Exhibit 2.3.11
ELEVENTH AMENDMENT AND WAIVER TO SECURITIZATION AGREEMENTS
THIS ELEVENTH AMENDMENT AND WAIVER TO SECURITIZATION AGREEMENTS (this
"Amendment"), made and entered into as of September 23, 2003 by and among CONE
RECEIVABLES II LLC, a North Carolina limited liability company ("CRLLC"), CONE
XXXXX CORPORATION, a North Carolina corporation ("Cone Xxxxx"); CONE FOREIGN
TRADING LLC, a North Carolina limited liability company ("CFT"; each of CRLLC,
Cone Xxxxx 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, the Operating
Agent and the Collateral Agent (as such terms are defined in the Purchase
Agreement referenced below).
W I T N E S E T H:
WHEREAS, Cone Xxxxx and CRLLC (collectively, the "Originators") 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 Xxxxx agreed (and each Subsidiary of Cone Xxxxx 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 Xxxxx, 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 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, that certain Eighth
Amendment to Securitization Agreements, dated as of July 10, 2001; among such
parties, that certain Ninth Amendment to Securitization Agreements, dated as of
November 9, 2001, among such parties, and that certain Tenth Amendment to
Securitization Agreements, dated as of September 5, 2003, among such parties
(collectively, the "Prior Amendments"), and
WHEREAS, it is contemplated that on or about the Eleventh Amendment
Effective Date, the Originators and certain of their Subsidiaries (collectively,
together with the Originators, the "Debtors") will commence Chapter 11
bankruptcy cases by the filing of voluntary petitions for relief under Chapter
11 of the Bankruptcy Code (collectively, the "Chapter 11 Cases") in the United
States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court")
and that thereafter each of the Originators will continue to manage its
properties and operates its business as a debtor and debtor in possession
pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code; and
WHEREAS, the Companies have requested that any Termination Event,
Incipient Termination Event, Event of Servicer Termination or Incipient Servicer
Termination Event that may occur as a result of the commencement of the Chapter
11 Cases be waived and that the Securitization Agreements be further amended in
certain respects as set forth in this Amendment, all so that the Purchases and
other transactions contemplated by the Securitization Agreements may continue to
occur after the commencement and during the pendency of the Chapter 11 Cases;
and
WHEREAS, GECC is willing to grant such waiver and the parties hereto
are willing to agree to such amendments, all in accordance with and 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. Certain Waiver and Reservations of Rights. Subject to the terms and
conditions of this Amendment, including without limitation the fulfillment of
the applicable conditions precedent specified in Section 7 below, GECC (in its
capacity as the Purchaser and the Operating Agent) hereby waives any Termination
Event, Incipient Termination Event, Event of Servicer Termination or Incipient
Servicer Termination
Event that may occur under (i) Section 9.01(d) or 9.02(e) of the Purchase
Agreement (as such agreement is in effect immediately prior to the effectiveness
of this Amendment) solely as a result of the commencement of the Chapter 11
Cases or (ii) Sections 9.01(s) or 9.02(c) of the Purchase Agreement (as such
agreement is in effect immediately prior to the effectiveness of this Amendment)
solely as a result of the Receivables Collection Turnover as of July 27, 2003
being greater than the maximum permitted as of such date under paragraph (c)(iv)
of Annex G to the Purchase Agreement (as such agreement is in effect immediately
prior to the effectiveness of this Amendment).
2. Amendments 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, in each case effective as of the
Eleventh Amendment Effective Date:
(A) Section 2.02(c) of the Purchase Agreement shall be deleted in its
entirety.
(B) Section 2.07(a) of the Purchase Agreement shall be deleted in its
entirety and the following new Section 2.07(a) shall be substituted in lieu
thereof. .
(a)(i) The Seller shall pay to the Purchaser an unused
facility fee (the "Unused Facility Fee") equal to five-eighths of one
percent (0.625%) per annum calculated daily from the Eleventh Amendment
Effective Date until the Facility Termination Date and payable on each
Business Day, commencing on the Eleventh Amendment Effective Date, on
the amount by which the Maximum Purchase Limit as in effect on such
date exceeds the Capital Investment on such date, which fee shall be
fully earned when payable and shall be non-refundable.
(ii) On the Eleventh Amendment Effective Date and on each
anniversary thereof that occurs prior to the Termination Date, the
Seller shall pay to the Operating Agent, for its own account, an
administration fee in the amount of $50,000, which fee shall be fully
earned when payable and shall be non-refundable.
(iii) The provisions of this Section 2.07(a) supersede and
replace the Fee Letter.
