------------------

 

HBI Receivables LLC
Weekly Settlement Report

                 
Report as of:
                         
Weekly Period:
      thru        
 
               

             
I.
  RECEIVABLES ROLLFORWARD        
 
 
Beginning Receivables Balance
    0  
 
 
+   Gross Sales
    0  
 
 
+   Debit Adjustments
    0  
 
 
-   Cash Collections
    0  
 
 
-   Credit Adjustments, Write-Offs, and Recoveries
    0  
 
           
 
 
Ending Receivables Balance
    0  
 
           
 
           
II.
  RECEIVABLES AGING SCHEDULE        
 
  Total Agings        
 
 
Current
    0  
 
 
1-30 dpd
    0  
 
 
31-60 dpd
    0  
 
 
61-90 dpd
    0  
 
 
91+ dpd
    0  
 
 
Credit Memos and Unapplied Cash
    0  
 
           
 
 
Total Receivables Balance
    0  
 
           
 
           
III.
  ELIGIBLE RECEIVABLES        
 
 
Per Most Recent Monthly Report:
       
 
 
Total Receivables Balance
    0  
 
 
Eligible Receivables Balance
    0  
 
 
Ineligible Receivables
    0  
 
 
Ineligible Receivables Percentage
    0.00 %
 
           
 
 
Per This Weekly Report:
       
 
 
Total Receivables Balance
    0  
 
 
Ineligible Receivables Percentage (calculated above)
    0.00 %
 
 
Eligible Receivables Balance
    0  
 
           
IV.
  OBLIGOR CONCENTRATION LIMITS        
 
 
Per Most Recent Monthly Report:
       
 
 
Eligible Receivables Balance
    0  
 
 
Excess Obligor Concentrations
    0  
 
 
Excess Other Concentrations
    0  
 
 
Excess Concentration Percentage
    0.00 %
 
           
 
 
Per This Weekly Report:
       
 
 
Eligible Receivables Balance
    0  
 
 
Excess Concentration Percentage (calculated above)
    0.00 %
 
 
Excess Concentrations
    0  
 
           
V.
  FUNDING AVAILABILITY        
 
 
Eligible Receivables Balance
    0  
 
 
-   Excess Concentrations
    0  
 
 
Net Receivables Balance
    0  
 
           
 
 
-   Loss Reserve Percentage per last Monthly Report
    0.00 %
 
 
-   Dilution Reserve Percentage per last Monthly Report
    0.00 %
 
 
-   Yield & Servicing Reserves per last Monthly Report
    0.00 %
 
 
Total Reserve Requirement
    0  
 
           
 
 
Available Funding Amount
    0  
 
           
VI.
  INCREASE / DECREASE IN CAPITAL        
 
 
Maximum Funding Amount
    250,000  
 
 
Amount Available for Funding Under the Facility
    0  
 
 
Beginning Capital Outstanding
    0  
 
 
Remaining Available Capital
    0  
 
 
Required Capital Paydown
    0  
 
 
Requested Increase / Purchase Amount
    0  
 
 
Required / Optional Repayment (min. equals Required Paydown)
    0  
 
 
Ending Capital Outstanding
    0  
 
           
VII.
  COMPLIANCE        
 
           
 
 
Purchaser Interest
       
 
 
Outstanding Capital
    0  
 
 
Net Receivables Balance
    0  
 
 
Aggregate Reserves
    0  
 
 
Purchaser Interest
    0.00 %
 
  Compliance?   Yes

The undersigned hereby represents and warrants that the foregoing is true and
correct as of the date hereof in accordance with the Receivables Purchase
Agreement dated November 27, 2007 (and as may be amended and otherwise modified
from time to time).

         
Signed By:
       
 
 
 
   

         
Title:
       
 
 
 
   

J.P. Morgan Securities Inc.         HSBC Securities (USA) Inc.   Page 1 of 1  
HBI Receivables LLC

--------------------------------------------------------------------------------

 

EXHIBIT XI
FORM OF SETTLEMENT REPORT
(Attached.)

--------------------------------------------------------------------------------

 

HBI Receivables LLC
   Monthly Settlement Report

                 
Report Period:
                         
Report as of:
                         

             
I.
  RECEIVABLES ROLLFORWARD        
 
 
Beginning Receivables Balance
    0  
 
 
+   Gross Sales
    0  
 
 
+   Debit Adjustments
    0  
 
 
-   Cash Collections
    0  
 
 
-   Bad Debt Write-Offs
    0  
 
 
+   Recoveries
    0  
 
 
-   Credit Adjustments and Customer Deduction Write-Offs
    0  
 
           
 
 
Ending Receivables Balance
    0  
 
           
 
           
II.
  RECEIVABLES AGING SCHEDULE        
 
  Debit Only        
 
 
Current
    0  
 
 
1-30 dpd
    0  
 
 
31-60 dpd
    0  
 
 
61-90 dpd
    0  
 
 
91+ dpd
    0  
 
           
 
 
Total Debit Receivables Balance
    0  
 
           
 
           
 
  Credit Only        
 
 
Current
    0  
 
 
1-30 dpd
    0  
 
 
31-60 dpd
    0  
 
 
61-90 dpd
    0  
 
 
91+ dpd
    0  
 
           
 
 
Total Credit Receivables Balance
    0  
 
           
 
           
 
  Total Agings        
 
 
Current
    0  
 
 
1-30 dpd
    0  
 
 
31-60 dpd
    0  
 
 
61-90 dpd
    0  
 
 
91+ dpd
    0  
 
 
Credit Memos and Unapplied Cash
    0  
 
           
 
 
Total Receivables Balance
    0  
 
           
 
           
III.
  ELIGIBLE RECEIVABLES        
 
 
Total Receivables Balance
    0  
 
 
-   Delinquent Receivables (> 60 dpd)
    0  
 
 
-   Intercompany / Affiliated Receivables
    0  
 
 
-   Foreign Receivables
    0  
 
 
-   Receivables from Bankrupt Obligors
    0  
 
 
-   Contra Accounts
    0  
 
 
-   Cross-Age (25% for Top 15 Obligors)
    0  
 
 
-   Aged Customer Credits
    0  
 
 
-   Unprocessed Credit Memos
    0  
 
 
-   Duplicated Sock Sales
    0  
 
 
-   Posting Differences to G/L Account
    0  
 
 
-   Payment Terms of 31-60 Days > 20%
    0  
 
 
-   Payment Terms of 61-90 Days > 3%
    0  
 
 
-   Payment Terms of 91-120 Days > 3%
    0  
 
 
-   Dating Receivables > 3%
    0  
 
 
-   Extended Payment Terms or Payment Terms > 120 days
    0  
 
 
-   Receivables with COD or CIA Payment Terms
    0  
 
 
-   Unapplied Cash Not Applied to the Aging
    0  
 
 
-   Trade Receivables Converted to Notes
    0  
 
 
-   Other Ineligibles
    0  
 
           
 
