SEVENTH AMENDMENT TO SECURITIZATION AGREEMENTS AND WAIVER
THIS SEVENTH AMENDMENT TO SECURITIZATION AGREEMENTS AND WAIVER
(this "Amendment"), made and entered into as of April 23, 2001, by and between
CONE RECEIVABLES II LLC, a North Carolina limited liability company ("CRLLC"),
CONE ▇▇▇▇▇ CORPORATION, a North Carolina corporation ("Cone ▇▇▇▇▇"), CONE
FOREIGN TRADING LLC, a North Carolina limited liability company ("CFT"; each of
CRLLC, Cone ▇▇▇▇▇ and CFT being herein referred to as a "Company" and,
collectively, as the "Companies"), and GENERAL ELECTRIC CAPITAL CORPORATION, a
New York corporation ("GECC"), acting in its capacities as the Purchaser,
Operating Agent, Collateral Agent, Letter of Credit Provider and Letter of
Credit Agent (as such terms are defined in the Purchase Agreement described
below).
W I T N E S E T H:
WHEREAS, Cone ▇▇▇▇▇ and CRLLC entered into that certain Receivables
Transfer Agreement, dated as of September 1, 1999 (as amended to the date
hereof, the "Transfer Agreement"; capitalized terms used herein and not
otherwise defined herein shall have the meanings given such terms in Annex X to
the Transfer Agreement as amended through this Amendment), whereby Cone ▇▇▇▇▇
agreed (and each Subsidiary of Cone ▇▇▇▇▇ which thereafter becomes an Originator
will agree) to sell, contribute or otherwise transfer to CRLLC, and CRLLC agreed
to purchase or otherwise acquire from such Originators, all of the right, title
and interest of such Originators in the Receivables; and
WHEREAS, CRLLC, as Seller, Redwood Receivables Corporation ("Redwood"),
as Purchaser, Cone ▇▇▇▇▇, as Servicer, and GECC, as Operating Agent and as
Collateral Agent, entered into that certain Receivables Purchasing and Servicing
Agreement, dated as of September 1, 1999 (as amended to the date hereof, the
"Purchase Agreement"; the Transfer Agreement and the Purchase Agreement are
herein collectively referred to as the "Securitization Agreements"), whereby
Purchaser agreed, among other things, to purchase from CRLLC from time to time
the Receivables sold or contributed to CRLLC pursuant to the Transfer Agreement;
and
WHEREAS, Redwood and GECC entered into that certain Assignment
Agreement, dated as of the date hereof (the "Redwood Assignment"), under which
Redwood assigned and delegated to GECC, pursuant to Section 2.05 of the
Liquidity Loan Agreement, all of Redwood's rights, titles and interests in and
to, and all of Redwood's obligations under, the Purchase Agreement and the other
Related Documents; and
WHEREAS, the Securitization Agreements were amended pursuant to that
certain First Amendment and Waiver to Securitization Agreements, dated as of
November 16, 1999, among the parties hereto, that certain Second Amendment to
Securitization Agreements, dated as of January 28, 2000, among the parties
thereto, that certain Third Amendment to Securitization Agreements, dated as of
March 31, 2000, among the parties thereto, that certain Fourth Amendment to
Securitization Agreements and Additional Originator Joinder Agreement, dated as
of April 24, 2000, among such parties, that certain Fifth Amendment to
Securitization Agreements, dated as of June 30, 2000, among such parties, and
that certain Sixth Amendment to Securitization Agreements, dated as of December
11, 2000, among such parties; and
WHEREAS, the Companies have requested that the Securitization
Agreements be further amended in certain respects, and the parties hereto are
willing to agree to such amendments, subject to the terms and conditions of this
Amendment; and
WHEREAS, a Termination Event has occurred and is continuing on this
date as a result of the failure of Cone ▇▇▇▇▇ and its Subsidiaries to comply
with the Minimum Fixed Charge Coverage Ratio covenant set forth in paragraph (a)
of Annex G to the Purchase Agreement for the Fiscal Quarter ending April 1,
2001; and
WHEREAS, the Companies have requested that the Purchaser and the
Operating Agent waive such Termination Event, and the Purchaser and the
Operating Agent are willing to grant such waiver subject to the terms and
conditions of this Amendment.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Waiver of Default. Subject to the terms and conditions of this
Amendment, including without limitation the fulfillment of the conditions
precedent specified in Section 7 below, the Purchaser and the Operating Agent
hereby waive any Termination Event or Incipient Termination Event under the
Purchase Agreement which may have resulted from the failure of Cone ▇▇▇▇▇ and
its Subsidiaries to comply with the Minimum Fixed Charge Coverage Ratio covenant
set forth in paragraph (a) of Annex G to the Purchase Agreement for the Fiscal
Quarter ending April 1, 2001; provided that this waiver relates solely to the
covenant and period specified above, and nothing in this Amendment is intended,
or shall be construed, to waive any other Termination Event or Incipient
Termination Event.
2. Amendment of Securitization Agreements. Subject to the terms and
conditions of this Amendment, including without limitation the fulfillment of
the conditions precedent specified in Section 7 below, the Securitization
Agreements shall be amended as follows:
(a) Section 2.01(b) of the Transfer Agreement is hereby
deleted in its entirety and the following new Section 2.01(b) is hereby
substituted in lieu thereof:
(b) Determination of Sold Receivables. On and as of each
Transfer Date, those Approved Receivables sold to, and
purchased by, CRLLC shall consist of (i) all Approved
Receivables owned by each Restricted Originator and (ii) those
Approved Receivables owned by each Stockholder Originator and
identified by reference to the General Trial Balance of such
Originator for sale to CRLLC (each such Receivable
individually, a "Sold Receivable," and collectively, the "Sold
Receivables"). The Sale Price of all Sold Receivables shall
not exceed the amount of cash available to CRLLC for the
payment thereof.
(b) Section 2.03(a) of the Purchase Agreement is hereby
amended by deleting the words "the third Business Day of the week" in the
initial clause of the first sentence of such section and by inserting in lieu
thereof the words "each Business Day".
(c) Section 2.04(b)(ii) of the Purchase Agreement is hereby
deleted in its entirety and the following new Section 2.04(b)(ii) is hereby
substituted in lieu thereof:
(ii) Payment of Purchase Price. The Purchaser shall, or shall
cause the Operating Agent to, make available to or on behalf
of the Seller on each Business Day during the Revolving
Period, in same day funds, all amounts on deposit in the
Collection Account that are to be disbursed to or on behalf of
the Seller as payment for the Transferred Receivables pursuant
to Section 6.03.
(d) Section 2.07(b) of the Purchase Agreement is hereby
amended by deleting the words "Settlement Date" therefrom and by substituting,
in lieu thereof, the words "Business Day".
(e) Section 3.02 of the Purchase Agreement is hereby amended
by adding a semicolon and the word "or" at the end of clause (g) thereof and by
adding the following new clause (h) at the end thereof:
(h) the Operating Agent shall not have received an Investment Base
Certificate as required by Section 2.03(a).
(f) The Purchase Agreement is hereby amended by adding the
following new Section 5.01(h) thereto:
(h) License for Use of Software and Other
Intellectual Property. Unless expressly prohibited by the
licensor thereof or any provision of applicable law, if any,
each of the Seller and Servicer hereby grants to the Operating
Agent on behalf of the Purchaser a license to use, without
charge, the Seller's or the Servicer's (as the case may be)
computer programs, software, printouts and other computer
materials, technical knowledge or processes, data bases,
materials, trademarks, registered trademarks, trademark
applications, service marks, registered service marks, service
▇▇▇▇ applications, patents, patent applications, trade names,
rights of use of any name, labels fictitious names,
inventions, designs, trade secrets, goodwill, registrations,
copyrights, copyright applications, permits, licenses,
franchises, customer lists, credit files, correspondence, and
advertising materials or any property of a similar nature, in
each case solely as it pertains to the Transferred
Receivables, or any rights to any of the foregoing, in the
advertising for sale, and selling any of the Transferred
Receivables, or exercising of any other remedies hereto, and
each of the Seller and the Servicer agrees that its rights
under all such licenses and franchise agreements shall inure
to the Operating Agent's benefit (on behalf of itself and the
Purchaser). Except upon the occurrence and continuation of a
Termination Event under Section 9.01(c) or (d), the Operating
Agent and the Purchaser agree not to use any such license
without giving the Seller and the Servicer notice.