(C) Section 4. 02 of the Purchase Agreement shall be amended by
adding the following new sentence at the end thereof:
Notwithstanding anything to the contrary set forth in this Section
4.02, it is expressly understood and agreed that each of the
representations and warranties made in this Section 4.02 by each DIP
Servicer is and shall be (i) subject to (x) compliance by such Servicer
with any applicable provisions of the Bankruptcy Code and (y) the entry
of the Interim Order and the Final Order (as applicable), and (ii)
qualified to exclude any noncompliance resulting solely from the filing
of the Chapter 11 Cases (but not excluding noncompliance resulting from
any
subsequent event, whether or not related to or derivative of the
filing of the Chapter 11 Cases).
(D) Section 5.03 of the Purchase Agreement shall be amended by adding
the following new paragraph (n) at the end thereof:
(n ) Amendments to Interim Order or Final Order. The Seller
shall not, without the prior written consent of the Operating Agent and
the Purchaser, consent to any amendment, supplement or other
modification of any of the terms or provisions contained in, or
applicable to, (a) the Interim Order or (b) the Final Order.
(E) Section 9.01 of the Purchase Agreement shall be deleted in its
entirety and the following new Section 9.01 shall be substituted in lieu
thereof:
SECTION 9.01 Termination Events. If any of the
following events (each, a "Termination Event") shall occur (regardless
of the reason therefor):
(a) the Seller shall (i) fail to make any payment of
any Seller Secured Obligation when due and payable and the same shall
remain unremedied for one Business Day or more, or (ii) fail or neglect
to perform, keep or observe any other provision of this Agreement or
the other Related Documents (other than any provision embodied in or
covered by any other clause of this Section 9.01) and the same shall
remain unremedied for three Business Days or more after written notice
thereof shall have been given by the Operating Agent or the Collateral
Agent to the Seller;
(b) except for defaults occasioned solely by the
filing of the Chapter 11 Cases, defaults arising from Debts with
respect to which the Bankruptcy Code prohibits any Originator from
complying or permits any Originator not to comply, and defaults with
respect to Debt where the holder thereof is stayed by the Bankruptcy
code or the Bankruptcy court from exercising remedies as a result of
such default, (i) a default or breach shall occur under any other
agreement, document or instrument to which any Originator, any
Originator's Subsidiary, the Seller or the Servicer is a party or by
which any such Person or its property is bound that involves the
failure to make any payment when due in respect of any Debt (other than
the Seller Secured Obligations) of any such Person in excess of
$1,000,000 in the aggregate, or (ii) any other default or breach shall
occur with respect to any such Debt in excess of $1,000,000 in the
aggregate and such default or breach causes, or permits any holder of
such Debt or a trustee or agent to cause, such Debt or a portion
thereof to become due prior to its stated maturity or prior to its
regularly scheduled dates of payment, regardless of whether such
default is waived, or such right is exercised, by such holder, trustee
or agent, and such default or breach remains uncured and unwaived for
15 days;
(c) a case or proceeding (other than the Chapter 11
Cases) shall have been commenced against any Originator, the Seller or
the Servicer seeking a decree or order in respect of any such Person
(i) under the Bankruptcy Code or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) appointing a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for any such Person or for any substantial part of such
Person's assets, or (iii) ordering the winding-up or liquidation of the
affairs of any such Person;
(d) except for the filing of the Chapter 11 Cases,
any Originator, the Seller or the Servicer shall (i) file a petition
seeking relief under the Bankruptcy Code or any other applicable
federal, state or foreign bankruptcy or other similar law, (ii) consent
or fail to object in a timely and appropriate manner to the institution
of proceedings thereunder or to the filing of any such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for
any such Person or for any substantial part of such Person's assets,
(iii) make an assignment for the benefit of creditors, or (iv) take any
corporate action in furtherance of any of the foregoing;
(e) the Seller or the Servicer (other than a DIP
Servicer) is not Solvent or admits in writing its inability to, or is
generally unable to, pay its Debts as such Debts become due;
(f) a final judgment or judgments in excess of
$5,000,000 (less the amount, if any, of any such judgment which is
covered by insurance as to which the insurer has confirmed coverage in
writing) in the aggregate at any time outstanding shall be rendered
against any Originator or the Servicer and the same shall not, within
60 days after the entry thereof, have been discharged or execution
thereof stayed or bonded pending appeal, or shall not have been
discharged prior to the expiration of any such stay;
(g) a final judgment shall be rendered against the
Seller;
(h) any information contained in any Investment Base
Certificate is untrue or incorrect in any respect or any representation
or warranty of any Originator or the Seller herein or in any other
Related Document or in any written statement, report, financial
statement or certificate (other than an Investment Base Certificate)
made or delivered by any Originator or the Seller to any Affected Party