 
Eligible Receivables Balance
    0  
 
           

J.P. Morgan Securities Inc.         HSBC Securities (USA) Inc.   Page 1 of 3  
HBI Receivables LLC

 

--------------------------------------------------------------------------------

 

HBI Receivables LLC
Monthly Settlement Report

                 
Report Period:
                         

                                      IV.   CONCENTRATION LIMITS                
                    % of Eligible   Concentration   Excess     Obligor
Concentration Limits   Eligible A/R Balance   Receivables   Limit  
Concentrations
 
                       
 
 
1.   Obligor A
    0       0.00 %     0.00 %     0  
 
 
2.   Obligor B
    0       0.00 %     0.00 %     0  
 
 
3.   Obligor C
    0       0.00 %     0.00 %     0  
 
 
4.   Obligor D
    0       0.00 %     0.00 %     0  
 
 
5.   Obligor E
    0       0.00 %     0.00 %     0  
 
 
6.   Obligor F
    0       0.00 %     0.00 %     0  
 
 
7.   Obligor G
    0       0.00 %     0.00 %     0  
 
 
8.   Obligor H
    0       0.00 %     0.00 %     0  
 
 
9.   Obligor I
    0       0.00 %     0.00 %     0  
 
 
10.  Obligor J
    0       0.00 %     0.00 %     0  
 
                                     
 
 
Total
    0       0.00 %             0  

                                                      % of Eligible  
Concentration   Excess     Other Concentration Limits   Eligible A/R Balance  
Receivables   Limit   Concentrations
 
 
1.   U.S. Government Receivables
    0       0.00 %     0.00 %     0  
 
 
2.   Foreign Receivables
    0       0.00 %     0.00 %     0  
 
                                   
 
 
Total
    0       0.00 %             0  
 
                                   
V.
  FUNDING AVAILABILITY                                
 
 
Eligible Receivables Balance
    0                          
 
 
-   Excess Obligor Concentrations
    0                          
 
 
-   Excess Other Concentrations
    0                          
 
 
Net Receivables Balance
    0                          
 
                                   
 
 
-   Loss Reserves
    0       0.00 %                
 
 
-   Dilution Reserves
    0       0.00 %                
 
 
-   Yield & Servicing Reserves
    0       0.00 %                
 
 
Total Reserve Requirement
    0                            
 
 
Available Funding Amount
    0                          
 
                                   
VI.
  INCREASE / DECREASE IN CAPITAL                                
 
 
Maximum Funding Amount
    250,000                          
 
 
Amount Available for Funding Under the Facility
    0                          
 
 
Beginning Capital Outstanding
    0                          
 
 
Remaining Available Capital
    0                          
 
 
Required Capital Paydown
    0                          
 
 
Requested Increase / Purchase Amount
    0                          
 
 
Required / Optional Repayment (min. equals Required Paydown)
    0                          
 
 
Ending Capital Outstanding
    0                          

          J.P. Morgan Securities Inc.         HSBC Securities (USA) Inc.   Page
2 of 3   HBI Receivables LLC

 

--------------------------------------------------------------------------------

 

HBI Receivables LLC
Monthly Settlement Report

                 
Report Period:
                         

VII.   RECEIVABLES PERFORMANCE TRIGGERS

     3-Month Delinquency Ratio

                                                              Current Month  
Previous Month   2-Months Ago   3-Month Avg.   Trigger              
 
            0.00 %     0.00 %     0.00 %     0.00 %     4.00 %
 
                                               
 
  Compliance?
  Yes                                

     3-Month Average Loss-to-Liquidation Ratio

                                                              Current Month  
Previous Month   2-Months Ago   3-Month Avg.   Trigger              
 
            0.00 %     0.00 %     0.00 %     0.00 %     2.25 %
 
                                               
 
  Compliance?
  Yes                                

     3-Month Average Dilution Ratio

                                                      Current Month   Previous
Month   2-Months Ago   3-Month Avg.   Trigger          
 
        0.00 %     0.00 %     0.00 %     0.00 %     13.50 %  
 
    Compliance?     Yes                                
 
                                           
 
  Purchaser Interest                                      
 
 
Outstanding Capital
  0                                  
 
 
Net Receivables Balance
  0                                  
 
 
Aggregate Reserves
  0                                  
 
 
Purchaser Interest
  0.00 %                                
 
                                           
 
    Compliance?     Yes                                

The undersigned hereby represents and warrants that the foregoing is true and
correct as of the date hereof in accordance with the Receivables Purchase
Agreement dated November 27, 2007 (and as may be amended and otherwise modified
from time to time).

         
Signed By:
       
 
 
 
   

         
Title:
       
 
 
 
   

          J.P. Morgan Securities Inc.         HSBC Securities (USA) Inc.   Page
3 of 3   HBI Receivables LLC

 

--------------------------------------------------------------------------------

 

EXHIBIT XII47
FINANCIAL COVENANT DEFINITIONS[Reserved.]
          “2016 Senior Notes” means the $500,000,000 8.00% senior unsecured
notes due December 15, 2016 issued by HBI.
          “Administrative Agent” means the Administrative Agent under the Credit
Agreement.
          “Business Day” has the meaning set forth in the Credit Agreement.
          “Capital Securities” means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person’s capital, whether now outstanding or
issued after the Restatement Effective Date; provided however, any shares,
interests, participations or other equivalents required to be issued in
connection with convertible debt shall not be considered “Capital Securities”
until issued.
          “Capitalized Lease Liabilities” means, with respect to any Person, all
monetary obligations of such Person and its Subsidiaries under any leasing or
similar arrangement which, in accordance with GAAP, should be classified as
capitalized leases, and for purposes of each Loan Document the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a premium or
a penalty; provided, however, any changes to the treatment or reclassification
of operating leases under GAAP or the interpretation of GAAP that would cause
operating leases to be considered capitalized leases under GAAP shall be ignored
as if such treatment or reclassification had never occurred and, for the
avoidance of doubt, operating leases shall not be considered Capitalized Lease
Liabilities hereunder.
          “Commercial Letter of Credit” has the meaning set forth in the Credit
Agreement.
          “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.
           “Credit Agreement” means that certain Amended and Restated Credit
Agreement, dated as of December 10, 2009, among HBI, the lenders from time to
time party
 

