Exhibit 2.3.9
NINTH AMENDMENT TO SECURITIZATION AGREEMENTS
THIS NINTH AMENDMENT TO SECURITIZATION AGREEMENTS (this
"Amendment"), made and entered into as of November 9, 2001 (the "Effective
Date"), 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 Delaware corporation ("GECC"), acting in its
capacities as the Purchaser and as the Operating Agent (as such terms are
defined in the Purchase Agreement referenced 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
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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 April 23, 2001 (the "Redwood Assignment"), under which Redwood
assigned and delegated to GECC, pursuant to Section 2.05 of the Liquidity Loan
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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, that
certain Sixth Amendment to Securitization Agreements, dated as of December 11,
2000, among such parties, that certain Seventh Amendment to Securitization
Agreements, dated as of April 23, 2001, among such parties, and that certain
Eighth Amendment to Securitization Agreements, dated as of July 10, 2001; among
such parties, and
WHEREAS, the Companies have requested that the Securitization Agreements
be further amended in certain respects as set forth in this Amendment, and the
parties hereto are willing to agree to such amendments 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. Amendments of Securitization Agreements. Subject to the terms and
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conditions of this Amendment, including without limitation the fulfillment of
the conditions precedent specified in Section 6 below, the Securitization
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Agreements shall be amended as follows:
(a) The definition of the term "Applicable Margin" set forth in Annex 3 to
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the Purchase Agreement shall be deleted in its entirety and the following
revised definition of such term shall be substituted in lieu thereof:
"Applicable Margin" shall mean 3.50%.
(b) Annex G to the Purchase Agreement shall be deleted in its entirety and
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the revised Annex G attached to this Amendment shall be substituted in lieu
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thereof.
(c) Annex X to the Securitization Agreements shall be further amended by
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adding the following new definitions thereto in the appropriate alphabetical
order:
"Amortization Date" shall mean each of the dates on which a
scheduled payment or mandatory prepayment of principal is due on Cone
▇▇▇▇▇' Debts under the Credit Facility and the Prudential Note Documents
(which dates, as of the Ninth Amendment Effective Date, are May 15, 2002,
June 30, 2002, August 15, 2002 and September 30, 2002).
"Amortization Testing Period" shall mean, with respect to any
Amortization Date, the period of 45 consecutive days that ends on such
Amortization Date."
"Credit Facility Availability" shall mean, as at any time of
determination thereof, the amount (if any) by which (a) the aggregate
amount of additional loans and letters of credit that are then available
to Cone ▇▇▇▇▇ and its Subsidiaries under the Credit Facility (such amount
being equal to the lesser of (x) the borrowing base available at such time
under the Credit Facility or (y) the aggregate commitments of the Credit
Facility Lenders at such time to make loans or issue letters of credit
under the Credit Facility to or
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for the account of Cone ▇▇▇▇▇ and its Subsidiaries) exceed (b) the sum of
(i) the aggregate outstanding principal balance at such time of all such
loans plus (ii) the aggregate outstanding reimbursement obligations at
such time of Cone ▇▇▇▇▇ and its Subsidiaries with respect to all such
letters of credit, plus (iii) the aggregate undrawn amount at such time of
all such letters of credit outstanding at such time; provided that the
Credit Facility Availability shall be zero dollars at any time when the
Credit Facility Lenders are not obligated to make any such loans or issue
any such letters of credit.
"Excess Liquidity" shall mean, as at any time of determination
thereof, the sum (without duplication) of (a) the aggregate unrestricted
cash of Cone ▇▇▇▇▇ and its Subsidiaries at such time (excluding any such
cash that serves as cash collateral for the Credit Facility), minus (b)
all checks drawn by Cone ▇▇▇▇▇ or any of its Subsidiaries that are paid on
such date, plus (c) the Receivables Availability at such time, plus (d)
the Credit Facility Availability at such time.
"Ninth Amendment Effective Date" shall mean November 9, 2001.
"Receivables Availability" shall mean, as at any time of
determination thereof, the amount (if any) by which the Availability at
such time (as disclosed in the most recently submitted Investment Base
Certificate or as otherwise determined by Purchaser or the Operating Agent
based on the Seller Collateral information available to it, including any
information obtained from any audit or from any other reports with respect
to the Seller Collateral, which determination shall be final, binding and
conclusive on all parties to the Purchase Agreement in the absence of
manifest error) exceeds the Capital Investment at such time.
(d) Annex X to the Securitization Agreements shall be further amended by
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deleting therefrom the definitions of the terms "Fee Letter", "Purchase Discount
Rate Cap" and "Special Limit" and by substituting the following new respective
definitions of such terms in lieu thereof:
"Fee Letter" shall mean that certain letter agreement dated November
9, 2001 among the Seller, Cone ▇▇▇▇▇ and GECC (as Purchaser and as
Operating Agent).