is untrue or incorrect in any material respect as of the date when made
or deemed made;
(i) any Governmental Authority (including the IRS or
the PBGC) shall file notice of a Lien with regard to any assets of any
Originator (other than a Lien (i) limited by its terms to assets other
than Receivables and
(ii) not materially adversely affecting the financial condition of such
Originator or Cone Xxxxx' ability to perform as Servicer hereunder);
(j) any Governmental Authority (including the IRS or
the PBGC) shall file notice of a Lien with regard to any of the assets
of the Seller;
(k) the Operating Agent or the Collateral Agent shall
have determined that any event or condition (other than the filing of
the Chapter 11 Cases) that has had or could reasonably be expected to
have or result in a Material Adverse Effect has occurred;
(l) (i) a default or breach shall occur under any
provision of Sections 4.02(o), 4.04, 5.01 or 8.14 of the Transfer
Agreement and the same shall remain unremedied for one Business Day or
more after the occurrence thereof, (ii) a default or breach shall occur
under any other provision of the Transfer Agreement and the same shall
remain unremedied for five Business Days or more after written notice
thereof shall have been given by the Operating Agent or the Collateral
Agent to the Seller or (iii) the Transfer Agreement shall for any
reason cease to evidence the transfer to the Seller of the legal and
equitable title to, and ownership of, the Transferred Receivables;
(m) except as otherwise expressly provided herein,
any Lockbox Agreement or the Transfer Agreement shall have been
modified, amended or terminated without the prior written consent of
the Purchaser, the Operating Agent and the Collateral Agent;
(n) an Event of Servicer Termination shall have
occurred;
(o) [intentionally omitted.]
(p) (i) with respect to the Transferred Receivables,
(A) prior to their Purchase hereunder, (1) the Seller shall cease to
hold valid and properly perfected title to and sole record and
beneficial ownership in such Transferred Receivables or (2) the
Purchaser shall cease to hold a first priority, perfected Lien in such
Transferred Receivables or (B) after their Purchase hereunder, (1) the
Purchaser shall cease to hold either (a) valid and properly perfected
title to and sole record and beneficial ownership in such Transferred
Receivables or (b) a first priority, perfected Lien in such Transferred
Receivables; or (ii) the Purchaser and the Collateral Agent shall cease
to hold a first priority, perfected Lien in the Seller Collateral;
(q) a default or breach of any of the covenants set
forth in Annex G shall have occurred;
(r) the Purchase Discount Rate shall be less than 50%
for two consecutive Settlement Periods;
(s) the Seller shall amend its articles of
organization or operating agreement without the express prior written
consent of the Purchaser, the Operating Agent and the Collateral Agent;
(t) CRLLC shall have received an Election Notice
pursuant to Section 2.01(d) of the Transfer Agreement;
(u) a Change of Control shall have occurred;
(v) a material adverse change shall occur after the
Closing Date in the financial condition or operation of any Originator,
the Seller or the Servicer (excluding the filing of the Chapter 11
Cases in the case of any Originator or the Servicer) or in the
collectibility of the Transferred Receivables;
(w) any Originator or any other Person shall obtain
the entry of an order authorizing any other action or actions adverse
to the Seller, the Operating Agent or the Purchaser, or their
respective rights and remedies hereunder or their interests in the
Transferred Receivables, that would, individually or in the aggregate,
have a Material Adverse Effect (excluding the filing of the Chapter 11
Cases);
(x) the entry by the Bankruptcy Court of an order
authorizing the appointment of an interim or permanent trustee in the
Chapter 11 Cases or the appointment of an examiner in the Chapter 11
Cases with expanded powers to operate or manage the financial affairs,
business, or reorganization of any or all of the Originators;
(y) any or all of the Chapter 11 Cases shall be
dismissed or converted from one under Chapter 11 to one under Chapter 7
of the Bankruptcy Code;
(z) the entry of an order by the Bankruptcy Court
granting relief from or modifying the automatic stay of Section 362 of
the Bankruptcy Code (i) to allow any creditor (other than the Operating
Agent on behalf of itself and the Purchaser) to execute upon or enforce
a Lien on any of the Transferred Receivables, or (ii) with respect to
any Lien of, or the granting of any Lien on any Transferred Receivables
to, any state or local environmental or regulatory agency or authority;
(aa) the Interim Order or the Final Order shall be
amended, modified, supplemented, revoked, vacated, stayed or
supplemented without the Operating Agent's and the Purchaser's prior
written consent in each such instance;
(bb) the Final Order (in form and substance
acceptable to the Operating Agent and the Purchaser) is not entered
immediately following the expiration of the Interim Order;
(cc) the sale without the Operating Agent's and the
Purchaser's written consent of all or substantially all of the assets
of any or all of the Originators or the other Debtors, either though a
sale under Section 363 of the Bankruptcy Code, through a confirmed plan
of reorganization or liquidation in the Chapter 11 Cases or otherwise;
or
(dd) the Credit Facility shall be refinanced,
replaced or refunded after the filing of the Chapter 11 Cases or any or
all of the Debtors obtain a debtor in possession credit facility in the
Chapter 11 Cases (other than under the Purchase Agreement and the
Transfer Agreement).