47   Amendment No. 4 amended and restated Exhibit XII in its entirety.

Exh. XII-1

--------------------------------------------------------------------------------

 

thereto, the administrative agent party thereto, the collateral agent party
thereto and the other agents party thereto, as in effect on the date hereof.
          “Credit Extension” means, as the context may require,
               (a) the making of a Loan by a Lender; or
               (b) the issuance of any Letter of Credit, any amendment to or
modification of any Letter of Credit that increases the face amount thereof, or
the extension of any Stated Expiry Date of any existing Letter of Credit, by an
Issuer.
          “Disposition” (or similar words such as “Dispose”) means any sale,
transfer, lease (as lessor), contribution or other conveyance (including by way
of merger) of, or the granting of options, warrants or other rights to, any of
HBI’s or its Subsidiaries’ assets (including accounts receivable and Capital
Securities of Subsidiaries) to any other Person in a single transaction or
series of transactions other than (i) to another Obligor, (ii) by a Foreign
Subsidiary to any other Foreign Subsidiary, (iii) by a Receivables Subsidiary to
any other Person or (iv) customary derivatives issued in connection with the
issuance of convertible debt.
          “Dollar” and the sign “$” mean lawful money of the United States.
          “EBITDA” means, for any applicable period, the sum of
               (a) Net Income, plus
               (b) to the extent deducted in determining Net Income, the sum of
(i) amounts attributable to amortization (including amortization of goodwill and
other intangible assets), (ii) federal, state, local and foreign income
withholding, franchise, state single business unitary and similar Tax expense,
(iii) Interest Expense, (iv) depreciation of assets, (v) all non-cash charges,
including 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”), (vi) net cash charges associated with or
related to any contemplated restructurings (such cost restructuring charges
being “Cash Restructuring Charges”) in an aggregate amount not to exceed
$120,000,000 since September 5, 2006, (vii) all amounts in respect of
extraordinary losses, (viii) 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),
(ix) any financial advisory fees, accounting fees, legal fees and other similar
advisory and consulting fees, cash charges in respect of strategic market
reviews, management bonuses and early retirement of Indebtedness, and related
out-of-pocket expenses incurred by HBI or any of its Subsidiaries as a result of
the Transaction, including fees and expenses in connection with the issuance,
redemption or exchange of the 2016 Senior Notes, all determined in accordance
with GAAP, (x) non-cash or unrealized losses on agreements with respect to
Hedging Obligations and (xi) 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 HBI and its Subsidiaries
incurred as a result of Permitted Acquisitions, Investments, Restricted
Payments, Dispositions permitted under the Credit Agreement and the issuance of
Capital Securities or Indebtedness

Exh. XII-2

--------------------------------------------------------------------------------

 

permitted under the Credit Agreement, 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 Permitted
Acquisition or Dispositions, (xii) losses on agreements with respect to Hedging
Obligations and any related tax losses and any costs, fees, and expenses related
to the termination thereof, in each case incurred in connection with or as a
result of the Transaction, (xiii) to the extent the related loss is not added
back pursuant to clause (c), all proceeds of business interruption insurance
policies, (xiv) expenses incurred by HBI or any Subsidiary to the extent
reimbursed in cash by a third party, and (xv) extraordinary, unusual or
non-recurring cash charges not to exceed $10,000,000 in any Fiscal Year, minus
               (c) to the extent included in determining such Net Income, the
sum of (i) all amounts in respect of extraordinary gains, (ii) non-cash gains on
agreements with respect to Hedging Obligations, (iii) reversals (in whole or in
part) of any restructuring charges previously treated as Non-Cash Restructuring
Charges in any prior period, (iv) gains on agreements with respect to Hedging
Obligations and any related tax gains, in each case incurred in connection with
or as a result of the Transaction and (v) non-cash items increasing such Net
Income for such period, 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.
          “EMU” means Economic and Monetary Union as contemplated in the Treaty
on European Union.
          “EMU Legislation” means legislative measures of the European Council
(including European Council regulations) for the introduction of, changeover to
or operation of a single or unified European currency (whether known as the Euro
or otherwise), being in part the implementation of the third stage of EMU.
          “Euros” means the single currency of Participating Member States of
the European Union.
          “Fiscal Quarter” means a quarter ending on the Saturday nearest to the
last day of March, June, September or December.
          “Fiscal Year” means any period of fifty-two or fifty-three consecutive
calendar weeks ending on the Saturday nearest to December 31; 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
December 31 of such calendar year.
          “Foreign Subsidiary” means any Subsidiary that is not a U.S.
Subsidiary or a Receivables Subsidiary.
          “GAAP” has the meaning set forth in the Credit Agreement.
          “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

Exh. XII-3

--------------------------------------------------------------------------------

 

executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
          “HBI” means Hanesbrands Inc., a Maryland corporation.
          “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.
          “Indebtedness” of any Person means, (i) all obligations of such Person
for borrowed money or advances and all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (ii) all 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, (iii) all Capitalized Lease Liabilities of such Person, (iv) for
purposes of Section 8.1.5 of the Credit Agreement only, net Hedging Obligations
of such Person, (v) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services (excluding trade accounts payable and accrued expenses in
the ordinary course of business which are not overdue for a period of more than
90 days or, if overdue for more than 90 days, as to which a dispute exists and
adequate reserves in conformity with GAAP have been established on the books of
such Person), (vi) indebtedness secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by) a
Lien on property owned or being acquired by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse (provided that in the event such indebtedness is limited in recourse
solely to the property subject to such Lien, for the purposes of this Exhibit
the amount of such indebtedness shall not exceed the greater of the book value
or the fair market value (as determined in good faith by HBI’s board of
directors) of the property subject to such Lien), (vii) monetary obligations
arising under Synthetic Leases, (viii) 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 any Permitted Factoring Facility, (ix) all obligations (other
than intercompany obligations) of such Person pursuant to any Permitted
Securitization (other than Standard Securitization Undertakings) or any
Permitted Factoring Facility, and (x) all Contingent Liabilities of such Person
in respect of any of the foregoing. The Indebtedness of any Person shall include
the Indebtedness of any other Person (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefore as a
result of such Person’s ownership interest in or other relationship with such
Person, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefore.
          “Interest Coverage Ratio” means, as of the last day of any Fiscal
Quarter, the ratio computed for the period consisting of such Fiscal Quarter and
each of the three immediately preceding Fiscal Quarters of:
               (a) EBITDA (for all such Fiscal Quarters)

