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AMENDMENT NO. 5 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 5 TO CREDIT AGREEMENT (this "Agreement") is made and
entered into as of this 10th day of August, 2001, by and among CONE XXXXX
CORPORATION, a North Carolina corporation (the "Borrower"), BANK OF AMERICA,
N.A., a national banking association, each of the Lenders signatory hereto and
BANK OF AMERICA, N.A., a national banking association, as Agent (the "Agent")
for the Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and the Lenders from time to time
party thereto (the Lenders") have entered into that certain Credit Agreement
dated as of January 28, 2000, as amended by Amendment No. 1 to Credit Agreement
dated as of July 14, 2000, Amendment No. 2 to Credit Agreement dated as of
December 12, 2000, Waiver and Amendment No. 3 to Credit Agreement dated as of
April 23, 2001, and Amendment No. 4 to Credit Agreement dated as of June 28,
2001 (as heretofore and hereby amended, and as from time to time further
amended, supplemented or replaced, the "Credit Agreement");
WHEREAS, the Borrower has informed the Agent and the Lenders of its
intention to sell to Richloom Fabrics Group, Inc. certain assets of the
Borrower's Xxxx Xxxx converting operations in the States of New York and South
Carolina, and other commissioned finishing facilities, as more fully set forth
in the purchase letter dated as of August 8, 2001 by and between the Borrower
and Richloom Fabrics Group, Inc., a copy of which is attached hereto as Exhibit
A (the "Xxxx Xxxx Disposition"); and
WHEREAS, the Xxxx Xxxx Disposition would otherwise violate certain
provisions of the Credit Agreement, the Borrower has requested that the Agent
and the Lenders agree to amend the Credit Agreement to permit the Xxxx Xxxx
Disposition, and the Agent and the Lenders have agreed, subject to the terms and
conditions of this Agreement, so to amend the Credit Agreement pursuant to the
terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants, promises and
conditions herein set forth, it is hereby agreed as follows:
1. Definitions. The term "Credit Agreement" as used herein and in
the other Loan Documents shall mean the Credit Agreement as previously and as
hereby amended and as from time to time further amended or modified. Unless the
context otherwise requires, all capitalized terms used herein without definition
shall have the respective meanings provided therefor in the Credit Agreement.
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2. Amendments to Credit Agreement.
(a) Schedule 1.1A to the Credit Agreement is hereby deleted in
its entirety and replaced with a new Schedule 1.1A as attached hereto.
3. Guarantors. Each of the Guarantors has joined into the
execution of this Agreement for the purpose of consenting to the amendment
contained herein and reaffirming its guaranty of the Obligations as
amended by the terms of this Agreement.
4. Borrower's Representations and Warranties. The Borrower hereby
represents, warrants and certifies that:
(a) The representations and warranties made by it in Article
VIII of the Credit Agreement are true on and as of the date hereof
before and after giving effect to this Agreement except that the
financial statements referred to in Section 8.6(a) shall be those most
recently furnished to each Lender pursuant to Section 9.1(a) and (b) of
the Credit Agreement;
(b) The Borrower has the power and authority to execute and
perform this Agreement and has taken all action required for the lawful
execution, delivery and performance thereof;
(c) Except as has been disclosed to the Agent and the Lenders
in writing, there has been no material adverse change in the condition,
financial or otherwise, of the Borrower and its Subsidiaries, taken as
a whole, since the date of the most recent financial reports of the
Borrower received by each Lender under Section 9.1(a) of the Credit
Agreement after giving effect to the transaction contemplated by this
Agreement;
(d) The business and properties of the Borrower and its
Subsidiaries are not, and since the date of the most recent financial
report of the Borrower and its Subsidiaries received by the Agent under
Section 9.1(a) of the Credit Agreement have not been, adversely
affected in any substantial way as the result of any fire, explosion,
earthquake, accident, strike, lockout, combination of workmen, flood,
embargo, riot, activities of armed forces, war or acts of God or the
public enemy, or cancellation or loss of any major contracts; and
(e) No Default or Event of Default has occurred and is
continuing.
