TENTH AMENDMENT TO MASTER LEASE
THIS TENTH AMENDMENT TO MASTER LEASE, dated as of January 28, 2000
(this "Amendment"), is between ATLANTIC FINANCIAL GROUP, LTD., a Texas limited
partnership ("Lessor"), and CONE XXXXX CORPORATION, a North Carolina corporation
("Lessee").
BACKGROUND
1. Lessor (as assignee of TBC Realty II Corporation) and Lessee are
parties to that certain Master Lease, dated as of October 24, 1994 (as
heretofore amended, the "Lease").
2. Lessee and Lessor desire to amend the Lease in certain respects as
set forth herein.
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 hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used in this Amendment and
not otherwise defined herein shall have the meanings assigned thereto in the
Lease.
SECTION 2. Representations and Warranties; Covenants. Section 32 of the
Lease is hereby deleted in its entirety, and the following shall be substituted
therefor:
I. Representations and Warranties of Lessee; Covenants of Lessee
A. Representations and Warranties. The Lessee represents and warrants
with respect to itself and to its Subsidiaries that:
1. Organization and Authority.
(a) The Lessee and each Subsidiary is a corporation duly organized and validly
existing under the laws of the jurisdiction of its formation;
(a) The Lessee and each Subsidiary (x) has the requisite power and authority to
own its properties and assets and to carry on its business as now being
conducted and as contemplated in the Lease Documents, and (y) is qualified to do
business in every jurisdiction in which failure so to qualify would have a
Material Adverse Effect;
(a) The Lessee has the power and authority to execute, deliver and perform this
Amendment, and to execute, deliver and perform each of the other Lease Documents
to which it is a party;
(a) Each Credit Party (other than the Lessee) has the power and authority to
execute, deliver and perform the Facility Guaranty and each of the other Lease
Documents to which it is a party;
(a) When executed and delivered, each of the Lease Documents to which any Credit
Party is a party will be the legal, valid and binding obligation or agreement,
as the case may be, of such Credit Party, enforceable against such Credit Party
in accordance with its terms, subject to the effect of any applicable
bankruptcy, moratorium, insolvency, reorganization or other similar law
affecting the enforceability of creditors' rights generally and to the effect of
general principles of equity (whether considered in a proceeding at law or in
equity); and
(a) The Security Documents create valid security interests in the Collateral
purported to be covered thereby, which security interests and Liens are and will
remain perfected security interests and Liens, prior to all other Liens other
than Permitted Liens.
1. Lease Documents. The execution, delivery and performance by each Credit Party
of each of the Lease Documents to which it is a party:
(a) have been duly authorized by all requisite Organizational Action of such
Credit Party required for the lawful execution, delivery and performance
thereof;
(a) do not violate any provisions of (i) any applicable law, rule or regulation,
(ii) any judgment, writ, order, determination, decree or arbitral award of any
Governmental Authority or arbitral authority binding on such Credit Party or its
properties, or (iii) the Organizational Documents or Operating Documents of such
Credit Party;
(a) does not and will not be in conflict with, result in a breach of or
constitute an event of default, or an event which, with notice or lapse of time
or both, would constitute an event of default, under any contract, indenture,
agreement or other instrument or document to which such Credit Party is a party,
or by which the properties or assets of such Credit Party are bound; and
(a) does not and will not result in the creation or imposition of any Lien upon
any of the properties or assets of such Credit Party or any Subsidiary, except
any Liens in favor of the Secured Parties created by the Security Documents.
1. Solvency. Each Credit Party is Solvent after giving effect to the
transactions contemplated by the Credit Agreement and the Lease Documents.
1. Subsidiaries and Stockholders. The Lessee has no Subsidiaries other than
those Persons listed as Subsidiaries in Schedule 8.4 and additional Subsidiaries
created or acquired after the Closing Date in compliance with Section 32(b)(xx);
Schedule 8.4 states as of the date hereof the organizational form of each
entity, the authorized and issued capitalization of each Subsidiary listed
thereon, the number of shares or other equity interests of each class of capital
stock or interest issued and outstanding of each such Subsidiary and the number
and/or percentage of outstanding shares or other equity interest (including
options, warrants and other rights to acquire any interest) of each such class
of capital stock or other equity interest owned by Lessee or by any such
Subsidiary; the outstanding shares or other equity interests of each such
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable; and Lessee and each such Subsidiary owns beneficially and of
record all the shares and other interests it is listed as owning in Schedule
8.4, free and clear of any Lien (other than Liens in favor of the Collateral
Agents under the Security Documents).
1. Ownership Interests. Lessee owns no interest in any Person other than the
Persons listed in Schedule 8.4, equity investments in Persons not constituting
Material Subsidiaries permitted under Section 32(c)(vii) and additional
Subsidiaries created or acquired after the date hereof in compliance with
Section 32(b)(xx).