Exh. XII-4

--------------------------------------------------------------------------------

 

               to
               (b) the sum (for all such Fiscal Quarters) of Interest Expense.
          “Interest Expense” means, for any applicable period, the aggregate
interest expense (both, without duplication, when accrued or paid and net of
interest income paid during such period to HBI and its Subsidiaries) of HBI and
its Subsidiaries for such applicable period, including the portion of any
payments made in respect of Capitalized Lease Liabilities allocable to interest
expense; provided that the term “Interest Expense” shall not include any
interest expense attributable to a Permitted Factoring Facility.
          “Investment” means, relative to any Person, (i) any loan, advance or
extension of credit made by such Person to any other Person, including the
purchase by such Person of any bonds, notes, debentures or other debt securities
of any other Person, and (ii) any Capital Securities held by such Person in any
other Person. The amount of any Investment shall be the original principal or
capital amount thereof less all returns of principal or equity thereon and
shall, if made by the transfer or exchange of property other than cash, be
deemed to have been made in an original principal or capital amount equal to the
fair market value of such property at the time of such Investment.
          “Issuer” has the meaning set forth in the Credit Agreement.
          “Lenders” means the various financial institutions and other Persons
from time to time party to the Credit Agreement.
          “Letter of Credit” has the meaning set forth in the Credit Agreement.
          “Letter of Credit Outstandings” means, on any date, an amount equal to
the sum of (i) the then aggregate amount which is undrawn and available under
all issued and outstanding Letters of Credit, and (ii) the then aggregate amount
of all unpaid and outstanding Reimbursement Obligations.
          “Leverage Ratio” means, as of the last day of any Fiscal Quarter, the
ratio of
               (a) Total Debt outstanding on the last day of such Fiscal Quarter
               to
               (b) EBITDA computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters.
          “Lien” means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever.
          “Loan Documents” has the meaning set forth in the Credit Agreement.
          “Loans” has the meaning set forth in the Credit Agreement.

Exh. XII-5

--------------------------------------------------------------------------------

 

          “Net Income” means, for any period, the aggregate of all amounts which
would be included as net income on the consolidated financial statements of HBI
and its Subsidiaries for such period.
          “Non-Cash Restructuring Charges” is defined in the definition of
“EBITDA”.
          “Obligor” has the meaning set forth in the Credit Agreement.
          “Open Account Paying Agreement” has the meaning set forth in the
Credit Agreement.
          “Participating Member State” means each country so described in any
EMU Legislation.
          “Permitted Acquisition” has the meaning set forth in the Credit
Agreement.
          “Permitted Factoring Facility” has the meaning set forth in the Credit
Agreement.
          “Permitted Securitization” has the meaning set forth in the Credit
Agreement.
          “Person” means any natural person, corporation, limited liability
company, partnership, joint venture, association, trust or unincorporated
organization, Governmental Authority or any other legal entity, whether acting
in an individual, fiduciary or other capacity.
          “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” has the meaning set forth in the Credit
Agreement.
          “Reimbursement Obligation” has the meaning set forth in the Credit
Agreement.
          “Restatement Effective Date” means December 10, 2009.
          “Restricted Payment” means (i) the declaration or payment of any
dividend (other than dividends payable solely in Capital Securities of HBI or
any Subsidiary (excluding a Receivables Subsidiary)) on, or the making of any
payment or distribution on account of, or setting apart assets for a sinking or
other analogous fund for the purchase, redemption, defeasance, retirement or
other acquisition of, any class of Capital Securities of HBI or any warrants,
options or other right or obligation to purchase or acquire any such Capital
Securities, whether now or hereafter outstanding, or (ii) the making of any
other distribution in respect of such Capital Securities, in each case either
directly or indirectly, whether in cash, property or obligations of HBI or any
Subsidiary or otherwise; provided, however, that any conversion feature of
convertible debt shall not be considered a “Restricted Payment”.

Exh. XII-6

--------------------------------------------------------------------------------

 

          “Standard Securitization Undertakings” shall mean representations,
warranties, covenants and indemnities entered into by HBI or any Subsidiary
which are reasonably customary in a securitization of Receivables.
          “Stated Expiry Date” has the meaning set forth in the Credit
Agreement.
          “Subsidiary” means, with respect to any Person, any other Person of
which more than 50% of the outstanding Voting Securities of such other Person
(irrespective of whether at the time Capital Securities of any other class or
classes of such other Person shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person. Unless the
context otherwise specifically requires, the term “Subsidiary” shall be a
reference to a Subsidiary of HBI (other than a Receivables Subsidiary).
          “Synthetic Lease” means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) (i) that is not a capital lease in
accordance with GAAP and (ii) in respect of which the lessee retains or obtains
ownership of the property so leased for federal income tax purposes, other than
any such lease under which that Person is the lessor.
          “Taxes” means all income, stamp or other taxes, duties, levies,
imposts, charges, assessments, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, and all interest, penalties or similar liabilities with respect
thereto.
          “Total Debt” means, on any date, the outstanding principal amount of
all Indebtedness of HBI and its Subsidiaries of the type referred to in clause
(i) of the definition of “Indebtedness”, clause (ii) of the definition of
“Indebtedness”, clause (iii) of the definition of “Indebtedness”, clause (vii)
of the definition of “Indebtedness” and clause (ix) of the definition of
“Indebtedness”, in each case exclusive of (a) intercompany Indebtedness between
HBI and its Subsidiaries, (b) any Contingent Liability in respect of any of the
foregoing, (c) any Permitted Factoring Facility, (d) any Commercial Letter of
Credit, (e) any Letter of Credit or other credit support relating to the
termination of agreements with respect to Hedging Obligations, in each case
under this clause (e), incurred in connection with or as a result of the
Transaction and (f) any Open Account Paying Agreements.
          “Transaction” has the meaning set forth in the Credit Agreement.
          “Treaty on European Union” means the Treaty of Rome of March 25, 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty (which was
signed at Maastricht, the Kingdom of Netherlands, on February 1, 1992 and came
into force on November 1, 1993), as amended from time to time.
          “UCC” has the meaning set forth in the Credit Agreement.
          “United States” or “U.S.” means the United States of America, its
fifty states and the District of Columbia.

Exh. XII-7

--------------------------------------------------------------------------------

 

          “U.S. Subsidiary” means any Subsidiary (other than a Receivables
Subsidiary) that is incorporated or organized under the laws of the United
States.
          “Voting Securities” means, with respect to any Person, Capital
Securities 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.

Exh. XII-8

--------------------------------------------------------------------------------

 

EXHIBIT XIII
FORM OF DAILY REPORT
(Attached.)