(g) Article VI of the Purchase Agreement is hereby deleted in
its entirety, and the replacement Article VI attached hereto as Exhibit A is
substituted in lieu thereof.
(h) Section 9.01(y) of the Purchase Agreement is hereby
deleted in its entirety and the following new Section 9.01(y) is hereby
substituted in lieu thereof:
(y) (i) the Credit Facility shall be terminated, (ii) an event
of default shall have occurred under the Credit Facility, or
(iii) by the 40th day prior to the then-current expiration
date of the Credit Facility, Cone ▇▇▇▇▇ shall not have
obtained either (a) a refinancing or an extension of the
Credit Facility on terms acceptable to the Purchaser, the
Operating Agent and the Collateral Agent or (b) a binding
written commitment for such refinancing or extension on terms
acceptable to the Purchaser, the Operating Agent and the
Collateral Agent, and in either such case with the Credit
Facility Lenders or with another lender or lenders acceptable
to the Purchaser, the Operating Agent and the Collateral
Agent.
(i) Annex G to the Purchase Agreement is hereby deleted in its
entirety and the revised Annex G attached to this Amendment as Exhibit B is
hereby substituted in lieu thereof.
(j) Annex 5.02(b) to the Purchase Agreement is hereby deleted
in its entirety and the revised Annex 5.02(b) attached to this Amendment as
Exhibit C is hereby substituted in lieu thereof.
(k) Annex 3 to the Purchase Agreement is hereby deleted in its
entirety and the revised Annex 3 attached to this Amendment as Exhibit D is
hereby substituted in lieu thereof.
(l) Annex X to the Securitization Agreements is hereby amended by
adding the following new definitions thereto:
"Collection Account Deficiency" shall mean, as of any Business
Day, the amount (if any) by which the amounts necessary to make
the payments required under Sections 6.04(a)(i) and (iii) of
the Purchase Agreement exceed the amounts transferred to the
Operating Agent on such date pursuant to Sections 6.03(a)(i),
6.03(b)(i), and 6.03(c)(i) of the Purchase Agreement.
"Seventh Amendment Effective Date" shall mean April 23, 2001.
(m) Annex X to the Securitization Agreements is hereby further
amended by deleting therefrom the definition of the term "Collection Account"
and by substituting the following new definition in lieu thereof:
"Collection Account" shall mean that certain segregated
deposit account established by the Purchaser and maintained
with the Depositary designated as the "GE CAF Depository
Account CFN4450," account number ▇▇-▇▇▇-▇▇▇, ABA No. 021 001
033, Reference CFN4550 Cone Receivables II LLC or such other
account established in accordance with the requirements set
forth in Section 6.01(b)(iii) of the Purchase Agreement.
(n) The definition of the term "Deferred Purchase Price
Collections" set forth in Annex X to the Securitization Agreements is hereby
amended by adding the following language immediately after the words "Retention
Account" therein: "(or, if and for so long as GE Capital is the Purchaser,
amounts paid to the Operating Agent for the account of such Purchaser)".
(o) Annex X to the Securitization Agreements is hereby amended
by deleting therefrom the definition of the term "Fee Letter" and by
substituting the following new definition of such term in lieu thereof:
"Fee Letter" shall mean that certain letter agreement dated
April 23, 2001, among the Seller, Cone ▇▇▇▇▇ and the
Purchaser.
(p) Annex X to the Securitization Agreements is hereby further
amended by deleting therefrom the definition of the term "Lockbox Agreement" and
by substituting the following new definition in lieu thereof:
"Lockbox Agreement" shall mean any agreement among an
Originator, the Seller, GE Capital, as agent, and a Lockbox
Bank with respect to a Lockbox and Lockbox Account that
provides, among other things, that (a) all items of payment
deposited in such Lockbox and Lockbox Account are held by such
Lockbox Bank as custodian for GE Capital, as agent, (b) such
Lockbox Bank has no rights of setoff or recoupment or any
other claim against such Lockbox Account, as the case may be,
other than for payment of its service fees and other charges
directly related to the administration of such Lockbox Account
and for returned checks or other items of payment and (c) such
Lockbox Bank agrees to forward all Collections received in
such Lockbox Account to the Collection Account within one
Business Day of receipt, and is otherwise in form and
substance acceptable to the Operating Agent.
(q) The definition of the term "Retained Monthly Yield" set
forth in Annex X to the Securitization Agreements is hereby amended by adding
the following language immediately after the words "Retention Account" therein:
"(or, if and for so long as GE Capital is the Purchaser, amounts paid to the
Operating Agent for the account of such Purchaser)".
(r) The definition of the term "Retained Servicing Fee" set
forth in Annex X to the Securitization Agreements is hereby amended by adding
the following language immediately after the words "Retention Account" therein:
"(or, if and for so long as GE Capital is the Purchaser, amounts paid to the
Operating Agent for the account of such Purchaser)".
(s) The definition of the term "Retained Unused Facility Fee"
set forth in Annex X to the Securitization Agreements is hereby amended by
adding the following language immediately after the words "Retention Account"
therein: "(or, if and for so long as GE Capital is the Purchaser, amounts paid
to the Operating Agent for the account of such Purchaser)".
(t) Annex X to the Securitization Agreements is hereby further
amended by deleting therefrom the definition of the term "Retention Account
Deficiency".
(u) Annex X to the Securitization Agreements is hereby further
amended by deleting the words "the Purchaser" from the definition of the term
"Retention Account" set forth therein and by substituting, in lieu thereof, the
word "Redwood."
(v) Annex X to the Securitization Agreements is hereby further
amended by deleting therefrom the definition of the term "Special Limit" and by
substituting the following new definition of such term in lieu thereof:
"Special Limit" means collectively for Levi ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇ Canada, and Levi ▇▇▇▇▇▇▇ Europe (collectively,
the "Levi ▇▇▇▇▇▇▇ Obligors") and as of any date of
determination thereof, (i) 15% if the Levi ▇▇▇▇▇▇▇ Fixed
Charge Coverage Ratio at such time is greater than 1.40:1.00,
(ii) 10% if the Levi ▇▇▇▇▇▇▇ Fixed Charge Coverage Ratio at
such time is greater than 1.25:1.00 but less than or equal to
1.40:1.00, or (iii) 5% if the Levi ▇▇▇▇▇▇▇ Fixed Charge
Coverage Ratio at such time is less than or equal to
1.25:1.00. Notwithstanding any of the foregoing, (i) if and
for so long as more than 50% in aggregate Outstanding Balance
at any one time of the aggregate Receivables owed by the Levi
▇▇▇▇▇▇▇ Obligors are greater than 60 days past their
respective Maturity Dates or 90 days past their respective
original invoice dates, the Special Limit shall not exceed
10%, and (ii) the Special Limit for the Levi ▇▇▇▇▇▇▇ Obligors
thereafter shall not exceed 10% from and after the 30th day
prior to the expiration date of the Credit Facility as then in
effect unless and until (a) the Credit Facility as then in
effect has been extended for a period acceptable to the
Purchaser, the Operating Agent and the Collateral Agent or
refinanced on terms acceptable to the Purchaser, the Operating
Agent and the Collateral Agent or (b) Cone ▇▇▇▇▇ shall have
obtained a legally binding written commitment for such
refinancing or extension on terms acceptable to the Purchaser,
the Operating Agent and the Collateral Agent, and in either
such case with the Credit Facility Lenders or with another
lender or lenders acceptable to the Purchaser, the Operating
Agent and the Collateral Agent. The Special Limit may be
changed at any time at the sole discretion of the Operating
Agent and, in the case of an increase only, upon satisfaction
of the Rating Agency Condition with respect thereto.