1. Financial Condition.
(a) The Lessee has heretofore furnished to Lessor and Lender an audited
consolidated balance sheet of the Lessee and its Subsidiaries as at January 3,
1999 and the notes thereto and the related consolidated statements of income,
stockholders' equity and cash flows for the Fiscal Year then ended as examined
and certified by McGladrey & Xxxxxx LLP, and unaudited consolidated interim
financial statements of the Lessee and its Subsidiaries consisting of a
consolidated balance sheets and related consolidated statements of income,
stockholders' equity and cash flows, in each case without notes, for and as of
the end of the nine month period ending October 3, 1999. Except as set forth
therein, such financial statements (including the notes thereto) present fairly
the financial condition of the Lessee and its Subsidiaries as of the end of such
Fiscal Year and nine month period and results of their operations and the
changes in its stockholders' equity for the Fiscal Year and interim period then
ended, all in conformity with GAAP applied on a Consistent Basis, subject
however, in the case of unaudited interim statements to year end audit
adjustments;
(a) since the later of (1) the date of the audited financial statements
delivered pursuant to subparagraph (A) above or (2) the date of the audited
financial statements most recently delivered pursuant to Section 32(b)(i)(A)
hereof, there has been no material adverse change in the condition, financial or
otherwise, of the Lessee or any of its Subsidiaries or in the businesses,
properties, performance, prospects or operations of the Lessee or its
Subsidiaries, nor have such businesses or properties been materially adversely
affected as a result of any fire, explosion, earthquake, accident, strike,
lockout, combination of workers, flood, embargo or act of God other than (i) as
set forth in the October Projections and (ii) as disclosed to Lessor and Lender
with respect to a certain customer's payment practices; and
(a) except as set forth in the financial statements referred to in subparagraph
(A) above or in Schedule 8.6 or permitted by Section 32(c)(v), neither the
Lessee nor any Subsidiary has incurred, other than in the ordinary course of
business, any material Indebtedness, Contingent Obligation or other commitment
or liability which remains outstanding or unsatisfied.
1. Title to Properties. The Lessee and each of its Subsidiaries and each other
Credit Party has good and marketable title to all its real and personal
properties, subject to no transfer restrictions or Liens of any kind, except for
the transfer restrictions and Liens described in Schedule 8.7 and Liens
permitted by Section 32(c)(iv).
1. Taxes. Except as set forth in Schedule 8.8, the Lessee and each of its
Subsidiaries has filed or caused to be filed all federal, state and local tax
returns which are required to be filed by it and, except for taxes and
assessments being contested in good faith by appropriate proceedings diligently
conducted and against which reserves (if required in accordance with GAAP) are
reflected in the financial statements described in Section 32(a)(vi)(A) or
Section 32(b)(i)(A) or (B) and satisfactory to the Lessee's independent
certified public accountants have been established, have paid or caused to be
paid all taxes as shown on said returns or on any assessment received by it, to
the extent that such taxes have become due.
1. Other Agreements. No Credit Party nor any Subsidiary is
(a) a party to or subject to any judgment, order, decree, agreement, lease or
instrument, or subject to other restrictions, which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect; or
(a) in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument to
which such Credit Party or any Subsidiary is a party, which default has, or if
not remedied within any applicable grace period could reasonably be likely to
have, a Material Adverse Effect.
1. Litigation. Except as set forth in Schedule 8.10, there is no action, suit,
investigation or proceeding at law or in equity or by or before any governmental
instrumentality or agency or arbitral body pending, or, to the knowledge of the
Lessee, threatened by or against the Lessee or any Subsidiary or other Credit
Party or affecting the Lessee or any Subsidiary or other Credit Party or any
properties or rights of the Lessee or any Subsidiary or other Credit Party,
which could reasonably be likely to have a Material Adverse Effect.
1. Investment Company. No Credit Party is an "investment company," or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended (15 X.X.X.xx. 80a-1, et seq.).
1. Patents, Etc. The Lessee and each other Credit Party owns or has the right to
use, under valid license agreements or otherwise, all material patents,
licenses, franchises, trademarks, trademark rights, trade names, trade name
rights, trade secrets and copyrights necessary to or used in the conduct of its
businesses as now conducted and as contemplated by the Lease Documents, without
known conflict with any patent, license, franchise, trademark, trade secret,
trade name, copyright, other proprietary right of any other Person.
1. No Untrue Statement. Neither (A) this Lease nor any other Lease Document or
certificate or document executed and delivered by or on behalf of the Lessee or
any other Credit Party in accordance with or pursuant to any Lease Document nor
(B) any statement, representation, or warranty provided to the Lender or Lessor
in connection with the negotiation or preparation of the Lease Documents
contains any misrepresentation or untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstance under which it was
made, in order to make any such warranty, representation or statement contained
therein not misleading.
1. No Consents, Etc. Neither the respective businesses or properties of the
Credit Parties or any Subsidiary, nor any relationship among the Credit Parties
or any Subsidiary and any other Person, nor any circumstance in connection with
the execution, delivery and performance of the Lease Documents and the
transactions contemplated hereby and thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person on the part of any Credit Party as a
condition to the execution, delivery and performance of, or consummation of the
transactions contemplated by the Lease Documents, which, if not obtained or
effected, would be reasonably likely to have a Material Adverse Effect, or if
so, such consent, approval, authorization, filing, registration or qualification
has been duly obtained or effected, as the case may be.
1. Employee Benefit Plans.
(a) The Lessee and each ERISA Affiliate is in compliance with all applicable
provisions of ERISA and the regulations and published interpretations thereunder
and in compliance with all Foreign Benefit Laws with respect to all Employee
Benefit Plans except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet expired.