Exh. XIII-1

--------------------------------------------------------------------------------

 

HBI Receivables LLC
Daily Settlement Report
Report as of:                          
Daily Period:                         

         
I. RECEIVABLES AGING SCHEDULE
       
Total Agings
       
Current
    0  
1-30 dpd
    0  
31-60 dpd
    0  
61-90 dpd
    0  
91+ dpd
    0  
Credit Memos and Unapplied Cash
    0  
Total Receivables Balance
    0  
 
       
II. ELIGIBLE RECEIVABLES
       
Per Most Recent Monthly Report:
       
Total Receivables Balance
    0  
Eligible Receivables Balance
    0  
Ineligible Receivables
    0  
Ineligible Receivables Percentage
    0.00 %
 
       
Per This Daily Report:
       
Total Receivables Balance
    0  
Ineligible Receivables Percentage (calculated above)
    0.00 %
Eligible Receivables Balance
    0  
 
       
III. OBLIGOR CONCENTRATION LIMITS
       
Per Most Recent Monthly Report:
       
Eligible Receivables Balance
    0  
Excess Obligor Concentrations
    0  
Excess Other Concentrations
    0  
Excess Concentration Percentage
    0.00 %
 
       
Per This Daily Report:
       
Eligible Receivables Balance
    0  
Excess Concentration Percentage (calculated above)
    0.00 %
Excess Concentrations
    0  
 
       
IV. FUNDING AVAILABILITY
       
Eligible Receivables Balance
    0  
• Excess Concentrations
    0  
Net Receivables Balance
    0  
 
       
• Loss Reserve Percentage per last Monthly Report
    0.00 %
• Dilution Reserve Percentage per last Monthly Report
    0.00 %
•Yield & Servicing Reserves per last Monthly Report
    0.00 %
Total Reserve Requirement
    0  
 
       
Available Funding Amount
    0  
 
       
V. INCREASE / DECREASE IN CAPITAL
       
Maximum Funding Amount
    250,000  
Amount Available for Funding Under the Facility
    0  
Beginning Capital Outstanding
    0  
Remaining Available Capital
    0  
Required Capital Paydown
    0  
Requested Increase / Purchase Amount
    0  
Required / Optional Repayment (min. equals Required Paydown)
    0  
Ending Capital Outstanding
    0  
 
       
VI. COMPLIANCE
       
 
       
Purchaser Interest
       
Outstanding Capital
    0  
Net Receivables Balance
    0  
Aggregate Reserves
    0  
Purchaser Interest
    0.00 %
Compliance?
Yes  

The undersigned hereby represents and warrants that the foregoing is true and
correct as of the date hereof in accordance with the Receivables Purchase
Agreement dated November 27, 2007 (and as may be amended and otherwise modified
from time to time).

                Signed By:           Title:       

          J.P. Morgan Securities Inc.         HSBC Securities (USA) Inc.   Page
1 of 1   HBI Receivables LLC

 

--------------------------------------------------------------------------------

 

SCHEDULE A48
PURCHASE GROUPS; COMMITMENTS; GROUP PURCHASE LIMITS
HSBC Purchase Group

     
Group Purchase Limit:
  $125,000,00075,000,00049
Managing Agent:
  HSBC Securities (USA) Inc.
Conduit Purchaser:
  Bryant Park Funding LLC
Committed Purchaser:
  HSBC Bank USA, National Association
PLC
 
Commitment:
  $125,000,00075,000,000   
PNC Purchase Group
     
Group Purchase Limit:
  $125,000,00075,000,000 
Managing Agent:
  PNC Bank, N.A.
Conduit Purchaser:
  Market Street Funding LLC
Committed Purchaser:
  PNC Bank, N.A.
Commitment:
  $125,000,00075,000,000 

 

48   Amendment No. 2 deleted and replaced this Schedule in its entirety.   49  
The Purchase Limit Reduction Notice, dated January 29, 2010, reduced the
aggregate Purchase Limit to $150,000,000 and thereby reduced the Commitments of
each Committed Purchaser to $75,000,000.

 

--------------------------------------------------------------------------------

 

SCHEDULE B
LIST OF CLOSING DOCUMENTS
(Attached.)

 

--------------------------------------------------------------------------------

 

Schedule B to Receivables Purchase Agreement
Schedule A to Receivbles Sale Agreement
RECEIVABLES PURCHASE FACILITY
among
HANESBRANDS INC.,
as Originator and Servicer,
HBI RECEIVABLES LLC,
as Seller,
THE COMMITTED PURCHASERS PARTY THERETO,
THE CONDUCT PURCHASERS PARTY THERETO,
THE MANAGING AGENTS PARTY THERETO,
and
JPMORGAN CHASE BANK, N.A.,
as Agent
November 27, 2007

 

--------------------------------------------------------------------------------

 

LIST OF CLOSING DOCUMENTS

         
 
            DOCUMENT
 
        A.   SELLER DOCUMENTATION
 
        1.   Receivables Purchase Agreement among HBI Receivables LLC (the
“Seller”), Hanesbrands Inc. (the “Company”), as Servicer, JPMorgan Chase Bank,
N.A. (“JPMorgan”), as a Committed Purchaser and as a Managing Agent, HSBC Bank
USA, National Association (“HSBC”), as a Committed Purchaser, HSBC Securities
(USA) Inc., as a Managing Agent, Falcon Asset Securitization Company LLC, as a
Conduct Purchaser, Bryant Park Funding LLC, as a Conduct Purchaser and JPMorgan
as agent for the “Purchasers” thereunder (together with its successors and
assigns the “Agent”).
 
       
 
  Exhibit I   Definitions
 
       
 
  Exhibit II   Form of Purchase Notice
 
       
 
  Exhibit III   Places of Business of the Seller Parties; Location(s) of
Records; Federal Employer Identification Number(s)
 
       
 
  Exhibit IV   Form of Reduction Notice
 
       
 
  Exhibit V   Form of Compliance Certificate
 
       
 
  Exhibit VI   Form of Collection Account Agreement
 
       
 
  Exhibit VII   Form of Assignment Agreement
 
       
 
  Exhibit VIII   Credit and Collection Policy
 
       
 
  Exhibit IX   Form of Contract(s)
 
       
 
  Exhibit X   Form of Weekly Report
 
       
 
  Exhibit XI   Form of Settlement Report
 
       
 
  Exhibit XII   Financial Covenant Definitions
 
       
 
  Exhibit XIII   Form of Daily Report
 
       
 
  Schedule A   Commitments
 
       
 
  Schedule B   Closing Documents
 
       
 
  Schedule C   Special Concentration Limits

2

--------------------------------------------------------------------------------

 

              DOCUMENT
 
       
 
  Schedule D   Calendar Months
 
        2.   Good Standing Certificates issued in respect of the Seller by the
Secretary of State of North Carolina. (Post Closing)
 
        3.   Certificate of the Secretary of the Seller certifying (i) a copy of
the Certificate of Formation of the Seller (attached thereto), (ii) a copy of
the Limited Liability Company Agreement of the Seller (attached thereto),
(iii) a copy of the resolutions of the Board of Directors of the Seller
(attached thereto) authorizing the execution, delivery and performance of each
Transaction Document to which the Seller is party, (iv) the names and signatures
of the officers authorized on its behalf to execute each Transaction Document to
which the Seller is party and (v) a good standing certificate issued in respect
of the Seller by the Secretary of State of the State of Delaware.
 