then, and in any such event, the Operating Agent shall, at the request
of, or may, with the consent of, the Purchaser or the Collateral Agent,
by notice to the Seller, declare the Facility Termination Date to have
occurred without demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Seller; provided, that the
Facility Termination Date shall automatically occur (i) upon the
occurrence of any of the Termination Events described in Sections
9.01(c), (d), (e) or (t) or (ii) four days after the occurrence of the
Termination Event described in Section 9.01(a)(i) if the same shall not
have been remedied by such time, in each case without demand, protest
or any notice of any kind, all of which are hereby expressly waived by
the Seller.
(F) Section 9.02(d) of the Purchase Agreement shall be deleted in its
entirety and the following new Section 9.02(d) shall be substituted in lieu
thereof:
(d) the Operating Agent or the Collateral Agent shall have
determined that any event or condition (other than the filing of the
Chapter 11 Cases) that materially adversely affects the ability of the
Servicer to collect the Transferred Receivables or to otherwise perform
hereunder has occurred;
(G) Section 2.02 of the Transfer Agreement shall be amended by adding
the following new sentence at the end thereof:
The priority of such Lien shall be as set forth in the Orders.
(H) Section 4.01 of the Transfer Agreement shall be amended by adding
the following new sentence at the end of the introductory paragraph thereof:
Notwithstanding anything to the contrary set forth in this Article IV,
it is expressly understood and agreed that each of the representations
and warranties made in this Article IV is and shall be (i) subject to
(x) compliance by the Originators with any applicable provisions of the
Bankruptcy Code and (y) the entry of the Interim Order and the Final
Order (as applicable) and compliance by the Originators with the same,
and (ii) qualified to exclude any noncompliance resulting solely from
the filing of the Chapter 11 Cases (but not excluding
noncompliance resulting from any subsequent event, whether or not
related to or derivative of the filing of the Chapter 11 Cases).
(I) Section 4.01(e) of the Transfer Agreement shall be deleted in its
entirety.
(J) Section 4.02(p) of the Transfer Agreement shall be deleted in its
entirety and the following new Section 4.02(p) shall be substituted in lieu
thereof:
(p) Special Notice List. Each of the Originators shall include
counsel to the Operating Agent on any "Special Notice List" or other
similar list of parties to be served with pleadings or notices in the
Chapter 11 Cases.
(K) Section 4.03 of the Transfer Agreement shall be amended by adding
the following new paragraphs (m) and (n) at the end thereof:
(m) Amendments to Interim Order or Final Order. No Originator
shall consent to any amendment, supplement or other modification of any
of the terms or provisions contained in, or applicable to, (a) the
Interim Order or (b) the Final Order.
(n) Filing of Motions and Applications. No Originator shall
apply to the Bankruptcy Court for authority to (i) take any action that
is prohibited by the terms of any of the Related Documents, or (ii)
refrain from taking any action that is required to be taken by the
terms of any of the Related Documents or the Orders.
(L) The Transfer Agreement shall be further amended by adding the
following new Section 8.15 at the end thereof:
8.15 Parties Including Trustees; Bankruptcy Court Proceedings.
This Agreement, the other Related Documents, and all Transfers made and
Liens created hereby or pursuant to any other Related Document shall be
binding upon each Originator, the estate of each Originator, and any
trustee or successor in interest of any Originator in any of the
Chapter 11 Cases or any subsequent case commenced under Chapter 7 of
the Bankruptcy Code, and shall not be subject to Section 365 of the
Bankruptcy Code. This Agreement and the other Related Documents shall
be binding upon, and inure to the benefit of, the respective successors
and assigns of Operating Agent and the Purchaser and each of their
respective assigns, transferees and endorsees. Each of the Transfers
made and the Liens created by this Agreement and the other Related
Documents shall be and remain valid and perfected in the event of the
commencement of the Chapter 11 Cases, the substantive consolidation of
the Chapter 11 Cases or conversion of any or all of the Chapter 11
Cases or any other bankruptcy case of any Originator to a case under
Chapter 7 of the Bankruptcy Code or in the event of dismissal of any or
all of the Chapter 11 Cases , in each case without the necessity that
the Operating Agent or the Purchaser file financing statements or
otherwise perfect
their respective ownership interests, security interests or Liens under
applicable law.