"Purchase Discount Rate Cap" shall mean a rate equal to eighty-two
and one-half percent (82.5%) with respect to that portion of the
Investment Base which consists of Eligible Receivables other than ▇▇▇▇ and
Hold Receivables and fifty percent (50%) with respect to that portion of
the Investment Base which consists of Eligible Receivables which are ▇▇▇▇
and Hold Receivables; provided, that (i) the Purchase Discount Rate Cap
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with respect to that portion of the Investment Base which consists of
Eligible Receivables other than ▇▇▇▇ and Hold Receivables shall be reduced
to eighty percent (80%) if the Excess Liquidity is less than $5,000,000 on
any date during any Amortization Testing Period and (ii) the Purchase
Discount Rate Cap with respect to any portion of the Investment Base may
be changed at any time at the sole discretion of the Operating Agent,
exercised in good faith, and, in the case of an increase only, upon
satisfaction of the Rating Agency Condition with respect thereto.
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"Special Limit" means (x) for each of PL Subsidiary, Inc. and its
Affiliates, Azteca Production International, Inc. and its Affiliates,
Kentucky Apparel, LLP and its Affiliates, and Koo's Manufacturing, Inc.
and its Affiliates, 4% and (y) 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.
(e) Annex X to the Securitization Agreements shall be further amended by
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adding the following sentence at the end of the definition therein of the term
"Concentration Discount Amount":
Notwithstanding anything herein to the contrary, the Concentration
Discount Amount for Springs Industries, Inc. and its Affiliates, as of any
date of determination thereof, shall be the lesser of (x) the percentage
that otherwise would have been applicable to such Obligors at such time
according to the table set forth above and (y) 6%.
(f) Annex X to the Securitization Agreements shall be further amended by
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deleting clause (v) of the definition therein of the term "Eligible Receivable"
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and by substituting the following new clause (v) in lieu thereof:
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(v) that complies with such other criteria and requirements as the
Operating Agent may from time to time specify in writing to the Seller or
the Originator thereof.
2. No Other Amendments. Except for the amendments expressly set forth and
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referred to in Section 1 above, the Securitization Agreements shall remain
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unchanged and in full force and effect.
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3. Representations and Warranties. Each Company hereby represents and
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warrants to GECC (in its capacity as Purchaser and the Operating 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 representations or warranties 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 3 shall be a Termination Event and an
Event of Servicer Termination for all purposes of the Securitization Agreements.
4. Ratification. Each Company hereby ratifies and reaffirms each and
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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.
5. Waiver by the Companies. Each of the Companies hereby waives any
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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.
6. Conditions to Effectiveness. This Amendment shall become effective, as
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of the Ninth 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
and the Operating Agent;
(b) the receipt by the Operating Agent of all fees and expenses
payable to the Purchaser or the Operating Agent, respectively, in
connection with this Amendment including without limitation the reasonable
legal fees and other reasonable out of pocket expenses of the Purchaser or
the Operating Agent incurred in connection with this Amendment;
(c) the receipt by the Operating Agent of the amendment fee due in
connection with this Amendment under the Fee Letter; and
(d) the receipt by the Operating Agent of written evidence that Cone
▇▇▇▇▇, the Credit Facility Lenders and the Credit Facility Lender Agent
have entered into the Amendment No. 8 to Credit Agreement and that Cone
▇▇▇▇▇ and The Prudential Insurance Company of America have entered into an
amendment of the Prudential Note Documents, both such amendments to be
substantially in the forms thereof previously supplied by Cone ▇▇▇▇▇ to
GECC, and that all conditions precedent to the effectiveness of such
amendments have been fulfilled.
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7. Reimbursement of Expenses. Each Company hereby agrees that it shall
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reimburse the Purchaser 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.
8. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
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ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK FOR CONTRACTS TO BE PERFORMED
ENTIRELY WITHIN SAID STATE.
9. Severability of Provisions. Any provision of this Amendment which is
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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.
10. Counterparts. This Amendment may be executed in any number of several
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counterparts, all of which shall be deemed to constitute but one original and
shall be binding upon all parties, their successors and permitted assigns.
11. Entire Agreement. The Securitization Agreements as amended and
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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.
12. Cone ▇▇▇▇▇' and GECC's Capacities. Cone ▇▇▇▇▇ is executing and
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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 and as the
Operating Agent, and all references herein to "GECC" shall be deemed to include
it in all such capacities unless otherwise expressly indicated.