Each Employee Benefit Plan that is intended to be qualified under Section 401(a)
of the Code has been determined or the Lessee or its Subsidiaries is in the
process of obtaining a determination by the Internal Revenue Service to be so
qualified, each trust related to such plan has been determined to be exempt
under Section 501(a) of the Code, and each Employee Benefit Plan subject to any
Foreign Benefit Law has received the required approvals by any Governmental
Authority regulating such Employee Benefit Plan. No material liability has been
incurred by the Lessee or any ERISA Affiliate which remains unsatisfied for any
taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan;
(a) Neither the Lessee nor any ERISA Affiliate has (i) engaged in a nonexempt
prohibited transaction described in Section 4975 of the Code or Section 406 of
ERISA affecting any of the Employee Benefit Plans or the trusts created
thereunder which could subject any such Employee Benefit Plan or trust to a
material tax or penalty on prohibited transactions imposed under Internal
Revenue Code Section 4975 or ERISA, (ii) incurred any accumulated funding
deficiency with respect to any Employee Benefit Plan, whether or not waived, or
any other liability to the PBGC which remains outstanding other than the payment
of premiums and there are no premium payments which are due and unpaid, (iii)
failed to make a required contribution or payment to a Multiemployer Plan, (iv)
failed to make a required installment or other required payment under Section
412 of the Code, Section 302 of ERISA or the terms of such Employee Benefit
Plan, or (v) failed to make a required contribution or payment, or otherwise
failed to operate in compliance with any Foreign Benefit Law regulating any
Employee Benefit Plan;
(a) Except as set forth on Schedule 8.16 hereto, no Termination Event has
occurred or is reasonably expected to occur with respect to any Pension Plan or
Multiemployer Plan, and neither the Lessee nor any ERISA Affiliate has incurred
any unpaid withdrawal liability with respect to any Multiemployer Plan;
(a) The present value of all vested accrued benefits under each Employee Benefit
Plan which is subject to Title IV of ERISA, or the funding of which is regulated
by any Foreign Benefit Law did not, as of the most recent valuation date for
each such plan, exceed the then current value of the assets of such Employee
Benefit Plan allocable to such benefits;
(a) To the best of the Lessee's knowledge, each Employee Benefit Plan which is
subject to Title IV of ERISA or the funding of which is regulated by any Foreign
Benefit Law, maintained by the Lessee or any ERISA Affiliate, has been
administered in accordance with its terms in all material respects and is in
compliance in all material respects with all applicable requirements of ERISA,
applicable Foreign Benefit Law and other applicable laws, regulations and rules;
(a) The consummation of the transactions evidenced by or contemplated by the
Lease Documents will not involve any prohibited transaction under ERISA which is
not subject to a statutory or administrative exemption; and
(a) No material proceeding, claim, lawsuit and/or investigation exists or, to
the best knowledge of the Lessee after due inquiry, is threatened concerning or
involving any Employee Benefit Plan;
1. Environmental Laws. Except as listed on Schedule 8.18 or as otherwise could
not reasonably be expected to have a Material Adverse Effect, the Lessee and
each Subsidiary is in compliance with all applicable Environmental Laws and has
been issued and currently maintains all required federal, state and local
permits, licenses, certificates and approvals. Except as listed on Schedule 8.18
or as otherwise could not
reasonably be expected to have a Material Adverse Effect, neither the Lessee nor
any Subsidiary has been notified of any pending or threatened action, suit,
proceeding or investigation, and neither the Lessee nor any Subsidiary is aware
of any facts, which (a) calls into question, or could reasonably be expected to
call into question, compliance by the Lessee or any Subsidiary with any
Environmental Laws, (b) seeks, or could reasonably be expected to form the basis
of a meritorious proceeding, to suspend, revoke or terminate any license, permit
or approval necessary for the operation of the Lessee's or any Subsidiary's
business or facilities or for the generation, handling, storage, treatment or
disposal of any Hazardous Materials, or (c) seeks to cause, or could reasonably
be expected to form the basis of a meritorious proceeding to cause, any property
of the Lessee or any Subsidiary or other Credit Party to be subject to any
restrictions on ownership, use, occupancy or transferability under any
Environmental Law.
1. Employment Matters.
(a) None of the employees of the Lessee or any Subsidiary is subject to any
collective bargaining agreement except as set forth on Schedule 8.19 and there
are no strikes, work stoppages, election or decertification petitions or
proceedings, unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings pending or, to the
best knowledge of the Lessee, threatened against the Lessee or any Subsidiary or
between the Lessee or any Subsidiary and any of its employees, other than
employee grievances arising in the ordinary course of business which could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect; and
(a) Except to the extent a failure to maintain compliance would not have a
Material Adverse Effect, the Lessee and each Subsidiary is in compliance in all
respects with all applicable laws, rules and regulations pertaining to labor or
employment matters, including without limitation those pertaining to wages,
hours, occupational safety and taxation, and there is neither pending or
threatened any litigation, administrative proceeding nor, to the knowledge of
the Lessee, any investigation, in respect of such matters which, if decided
adversely, could reasonably be likely, individually or in the aggregate, to have
a Material Adverse Effect.
1. RICO. Neither the Lessee nor any Subsidiary is engaged in or has engaged in
any course of conduct that could subject any of their respective properties to
any Lien, seizure or other forfeiture under any racketeer influenced and corrupt
organizations law, whether civil or criminal, or other similar laws.
1. Year 2000 Compliance. All computer applications (including those affected by
information received from its suppliers and vendors) that are material to the
business and operations of the Lessee or any of its Subsidiaries are Year 2000
Compliant, except to the extent that a failure to be so could not reasonably be
expected to have a Material Adverse Effect.
