Exhibit 10.24.2
Amendment as of November 12, 2003 of
Amendment and Restatement of
Yarn Purchase Agreement as of January 1, 1999
as amended by an Amended and Restated Yarn
Purchase Agreement dated as of February 15, 2002
WHEREAS, Parkdale America, LLC and Cone ▇▇▇▇▇ Corporation,
hereinafter referred to as "Cone," are parties to a Yarn Purchase Agreement as
of January 1, 1999, as amended by an Amendment and Restatement of Yarn Purchase
Agreement effective as of February 15, 2002,among Cone, Parkdale America, LLC,
Parkdale ▇▇▇▇▇, Incorporated, and Magnolia Manufacturing Co., Inc. (the
"Agreement"); and
WHEREAS, Parkdale America, LLC and Parkdale ▇▇▇▇▇,
Incorporated, for itself and as successor by merger to Magnolia Manufacturing
Co., Inc., together hereinafter referred to as "Parkdale," and Cone desire to
amend the Agreement to reflect an agreement between the parties with respect to
matters resulting from the filing by Cone for protection under Chapter 11 of the
U.S. Bankruptcy Code and its plans for a Section 363 sale of its assets at an
auction scheduled for January 29, 2004 (the "Auction"), to WLR Recovery Fund II
LLP and WLR Cone ▇▇▇▇▇ Acquisition LLC, together referred to as "WLR", or such
other successful bidder(s);
It is agreed between the parties:
1. Cone will assume the Agreement, as amended hereby, in its bankruptcy case by
filing a motion with the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court") on or before November 14, 2003; and
2. From the date the Bankruptcy Court enters an order authorizing Cone to assume
the Agreement, as amended hereby (the "Assumption Date") until the earlier of
(i) the date the Bankruptcy Court enters an order approving the results of the
auction for a sale of substantially all of Cone's assets or all or a substantial
portion of Cone's denim business line to WLR or such other successful bidder(s)
acceptable to Parkdale (the "Auction Approval Date") or (ii) the date of
confirmation of a plan of reorganization without a sale of substantially all of
Cone's assets or all or a substantial portion of Cone's denim business line, or
alternatively, with a sale of substantially all of Cone's assets or all or a
substantial portion of Cone's denim business line to WLR or such other
successful bidder(s) acceptable to Parkdale (the "Confirmation Date"), Parkdale
agrees to extend credit terms to Cone of net thirty (30) days with a credit
limit of $2.2 million; and
3. From the Auction Approval Date or the Confirmation Date, as the case may be,
until the earlier of the closing of the sale of all or substantially all of
Cone's assets or all or a substantial portion of Cone's denim business line (the
"Auction Closing Date") or the consummation of Cone's plan of reorganization
(the "Effective Date"), respectively, credit terms shall be net thirty (30) days
with a credit limit of the lesser of $4.0 million or at the total amount of the
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aggregate cure payments that Cone has made to Parkdale under the terms hereof;
and
4. Cone shall make aggregate cure payments to Parkdale of $4.0 million, payable
$1.0 million per week (the "Cure Installments") commencing the week of December
1, 2003 in full and complete satisfaction of the pre-petition claims of Parkdale
in the aggregate amount of approximately $4.6 million and any and all other
defaults under the Agreement existing as of the date of this Amendment; and
5. Immediately following Parkdale's receipt of each of the Cure Installments,
Parkdale shall remit payment to Cone in the amount of one-fourth all cotton
market differential deposits paid by Cone for Parkdale's post-petition yarn
shipments to Cone; and
6. Following the Auction Closing Date or the Effective Date, as the case may be,
Parkdale agrees to extend credit terms to Cone or its assignee of net 35 days,
with a 10-day grace period for payment. Parkdale will agree to increase the
credit limit of Cone or its assignee to an amount sufficient to support such
trade terms provided Cone or its assignee is able to provide Parkdale with
sufficient evidence of credit availability under applicable financing agreements
to pay Parkdale for all yarn shipped in accordance with the credit terms; and
7. Cone shall outsource to Parkdale any conventional ring yarn production
pursuant to the Agreement, as amended hereby, at prices currently in effect
under the Agreement; and
8. Cone shall provide to Parkdale a right of first refusal on all of its
domestic denim spun yarn purchases, including without limitation open-end yarn
purchases. The cotton cost component of the open-end yarn purchases shall
reflect market basis differential as mutually agreed upon annually by the
parties; and
9. This amendment to the Agreement is expressly subject to the entry of an order
by the Bankruptcy Court approving the assumption of the Agreement as amended
herein; and
10. Parkdale will sell yarn to Cone at market prices for cash before delivery
until the Assumption Date; and
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11. The obligations of Parkdale to extend credit terms to Cone pursuant
to the Agreement, as amended hereby, shall terminate upon the occurrence
of any of the following:
a. a "Material Adverse Effect" as that term is defined in the WLR
asset purchase agreement, as filed with the Bankruptcy Court on
November 7, 2003; or
b. the failure of the Auction Approval Date or the Confirmation Date
to occur within a reasonable time after February 16, 2004.
Each of the parties has caused this Amendment to be executed by its appropriate
officer as of November 12, 2003.
PARKDALE CONE ▇▇▇▇▇ CORPORATION
Parkdale America, LLC by: /s/▇▇▇▇ ▇. ▇▇▇▇▇
by: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ title: EVP & CFO
title: EVP/CFO
Parkdale ▇▇▇▇▇, Incorporated
for itself and as successor by interest to
Magnolia Manufacturing Co., Inc.
by: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
title: EVP/CFO
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