(w) Schedule 4.01(r) to the Purchase Agreement shall be
deleted in its entirety and the updated Schedule 4.01(r) attached hereto as
Exhibit E shall be substituted in lieu thereof.
3. No Other Waivers or Amendments. Except for the waivers and
amendments of the Securitization Agreements expressly set forth and referred
to in Section 1 and Section 2 above, the Securitization Agreements shall remain
unchanged and in full force and effect.
4. Representations and Warranties. Each Company hereby represents and
warrants to Redwood and GECC (in its capacities as Purchaser, the Operating
Agent and the Collateral Agent) that (i) this Amendment has been duly
authorized, executed and delivered by each Company, (ii) after giving effect to
this Amendment, no Termination Event, Incipient Termination Event, Event of
Servicer Termination or Incipient Servicer Termination Event has occurred and is
continuing as of the date of this Amendment, and (iii) all of the
representations and warranties made by each Company in the Securitization
Agreements are true and correct in all material respects on and as of the date
of this Amendment (except to the extent that any such representation or warranty
expressly referred to a specific prior date). Any breach in any material respect
by any Company of any of its representations and warranties contained in this
Section 4 shall be a Termination Event and an Event of Servicer Termination for
all purposes of the Securitization Agreements.
5. Ratification. Each Company hereby ratifies and reaffirms each and
every term, covenant and condition set forth in the Securitization Agreements
and all other documents delivered by such Company in connection therewith
(including without limitation the other Related Documents to which each Company
is a party), effective as of the date hereof.
6. Waiver by the Companies. Each of the Companies hereby waives any
claim, defense, demand, action or suit of any kind or nature whatsoever against
the Purchaser, the Operating Agent or the Collateral Agent arising on or prior
to the date of this Amendment in connection with any of the Securitization
Agreements or the transactions contemplated thereunder.
7. Condition Precedent to Effectiveness. This Amendment shall become
effective, upon the Seventh Amendment Effective Date, subject to the
satisfaction of the following conditions on or prior to such date:
(a) the receipt by the Operating Agent of this Amendment, duly
executed, completed and delivered by each of the Companies, the
Purchaser, the Operating Agent and the Collateral Agent;
(b) the receipt by the Operating Agent of the Fee Letter of
even date herewith (in form and substance satisfactory to the
Purchaser) duly executed and delivered by CRLLC, Cone ▇▇▇▇▇, and the
Operating Agent;
(c) the receipt by the Operating Agent of an Investment Base
Certificate dated as of the Seventh Amendment Effective Date;
(d) the delivery by the Operating Agent of a notice to each
lockbox bank in the form set forth as Exhibit F, with respect to
each of the Lockbox Accounts maintained with such bank;
(e) the receipt by the Operating Agent of all fees and
expenses payable to the Purchaser, the Collateral Agent, or the
Operating Agent, respectively, in connection with this Amendment,
including without limitation any fees specified in the aforesaid Fee
Letter and the reasonable legal fees and other reasonable out of pocket
expenses of the Purchaser, the Collateral Agent, or the Operating Agent
incurred in connection with this Amendment; and
(f) Each of CRLLC, Cone ▇▇▇▇▇ and CFT shall have consented in
writing to the execution, delivery and performance of the Redwood
Assignment.
8. Reimbursement of Expenses. Each Company hereby agrees that it shall
reimburse the Purchaser, the Collateral Agent, and the Operating Agent on demand
for all reasonable costs and expenses (including without limitation reasonable
attorney's fees) incurred by such parties in connection with the negotiation,
documentation and consummation of this Amendment and the other documents
executed in connection herewith and therewith and the transactions contemplated
hereby and thereby.
9. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK FOR CONTRACTS TO BE
PERFORMED ENTIRELY WITHIN SAID STATE.
10. Severability of Provisions. Any provision of this Amendment which
is 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, each Company hereby
waives any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
11. Counterparts. This Amendment may be executed in any number of
several counterparts, all of which shall be deemed to constitute but one
original and shall be binding upon all parties, their successors and
permitted assigns.
12. Entire Agreement. The Securitization Agreements as amended and
supplemented by this Amendment embody the entire agreement between the parties
hereto relating to the subject matter hereof and supersede all prior agreements,
representations and understandings, if any, relating to the subject
matter hereof.
13. Cone ▇▇▇▇▇' and GECC's Capacities. Cone ▇▇▇▇▇ is executing and
delivering this Amendment both in its capacity as an Originator under the
Transfer Agreement and as the Servicer under the Purchase Agreement and all
references herein to "Cone ▇▇▇▇▇" shall be deemed to include it in both such
capacities unless otherwise expressly indicated. GECC is executing and
delivering this Amendment both in its capacity as the Purchaser, as the
Operating Agent for the Purchaser, and as the Collateral Agent for the Purchaser
and the Purchaser Secured Parties, and all references herein to "GECC" shall be
deemed to include it in all such capacities unless otherwise expressly
indicated.
14. Lockbox Account Agreement Amendments. On or before April 27, 2001,
CRLLC and Cone ▇▇▇▇▇ shall cause Bank of America, N.A. to enter into a written
amendment with CRLLC, Cone ▇▇▇▇▇ and the Operating Agent of each of the Lockbox
Account Agreements with such bank in the form of Exhibit G.
[remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed by their respective officers thereunto duly authorized, as of
the date first above written.
CONE RECEIVABLES II LLC
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
CONE ▇▇▇▇▇ CORPORATION, as an
Originator and as Servicer
By /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: W. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Treasurer
CONE FOREIGN TRADING LLC
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION, as Purchaser,
as Operating Agent and as Collateral Agent
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Duly Authorized Signatory
EXHIBIT A
ARTICLE VI
COLLECTIONS AND DISBURSEMENTS
SECTION 6.01 Establishment of Deposit Accounts.
(a) The Lockbox Accounts.
(i) The Seller has established with each Lockbox Bank
one or more Lockbox Accounts. The Seller agrees that prior to
the Facility Termination Date the Operating Agent, and from
and after the Facility Termination Date the Collateral Agent,
shall have exclusive dominion and control of each Lockbox
Account and all monies, instruments and other property from
time to time on deposit therein. The Seller shall not make or
cause to be made, or have any ability to make or cause to be
made, any withdrawals from any Lockbox Account except as
provided in Section 6.01(b)(ii).