(M) Annex G to the Purchase Agreement shall be deleted in its entirety
and the revised Annex G attached to this Amendment as Exhibit A shall be
substituted in lieu thereof.
(N) Annex X to the Purchase Agreement and the Transfer Agreement shall
be amended by deleting therefrom the definitions of the terms "Applicable
Margin", Concentration Discount Amount", "Excess Liquidity", "Facility
Termination Date," "Final Purchase Date", "Maximum Purchase Limit", "Purchase
Discount Rate Cap", "Receivables Availability", "Related Documents" and
"Reserves" and "Unused Facility Fee" and by substituting in lieu thereof the
following new respective definitions of such terms:
"Applicable Margin" shall mean 2.75%.
"Concentration Discount Amount" means, with respect to (i)
Levi Xxxxxxx, Xxxx Xxxxxxx Canada, Levi Xxxxxxx Europe and the
Affiliates thereof (collectively, the "Levi Xxxxxxx Obligors"), 40% and
(ii) any Obligor that is not a Levi Xxxxxxx Obligor, and as of any date
of determination thereof, the percentage of the aggregate Outstanding
Balance at such time of all Eligible Receivables set forth in the table
below based upon the Senior Unsecured Short-Term Debt Rating (or, in
the absence of such rating, the equivalent Senior Unsecured Long-Term
Debt Rating) assigned to such Obligor at such time by S&P and Xxxxx'x
(and, if such Obligor is rated by both agencies and has a split rating,
the applicable rating will be the lower of the two):
---------------------- ----------------------- ----------------------
MINIMUM S&P RATING MINIMUM XXXXX'X RATING APPLICABLE PERCENTAGE
---------------------- ----------------------- ----------------------
A-1+ or AA- P-1 or Aa3 15.0%
---------------------- ----------------------- ----------------------
A-1 or A+ P-1 or A1 15.0%
---------------------- ----------------------- ----------------------
Below A-1 or A+ Below P-2 or Baa1 10.0%
or not rated by or not rated either
either S&P or Xxxxx'x either S&P or Xxxxx'x
---------------------- ----------------------- ----------------------
If an Obligor has neither a Senior Unsecured Short-Term Debt
Rating or a Senior Unsecured Long-Term Debt Rating by either S&P or
Xxxxx'x, then such Obligor's Concentration Discount Amount will be
10.0% of the aggregate Outstanding Balance at such time of all Eligible
Receivables. The percentages referenced above may be changed with
respect to any or all Obligors at any time at the sole discretion of
the Operating Agent.
"Excess Liquidity" shall mean, as at any time of determination
thereof, the sum (without duplication) of (a) the aggregate
unrestricted cash of Cone Xxxxx and its Subsidiaries at such time
(excluding any such cash that serves as cash collateral for letters of
credit or other indebtedness of Cone Xxxxx or any other Person), minus
(b) all checks drawn by Cone Xxxxx or any of its Subsidiaries that are
paid on such date, plus (c) the Receivables Availability at such time.
"Facility Termination Date" shall mean the earliest of (a) the
date so designated pursuant to Section 9.01 of the Purchase Agreement,
(b) 90 days prior to the Final Purchase Date, (c) 90 days prior to the
date of termination of the Maximum Purchase Limit specified in a notice
from the Seller to the Purchaser delivered pursuant to and in
accordance with Section 2.02(b) of the Purchase Agreement, and (c) two
(2) Business Days prior to the date any plan or plans of reorganization
or liquidation for any or all of the Originators in the Chapter 11
Cases becomes effective.
"Final Purchase Date" shall mean May 29, 2004.
"Maximum Purchase Limit" shall mean $35,000,000.
"Purchase Discount Rate Cap" shall mean a rate equal to
eighty-five percent (85%) with respect to that portion of the
Investment Base which consists of Eligible Receivables; provided, that
the Purchase Discount Rate Cap may be changed at any time at the sole
discretion of the Operating Agent, exercised in good faith (other than
solely as a result of the filing of the Chapter 11 Cases).
"Receivables Availability" shall mean, as at any time of
determination thereof, the sum (without duplication) of the amount (if
any) by which the Availability at such time exceeds the Capital
Investment at such time, and for purposes of this definition
Availability shall be determined by the Operating Agent in its good
faith credit judgment based on the most recently submitted Investment
Base Certificate and such other information as may be available to the
Operating Agent and with trade payables and other expenses and
liabilities of Cone Xxxxx and its Subsidiaries being paid in the
ordinary course of business and without acceleration of sales of
inventory by Cone Xxxxx and its Subsidiaries, and such determination
shall be binding and conclusive on all parties to the Purchase
Agreement in the absence of manifest error.
