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WAIVER UNDER
1992 NOTE AGREEMENT
This Waiver ("Waiver"), entered into as of August 10, 2001, by and
among CONE XXXXX CORPORATION (the "Company") and THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA ("Noteholder").
WHEREAS, the parties hereto have executed and delivered that certain
Note Agreement dated as of August 13, 1992 (as previously amended and as it may
be further amended, modified or supplemented, the "Note Agreement");
WHEREAS, the Company has informed the Noteholder of its intention to
sell to Richloom Fabrics Group, Inc. certain assets of the Company's Xxxx Xxxx
converting operations in the State of New York, as more fully set forth in the
purchase letter, dated August 8, 2001, by and between the Company and Richloom
Fabrics Group, Inc., a copy of which is attached hereto as Exhibit A (the "Xxxx
Xxxx Disposition");
WHEREAS, the Xxxx Xxxx Disposition would, unless permitted by the
Noteholder, violate Paragraph 6C(3) of the Note Agreement;
WHEREAS, the Company has requested that the Noteholder agree to waive
such violation in order to permit the Xxxx Xxxx Disposition;
WHEREAS, Noteholder is willing to enter into this Waiver subject to the
satisfaction of conditions and terms set forth herein; and
WHEREAS, capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Note Agreement;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Waiver and Consent. Provided that the conditions set forth in Section
2 below are met on or prior to the date hereof, the Noteholder hereby waives the
failure of the Company to comply with the covenant incorporated by Paragraph
6C(3) of the Note Agreement prohibiting any Asset Disposition other than
Permitted Asset Dispositions to the extent and only to the extent necessary to
permit the Xxxx Xxxx Disposition.
2. Conditions of Effectiveness. Upon satisfaction of the following,
the effective date of this Waiver shall be August 10, 2001
(the "Effective Date"). This Waiver shall become effective when, and only when:
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(a) The Noteholder shall have received all of the following documents,
each (unless otherwise indicated) being dated the date hereof, in form and
substance satisfactory to the Noteholder:
(i) executed originals of each of this Waiver and the Consent of
Guarantors, attached hereto;
(ii) a duly executed amendment to the Credit Agreement containing
substantially the same waiver as is contained herein and otherwise in
form and substance acceptable to the Noteholder and under which all
conditions have been satisfied and that is in full force and effect;
(iii) a duly executed letter from General Electric Capital
Corporation, in form and substance satisfactory to the Noteholder,
confirming that the conditions set forth in the securitization
agreement with the Company have been satisfied; and
(iv) such other documents, instruments, approvals or opinions as the
Noteholder may reasonably request.
(b) The Company shall have offered to prepay and, if such offer is
accepted, prepaid the Notes in accordance with Paragraph 4A(ii) of the Note
Agreement in an amount equal to the aggregate pro rata share for the Notes, as
set forth in the fifth sentence of Paragraph 4A(ii)B of the Note Agreement, of
the Net Proceeds of the Xxxx Xxxx Disposition;
(c) The Company shall have paid all costs and expenses (including legal
fees) incurred by the Noteholder; and
(d) The representations and warranties contained herein shall be true on
and as of the date hereof, there shall exist on the date hereof, no Event of
Default or Default; except as disclosed in writing to the Noteholder, there
shall exist no material adverse change in the financial condition, business
operation or prospects of the Company or its Subsidiaries since December 31,
2000; and the Company shall have delivered to the Noteholder an Officer's
Certificate to such effect.
3. Representations and Warranties.
(a) The Company hereby repeats and confirms each of the representations
and warranties made by it in the Credit Agreement (it being understood that any
reference to (i) Lender includes the Noteholder, and (ii) Loan Documents
includes the Note Agreement and the Notes, after giving effect to waiver
provided hereby) and in paragraph 8H of the Note Agreement as though made on and
as of the date hereof, with each reference therein to "this Agreement",
"hereof", "hereunder", "thereof", "thereunder" and words of like import being
deemed to be a reference to the Note Agreement after giving effect to waiver
provided hereby.
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(b) The Company further represents and warrants that there are no
pending or threatened actions, suits or proceedings affecting the Company or
any of its Subsidiaries or the properties of the Company or any of its
Subsidiaries before any court, governmental agency or arbitrator, that may, if
adversely determined, materially adversely affect the financial condition,
properties, business, operations or prospects of the Company and it
Subsidiaries, considered as a whole, or affect the legality, validity or
enforceability of the Note Agreement.