A. Affirmative Covenants. Unless the Lessor and the Lender shall otherwise
consent in writing, the Lessee will, and where applicable will cause each
Subsidiary to:
1. Financial Reports, Etc.
(a) As soon as practical and in any event within 90 days after the end of each
Fiscal Year of the Lessee, deliver or cause to be delivered to the Lessor and
Lender (1) consolidated and consolidating balance sheets of the Lessee and its
Subsidiaries as at the end of such Fiscal Year, and the notes thereto, and the
related consolidated and consolidating statements of income, stockholders'
equity and cash flows, and the respective notes thereto, for such Fiscal Year,
setting forth (other than for consolidating statements) comparative financial
statements for the preceding Fiscal Year, all prepared in accordance with GAAP
applied on a Consistent Basis and containing, with respect to the consolidated
financial statements, opinions of McGladrey & Xxxxxx LLP, or other such
independent certified public accountants selected by the Lessee and approved by
the Lender, which are unqualified as to the scope of the audit performed and as
to the "going concern" status of the Lessee and without any exception not
acceptable to the Lender, and (2) a Compliance Certificate as of the end of such
Fiscal Year;
(a) as soon as practical and in any event within 45 days after the end of each
fiscal quarter (except for the last fiscal quarter of the Fiscal Year, as to
which the following shall not be required to be delivered), deliver to the
Lessor and Lender (1) consolidated and consolidating balance sheets of the
Lessee and its Subsidiaries as at the end of such fiscal quarter, and the
related consolidated and consolidating statements of income, stockholders'
equity and cash flows for such fiscal quarter and for the period from the
beginning of the then current Fiscal Year through the end of such reporting
period, and accompanied by a certificate of an Authorized Representative to the
effect that such financial statements present fairly the financial position of
the Lessee and its Subsidiaries as of the end of such fiscal period and the
results of their operations and the changes in their financial position for such
fiscal period, in conformity with the standards set forth in Section
32(a)(vi)(A) with respect to interim financial statements, and (2) a Compliance
Certificate as of the end of such quarter;
(a) as soon as practical and in any event within 45 days after the end of each
Fiscal Quarter, deliver to the Lessor and Lender a certificate of an Authorized
Representative of the Lessee certifying all Asset Dispositions for such Fiscal
Quarter constituting Permitted Asset Dispositions under the terms of clause
(viii) of such defined term, together with evidence of application of all
proceeds of each such Permitted Asset Disposition consummated more than 180 days
prior to the end of such Fiscal Quarter;
(a) together with each delivery of the financial statements required by Section
32(b)(i)(A)(1), deliver to the Lessor and Lender a letter from the Lessee's
accountants specified in Section 32(b)(i)(A)(1) stating that in performing the
audit necessary to render an opinion on the financial statements delivered under
Section 32(b)(i)(A)(1), they obtained no knowledge of any Default or Event of
Default by
the Lessee in the fulfillment of the terms and provisions of this Lease insofar
as they relate to financial matters (which at the date of such statement remains
uncured); or if the accountants have obtained knowledge of such Default or Event
of Default, a statement specifying the nature and period of existence thereof;
(a) promptly upon their becoming available to the Lessee, the Lessee shall
deliver to the Lessor and Lender a copy of (1) all regular or special reports or
effective registration statements which Lessee or any Subsidiary shall file with
the Securities and Exchange Commission (or any successor thereto) or any
securities exchange, (2) any proxy statement distributed by the Lessee or any
Subsidiary to its shareholders, bondholders or the financial community in
general, and (3) any management letter or other report submitted to the Lessee
or any Subsidiary by independent accountants in connection with any annual,
interim or special audit of the Lessee or any Subsidiary;
(a) not later than the last Business Day of each Fiscal Year, deliver to the
Lessor and Lender a capital and operating expense budget and consolidated
financial projections for the Lessee and its Subsidiaries for the next Fiscal
Year, prepared in accordance with GAAP applied on a Consistent Basis;
(a) as soon as practicable and in any event within twenty-five (25) days
following the end of each fiscal month, deliver to the Lessor and Lender a
Compliance Certificate as of the end of such month in form and substance
acceptable to the Lender; and
(a) as soon as practical and in any event within 25 days after the end of each
fiscal month, deliver to Lessor and Lender consolidated balance sheets of the
Lessee and its Subsidiaries as at the end of such fiscal month, and the related
consolidated statements of income, stockholders' equity and cash flows for such
fiscal month and for the period from the beginning of the then current Fiscal
Year through the end of such fiscal month all prepared by management of the
Lessee using inventory estimation, and accompanied by a certificate of an
Authorized Representative to the effect that such financial statements present
fairly the financial position of the Lessee and its Subsidiaries as of the end
of such fiscal month and the results of their operations and the changes in
their financial position for such fiscal month; and
(a) promptly, from time to time, deliver or cause to be delivered to the Lessor
and Lender such other information regarding Lessee's and any Subsidiary's
operations, business affairs and financial condition as the Lessor or Lender may
reasonably request.
The Lessor and the Lender are hereby authorized to deliver a
copy of any such financial or other information delivered hereunder to
the Lender (or any affiliate of Lender) or to the Lessor, to any
Governmental Authority having jurisdiction over the Lessor or the
Lender pursuant to any written request therefor or in the ordinary
course of examination of loan files, or to any other Person who
shall acquire or consider the assignment of, or acquisition of any
participation interest in, any obligation related to this Lease.
1. Maintain Properties. Maintain all properties necessary to its operations in
good working order and condition, make all needed repairs, replacements and
renewals to such properties, and maintain free from Liens all trademarks, trade
names, patents, copyrights, trade secrets, know-how, and other intellectual
property and proprietary information (or adequate licenses thereto), in each
case as are reasonably necessary to conduct its business as currently conducted
or as contemplated hereby, all in accordance with customary and prudent business
practices.
1. Existence, Qualification, Etc. Except as otherwise expressly permitted under
Section 32(c)(viii), do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and all material rights and
franchises, and maintain its license or qualification to do business as a
foreign corporation and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary, except where the failure to so qualify would not
have a Material Adverse Effect.