"Related Documents" shall mean each Lockbox Agreement, the
Transfer Agreement, the Purchase Agreement, each Receivables
Assignment, the Purchase Assignment, Parent Agreement, the Insurance
Policy, the Insurance Agreement, the Orders, and all other agreements,
instruments, documents and certificates identified in the Schedule of
Documents and including all other pledges, powers of attorney,
consents, assignments, contracts, notices, and all other written matter
whether heretofore, now or hereafter executed by or on behalf of any
Person, or any employee of any Person, and delivered in connection with
the Transfer
Agreement, the Purchase Agreement or the transactions contemplated
thereby. Any reference in the Transfer Agreement, the Purchase
Agreement or any other Related Document to a Related Document shall
include all Appendices thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to such
Related Document as the same may be in effect at any and all times such
reference becomes operative.
"Reserves" shall mean (i) the aggregate Concentration Discount
Amount for all Obligors of Transferred Receivables, (ii) the Special
Reserve, (iii) the Extended Term Reserve, and (iv) such other reserves
as the Operating Agent may establish from time to time in its sole
discretion.
"Unused Facility Fee" shall have the meaning assigned to it in
the Section 2.07(a)(i) of the Purchase Agreement.
(O) Annex X to the Purchase Agreement and the Transfer Agreement shall
be further amended by deleting clauses (f) and (m) of the definition therein of
the term "Eligible Receivable" and by substituting in lieu thereof the following
new clauses (f) and (m), respectively:
(f) that does not represent "billed but not yet shipped" or
"xxxx and hold" goods or merchandise, unperformed services, consigned
goods or "sale or return" goods and does not represent "progress
billed" goods or merchandise or arise from a transaction for which any
additional performance by the Originator thereof, or acceptance by or
other act of the Obligor thereunder, remains to be performed as a
condition to any payments on such Receivable;
(m) with respect to which the Originator thereof has submitted
all necessary documentation for payment to the Obligor thereunder and
such Originator has fulfilled all of its other obligations in respect
thereof;
(P) Annex X to the Purchase Agreement and the Transfer Agreement shall
be further amended by adding thereto the following new definitions in
appropriate alphabetical order:
"Adjusted Default Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage) of:
(a) (i) the average of the respective Outstanding
Balances of all Transferred Receivables (other than any Transferred
Receivable that is a liability of Azteca) with respect to which any
payment, or part thereof, remained unpaid for more than 90 days past
their respective Maturity Dates as of the last day of the three
Settlement Periods immediately preceding such date, plus (without
duplication) (ii) the aggregate Outstanding Balance of Transferred
Receivables
(other than any Transferred Receivable that is a liability of Azteca)
that were written off as uncollectible during such Settlement Periods
to
(b) the average of the respective Outstanding
Balances of all Transferred Receivables (other than any Transferred
Receivable that is a liability of Azteca) as of the last day of the
three Settlement Periods immediately preceding such date.
"Azteca" shall mean Azteca Production International, Inc. and
its Affiliates.
"Bankruptcy Court" shall have the meaning given such term in
the Eleventh Amendment.
"Bankruptcy Rules" shall mean the Federal Rules of Bankruptcy
Procedure, as the same may from time to time be in effect and
applicable to the Chapter 11 Cases.
"Chapter 11 Cases" shall have the meaning given such term in
the Eleventh Amendment.
"Debtors" shall have the meaning given such term in the
Eleventh Amendment.
"DIP Servicer" shall mean each Servicer that is a debtor and
debtor in possession in the Chapter 11 Cases.
"Eleventh Amendment" means that certain Eleventh Amendment and
Waiver to Securitization Agreements dated as of September 23, 2003 by
and among the Seller, the Originators, the Servicer, the Purchaser, the
Operating Agent and the Collateral Agent.
"Eleventh Amendment Effective Date" means the date on which
all of the conditions precedent to the effectiveness of the Eleventh
Amendment specified in Section 7 thereof are fulfilled to the
satisfaction of the Operating Agent and the Purchaser.
"Final Order" shall mean the order of the Bankruptcy Court
entered in the Chapter 11 Cases after a final hearing pursuant to
Sections 363 and 364 of the Bankruptcy Code and Bankruptcy Rule 4001,
satisfactory in form and substance to the Purchaser and the Operating
Agent, and from which no appeal has been timely filed, or if timely
filed, no stay pending appeal shall have been granted, together with
all extensions, modifications and amendments thereto, authorizing each
of the Originators to enter into the Eleventh Amendment and to perform
under the Related Documents to which it is or will be a party, to sell
or contribute
Receivables to Seller under the Sale Agreement, and to incur
indebtedness and grant Liens under the Sale Agreement and the other
Related Documents, all as set forth in such order.