(ii) The Seller and the Servicer have instructed all
existing Obligors of Transferred Receivables, and shall
instruct all future Obligors of such Receivables, to make
payments in respect thereof only (A) by check or money order
mailed to one or more lockboxes or post office boxes under the
control of the Operating Agent (each a "Lockbox" and
collectively the "Lockboxes") or (B) by wire transfer or
moneygram directly to a Lockbox Account. Schedule 4.01(r)
lists all Lockboxes and all Lockbox Banks at which the Seller
maintains Lockbox Accounts as of the Closing Date, and such
schedule correctly identifies (1) with respect to each such
Lockbox Bank, the name, address and telephone number thereof,
(2) with respect to each Lockbox Account, the name in which
such account is held and the complete account number therefor,
and (3) with respect to each Lockbox, the lockbox number and
address thereof. The Seller and the Servicer shall endorse, to
the extent necessary, all checks or other instruments received
in any Lockbox so that the same can be deposited in the
Lockbox Account, in the form so received (with all necessary
endorsements), on the first Business Day after the date of
receipt thereof. In addition, each of the Seller and the
Servicer shall deposit or cause to be deposited into a Lockbox
Account all cash, checks, money orders or other proceeds of
Transferred Receivables or Seller Collateral received by it
other than in a Lockbox or a Lockbox Account, in the form so
received (with all necessary endorsements), not later than the
close of business on the first Business Day following the date
of receipt thereof, and until so deposited all such items or
other proceeds shall be held in trust for the benefit of the
Collateral Agent. Neither the Seller nor the Servicer shall
make any deposits into a Lockbox or any Lockbox Account except
in accordance with the terms of this Agreement or any other
Related Document.
(iii) If, for any reason, a Lockbox Agreement
terminates or any Lockbox Bank fails to comply with its
obligations under the Lockbox Agreement to which it is a
party, then the Seller shall promptly notify all Obligors of
Transferred Receivables who had previously been instructed to
make wire payments to a Lockbox Account maintained at any such
Lockbox Bank to make all future payments to a new Lockbox
Account in accordance with this Section 6.01(a)(iii). The
Seller shall not close any such Lockbox Account unless it
shall have (A) received the prior written consent of the
Operating Agent and the Collateral Agent, (B) established a
new account with the same Lockbox Bank or with a new
depositary institution satisfactory to the Operating Agent and
the Collateral Agent, (C) entered into an agreement covering
such new account with such Lockbox Bank or with such new
depositary institution substantially in the form of such
Lockbox Agreement or that is satisfactory in all respects to
the Operating Agent and the Collateral Agent (whereupon, for
all purposes of this Agreement and the other Related
Documents, such new account shall become a Lockbox Account,
such new agreement shall become a Lockbox Agreement and any
new depositary institution shall become a Lockbox Bank), and
(D) taken all such action as the Collateral Agent shall
require to grant and perfect a first priority Lien in such new
Lockbox Account to the Purchaser under Section 8.01 of this
Agreement. Except as permitted by this Section 6.01(a),
neither the Seller nor the Servicer shall open any new Lockbox
or Lockbox Account without the prior written consent of the
Operating Agent and the Collateral Agent.
(b) Collection Account.
(i) The Purchaser has established and shall maintain
the Collection Account with the Depositary. The Seller and the
Purchaser agree that prior to the Facility Termination Date
the Operating Agent, and from and after the Facility
Termination Date the Collateral Agent, shall have exclusive
dominion and control of the Collection Account and all monies,
instruments and other property from time to time on deposit
therein.
(ii) The Operating Agent or the Collateral Agent (as
the case may be) shall instruct each Lockbox Bank to transfer,
on each Business Day and in same day funds, all available
funds in each Lockbox Account to the Collection Account, and
the Seller shall cause each Lockbox Bank to make such
transfer. The Purchaser, the Operating Agent and the
Collateral Agent may deposit into the Collection Account from
time to time all monies, instruments and other property
received by any of them as proceeds of the Transferred
Receivables. On each Business Day prior to the Facility
Termination Date the Operating Agent shall instruct and cause
the Depositary (which instruction may be in writing or by
telephone confirmed promptly thereafter in writing) to release
funds on deposit in the Collection Account in the order of
priority set forth in Section 6.03. On each Business Day from
and after the Facility Termination Date the Collateral Agent
shall apply all amounts when received in the Collection
Account in the order of priority set forth in Section 6.05.
(iii) If, for any reason, the Depositary wishes to
resign as depositary of the Collection Account or fails to
carry out the instructions of the Operating Agent or the
Collateral Agent, then the Operating Agent or the Collateral
Agent shall promptly notify the Purchaser Secured Parties. The
Purchaser shall not close the Collection Account unless it
shall have (A) received the prior written consent of the
Operating Agent and the Collateral Agent, (B) established a
new deposit account with the Depositary or with a new
depositary institution satisfactory to the Operating Agent and
the Collateral Agent, (C) entered into an agreement covering
such new account with such new depositary institution
satisfactory in all respects to the Operating Agent and the
Collateral Agent (whereupon such new account shall become the
Collection Account for all purposes of this Agreement and the
other Related Documents), and (D) taken all such action as the
Collateral Agent shall require to grant and perfect a first
priority Lien in such new Collection Account to the Collateral
Agent under the Collateral Agent Agreement.
(c) Retention Account. The Purchaser (if other than GE
Capital) has established and shall maintain the Retention Account with the
Depositary. The Seller and the Purchaser agree that prior to the Facility
Termination Date the Operating Agent, and from and after the Facility
Termination Date the Collateral Agent, shall have exclusive dominion and control
of the Retention Account and all monies, instruments and other property from
time to time on deposit therein. Notwithstanding anything herein to the
contrary, if and for so long as GE Capital is the Purchaser, all amounts which
are required by the terms of this Agreement to be transferred to the Retention
Account shall be transferred instead directly to such Purchaser.
(d) Collateral Account. The Purchaser (if other than GE
Capital) has established and shall maintain the Collateral Account with the
Depositary. The Seller and the Purchaser agree that the Operating Agent shall
have exclusive dominion and control of the Collateral Account and all monies,
instruments and other property from time to time on deposit therein.
Notwithstanding anything herein to the contrary, if and for so long as GE
Capital is the Purchaser, all amounts which are required by the terms of this
Agreement to be transferred to the Collateral Account shall be transferred
instead directly to such Purchaser.
SECTION 6.02 Funding of Collection Account.
(a) As soon as practicable, and in any event no later than
11:00 a.m. (New York time) on each Business Day:
(i) the Operating Agent or the Collateral Agent (as
the case may be) and the Seller shall cause the Lockbox Bank
to make the transfer to the Collection Account required to be
made on such Business Day pursuant to Section 6.01(b)(ii);
(ii) the Purchaser or the Operating Agent shall, or
shall cause the Collateral Agent to, deposit in the Collection
Account the amount, if any, required pursuant to Section
2.04(b)(i);
(iii) [intentionally omitted];
(iv) if, on the immediately preceding Business Day,
the Operating Agent shall have notified the Seller of any
Purchase Excess pursuant to Section 2.11, then the Seller
shall deposit cash in the amount of such Purchase Excess in
the Collection Account;
(v) if on such Business Day the Seller is required to
make other payments under this Agreement not previously
retained out of Collections (including Additional Amounts and
Indemnified Amounts not previously paid), then the Seller
shall deposit an amount equal to such payments in the
Collection Account;
(vi) if, on the immediately preceding Business Day,
any Originator made a capital contribution or repurchased a
Transferred Receivable pursuant to Section 4.04 of the
Transfer Agreement, or made a payment as a result of any
Dilution Factors pursuant to Section 4.02(o) of the Transfer
Agreement, then the Seller shall deposit cash in the amount so
received from such Originator for such contribution,
repurchase or payment in the Collection Account; and
(vii) the Servicer shall deposit in the Collection
Account the Outstanding Balance of any Transferred Receivable
it elects to pay pursuant to Section 7.04.
(b) If, on or before 4:00 p.m. (New York time) on any Business
Day, the Operating Agent shall have notified the Seller of any Collection
Account Deficiency pursuant to Section 6.04(b), then the Seller shall deposit
cash in the amount of such deficiency in the Collection Account no later than
11:00 a.m. (New York time) on the immediately following Business Day.