1. Regulations and Taxes. Comply in all material respects with or contest in
good faith all statutes and governmental regulations and pay all taxes,
assessments, governmental charges, claims for labor, supplies, rent and any
other obligation which, if unpaid, would become a Lien against any of its
properties, except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves acceptable
to the Lessee's independent certified public accountants have been established
unless and until any Lien resulting therefrom attaches to any of its property
and becomes enforceable against its creditors.
1. Insurance. (A) Keep all of its insurable properties adequately insured at all
times with responsible insurance carriers (or on a self-insured basis customary
for companies similarly situated and in accordance with prudent business
practices) against loss or damage by fire and other hazards to the extent and in
the manner as are customarily insured against by similar businesses owning such
properties similarly situated and otherwise as required by the Security
Documents, (B) maintain general public liability insurance with responsible
insurance carriers (or self-insurance as is customary for similarly situated
companies and in accordance with prudent business practices) at all times
against liability on account of damage to persons and property and (C) maintain
insurance under all applicable workers' compensation laws (or, in the
alternative, maintain required reserves if self-insured for workers'
compensation purposes) and against loss by reason by business interruption, each
of the foregoing policies of insurance to have such limits, deductibles,
exclusions, co-insurance and other provisions providing no less coverages than
that specified in Schedule 9.5, and such insurance policies to be in form
reasonably satisfactory to the Lender, General Collateral Agent and/or Priority
Collateral Agent.
1. True Books. Keep true books of record and account in which full, true and
correct entries will be made of all of its dealings and transactions, and set up
on its books such reserves as may be required by GAAP with respect to doubtful
accounts and all taxes, assessments, charges, levies and claims and with respect
to its business in general, and include such reserves in interim as well as
year-end financial statements.
1. Year 2000 Compliance. The Lessee will promptly notify the Lessor and the
Lender in the event the Lessee discovers or determines that any computer
application (including those affected by information received from its suppliers
and vendors) that is material to its or any of its Subsidiaries' business and
operations is not Year 2000 Compliant, except to the extent that such failure
could not reasonably be expected to have a Material Adverse Effect.
1. Right of Inspection. Permit any Person designated by Lender or the Lessor to
visit and inspect, at the Lessee's expense, any of the properties, corporate
books and financial reports of the Lessee or any Subsidiary and to discuss its
affairs, finances and accounts with its principal officers and independent
certified public accountants, all at reasonable times, at reasonable intervals
and with reasonable prior notice.
1. Observe all Laws. Conform to and duly observe in all material respects all
laws, including all Environmental Laws and ERISA, rules and regulations and all
other valid requirements of any Governmental Authority with respect to the
conduct of its business, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
1. Governmental Licenses. Obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and as
contemplated by the Lease Documents, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
1. Covenants Extending to Other Persons. Cause each of its Subsidiaries to do
with respect to itself, its business and its assets, each of the things required
of the Lessee in Sections 32(b)(i) through (x), inclusive, and Section
32(b)(xx).
1. Officer's Knowledge of Default. Upon any officer of the Lessee obtaining
knowledge of any Default or Event of Default hereunder or under any other
obligation of the Lessee or any Subsidiary or other Credit Party to Lessor or
Lender, or any event, development or occurrence which could reasonably be
expected to have a Material Adverse Effect, cause such officer or an Authorized
Representative to promptly notify the Lender of the nature thereof, the period
of existence thereof, and what action the Lessee or such Subsidiary or other
Credit Party proposes to take with respect thereto.
1. Suits or Other Proceedings. Upon any officer of the Lessee obtaining
knowledge of any litigation or other proceedings being instituted against the
Lessee or any Subsidiary or other Credit Party, or any attachment, levy,
execution or other process being instituted against any assets of the Lessee or
any Subsidiary or other Credit Party, making a claim or claims in an aggregate
amount greater than $3,000,000, to the extent not covered by insurance, promptly
deliver to the Lender written notice thereof stating the nature and status of
such litigation, dispute, proceeding, levy, execution or other process.
1. Notice of Environmental Complaint or Condition. Promptly provide to the
Lender true, accurate and complete copies of any and all notices, complaints,
orders, directives, claims or citations received by the Lessee or any Subsidiary
relating to any (A) material violation or alleged material violation by the
Lessee or any Subsidiary of any applicable Environmental Law; (B) release or
threatened release by the Lessee or any Subsidiary, or by any Person handling,
transporting or disposing of any Hazardous Material on behalf of the Lessee or
any Subsidiary, or at any facility or property owned or leased or operated by
the Lessee or any Subsidiary, of any Hazardous Material, except where occurring
legally pursuant to a permit or license or to the extent such release could not
have a Material Adverse Effect; or (C) material liability or alleged material
liability of the Lessee or any Subsidiary for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous Materials.
1. Environmental Compliance. If the Lessee or any Subsidiary shall receive any
letter, notice, complaint, order, directive, claim or citation alleging that the
Lessee or any Subsidiary has violated any Environmental Law, has released any
Hazardous Material, or is liable for the costs of cleaning up, removing,
remediating or responding to a release of Hazardous Materials, the Lessee and
any Subsidiary shall, within the time period permitted and to the extent
required by the applicable Environmental Law or the Governmental Authority
responsible for enforcing such Environmental Law, remove or remedy, or cause the
applicable Subsidiary to remove or remedy, such violation or release or satisfy
such liability.