        B.   COMPANY DOCUMENTATION
 
        4.   Receivables Sale Agreement between the Company, as originator, and
Seller, as buyer.
 
       
 
  Exhibit I   Definitions
 
       
 
  Exhibit II   Chief Executive Office; Places of Business; Locations of Records;
Federal Employer Identification Number(s); Other Names (s)
 
       
 
  Exhibit III   Reserved
 
       
 
  Exhibit IV   Form of Compliance Certificate
 
       
 
  Exhibit V   Credit and Collection Policy
 
       
 
  Exhibit VI   Form of Subordinated Note
 
       
 
  Schedule A   List of Documents to be Delivered to Buyer Prior to the Purchase
 
        5.   Certificate of the Secretary of the Company certifying (i) a copy
of the Articles of Incorporation of the Company (attached thereto), (ii) a copy
of the Bylaws of the Company (attached thereto), (iii) a copy of the resolutions
of the Board of Directors of the Company (attached thereto) authorizing the
execution, delivery and performance of each Transaction Document to which the
Company is party, (iv) the names and signatures of the officers authorized on
its behalf to execute each Transaction Document to which the Company is party
and (v) good standing certificates for the Company issued by the Department of
Assessments and Taxation of the State of Maryland and the Secretary of State of
the State of North Carolina.
 
        C.   UCC DOCUMENTATION
 
        6.   UCC Lien Search Report in respect of filings made against the
Seller in the office of the Secretary of State of the State of Delaware.
 
        7.   UCC Lien Search Reports in respect of filings made against the
Company in the office of the
 
       

3

--------------------------------------------------------------------------------

 

              DOCUMENT
 
            Maryland Department of Assessments and Taxation.
 
        8.   Tax Lien and Judgment Search Reports in respect of filings made
against the Company in the offices of North Carolina Secretary of State, (ii)
Forsyth County Superior Court Clerk.
 
        9.   UCC-1 Financing Statement naming the Seller as debtor and the Agent
as secured party filed in the office of the Secretary of State of the State of
Delaware.
 
        10.   UCC-1 Financing Statement naming the Company as debtor/seller, the
Seller as secured party/buyer/assignor and the Agent as assignee of the secured
party/buyer/assignor filed in the office of the Department of Assessments and
Taxation of the State of Maryland.
 
        11.   UCC-3 Financing Statements related to Credit Agreements (2).
 
        12.   Post-filing UCC Lien Search reports in respect of the filings
listed in the immediately preceding two items. (Post Closing)
 
        D.   OPINION LETTERS
 
        13.   Opinion of Kirkland & Ellis LLP, counsel for the Seller and the
Company, regarding corporate matters, enforceability and non-contravention of
material agreements, New York law and the law of the United States of America.
 
        14.   Opinion of Kirkland & Ellis LLP, counsel for the Seller and the
Company, regarding creation of security interests under New York law and
perfection under Delaware law.
 
        15.   Opinion of Kirkland & Ellis LLP, counsel for the Seller and the
Company, regarding “true sale” and “substantive nonconsolidation” issues.
 
        16.   Opinion of Venable LLC, special Maryland counsel, regarding, among
other things, corporate matters and perfection of security interests under
Maryland law.
 
        E.   MISCELLANEOUS
 
        17.   Fee Letter among the Seller, the Managing Agents and the Agent.
 
        18.   Subordinated Note made by Seller in favor of the Company.
 
        19.   Blocked Account Control Agreement among the Seller, the Agent and
JPMorgan, as Depositary.
 
        20.   Asset Purchase Agreement between Falcon Asset Securitization
Company LLC and JPMorgan.
 
        21.   Liquidity Asset Purchase Agreement between Bryant Park Funding LLC
and HSBC.
 
        22.   Settlement Report for the month prior to the closing date.
 
        23.   Agent Authorized Signer Form

4

--------------------------------------------------------------------------------

 

              DOCUMENT
 
        24.   Collateral Release Agreement (First Lien Credit Agreement) among
the Company, the Seller, JPMorgan, Citicorp USA, Inc., as administrative agent
and Citibank, N.A., as collateral agent.
 
        25.   Collateral Release Agreement (Second Lien Credit Agreement) among
the Company, HBI Branded Apparel Limited, Inc., the Seller, JPMorgan, Citicorp
USA, Inc., as administrative agent, and Citibank, N.A., as collateral agent.

5

--------------------------------------------------------------------------------

 

SCHEDULE C4950
SPECIAL CONCENTRATION PERCENTAGES

          Obligor Name   Special Concentration Percentage
[****]
    [****] %
[****]
    [****] %
[****]
    [****] %
[****]
    [****] %
[****]
    [****] %
[****]
    [****] %

 

4950   Schedule C was deleted and replaced in its entirety by Amendments No. 1,
No. 2 and No. 5.

 
**** Omitted pursuant to a confidential treatment request

 

--------------------------------------------------------------------------------

 

SCHEDULE D
CALENDAR MONTHS
(Attached.)