"Interim Order" shall mean the interim order of the Bankruptcy
Court entered in the Chapter 11 Cases after an interim hearing
(assuming satisfaction of the standards prescribed in Sections 363 and
364 of the Bankruptcy Code and Bankruptcy Rule 4001 and other
applicable law), together with all extensions, modifications and
amendments thereto, satisfactory in form and substance to Agent,
authorizing, on an interim basis, each of the Originators to enter into
the Eleventh Amendment and to perform under the Related Documents to
which it is or will be a party, to sell or contribute Receivables to
Seller under the Sale Agreement, and to incur indebtedness and grant
Liens under the Sale Agreement and the other Related Documents, all as
set forth in such order.
"Orders" shall mean the Interim Order and the Final Order.
"Special Reserve" shall mean $2,500,000.
"Tenth Amendment" means that certain Tenth Amendment to
Securitization Agreements dated as of September 5, 2003, by and among
the Seller, the Originators, the Servicer, the Purchaser, and the
Operating Agent.
(Q) Each of the Securitization Agreements shall be further amended so
that each and every reference therein to Cone Xxxxx or CFT shall be deemed, from
and after the Eleventh Amendment Effective Date, to refer to such Person as a
debtor and debtor in possession in the Chapter 11 Cases.
3. No Other Waivers or Amendments. Except for the waivers and
amendments expressly set forth and referred to in Section 1 and Section 2 above,
respectively, the Securitization Agreements shall remain unchanged and in full
force and effect. The waivers set forth in Section 1 above relate solely to the
specific events described in such section, and nothing in this Amendment is
intended (or shall be construed) as a waiver of any other Termination Events,
Incipient Termination Events, Events of Servicer Termination or Incipient
Servicer Termination Events that may arise from the occurrence of any other
event or events.
4. Representations and Warranties. Each Company hereby represents and
warrants to GECC (in its capacity as Purchaser and the Operating Agent) that (i)
subject to the entry of the Interim Order in the case of Cone Xxxxx and CFT,
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, and after giving effect to, 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 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 Eleventh Amendment Effective Date (and after
giving effect to this Amendment).
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 Eleventh Amendment Effective Date in connection with any of the
Securitization Agreements or the transactions contemplated thereunder.
7. Conditions to Effectiveness. This Amendment shall become effective
as of the Eleventh Amendment Effective Date subject to the satisfaction on or
prior to such date of the following conditions precedent to such effectiveness:
(i) the receipt by the Operating Agent of one or more counterparts of this
Amendment, duly executed, completed and delivered by each of the Companies, the
Purchaser and the Operating Agent, (ii) the receipt by the Operating Agent of
payment (for the benefit of GECC as Purchaser) of a waiver and amendment fee in
the amount of $250,000 (which fee shall be fully earned and non-refundable upon
payment; provided that if (x) Cone Xxxxx and the other Debtors hereafter become
the subject of the Chapter 11 Cases, (y) Cone Xxxxx and such other Debtors
obtain a debtor in possession credit facility in the Chapter 11 Cases that
replaces the securitization facility provided under the Securitization
Agreements, and (z) GECC is the primary agent or co-agent for the lenders
participating in such facility, GECC hereby agrees that it will credit $250,000
of such amendment fee against the payment of any origination, structuring or
similar fee payable to GECC (for its own account) at the time of the closing of
such facility; provided further that nothing in this Amendment is intended, or
shall be construed, as an offer or commitment by GECC to provide, or otherwise
participate as an agent or lender in, any such debtor in possession credit
facility), (iii) the receipt by the Operating Agent of payment (for its own
account) of the $50,000 administration fee due on the Eleventh Amendment
Effective Date under Section 2.07(a)(ii) of the Purchase Agreement as amended by
this Amendment, and (iv) the receipt by the Operating Agent of written evidence
satisfactory to it that the Chapter 11 Cases have been commended by Cone Xxxxx
and CFT and that the Interim Order, in form and substance satisfactory to the
Operating Agent, has been entered by the Bankruptcy Court in the Chapter 11
Cases; provided that the waiver provided in clause (i) of Section 1 hereof shall
become effective as of the date of this Amendment upon the satisfaction of the
condition precedent specified in clause (i) above only; and provided further
that (A) no Purchases or Transfers shall be made after the filing of the Chapter
11 Cases unless and until all of the conditions precedent specified in clauses
(ii), (iii) and (iv) of this Section 7 are satisfied and (B) the waiver provided
in clause (i) of Section 1
hereof shall expire and become null and void on the third (3rd) Business Day
after the date of the filing of the Chapter 11 Cases unless on or prior to such
date all of the conditions precedent specified in clauses (ii), (iii) and (iv)
of this Section 7 are satisfied.
8. Reimbursement of Expenses. Each Company hereby agrees that it shall
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.