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5. Entire Agreement. This Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. None of the terms or conditions of this
Agreement may be changed, modified, waived or canceled orally or otherwise,
except by writing, signed by all the parties hereto, specifying such change,
modification, waiver or cancellation of such terms or conditions, or of any
proceeding or succeeding breach thereof.
6. Full Force and Effect of Amendment. Except as hereby
specifically amended, modified or supplemented, the Credit Agreement and all of
the other Loan Documents are hereby confirmed and ratified in all respects and
shall remain in full force and effect according to their respective terms.
7. Counterparts. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
8. Enforceability. Should any one or more of the provisions of
this Agreement be determined to be illegal or unenforceable as to one or more
of the parties hereto, all other provisions nevertheless shall remain
effective and binding on the parties hereto.
9. Credit Agreement and Other Loan Documents. All references in
any of the Loan Documents to the "Credit Agreement" shall mean the Credit
Agreement as amended hereby.
10. Condition to Effectiveness. This Agreement shall become
effective as of the date hereof provided (a) the Agent shall have received at
least one executed copy, certified by the Borrower, of each of (x) a waiver
under the Senior Note Agreement with respect to the Xxxx Xxxx Disposition in
form and substance acceptable to the Agent and in full force and effect, and (y)
the approval letter required under the Securitization Intercreditor Agreement,
and (b) the Xxxx Xxxx Disposition shall have occurred, or be occurring
substantially simultaneously herewith, substantially on the terms and conditions
set forth on Exhibit A.
[Signature pages follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the day and year
first above written.
BORROWER:
CONE XXXXX CORPORATION
By: /s/ W. Xxxxx Xxxxxxx
Name: W. Xxxxx Xxxxxxx
Title: Treasurer
GUARANTORS:
CIPCO S.C., INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Assistant Secretary
CONE FOREIGN TRADING LLC
By: /s/ W. Xxxxx Xxxxxxx
Name: W. Xxxxx Xxxxxxx
Title: Treasurer
AGENT:
BANK OF AMERICA, N.A. as Agent for the Lenders
By: /s/ Xxxx X. Register
Name: Xxxx X. Register
Title: Principal
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LENDERS:
BANK OF AMERICA, N.A.
By: /s/ Xxxx X. Register
Name: Xxxx X. Register
Title: Principal
FIRST UNION NATIONAL BANK
By: /s/ Xxx Xxxxxx
Name: Xxx Xxxxxx
Title: Vice President
WACHOVIA BANK, N.A.
By: /s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Senior Vice President
SUNTRUST BANK
By: /s/ Xxxxxx X. Xxxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Director
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Managing Director
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Exhibit A
August 8, 2001 Letter Agreement by and between Cone Xxxxx Corporation and
Richloom Fabrics Group, Inc.
[See attached.]
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Cone Xxxxx Corporation
0000 Xxxxx Xxx Xxxxxx
P O Box 26540
Xxxxxxxxxx XX 00000-0000
August 8, 2001
Xx. Xxxxx Xxxxxxx, President
Richloom Fabrics Group, Inc
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Subject: Letter Agreement
Dear Xxx:
This is to confirm our agreement, subject to approval by the Cone Board, on the
sale of certain assets as is/where is of Cone's New York converting operations
(Xxxx Xxxx):
1. Richloom will purchase the Xxxx Xxxx fixed assets located at 000 Xxxxx
Xxxxxx for a price of $375,000 cash to be paid on August 10, 2001.
2. Richloom will purchase the Xxxx Xxxx inventory (including screens) for
$5,000,000 cash to be paid on August 10, 2001.
3. Subject to operating in the ordinary course of business until that time,
the final inventory will be established as of August 12, 2001.
4. On August 10, 2001, Cone will prepare a schedule listing outstanding
letters of credit for goods on order (estimated at $460,000). Cone will
invoice Richloom for the above amount with due dates to coincide with the
due date of the individual letters of credit.