1. Indemnification. Without limiting the generality of any other indemnities
contained in any Lease Document, the Lessee hereby agrees to indemnify and hold
the Lessor and the Lender and any affiliate of Lessor or Lender, and their
respective officers, directors, employees and agents, harmless from and against
any and all claims, losses, penalties, liabilities, damages and expenses
(including assessment and cleanup costs and reasonable attorneys', consultants'
or other expert fees, expenses and disbursements) arising directly or indirectly
from, out of or by reason of (a) the violation of any Environmental Law by the
Lessee or any Subsidiary or with respect to any property owned, operated or
leased by the Lessee or any Subsidiary or (b) the handling, storage,
transportation, treatment, emission, release, discharge or disposal of any
Hazardous Materials by or on behalf of the Lessee or any Subsidiary, or on or
with respect to property owned or leased or operated by the Lessee or any
Subsidiary. The provisions of this Section 32(b)(xvi) shall survive repayment of
the expiration or termination of this Lease.
1. Further Assurances. At the Lessee's cost and expense, upon request of the
Lender, duly execute and deliver or cause to be duly executed and delivered, to
the Lender such further instruments, documents, certificates, financing and
continuation statements, and do and cause to be done such further acts that may
be reasonably necessary or advisable in the reasonable opinion of the Lender to
carry out more effectively the provisions and purposes of this Lease, the
Security Documents and the other Lease Documents.
1. Employee Benefit Plans.
(a) With reasonable promptness, and in any event within thirty (30) days
thereof, give notice to the Lender of (1) the establishment of any new Pension
Plan (which notice shall include a copy of such plan), (2) the commencement of
contributions to any Employee Benefit Plan to which the Lessee or any of its
ERISA Affiliates was not previously contributing, (3) any material increase in
the benefits of any existing Employee Benefit Plan, (4) each funding waiver
request filed with respect to any Pension Plan and all communications received
or sent by the Lessee or any ERISA Affiliate with respect to such request,
including any communications relating to the PBGC Agreement and (5) the failure
of the Lessee or any ERISA Affiliate to make a required installment or payment
under Section 302 of ERISA or Section 412 of the Code (in the case of Employee
Benefit Plans regulated by the Code or ERISA and including any installments or
payments relating to the PBGC Agreement) or under any Foreign Benefit Law (in
the case of Employee Benefit Plans regulated by any Foreign Benefit Law) by the
due date;
(a) Promptly and in any event within fifteen (15) days of becoming aware of the
occurrence or forthcoming occurrence of any (1) Termination Event or (2)
nonexempt "prohibited transaction," as such term is defined in Section 406 of
ERISA or Section 4975 of the Code, in connection with any Employee Benefit Plan
or any trust created thereunder, deliver to the Lender a notice specifying the
nature thereof, what action the Lessee or any ERISA Affiliate has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto; and
(a) With reasonable promptness but in any event within fifteen (15) days for
purposes of clauses (1), (2) and (3), deliver to the Lender copies of (1) any
unfavorable determination letter from the Internal Revenue Service regarding the
qualification of an Employee Benefit Plan under Section 401(a) of the Code, (2)
all notices received by the Lessee or any ERISA Affiliate of the PBGC's or any
Governmental Authority's intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, including all correspondence
associated with the PBGC Agreement, (3) each Schedule B (Actuarial Information)
to the annual report (Form 5500 Series) filed by the Lessee or any ERISA
Affiliate with the Internal Revenue Service with respect to each Employee
Benefit Plan and (4) all notices received by the Lessee or any ERISA Affiliate
from a Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA. The Lessee will notify
the Lender in writing within five (5) Business Days of the Lessee or
any ERISA Affiliate obtaining knowledge or reason to know that the Lessee or any
ERISA Affiliate has filed or intends to file a notice of intent to terminate any
Pension Plan under a distress termination within the meaning of Section 4041(c)
of ERISA.
1. Continued Operations. Continue at all times to conduct its business and
engage principally in the same line or lines of business substantially as
heretofore conducted.
1. New Subsidiaries. Simultaneously with (1) the acquisition or creation of any
Material Subsidiary which is a Domestic Subsidiary, or upon any existing
Domestic Subsidiary becoming a Material Subsidiary, and (2) the acquisition or
creation of any Material Direct Foreign Subsidiary, cause to be delivered the
documents, certificates and opinions required to be delivered pursuant to
Section 9.20 of the Credit Agreement (and provide copies thereof to the Lender).
1. Controlled Accounts. Cause at all times all of its depository accounts, other
than Excluded Deposit Accounts, to be held by and maintained with the agent or
any lender under the Credit Agreement.
1. Credit Facility. On and after July 3, 2000, maintain at all times a revolving
credit facility (or a binding commitment therefor with an effective date on or
prior to August 7, 2000) having a maturity date no earlier than August 7, 2002
with at least $80,000,000 in aggregate commitments available thereunder and
otherwise in form and substance satisfactory to the Lender, in its sole
discretion.
1. Third-party Consultant. Pay all fees and expenses of a third-party business
consultant to be hired on or before February 15, 2000 pursuant to Section 9.22
of the Credit Agreement, and furnish copies of all reports of such consultant to
Lender.