SECTION 6.03 Daily Disbursements From the Collection Account
and Related Sub-Accounts; Revolving Period. On each Business Day during the
Revolving Period, and following the transfers made pursuant to Section 6.02, the
Operating Agent shall disburse all amounts then on deposit in the Collection
Account and its related subaccounts in the following priority:
(a) with respect to amounts on deposit in the Collection
Account:
(i) to the Operating Agent, the amount of any Collection
Account Deficiency deposited pursuant to Section 6.02(b);
(ii) to the Deferred Purchase Price Sub-Account, the
amount of all Deferred Purchase Price Collections deposited in
the Collection Account on that day;
(iii) to the Capital Investment Sub-Account, the balance
of any amounts remaining after making the foregoing
disbursements;
(b) with respect to amounts on deposit in the Deferred
Purchase Price Sub-Account after making the transfers required by Section
6.03(a):
(i) to the Operating Agent, an amount equal to the sum of
(A) Daily Yield;
(B) the Yield Shortfall as of the immediately
preceding Business Day;
(C) the Servicing Fee;
(D) the Servicing Fee Shortfall as of the immediately
preceding Business Day;
(E) the Unused Facility Fee; and
(F) the Unused Facility Fee Shortfall as of the
immediately preceding Business Day;
(ii) to the Capital Investment Sub-Account, an amount
equal to the Dilution Funded Amount;
(iii) if the Deferred Purchase Price Adjustment is
less than zero, then to the Capital Investment Sub-Account an
amount equal to the absolute value of the Deferred Purchase
Price Adjustment;
(iv) to an account previously designated by the
Seller, in partial payment of the Deferred Purchase Price, the
balance of any amounts remaining after making the foregoing
disbursements; and
(c) with respect to amounts on deposit in the Capital
Investment Sub-Account after making the transfers required by Section 6.03(a):
(i) to the Operating Agent, an amount equal to the
sum of any Yield Shortfall, any Servicing Fee Shortfall and
any Unused Facility Fee Shortfall following the transfer made
pursuant to Section 6.03(b)(i);
(ii) to the Operating Agent (or, in the case of
Indemnified Amounts or Additional Amounts for the account of
the applicable Purchaser Indemnified Person or Affected Party,
respectively), an amount equal to the deposits made in the
Collection Account pursuant to Section 6.02(a)(v) and not
otherwise disbursed pursuant to Section 6.03(a)(i);
(iii) to the Operating Agent, an amount equal to any
Purchase Excess;
(iv) if the Deferred Purchase Price Adjustment is
greater than zero, then to the Seller an amount equal to the
Deferred Purchase Price Adjustment as partial payment of the
Deferred Purchase Price; and
(v) the balance of any amounts remaining after making
the foregoing disbursements, at the Seller's option, (A) to an
account previously designated by the Seller as payment of the
Cash Purchase Price for Purchases made on such day or (B) if,
pursuant to a Repayment Notice, the Seller has requested to
reduce the Capital Investment of the Purchaser, then to the
Purchaser, the lesser of (1) the amount of such requested
reduction of Capital Investment and (2) such balance.
SECTION 6.04 Revolving Period Settlement Procedures.
(a) On each Business Day, the amounts transferred to the
Operating Agent pursuant to Sections 6.03(a)(i), 6.03(b)(i), 6.03(c)(i),and
6.03(c)(iii) shall be disbursed by the Operating Agent in the following
priority:
(i) to the Purchaser (or, if applicable, any Purchaser
Indemnified Person), an amount equal to:
(A) the accrued and unpaid Daily Yield as of such
date;
(B) all Additional Amounts incurred and payable to any
Affected Party as of such date;
(C) all other amounts accrued and payable
under this Agreement as of such date (including
Indemnified Amounts incurred and payable to any
Purchaser Indemnified Person) to the extent not
already transferred pursuant to Section 6.03(c)(ii);
and
(D) if a Purchase Excess exists on such date, an
amount equal to such excess;
(ii) [intentionally omitted];
(iii) to the Servicer on behalf of the Seller, an amount
equal to its accrued and unpaid Servicing Fee as of such date;
(iv) [intentionally omitted]; and
(v) the balance remaining after retaining or disbursing
the foregoing amounts to an account previously designated by
the Seller.
(b) No later than 4:00 p.m. (New York time) on each Business
Day, the Operating Agent shall determine and notify the Seller of any Collection
Account Deficiency for the immediately preceding Business Day, and the Seller
shall deposit cash in the amount of such Collection Account Deficiency to the
Collection Account pursuant to Section 6.02(b).
(c) Notwithstanding anything herein to the contrary, any and
all funds on deposit in the Collateral Account or the Retention Account as of
the Seventh Amendment Effective Date shall be applied on such date pursuant to
this Section 6.04 as in effect immediately prior to the Seventh Amendment
Effective Date and as if the Seventh Amendment Effective Date was a Settlement
Date.
SECTION 6.05 Liquidation Period Settlement Procedures. On
each Business Day from and after the Facility Termination Date until the
Termination Date, the Collateral Agent shall:
(a) as soon as practicable, transfer all amounts (if any)
then on deposit in the Retention Account to the Collection Account;
(b) transfer all amounts in the Collection Account in the
following priority:
(i) to the Deferred Purchase Price Sub-Account, an amount
equal to all Deferred Purchase Price Collections deposited in
the Collection Account on such day; and
(ii) to the Capital Investment Sub-Account, the balance
of any amounts remaining after making the foregoing
disbursement;
(c) transfer all amounts in the Deferred Purchase Price
Sub-Account (after making the transfers required by Section 6.05(b)), in the
following priority:
(i) if an Event of Servicer Termination has occurred
and a Successor Servicer has assumed the responsibilities and
obligations of the Servicer in accordance with Section 11.02,
then to the Successor Servicer an amount equal to its accrued
and unpaid Successor Servicing Fees and Expenses;
(ii) to the Purchaser, an amount equal to accrued and
unpaid CP Interest Amount as of such date;
(iii) [intentionally omitted];
(iv) [intentionally omitted];
(v) [intentionally omitted];
(vi) to the Capital Investment Sub-Account:
(A) an amount equal to the Dilution Funded Amount;
and
(B) the balance of any amounts remaining after making
the disbursements set forth in Sections
6.05(c)(i)-(vi)(A);
(vii) [intentionally omitted];
(viii) to the Purchaser, an amount equal to (A)
accrued and unpaid Daily Yield plus any Prepayment Fee then
due and unpaid minus (B) the aggregate amounts paid pursuant
to Sections 6.05(c)(ii), (iv), (v) and (vii);
(ix) if an Event of Servicer Termination shall not
have occurred, to the Servicer in an amount equal to its
accrued and unpaid Servicing Fee; and
(x) upon payment in full of all amounts set forth in
Sections 6.05(d)(i) through (d)(viii) below, the balance of
any amounts remaining to an account previously designated by
the Seller as partial payment of the Deferred Purchase Price;
and
(d) transfer all amounts in the Capital Investment
Sub-Account, in the following priority:
(i) to the Purchaser, an amount equal to:
(A) accrued and unpaid CP Interest Amount as of
such date to the extent not paid under Sections 6.05(c)(ii)
and 6.05(c)(viii); and
(B) the principal of all Capital Investment;
(ii) [intentionally omitted];
(iii) [intentionally omitted];
(iv) [intentionally omitted];
(v) to the Purchaser, an amount equal to:
(A) all Additional Amounts incurred and payable
to any Affected Party; and
(B) all Indemnified Amounts incurred and payable
to any Purchaser Indemnified Person;
(vi) [intentionally omitted];
(vii) to the Purchaser, an amount equal to (A)
accrued and unpaid Daily Yield plus any Prepayment Fee then
due and unpaid, minus (B) the aggregate amounts paid pursuant
to Sections 6.05(c)(ii), 6.05(c)(iv), 6.05(c)(v),
6.05(c)(vii), 6.05(c)(viii), 6.05(d)(i)(A), 6.05(d)(iii)(A),
6.05(d)(iv)(A) and 6.05(d)(vi)(A);
(viii) If an Event of Servicer Termination shall not
have occurred, to the Servicer in an amount equal to its
accrued and unpaid Servicing Fee; and
(ix) to an account previously designated by the
Seller, the balance of any funds remaining after payment in
full of all amounts set forth in Sections
6.05(d)(i)-(d)(viii).