4. Miscellaneous.
4A. Reference to and Effect on the Note Agreement.
(a) Except as specifically waived above, all provisions of the Note
Agreement, and all other related documents, are and shall continue to be in
full force and effect and are hereby in all respects ratified and confirmed.
(b) The execution, delivery and effectiveness of this Waiver shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any holder of a Note under the Note Agreement or the Notes, nor
constitute a waiver of any provision of any of the foregoing.
4B. Costs and Expenses. The Company agrees to pay on demand all costs
and expenses incurred by any holder of a Note in connection with the
preparation, execution and delivery of this Waiver, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel. The
Company further agrees to pay on demand all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses of
counsel), incurred by any holder of a Note in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this Waiver,
including, without limitation, counsel fees and expenses in connection with the
enforcement of rights under this paragraph 6B.
4C. Execution in Counterparts. This Waiver may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same instrument.
4D. Governing Law. This Waiver shall be governed by, and construed in
accordance with, the laws of the State of New York.
4E. Estoppel. To induce the Noteholder to enter into this Waiver, the
Company hereby acknowledges and agrees that, as of the date hereof, there exists
no right of offset, defense or counterclaim in favor of the Company against any
holder of the Notes with respect to the obligations of the Company to any such
holder, either with or without giving effect to this Waiver.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CONE XXXXX CORPORATION
By /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By /s/ Xxxxxx X. Xxxxxx, CFA
Name: Xxxxxx X. Xxxxxx, CFA
Title: Vice President
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CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing
Waiver under 1992 Note Agreement, dated as of August 10, 2001 (the "Waiver"),
(ii) consents to the execution and delivery of the Waiver by the parties
thereto, and (iii) reaffirms all of its obligations and covenants under the
Guaranty Agreement dated as of January 28, 2000, and agrees that none of such
obligations and covenants shall be affected by the execution and delivery of the
Waiver. This Consent and Reaffirmation may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.
CIPCO S.C., INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Assistant Secretary
CONE FOREIGN TRADING LLC
By: W. Xxxxx Xxxxxxx
Name: W. Xxxxx Xxxxxxx
Title: Treasurer
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Exhibit B
August 9, 2001
Cone Xxxxx Corporation
0000 Xxxxx Xxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Treasurer
RE: Receivables Purchase and Servicing Agreement, dated as of September
1, 1999, as amended (the "Receivables Purchase Agreement"), among Cone
Receivables II LLLC, Cone Xxxxx Corporation, as Servicer, Redwood
Receivables Corporation, and General Electric Capital Corporation, as
Operating Agent and Collateral Agent, and Receivables Transfer
Agreement, dated as of September 1, 1999, as amended (the "Receivables
Transfer Agreement"), among Cone Receivables II LLC, Cone Xxxxx
Corporation and the other Originators party thereto
Gentlemen:
All capitalized terms used in this letter shall have the respective
meanings given such terms in the above-referenced Receivables Transfer
Agreement.
This letter confirms that Cone Receivables II LLC and the Operating
Agent hereby (I) consent to the sale (the "Sale") by Cone Xxxxx Corporation
("Cone Xxxxx") to Richloom Fabrics Group, Inc. (or any Affiliate thereof) of the
inventory and fixed assets of Cone Xxxxx' Xxxx Xxxx converting operations;
provided that (I) the Sale is for a cash purchase price payable in full at
closing of not less than $5,375,000,m (ii) the Sale is otherwise made in
accordance with the terms and conditions of the letter agreement dated August 8,
2001 between Cone Xxxxx and Richloom Fabrics Group, Inc., (iii) the Sale does
not include any Receivables or any Contracts relating thereto, and (iv) this
letter and the consents granted herein relate solely to the Sale and nothing in
this letter is intended (or shall be construed) to constitute the consent of
Cone Receivables II, LLC or the Operating Agent to the sale of any other assets
of Cone Xxxxx or any other Originator or any other transaction or the waiver by
cone Receivables II LLC or the Operating Agent of any breach of the Receivables
Transfer Agreement.
This letter may be executed in any number of counterparts.
Very truly yours,
GENERAL ELECTRIC CAPITAL
CORPORATION, as Operating Agent
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Duly Authorized Signatory
CONE RECEIVABLES II LLC
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Secretary