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 the Prior Amendments and 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 Xxxxx' and GECC's Capacities. Cone Xxxxx 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 Xxxxx" 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, the Operating
Agent, and the Collateral Agent, and all references herein to "GECC" shall be
deemed to include it in all such capacities unless otherwise expressly
indicated.
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/ Xxxxxx X.Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Secretary
CONE XXXXX CORPORATION, as an
Originator and as Servicer
By /s/ W. Xxxxx Xxxxxxx
Name: W. Xxxxx Xxxxxxx
Title: Treasurer
CONE FOREIGN TRADING LLC
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
as Purchaser, Operating Agent and Collateral Agent
By: /s/ C. Xxxx Xxxxx
Name: C. Xxxx Xxxxx
Title: Duly Authorized Signatory
EXHIBIT A
Annex G to Purchase Agreement
Financial Covenants
(a) Maximum Capital Expenditures. Cone Xxxxx and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures during each of the
following periods that exceed in the aggregate the amounts set forth opposite
such period:
Period: Maximum Capital Expenditures:
------------------------ -----------------------------
Fiscal year ending
December 28, 2003 $6,000,000
Two fiscal months ending
February 29, 2004 2,000,000
(b) Minimum Excess Liquidity. The Seller and Cone Xxxxx shall maintain
an Excess Liquidity at all times of not less than $2,000,000.
(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 8.0%;
(ii) Adjusted Default Ratio shall be less than 4.0%;
(iii) Delinquency Ratio shall be less than 2.2%;
(iv) Gross Dilution Ratio shall be less than 3.0%;
(v) Receivables Collection Turnover shall be less than 70
days; and
(vi) Seller's Net Worth Percentage shall not be less than
5.0%.
(d) Minimum EBITDA. Cone Xxxxx and its Subsidiaries shall have on a
consolidated basis, as of the end of each period set forth below, EBITDA for the
period then ended of not less than the amount set forth opposite such period:
Period: Minimum EBITDA:
------------------------ ---------------
Three fiscal months ending
September 30, 2003 $ 50,000
Six fiscal months ending
December 28, 2003 200,000
Eight fiscal months ending
February 29, 2004 2,500,000
(e) 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
proceeds of insurance or 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 insurance proceeds or 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 Xxxxx and its Subsidiaries to unconsolidated affiliates as
determined on a consolidated basis.
"EBITDA" shall mean, with respect to Cone Xxxxx 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)
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, and (vii) Restructuring Charges.
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.
"Excess Liquidity" shall have the meaning ascribed to such
term in Annex X.
"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 Xxxxx and Seller only,
Redwood Yield and fees (other than servicing fees), (d) with respect to Cone
Xxxxx only, amounts paid or payable by Cone Xxxxx under the Xxxxxx Swap
Agreement, and (e) with respect to Cone Xxxxx only, net cash paid with respect
to interest, discount, yield, and fees owed by Cone Xxxxx or any of its
Subsidiaries under the Existing Receivables Purchase Facility.
"Net Income" shall mean, with respect to Cone Xxxxx and its
Subsidiaries on a consolidated basis and for any period, the after taxes net
income or loss of Cone Xxxxx and its Subsidiaries as it would appear on a
consolidated statement of income of Cone Xxxxx 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 Xxxxx or any
Subsidiary in the net income or loss of any other Person).
"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 Xxxxx
and its Subsidiaries on a consolidated basis and for any period, (i) any and all
expenses and charges related to such Persons' reconfiguration of their U.S.
denim operations including the closing of certain facilities, the outsourcing of
certain production and administrative functions and certain personnel reductions
at the Carlisle and Jacquard business units, (ii) any and all losses on the
write-down or sale of assets of such Persons during the pendency of the Chapter
11 Cases, (iii) any and all professional fees and expenses of such Persons'
attorneys and other professional advisors related to the Chapter 11 Cases as
well as professional fees and expenses of its creditors related to the Chapter
11 Cases, (iv) any and all fees and expenses incurred by such Persons in
connection with the Tenth Amendment and the Eleventh Amendment and any debtor in
possession credit facility obtained by the Debtors in the Chapter 11 Cases, (v)
non-cash charges arising from the termination of any Plans on or after the
filing of the Chapter 11 Cases, and (vi) any and all other expenses of such
Persons that would be classified as a reorganization item pursuant to AICPA
Statement of Position 90-7; provided, however, that for purposes of this
definition the aggregate cash portion of the Restructuring Charges for any
period shown below shall not exceed the amount shown below for such period:
Period: Minimum Cash Portion:
------------------------ ---------------------
Three fiscal months ending
September 30, 2003 6,000,000
Six fiscal months ending
December 28, 2003 11,000,000
Eight fiscal months ending
February 29, 2004 12,500,000
(f) 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.