SECTION 6.06 Investment of Funds in Accounts. To the extent
uninvested amounts are on deposit in the Collateral Account or the Retention
Account on any given day during the Revolving Period, the Operating Agent shall
invest all such amounts in Permitted Investments selected by the Operating Agent
that mature no later than (a) the immediately succeeding Business Day, in the
case of the Collateral Account, and (b) the immediately succeeding Settlement
Date, in the case of the Retention Account. From and after the Facility
Termination Date, any investment of such amounts shall be solely at the
discretion of the Operating Agent, subject to the restrictions described above.
Notwithstanding anything herein to the contrary, any and all funds on deposit in
the Retention Account or Collateral Account shall not be so invested if and for
so long as GE Capital is the Purchaser.
SECTION 6.07 Termination Procedures.
(a) On the earlier of (i) the first Business Day after the
Facility Termination Date on which the Capital Investment has been reduced to
zero or (ii) the Final Purchase Date, if the obligations to be paid pursuant to
Section 6.05 have not been paid in full, the Seller shall immediately deposit in
the Collection Account an amount sufficient to make such payments in full.
(b) On the Termination Date, all amounts on deposit in the
Collection Account and the Retention Account shall be disbursed to the Seller.
Such disbursement shall constitute the final payment to which the Seller is
entitled pursuant to the terms of this Agreement.
EXHIBIT B
Annex G to Purchase Agreement
Financial Covenants
(a) Minimum Fixed Charge Coverage Ratio. Cone ▇▇▇▇▇ and its
Subsidiaries shall have on a consolidated basis, as of the end of each fiscal
quarter set forth below, a Fixed Charge Coverage Ratio for the Rolling Period
then ended of not less than the applicable ratio set forth below:
Fiscal Quarter Minimum Fixed Charge
Ending: Coverage Ratio:
-------------- --------------------
April 1, 2001 0.60 to 1.0
July 1, 2001 0.50 to 1.0
October 1, 2001 and 0.80 to 1.0
Each Fiscal Quarter
thereafter
(b) Minimum Tangible Net Worth. Cone ▇▇▇▇▇ and its
Subsidiaries on a consolidated basis shall have a Tangible Net Worth, as of the
Third Amendment Effective Date and as of the end of the fiscal quarter ending
April 1, 2001, July 1, 2001 or October 1, 2001, of not less than $120,000,000.
Thereafter, Cone ▇▇▇▇▇ and its Subsidiaries on a consolidated basis shall have,
as of the end of each fiscal year ending on or after December 31, 2001 (each
such fiscal year herein called the "Subject Fiscal Year") and as of the end of
the first three fiscal quarters of the immediately succeeding fiscal year, a
Tangible Net Worth of not less than the sum of (i) the minimum Tangible Net
Worth required hereunder for the fiscal year which immediately preceded the
Subject Fiscal Year (or, where the Subject Fiscal Year is the fiscal year ending
December 31, 2001, the sum of $120,000,000) plus (ii) an amount equal to
twenty-five percent (25%) of the positive net income of Cone ▇▇▇▇▇ and its
Subsidiaries on a consolidated basis for the Subject Fiscal Year plus (iii) an
amount equal to one hundred percent (100%) of the amount of any equity raised by
or capital contributed to Cone ▇▇▇▇▇ during the Subject Fiscal Year.
(c) Receivable Performance Covenants. The Seller shall not
violate or fail to comply with any of the following covenants as of any
Settlement Date:
(i) Default Ratio shall be less than 5.5%;
(ii) Delinquency Ratio shall be less than 2.2%;
(iii) Gross Dilution Ratio shall be less than 4.0%;
(iv) Receivables Collection Turnover shall be less than 65
days; and
(v) Seller's Net Worth Percentage shall not be less than 5.0%.
(d) Capitalized terms used in this Annex G and not otherwise
defined below shall have the respective meanings ascribed to them in Annex X.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures (by the expenditure of cash or the incurrence of Debt) by such
Person during any measuring period for any fixed assets or improvements or for
replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under GAAP, but
excluding expenditures under Capital Leases and any expenditures financed by the
incurrence of Debt other than under the Purchase Agreement or the Credit
Facility. If the expenditures cannot be specifically identified and linked to
the incurrence of Debt (other than the incurrence of Debt other than under the
Purchase Agreement or Credit Facility), then such exclusion from this definition
of Capital Expenditures shall be determined by and based on the judgment of the
Operating Agent. For purposes of this Annex G, Capital Expenditures shall
include investments in and advances by Cone ▇▇▇▇▇ and its Subsidiaries to
unconsolidated affiliates as determined on a consolidated basis.
"EBITDA" shall mean, with respect to Cone ▇▇▇▇▇ and its
Subsidiaries for any fiscal period, an amount equal to (a) consolidated Net
Income for such period, minus (b) the sum, without duplication, of (i) income
tax credits, (ii) interest income, (iii) gain from extraordinary items for such
period, (iv) any aggregate net gain (but not any aggregate net loss) during such
period arising from the sale, exchange or other disposition of capital assets by
such Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities), and (v) any other non-cash gains that have been added in
determining consolidated Net Income, in each case to the extent included in the
calculation of consolidated Net Income of such Person for such period in
accordance with GAAP, plus (c) the sum, without duplication, of (i) any
provision for income taxes, (ii) Interest Expense, (iii) loss from extraordinary
items for such period, (iv) depreciation and amortization for such period, (v)
amortized debt discount for such period, (vi) Restructuring Charges, and (vii)
the amount of any deduction to consolidated Net Income as the result of any
grant to any members of the management of such Person of any Stock, in each case
to the extent included in the calculation of consolidated Net Income of such
Person for such period in accordance with GAAP. For purposes of this definition,
the following items shall be excluded in determining consolidated Net Income of
a Person: (A) the income (or deficit) of any other Person accrued prior to the
date it became a Subsidiary of, or was merged or consolidated into, such Person
or any of such Person's Subsidiaries; (B) the income (or deficit) of any other
Person (other than a Subsidiary) in which such Person has an ownership interest,
except to the extent any such income has actually been received by such Person
in the form of cash dividends or distributions; (C) the undistributed earnings
of any Subsidiary of such Person to the extent that the declaration or payment
of dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (D) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (E) any write-up of any asset; (F) any net
gain from the collection of the proceeds of life insurance policies; (G) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Debt, of such Person, (H) in the case of a successor to such
Person by consolidation or merger or as a transferee of its assets, any earnings
of such successor prior to such consolidation, merger or transfer of assets, and
(I) any deferred credit representing the excess of equity in any Subsidiary of
such Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary.
"Fixed Charges" shall mean, with respect to any Person for any
fiscal period, the aggregate of (a) all Interest Expense paid or accrued during
such period, plus (b) all cash income taxes paid during such period plus (c)
scheduled payments of principal with respect to Debt (other than Debt of a type
described in parts (f) or (g) of the definition of such term in Annex X) made or
due during such period, plus (d) scheduled reductions in availability under the
Credit Facility, plus (e) cash dividends or other cash distributions on such
Person's Stock (common or preferred) made or paid during such period.
"Fixed Charge Coverage Ratio" shall mean, with respect to any
Person for any fiscal period, the ratio of (i) EBITDA less Capital Expenditures
to (ii) Fixed Charges.