A. Negative Covenants. Unless the Lender and the Lessor shall otherwise consent
in writing, the Lessee will not, nor will it permit any Subsidiary to:
1. Financial Covenants.
(a) Consolidated Net Worth. Permit Consolidated Net Worth to be less than (i)
$145,000,000 from the Closing Date until (but excluding) the last day of the
fiscal quarter that includes the Closing Date (the "Closing Date Quarter"), and
(ii) as at the last day of each fiscal quarter of the Lessee commencing with the
Closing Date Quarter and until (but excluding) the last day of the next
following fiscal quarter of the Lessee, the sum of (1) the amount of
Consolidated Net Worth required to be maintained pursuant to this Section
32(c)(i)(A) as at the end of the immediately preceding fiscal quarter (or, in
the case of the Closing Date Quarter, required to be maintained as of the
Closing Date), plus (2) 100% of the aggregate amount of all increases in the
stated capital and additional paid-in capital accounts of the Lessee resulting
from the issuance of equity securities or other capital investments.
(a) Consolidated Leverage Ratio. Permit as of the end of each Four-Quarter
Period set forth below the Consolidated Leverage Ratio to be more than that set
forth opposite each such period:
Leverage Ratio
Period Must Not Exceed
------------------------------------ ---------------------------------
Four Quarter Period ended 13.05 to 1.00
January 2, 2000
Four Quarter Period ending 10.25 to 1.00
April 2, 2000
Four Quarter Period ending 9.50 to 1.00
July 2, 2000
(a) Consolidated Interest Coverage Ratio. Permit as of the end of each month for
the Twelve-Month Periods set forth below the Consolidated Interest Coverage
Ratio to be less than that set forth opposite each such period:
Interest Coverage Ratio
Period Must Exceed
-------------------------------------- ---------------------------------
Twelve Month Period ended 1.00 to 1.00
January 2, 2000
Twelve Month Period ending
April 2, 2000
1.35 to 1.00
Twelve Month Period ending 1.40 to 1.00
July 2, 2000
(a) Consolidated EBITDA. Permit Consolidated EBITDA for each period set forth
below to be less than the amount set forth opposite such period:
Consolidated EBITDA
Period Ending Must Exceed
------------------------------------- ------------------------------
Fiscal Quarter ended
January 2, 2000 $ 2,000,000
Fiscal Quarter ending
April 2, 2000 $ 8,550,000
Two Fiscal Quarters ending
July 2, 2000 $20,450,000
From and after August 7, 2000, this Section 32(c)(i) shall be replaced
by the financial covenants set forth in Sections 32(c)(vii), (viii) and
(ix) of the Seventh Amendment to Master Lease, dated as of June 27,
1997, between Lessor and Lessee.
1. Acquisitions. Enter into any agreement, contract, binding commitment
or other arrangement providing for any Acquisition, or take any action to
solicit the tender of securities or proxies in respect thereof in order to
effect any Acquisition; provided, however, the Lessee may (a) consummate the
Parras Cone Acquisition and (b) enter into such agreements and take other
actions to effect any Acquisition other than the Parras Cone Acquisition to the
extent the Cost of Acquisition with respect thereto when aggregated with the
Cost of Acquisition of all other Acquisitions other than the Parras Cone
Acquisition and all loans, advances and investments permitted under Section
32(c)(x)(H) (including any such investment to finance the Parras Cone
Acquisition) does not exceed $500,000.
1. Capital Expenditures.
(a) Make or become committed to make U.S. Capital Expenditures which exceed in
the aggregate in any Fiscal Year of the Lessee described below (on a
noncumulative basis, with the effect that amounts not expended in any Fiscal
Year may not be carried forward to a subsequent period), the amount set forth
opposite each such period:
Capital Expenditures
Period Not to Exceed
--------------------------------------------------------------------------
Fiscal Year ended January 2, 2000 $13,500,000
January 3, 2000 through and including $8,000,000
August 7, 2000
(a) Make or become committed to make Mexican Capital Expenditures from the date
hereof through August 7, 2000 except, to the extent an Event of Default has not
occurred and is continuing, for Capital Expenditures in an aggregate amount not
in excess of $1,000,000 for the purpose of purchasing certain real property in
Altamira, Mexico and making certain improvements thereto to the extent such
improvements have been contractually agreed to with third parties prior to the
Closing Date.