5. Richloom will bear the cost of operating the Wolf warehouse at Carlisle,
South Carolina (not a part of the purchase) until all purchased inventory
has been removed;
6. If Richloom requires access to Xxxx Xxxx space at 000 Xxxxx Xxxxxx after
August 31, 2001, Richloom will pay one-half lease costs. Cone will
terminate all employees not selected for retention by Richloom on August
17, 2001.
7. Richloom will not require any of Xxxx Xxxx'x independent sales
representatives or any of Cone's non-Wolf employees, and Richloom agrees
not to employ any such person for two years from the date of closing
without prior approval from Cone.
8. Richloom agrees to honor all greige purchase contracts, deliveries, royalty
agreements, jobber contracts, and pattern continuity based on existing
commitments for the duration of the continuity commitment. Finishing
charges for all lots closed and billed after August 10, 2001 will be the
responsibility of Richloom and will be paid according to their terms.
9. Richloom agrees to continue to run existing Xxxx Xxxx patterns at Carlisle
and use its best efforts to substantially increase its other business with
Carlisle.
10. Richloom agrees to assist Cone in the collection of Xxxx Xxxx receivables,
including holding shipments upon request.
Please indicate your agreement with the above by signing below and faxing an
executed copy to me.
Sincerely, Accepted and agreed to this 8th day of August, 2001
CONE XXXXX CORPORATION RICHLOOM FABRICS GROUP, INC.
/s/ Xxxx X. Xxxxxx /s/ Xxxxx Xxxxxxx
President and Chief Executive Officer Xxxxx Xxxxxxx, President
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Schedule 1.1A
Disposition of Additional Assets
The expected value of net proceeds on the disposition of fixed assets under
Cone's 2001 Reinvention Plan is approximately $14,813,000 as shown below. The
total excludes assets listed on Schedule 1.1; $349,000 for Salisbury warehouse
sold in June 2001 and estimated $590,000 from auction of remaining Salisbury
equipment in late July with proceeds expected in third quarter of 2001. Total
expected value of proceeds from the plan is approximately $15,752,000.
1) Xxxxxx Plant
- 80 Nissan SC looms, 10 Sulzer P7200's, 90 LA51 Nissan looms
- EV of proceeds = $1,089,000
- Target timeline: in 2001
2) Xxxxxxxx Plant
- Equipment sold post closing - slashers
- EV of proceeds = $80,000
- Target timeline: 2002
3) Raytex Plant
- Equipment
- EV of proceeds = $3,720,000
- Target timeline: July 2001 - December 2002
- Land & Building
- EV of proceeds = $2,933,000
- Target timeline: Sale to Seiren Corp in 2001 or 2002/2003 to other
buyers
4) Xxxx Xxxx Converting Operations
- Equipment and Inventory located in New York City, Carlisle, SC other
commissioned finishing facilities
- EV of proceeds = $4,000,000
- Target timeline: Sale to Richloom Fabrics Group, Inc. in August 2001
5) Greensboro land - Proximity site
- 28 acres on Maple Street in Greensboro NC, corner of Wendover &
Yanceyville
- EV of proceeds = $2,080,000
- Target timeline: December 2001 - December 2002
6) Greensboro land - behind White Oak
- 13 acres of land on the SW corner of Summit Avenue and 16th Street
- EV of proceeds = $500,000
- Target timeline: December 2001
7) Greensboro land - behind wastewater treatment facility - odor issues
- 45 acres of land on Summit Avenue in Greensboro
- EV of proceeds = $372,000
- Target timeline: December 2001
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8) Miscellaneous land
- Xxxxxxxxxx County - Cotton Mill Cafe land
- EV of proceeds = $6,000
- Target timeline: 2001 - needed releases
- Xxxxxxxxxx County - Xxxxxxx land
- EV of proceeds = $23,000
- Target timeline: 2001 - needed releases
- Salisbury - 6.5 acres Town Creek flood plain
- EV of proceeds = $10,000
- Target timeline: 2001