"Interest Expense" shall mean, with respect to any Person for
any fiscal period, interest expense (whether cash or non-cash) of such Person
determined on a consolidated basis in accordance with GAAP for the relevant
period ended on such date, including (a) amortization of original issue discount
on any Debt and of all fees payable in connection with the incurrence of such
Debt (to the extent included in interest expense), (b) the interest component of
any Capital Lease Obligation, (c) with respect to Cone ▇▇▇▇▇ and Seller only,
Redwood Yield and fees (other than servicing fees), (d) with respect to Cone
▇▇▇▇▇ only, amounts paid or payable by Cone ▇▇▇▇▇ under the ▇▇▇▇▇▇ Swap
Agreement, and (e) with respect to Cone ▇▇▇▇▇ only, net cash paid with respect
to interest, discount, yield, and fees owed by Cone ▇▇▇▇▇ or any of its
Subsidiaries under the Existing Receivables Purchase Facility.
"Net Income" shall mean, with respect to Cone ▇▇▇▇▇ and its
Subsidiaries on a consolidated basis and for any period, the after taxes net
income or loss of Cone ▇▇▇▇▇ and its Subsidiaries as it would appear on a
consolidated statement of income of Cone ▇▇▇▇▇ and its Subsidiaries for such
period prepared in accordance with GAAP (such net income or loss shall (a) be
net of extraordinary items and (b) include, to the extent the inclusion thereof
is in accordance with GAAP, the equity of Cone ▇▇▇▇▇ or any Subsidiary in the
net income or loss of any other Person).
"Net Worth" shall mean, with respect to any Person as of any
date of determination, (a) the book value of the assets of such Person, minus
(b) reserves applicable thereto, minus (c) all of such Person's liabilities on a
consolidated basis (including accrued and deferred income taxes), all as
determined in accordance with GAAP.
"Net Worth Percentage" shall mean, as of any date of
determination thereof, a fraction (expressed as a percentage) (a) the numerator
of which equals the excess of the Seller's assets over its liabilities, in each
case as determined in accordance with GAAP consistently applied, and (b) the
denominator of which equals the aggregate Outstanding Balance of the Transferred
Receivables.
"Restructuring Charges" shall mean, with respect to Cone ▇▇▇▇▇
and its Subsidiaries on a consolidated basis, (i) for any Rolling Period shown
below, any of the expenses related to Cone ▇▇▇▇▇' restructuring plans announced
in the fourth quarter of 1998 and first quarter of 1999 relating to closing its
Salisbury Plant, overhead downsizing and reorganization, the merger of the denim
and sportswear fabric businesses into one unit and the corresponding reduction
of the manufacturing staff, the closing of the ▇▇▇▇▇▇▇▇ and Cliffside yarn
manufacturing facilities, the restructuring, downsizing and reorganization of
the Carlisle Plant, and inventory and related charges associated with these
product realignments and plant closings, but at no time will the aggregate of
the Restructuring Charges under this part (i) for any Rolling Period shown below
exceed the amount listed below for such period:
Rolling Period ending Amount
--------------------- ------
July 4, 1999 $33,800,000
October 3, 1999 $36,800,000
January 2, 2000 $19,500,000
April 2, 2000 $5,000,000
July 2, 2000 $5,000,000
October 1, 2000 $2,000,000
Each fiscal quarter thereafter $ 0
; and (ii) solely with respect to each of the Rolling Periods ending on December
30, 2000, April 1, 2001 and July 1, 2001, any of the expenses related to Cone
Mill's restructuring plans announced in the fourth quarter of 2000 relating to
restructuring, downsizing, and reorganization of Cone Mill's Raytex Plant, but
the amount of Restructuring Charges under this part (ii) shall be calculated on
a pretax basis and shall not exceed in the aggregate the lesser of the actual
pre-tax Restructuring Charges recorded or $45,000,000 (of which not more than
$2,500,000 of such Restructuring Charges shall be cash charges at the time of
the recording of the charge or in any subsequent Rolling Period thereafter).
"Rolling Period" shall mean, as of the end of any fiscal
quarter of any person, the immediately preceding 4 fiscal quarters, including
the fiscal quarter then ending.
"Tangible Net Worth" shall mean, with respect to any Person at
any date, the Net Worth of such Person at such date, excluding, however, from
the determination of the total assets at such date, (a) all goodwill,
capitalized organizational expenses, capitalized research and development
expenses, trademarks, trade names, copyrights, patents, patent applications,
licenses and rights in any thereof, and other intangible items (excluding any
intangible assets generated pursuant to FASB 132 relating to pension
liabilities), (b) all unamortized debt discount and expense, (c) treasury Stock,
and (d) any write-up in the book value of any asset resulting from a revaluation
thereof.
(e) Rules of Construction Concerning Financial Covenants.
Unless otherwise specifically provided therein, any accounting term used in any
Related Document shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations thereunder shall be
computed in accordance with GAAP consistently applied. That certain items or
computations are explicitly modified by the phrase "in accordance with GAAP"
shall in no way be construed to limit the foregoing. If any Accounting Changes
occur and such changes result in a change in the calculation of the financial
covenants, standards or terms used in any Related Document, then the parties
thereto agree to enter into negotiations in order to amend such provisions so as
to equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the financial condition of such Persons and their
Subsidiaries shall be the same after such Accounting Changes as if such
Accounting Changes had not been made. If the parties thereto agree upon the
required amendments thereto, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained therein shall, only to the extent
of such Accounting Change, refer to GAAP consistently applied after giving
effect to the implementation of such Accounting Change. If such parties cannot
agree upon the required amendments within 30 days following the date of
implementation of any Accounting Change, then all financial statements delivered
and all calculations of financial covenants and other standards and terms in
accordance with the Related Documents shall be prepared, delivered and made
without regard to the underlying Accounting Change.
Exhibit C
ANNEX 5.02(b)
to
PURCHASE AGREEMENT
INVESTMENT REPORTS
The Seller shall furnish, or cause to be furnished, to the
Purchaser, the Operating Agent and the Collateral Agent the following:
(a) As soon as available, and in any event no later than 11:00
a.m. (New York time) on each Business Day, (i) an Investment Base Certificate
which shall be prepared by the Seller or the Servicer as of the previous
Business Day, (ii) a certificate (the "Daily Liquidity Certificate"), in the
form attached as Schedule 1 hereto, which shall be prepared by the Seller and
the Servicer as of the previous Business Day; and (iii) a written report, in
form and substance satisfactory to the Purchaser, the Operating Agent and the
Collateral Agent, summarizing as of the previous Business Day all Transferred
Receivables that are not Eligible Receivables;
(b) On the last Business Day of each week, a projected (cash
based) cash flow statement of Cone ▇▇▇▇▇ and its Subsidiaries for the 13-week
period beginning on such date;
(c) On or before the 25th day after the end of each month, the
following monthly certificates and reports delivered pursuant to the terms of
the Credit Facility: (i) a compliance certificate, (ii) a borrowing base
certificate, (iii) a consolidated statement of operations, (iv) a consolidated
balance sheet, (v) a consolidated statement of cash flows and (vi) a
consolidated statement of changes in stockholder equity; and
(d) Such other reports, statements and reconciliations with
respect to the Investment Base or Seller Collateral as the Purchaser, the
Operating Agent or the Collateral Agent shall from time to time request in its
reasonable discretion.