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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: Secretary
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 and as Operating Agent
By /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Duly Authorized Signatory
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EXHIBIT A
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Annex G to Purchase Agreement
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Financial Covenants
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(a) Minimum Fixed Charge Coverage Ratio. Cone ▇▇▇▇▇ and its Subsidiaries
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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:
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September 30, 2001 0.58 to 1.0
December 30, 2001 0.52 to 1.0
March 31, 2002 0.46 to 1.0
June 30, 2002 0.51 to 1.0
September 29, 2002 0.49 to 1.0
December 29, 2002 0.74 to 1.0
Each fiscal quarter thereafter 0.80 to 1.0
(b) Minimum Tangible Net Worth. Cone ▇▇▇▇▇ and its Subsidiaries on a
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consolidated basis shall have a Tangible Net Worth (x) as of the Third Amendment
Effective Date and as of the end of each fiscal quarter ending April 1, 2001,
July 1, 2001 or September 30, 2001, of not less than $90,000,000 and (y) as of
the end of the fiscal year ending December 30, 2001 and as of the end of each
fiscal quarter ending March 31, 2002, June 30, 2002 and September 29, 2002, of
not less than $75,000,000. Thereafter, Cone ▇▇▇▇▇ and its Subsidiaries on a
consolidated basis shall have, as of the end of each fiscal year ending on or
after December 29, 2002 (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 plus (ii) an amount equal to
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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
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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
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to comply with any of the following covenants as of any Settlement Date:
(i) Default Ratio shall be less than 5.5%;
Annex G to Purchase Agreement
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(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) Minimum EDBITDA. Cone ▇▇▇▇▇ and its Subsidiaries shall have on
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a consolidated basis, as of the end of each fiscal quarter set forth below,
EBITDA for the period then ended of not less than the amount set forth opposite
such period:
Fiscal Quarter Minimum EBITDA
Ending: --------------
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September 30, 2001 $28,500,000
December 30, 2001 $23,500,000
March 31 2002 $22,000,000
June 30, 2002 $26,000,000
September 29, 2002 $29,500,000
December 29, 2002
or thereafter $37,000,000
(e) Capitalized terms used in this Annex G and not otherwise defined
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below shall have the respective meanings ascribed to them in Annex X.
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"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
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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)
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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
Annex G to Purchase Agreement
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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)
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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)
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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
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due during such period, plus (d) scheduled reductions in availability under the
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Credit Facility, plus (e) cash dividends or other cash distributions on such
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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.
Annex G to Purchase Agreement
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"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)
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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
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Annex G. to Purchase Agreement
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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
; (ii) solely with respect to each of the Rolling Periods ending on December 30,
2000, April 1, 2001, July 1, 2001, and September 30, 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); (iii) solely with respect to each of the Rolling Periods ending on
July 1, 2001, September 30, 2001, December 30, 2001 and March 31, 2002, any of
the expenses related to Cone ▇▇▇▇▇' reinvention plan announced in June 2001, but
the amount of Restructuring Charges under this part (iii) 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 $35,000,000 (of which not more than
$4,000,000 of such Restructuring Charges shall be cash charges at the time of
the recording of the charge or in any subsequent Rolling Period thereafter), and
(iv) solely with respect to each of the Rolling Periods ending on September 30,
2001, December 30, 2001, March 31, 2002 and June 30, 2002, any of the expenses
relating to the sale of Cone ▇▇▇▇▇' New York converting operations, but the
amount of the Restructuring Charges under this part (iv) shall be calculated on
a pre-tax basis and shall not exceed in the aggregate the lesser of the actual
pre-tax Restructuring Charges recorded or $6,700,000 (of which not more than
$2,000,000 of such Restructuring Charges shall be cash charges at the time of
recording the charge or in any subsequent Rolling Period thereafter), and (v)
solely with respect to each of the Rolling Periods ending December 30, 2001,
March 31, 2002, June 30, 2002 and September 29, 2002, any of the expenses
relating to the discontinuation of Cone ▇▇▇▇▇' khaki fabric business, but the
amount of the Restructuring Charges under this part (v) shall be calculated on a
pre-tax basis and shall not exceed in the aggregate the lesser of the actual
pre-tax Restructuring Charges recorded or $750,000.
"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
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determination of the total assets at such date, (a) all goodwill, capitalized
organizational expenses, capitalized research and development expenses,
trademarks, trade names, copyrights,
Annex G to Purchase Agreement
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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, (d) any write-up in the book value of any asset resulting
from a revaluation thereof, and (e) minimum pension liabilities as determined in
accordance with FASB 87.
(f) Rules of Construction Concerning Financial Covenants. Unless
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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.
Annex G to Purchase Agreement
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