 

--------------------------------------------------------------------------------

 

(HANESBRANDS INC LOGO) [g25453g2545303.gif]
Calendar Year 2007
52 Weeks Ending 12/29/2007

                                                                               
                                                                               
  PERIOD 1 - JANUARY   PERIOD 2 - FEBRUARY   PERIOD 3 - MARCH 12/31/2006 -
02/03/2007   02/04/2007 - 03/03/2007   03/04/2007 - 03/31/2007
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
31
    1       2       3       4       5       6       4       5       6       7  
    8       9       10       4       5       6       7       8       9       10
 
7
    8       9       10       11       12       13       11       12       13    
  14       15       16       17       11       12       13       14       15    
  16       17  
14
    15       16       17       18       19       20       18       19       20  
    21       22       23       24       18       19       20       21       22  
    23       24  
21
    22       23       24       25       26       27       25       26       27  
    28       1       2       3       25       26       27       28       29    
  30       31  
28
    29       30       31       1       2       3                                
                                                                               
 

                                                                               
                                                                               
  PERIOD 4 - APRIL   PERIOD 5 - MAY   PERIOD 6 - JUNE 04/01/2007 - 05/05/2007  
05/06/2007 - 06/02/2007   6/03/2007 - 06/30/2007
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Web   Thu   Fri   Sat
1
    2       3       4       5       6       7       6       7       8       9  
    10       11       12       3       4       5       6       7       8       9
 
8
    9       10       11       12       13       14       13       14       15  
    16       17       18       19       10       11       12       13       14  
    15       16  
15
    16       17       18       19       20       21       20       21       22  
    23       24       25       26       17       18       19       20       21  
    22       23  
22
    23       24       25       26       27       28       27       28       29  
    30       31       1       2       24       25       26       27       28    
  29       30  
29
    30       1       2       3       4       5                                  
                                                                               

                                                                               
                                                                               
  PERIOD 7 - JULY   PERIOD 8 - AUGUST   PERIOD 9 - SEPTEMBER 07/01/2007 -
08/04/2007   08/05/2007 - 09/01/2007   09/02/2007 - 09/29/2007
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
1
    2       3       4       5       6       7       5       6       7       8  
    9       10       11       2       3       4       5       6       7       8
 
8
    9       10       11       12       13       14       12       13       14  
    15       16       17       18       9       10       11       12       13  
    14       15  
15
    16       17       18       19       20       21       19       20       21  
    22       23       24       25       16       17       18       19       20  
    21       22  
22
    23       24       25       26       27       28       26       27       28  
    29       30       31       1       23       24       25       26       27  
    28       29  
29
    30       31       1       2       3       4                                
                                                                               
 

                                                                               
                                                                               
  PERIOD 10 - OCTOBER   PERIOD 11 - NOVEMBER   PERIOD 12 - DECEMBER 09/30/2007 -
11/03/2007   11/04/2007 - 12/01/2007   12/02/2007 - 12/29/2007
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
30
    1       2       3       4       5       6       4       5       6       7  
    8       9       10       2       3       4       5       6       7       8  
7
    8       9       10       11       12       13       11       12       13    
  14       15       16       17       9       10       11       12       13    
  14       15  
14
    15       16       17       18       19       20       18       19       20  
    21       22       23       24       16       17       18       19       20  
    21       22  
21
    22       23       24       25       26       27       25       26       27  
    28       29       30       1       23       24       25       26       27  
    28       29  
28
    29       30       31       1       2       3                                
                                                                               
 

LEGEND

     
 
  HOLIDAY

 

--------------------------------------------------------------------------------

 

(HANESBRANDS INC LOGO) [g25453g2545303.gif]
Calendar Year 2008
53 Weeks Ending 1/3/2009

                                                                               
                                                                               
  PERIOD 1 - JANUARY   PERIOD 2 - FEBRUARY   PERIOD 3 - MARCH 12/30/2007 -
02/02/2008   02/03/2008 - 03/01/2008   03/02/2008 - 03/29/2008
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
30
    31       1       2       3       4       5       3       4       5       6  
    7       8       9       2       3       4       5       6       7       8  
6
    7       8       9       10       11       12       11       11       12    
  13       14       15       16       9       10       11       12       13    
  14       15  
13
    14       15       16       17       18       19       17       18       19  
    20       21       22       23       16       17       18       19       20  
    21       22  
20
    21       22       23       24       25       26       24       25       26  
    27       28       29       1       23       24       25       26       27  
    28       29  
27
    28       29       30       31       1       2                              
                                                                               
   

                                                                               
                                                                               
  PERIOD 4 - APRIL   PERIOD 5 - MAY   PERIOD 6 - JUNE 03/30/2008 - 05/03/2008  
05/04/2008 - 05/31/2008   6/01/2008 - 06/28/2008
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Web   Thu   Fri   Sat
30
    31       1       2       3       4       5       4       5       6       7  
    8       9       10       1       2       3       4       5       6       7  
6
    7       8       9       10       11       12       11       12       13    
  14       15       16       17       8       9       10       11       12      
13       14  
13
    14       15       16       17       18       19       18       19       20  
    21       22       23       24       15       16       17       18       19  
    20       21  
20
    21       22       23       24       25       26       25       26       27  
    28       29       30       31       22       23       24       25       26  
    27       28  
27
    28       29       30       1       2       3                                
                                                                               
 

                                                                               
                                                                               
  PERIOD 7 - JULY   PERIOD 8 - AUGUST   PERIOD 9 - SEPTEMBER 06/29/2008 -
08/02/2008   08/03/20008 - 08/30/2008   08/31/2008 - 9/27/2008
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
29
    30       1       2       3       4       5       3       4       5       6  
    7       8       9       31       1       2       3       4       5       6  
6
    7       8       9       10       11       12       10       11       12    
  13       14       15       16       7       8       9       10       11      
12       13  
13
    14       15       16       17       18       19       17       18       19  
    20       21       22       23       14       15       16       17       18  
    19       20  
20
    21       22       23       24       25       26       24       25       26  
    27       28       29       30       21       22       23       24       25  
    26       27  
27
    28       29       30       31       1       2                              
                                                                               
   

                                                                               
                                                                               
  PERIOD 10 - OCTOBER   PERIOD 11 - NOVEMBER   PERIOD 12 - DECEMBER 09/28/2008 -
11/01/2008   11/02/2008 - 11/29/2008   11/30/2008 - 1/3/2009
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
28
    29       30       1       2       3       4       2       3       4       5
      6       7       8       30       1       2       3       4       5       6
 
5
    6       7       8       9       10       11       9       10       11      
12       13       14       15       7       8       9       10       11       12
      13  
12
    13       14       15       16       17       18       16       17       18  
    19       20       21       22       14       15       16       17       18  
    19       20  
19
    20       21       22       23       24       25       23       24       25  
    26       27       28       29       21       22       23       24       25  
    26       27  
26
    27       28       29       30       31       1                              
                                28       29       30       31       1       2  
    3  

LEGEND

     
 
  HOLIDAY

 

--------------------------------------------------------------------------------

 

(HANESBRANDS INC LOGO) [g25453g2545303.gif]
Calendar Year 2009
52 Weeks Ending 01/02/2010

                                                                               
                                                                               