Schedule 1 to Annex 5.02(b)
DAILY LIQUIDITY CERTIFICATE AS OF _______________________
General Electric Capital Corporation
As Operating Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Cone Receivables II LLC Account Manager
Ladies and Gentlemen:
This certificate is given pursuant to the Receivables Purchase and
Servicing Agreement, dated as of September 1, 1999, as amended (the "Purchase
Agreement"), by and among Cone Receivables II LLC, as seller (the "Seller"),
Cone ▇▇▇▇▇ Corporation, as servicer (the "Servicer"), and General Electric
Capital Corporation, as purchaser (the "Purchaser"), as operating agent for the
Purchaser (in such capacity, the "Operating Agent"), and as collateral agent for
the Purchaser and the Purchaser Secured Parties (in such capacity, the
"Collateral Agent"). Capitalized terms used and not otherwise defined herein
shall have the respective meanings ascribed to them in the Purchase Agreement.
The undersigned hereby certify and represent that the following
statements are true and correct on the date hereof:
1. Total Cash on hand for Cone ▇▇▇▇▇ and its Subsidiaries $
2. Less checks written but not yet cashed $
3 Net Cash on hand (sum of 1 minus 2) $
4. Total A/R Availability under Purchase Agreement $
5. Less Outstandings under Purchase Agreement $
6. A/R Availability Excess (Shortfall) (sum of 4 minus 5) $
7. Total Availability under the Credit Facility $
8. Less Outstandings under the Credit Facility $
9. Credit Facility Availability Excess (Shortfall)
(sum of 7 minus 8) $
10. Total Liquidity (sum of 3, 6 and 9) $
Very truly yours,
CONE RECEIVABLES II LLC, as Seller
By:
Name:
Title:
CONE ▇▇▇▇▇ CORPORATION, as Servicer
By:
Name:
Title:
Exhibit D
Annex 3
Determination of "Redwood Yield"
REDWOOD YIELD = Sum of Daily Yields
for each day in a Settlement Period
1. Daily Yield = CP Interest Amount + Margin Amount
2. CP Interest Amount = Capital Investment x Daily Index Rate
3. Daily Index Rate = Index Rate / 360
4. Margin Amount = Prior to a Termination Event:
Capital Investment x Daily Margin
Subsequent to a Termination Event:
Capital Investment x Daily Default Margin
Definitions
Capitalized terms used herein and not otherwise defined shall
have the respective meanings ascribed to them in Annex X.
"Applicable Margin" shall mean 2.50%.
"Daily Margin" shall mean a per diem percentage rate at any
time equal to (i) Applicable Margin as in effect at such time divided by (ii)
360.
"Daily Default Margin" shall mean per diem percentage rate at
any time equal to (a) sum of (i) the Daily Margin as in effect at such time plus
(i) two percent (2.0%) divided by (b) 360.
"Index Rate" shall mean the latest rate for 30-day dealer
placed commercial paper (which for purposes hereof shall mean high grade
unsecured notes sold through dealers by major corporations in multiples of
$100,000), which normally is published in the "Money Rates" section of The Wall
Street Journal (or if such rate ceases to be so published, as quoted from such
other generally available and recognizable independent source as the Operating
Agent may reasonably select). Each change in any interest rate based upon the
Index Rate shall take effect at the time of such change in the Index Rate.
Exhibit E
Schedule 4.01(r) to
the Purchase Agreement
Deposit and Disbursement Accounts
Bank of America - Atlanta
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Associated Bank Account:
Bank of America
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ABA # 111 000 012
Account # ▇▇▇▇▇▇▇▇▇▇
Contact:
▇▇▇▇▇▇ Pretty
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ -0001
▇▇▇-▇▇▇-▇▇▇▇ (phone)
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Bank of America - California
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Associated Bank Account:
Bank of America California
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ABA # 121 000 358
Account # ▇▇▇▇-▇-▇▇▇▇▇
Contact:
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800-262-2726 ext. 57739 (phone)
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Exhibit F
[For Bank of America, N.A. Lockboxes]
April __, 2001
Bank of America, N.A.
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Attention:
RE: Lockbox Account Agreement (the "Agreement"), dated as of _____,
1999, by and among Bank of America, N.A. ("Bank"), Cone ▇▇▇▇▇
Corporation (the "Servicer"), Cone Receivables II LLC (the "Company"),
and General Electric Capital Corporation, acting in its capacity as
Operating Agent and Collateral Agent (the "Agent")
Ladies and Gentlemen:
All capitalized terms used herein but not otherwise defined
herein shall have the meanings given such terms in the Agreement.
Pursuant to Section 3 of the Agreement, the Company hereby
instructs the Bank to determine, on each business day, the balance of all
available funds on deposit in the Lockbox Account and automatically initiate a
federal funds wire transfer not later than 10:00 a.m. (New York City time) each
business day, of all available funds then on deposit in the Lockbox Account to
the account designated below, or to such other account as may be designated in
writing from time to time by the Agent (the "Collection Account"):
Bankers Trust Company
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ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: ▇▇-▇▇▇-▇▇▇
Account Name: GE CAF Depository Account CFN4450
Reference: CFN4550 Cone Receivables II LLC
Please confirm your receipt of this letter by signing a copy
of it in the space indicated below.
Very truly yours,
CONE RECEIVABLES II LLC
By:
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Name:
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Title:
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RECEIPT ACKNOWLEDGED:
BANK OF AMERICA, N.A.
By:
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Name:
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Title:
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Exhibit G
[For Bank of America, N.A. Lockboxes]
April __, 2001
Bank of America, N.A.
Attention:
Cone Receivables II LLC
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Attention: Treasurer
Cone ▇▇▇▇▇ Corporation
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Attention: Treasurer
RE: Lockbox Account Agreement (the "Agreement"), dated as of _____,
1999, by and among Bank of America, N.A. ("Bank"), Cone ▇▇▇▇▇
Corporation (the "Servicer"), Cone Receivables II LLC (the "Company"),
and General Electric Capital Corporation, acting in its capacity as
Operating Agent and Collateral Agent (the "Agent")
Ladies and Gentlemen:
All capitalized terms used herein but not otherwise defined
herein shall have the meanings given such terms in the Agreement.
This letter confirms that the Bank, the Servicer, the Company
and the Agent agree that, effective from and after April 23, 2001:
(a) Section 3 of the Agreement shall be deleted in its entirety and
the following new Section 3 shall be substituted in lieu thereof:
3. Control of Lockbox and Lockbox Account. The Lockbox and the
Lockbox Account shall be under the sole dominion and control
of Agent and shall be maintained by Bank in the name of "Cone
Receivables II LLC". Notwithstanding any provision herein to
the contrary and except as set forth in paragraphs 6,7 and 8
below, the Bank shall honor only the instructions and
directions of the Agent with respect to any transfer or
withdrawal of funds from the Lockbox Account.
(b) Section 4 of the Agreement shall be amended by adding the
following new subsection (c) thereto:
(c) Bank shall determine, on each business day, the balance of
all available funds on deposit in the Lockbox Account and
automatically initiate a federal funds wire transfer not later
than 10:00 a.m. (New York City time) each business day, of all
available funds then on deposit in the Lockbox Account to the
account designated below, or to such other account as may be
designated in writing from time to time by the Agent (the
"Collection Account"):
Bankers Trust Company
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ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: ▇▇-▇▇▇-▇▇▇
Account Name: GE CAF Depository Account CFN4450
Reference: CFN4550 Cone Receivables II LLC
(c) Section 10 of the Agreement shall be amended by deleting the
language "(a) immediately transmit to such account as the Agent may designate by
written notice to Bank" and by substituting, in lieu thereof, the following
language: "(a) immediately transmit to the Concentration Account".
Please confirm your agreement to the amendments set forth
above in this letter by signing a copy of this letter in the space indicated
below.
Very truly yours,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Operating Agent and Collateral Agent
By:
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____________, Duly Authorized Signatory
AGREED TO:
BANK OF AMERICA, N.A.
By:
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Name:
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Title:
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CONE RECEIVABLES II LLC
By:
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Name:
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Title:
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CONE ▇▇▇▇▇ CORPORATION
By:
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Name:
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Title:
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