  PERIOD 1 - JANUARY   PERIOD 2 - FEBRUARY   PERIOD 3 - MARCH 1/04/2009 -
02/07/2009   02/08/2009 - 03/07/2009   03/08/2009 - 04/04/2009
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
4
    5       6       7       8       9       10       8       9       10       11
      12       13       14       8       9       10       11       13       13  
    14  
11
    12       13       14       15       16       17       15       16       17  
    18       19       20       21       15       16       17       18       19  
    20       21  
18
    19       20       21       22       23       24       22       23       24  
    25       26       27       28       22       23       24       25       26  
    27       28  
25
    26       27       28       29       30       31       1       2       3    
  4       5       6       7       29       30       31       1       2       3  
    4  
1
    2       3       4       5       6       7                                  
                                                                               

                                                                               
                                                                               
  PERIOD 4 - APRIL   PERIOD 5 - MAY   PERIOD 6 - JUNE 04/05/2009 - 05/09/2009  
05/10/2009 - 06/06/2009   06/07/2009 - 07/04/2009
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Web   Thu   Fri   Sat
5
    6       7       8       9       10       11       10       11       12      
13       14       15       16       7       8       9       10       11       12
      13  
12
    13       14       15       16       17       18       17       18       19  
    20       21       22       23       14       15       16       17       18  
    19       20  
19
    20       21       22       23       24       25       24       25       26  
    27       28       29       30       21       22       23       24       25  
    26       27  
26
    27       28       29       30       1       2       31       1       2      
3       4       5       6       28       29       30       1       2       3    
  4  
3
    4       5       6       7       8       9                                  
                                                                               

                                                                               
                                                                               
  PERIOD 7 - JULY   PERIOD 8 - AUGUST   PERIOD 9 - SEPTEMBER 07/05/2009 -
08/08/2009   08/09/20009 - 09/05/2009   09/06/2009 - 10/03/2009
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
5
    6       7       8       9       10       11       9       10       11      
12       13       14       15       6       7       8       9       10       11
      12  
12
    13       14       15       16       17       18       16       17       18  
    19       20       21       22       13       14       15       16       17  
    18       19  
19
    20       21       22       23       24       25       23       24       25  
    26       27       28       29       20       21       22       23       24  
    25       26  
26
    27       28       29       30       31       1       30       31       1    
  2       3       4       5       27       28       29       30       1       2
      3  
2
    3       4       5       6       7       8                                  
                                                                               

                                                                               
                                                                               
  PERIOD 10 - OCTOBER   PERIOD 11 - NOVEMBER   PERIOD 12 - DECEMBER 10/04/2009 -
11/07/2009   11/08/2009 - 12/05/2009   12/06/2009 - 01/02/2010
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
4
    5       6       7       8       9       10       8       9       10       11
      12       13       14       6       7       8       9       10       11    
  12  
11
    12       13       14       15       16       17       15       16       17  
    18       19       20       21       13       14       15       16       17  
    18       19  
18
    19       20       21       22       23       24       22       23       24  
    25       26       27       28       20       21       22       23       24  
    25       26  
25
    26       27       28       29       30       31       29       30       1  
    2       3       4       5       27       28       29       30       31      
1       2  
1
    2       3       4       5       6       7                                  
                                                                               

 

--------------------------------------------------------------------------------

 

(HANESBRANDS INC LOGO) [g25453g2545303.gif]
Calendar Year 2010
52 Weeks Ending 01/01/2011

                                                                               
                                                                               
  PERIOD 1 - JANUARY   PERIOD 2 - FEBRUARY   PERIOD 3 - MARCH 1/03/2010 -
02/06/2010   02/07/2010 - 03/06/2010   03/07/2010 - 04/03/2010
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
3
    4       5       6       7       8       9       7       8       9       10  
    11       12       13       7       8       9       10       11       12    
  13  
10
    11       12       13       14       15       16       14       15       16  
    17       18       19       20       14       15       16       17       18  
    19       20  
17
    18       19       20       21       22       23       21       22       23  
    24       25       26       27       21       22       23       24       25  
    26       27  
24
    25       26       27       28       29       30       28       1       2    
  3       4       5       6       28       29       30       31       1       2
      3  
31
    1       2       3       4       5       6                                  
                                                                               

                                                                               
                                                                               
  PERIOD 4 - APRIL   PERIOD 5 - MAY   PERIOD 6 - JUNE 04/04/2010 - 05/08/2010  
05/09/2010 - 06/05/2010   06/06/2010 - 07/03/2010
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Web   Thu   Fri   Sat
4
    5       6       7       8       9       10       9       10       11      
12       13       14       15       6       7       8       9       10       11
      12  
11
    12       13       14       15       16       17       16       17       18  
    19       20       21       22       13       14       15       16       17  
    18       19  
18
    19       20       21       22       23       24       23       24       25  
    26       27       28       29       20       21       22       23       24  
    25       26  
25
    26       27       28       29       30       1       30       31       1    
  2       3       4       5       27       28       29       30       1       2
      3  
2
    3       4       5       6       7       8                                  
                                                                               

                                                                               
                                                                               
  PERIOD 7 - JULY   PERIOD 8 - AUGUST   PERIOD 9 - SEPTEMBER 07/04/2010 -
08/07/2010   08/08/20010 - 09/04/2010   09/05/2010 - 10/02/2010
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
4
    5       6       7       8       9       10       8       9       10       11
      12       13       14       5       6       7       8       9       10    
  11  
11
    12       13       14       15       16       17       15       16       17  
    18       19       20       21       12       13       14       15       16  
    17       18  
18
    19       20       21       22       23       24       22       23       24  
    25       26       27       28       19       20       21       22       23  
    24       25  
25
    26       27       28       29       30       31       29       30       31  
    1       2       3       4       26       27       28       29       30      
1       2  
1
    2       3       4       5       6       7                                  
                                                                               

                                                                               
                                                                               
  PERIOD 10 - OCTOBER   PERIOD 11 - NOVEMBER   PERIOD 12 - DECEMBER 10/03/20010-
11/06/2010   11/07/2010 - 12/04/2010   12/05/2010 - 01/01/2011
Sun
  Mon   Tue   Wed   Thu   Fri   Sat   Sun   Mon   Tue   Wed   Thu   Fri   Sat  
Sun   Mon   Tue   Wed   Thu   Fri   Sat
3
    4       5       6       7       8       9       7       8       9       10  
    11       12       13       5       6       7       8       9       10      
11  
10
    11       12       13       14       15       16       14       15       16  
    17       18       19       20       12       13       14       15       16  
    17       18  
17
    18       19       20       21       22       23       21       22       23  
    24       25       26       27       19       20       21       22       23  
    24       25  
24
    25       26       27       28       29       30       28       29       30  
    1       2       3       4       26       27       28       29       30      
31       1  
31
    1       2       3       4       5       6