1. Liens. Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to any property or assets now
owned or hereafter acquired by the Lessee or any Subsidiary, other than the
following (collectively, "Permitted Liens"):
(a) Liens on the General Collateral and the Priority Collateral created under
the General Security Instruments and the Priority Security Instruments in favor
of the General Collateral Agent or the Priority Collateral Agent, as applicable;
(a) Liens on Receivables (as defined in and transferred by an Originator in
accordance with the Receivables Transfer Agreement) and Returned Goods (as
defined in the Securitization Intercreditor Agreement) in favor of General
Electric Capital Corporation, as collateral agent under the Receivables Purchase
Agreement, including, but not limited to, either (i) Liens securing an increase
in the Securitization Outstandings under the Receivables Purchase Agreement from
$50,000,000 to $60,000,000 or (ii) Liens securing an additional factoring or
securitization of receivables in an aggregate amount not to exceed $10,000,000;
(a) Liens existing on the date hereof, other than as referred to in clauses (A)
and (B) above, and set forth on Schedule 8.7;
(a) Liens imposed by law for taxes, assessments or charges of any Governmental
Authority for claims not yet due or which are being contested in good faith by
appropriate proceedings diligently conducted, which, except as expressly so
specified on Schedule 8.7, are inferior in respect of the Collateral to the
Liens conferred under the Security Documents, and with respect to which adequate
reserves or other appropriate provisions are being maintained in accordance with
GAAP and which Liens are not yet enforceable by such creditors against other
creditors;
(a) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other similar Liens imposed by law or created in the ordinary
course of business and in existence less than 90 days from the date of creation
thereof for amounts not yet due or which are being contested in good faith by
appropriate proceedings diligently conducted, which, except as expressly so
specified on Schedule 8.7, are inferior in respect of the Collateral to the
Liens conferred under the Security Documents, and with respect to which adequate
reserves or other appropriate provisions are being maintained in accordance with
GAAP and which Liens are not yet enforceable by such creditors against other
creditors;
(a) Liens incurred or deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal bonds) in connection
with workers' compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations or arising as a result of progress payments under
government contracts;
(a) with respect to all real property to which (H) below does not apply,
easements (including reciprocal easement agreements and utility agreements),
rights-of-way, covenants, consents, reservations, encroachments, variations and
zoning and other restrictions, charges or encumbrances (whether or not
recorded), which do not interfere materially with the ordinary conduct of the
business of the Lessee or any Subsidiary and
which do not materially detract from the value of the property to which they
attach or materially impair the use thereof to the Lessee or any Subsidiary;
(a) with respect to Mortgaged Real Property for which a Title Policy is required
to be issued pursuant to the terms hereof, matters acceptable to the agent
pursuant to the Credit Agreement appearing as exceptions to coverage on the
Title Policies;
(a) purchase money Liens to secure Indebtedness permitted under Section
32(c)(v)(D) and incurred to purchase fixed assets, provided such Indebtedness
represents not less than 75% and not more than 95% of the purchase price of such
assets as of the date of purchase thereof and no property other than the assets
so purchased secures such Indebtedness;
(a) Liens arising in connection with Capital Leases permitted under Section
32(c)(v)(F); provided that no such Lien shall extend to any Collateral or to any
other property other than the assets subject to such Capital Leases; and
(a) Liens on assets of Parras Cone to secure Indebtedness permitted under
Section 32(c)(v)(I).
1. Indebtedness. Incur, create, assume or permit to exist any Indebtedness,
howsoever evidenced, except:
(a) Indebtedness existing as of the Closing Date as set forth in Schedule 8.6;
provided, none of the instruments and agreements evidencing or governing such
Indebtedness shall be amended, supplemented or restated after the Closing Date
to change any terms of subordination, repayment or rights of enforcement,
conversion, put or exchange rights to be materially less favorable to the Lessor
or the Lender than the terms and rights as in effect on the Closing Date;
(a) Indebtedness owing to the agent or any lender in connection with the Credit
Agreement;
(a) the endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business;
(a) purchase money Indebtedness (other than the Parras Cone Debt) described in
Section 32(c)(iv)(I) not to exceed an aggregate outstanding principal amount at
any time of $10,000,000;
(a) Indebtedness arising from Rate Hedging Obligations permitted under Section
32(c)(xv);
(a) obligations under Capital Leases not to exceed an aggregate principal amount
at any time in excess of $5,000,000;
(a) unsecured intercompany Indebtedness for loans and advances made by the
Lessee or any Guarantor to the Lessee or any Guarantor, any such Indebtedness of
the Lessee owing to any Guarantor shall be subordinate to payment of the
obligations hereunder at all times in accordance with the terms of the Facility
Guaranty;
(a) additional unsecured Indebtedness for Money Borrowed not otherwise covered
by clauses (A) through (G) above, provided that the aggregate outstanding
principal amount of all such other Indebtedness permitted under this clause (H)
shall in no event exceed $10,000,000 at any time;
(a) the Parras Cone Debt;
(a) Indebtedness extending the maturity of, or renewing, refunding or
refinancing, in whole or in part, Indebtedness incurred under clauses (A), (B),
(G), (H) and (I) of this Section 32(c)(v), provided that the terms of any such
extension, renewal, refunding or refinancing Indebtedness (and of any agreement
or instrument entered into in connection therewith) shall not change any terms
of subordination, repayment or rights of enforcement, conversion, put or
exchange rights to be materially less favorable to the Lessor and the Lender
than the terms of the Indebtedness as in effect prior to such action, and
provided further that (1) the aggregate principal amount of such extended,
renewed, refunded or refinanced Indebtedness shall not be increased by such
action, (2) the group of direct or contingent obligors on such Indebtedness
shall not be expanded as a result of any such action, and (3) immediately before
and immediately after giving effect to any such extension, renewal, refunding or
refinancing, no Default or Event of Default shall have occurred and be
continuing; and
(a) Securitization Outstandings or Indebtedness described in and secured by
Liens permitted under Section 32(c)(iv)(B)(ii).
1. Transfer of Assets. Conduct, permit, or suffer, or agree to conduct or
permit, or acquiesce in, any Asset Disposition other than Permitted Asset
Dispositions.
1. Investments. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any stock or other securities, or make or permit to exist any
interest whatsoever in any other Person or permit to exist any loans or advances
to any Person, except that Lessee may make or maintain:
(a) investments in securities of any Person acquired in an Acquisition permitted
hereunder;
(a) investments in Eligible Securities;
(a) investments existing as of the date hereof and as set forth in Schedule 8.4;
(a) accounts receivable arising and trade credit granted in the ordinary course
of business and any securities received in satisfaction or partial satisfaction
thereof in connection with accounts of financially troubled Persons to the
extent reasonably necessary in order to prevent or limit loss;
(a) investments in (i) Guarantors and (ii) Cone Receivables II LLC in connection
with the Securitization Transaction;
(a) loans between the Lessee and the Guarantors described in Section
32(c)(v)(G);
(a) investments made at such time as no Event of Default shall have occurred and
be continuing relating to the site in Altamira, Mexico (at which site the Lessee
intends to construct a denim manufacturing facility), not in excess of the
amounts set forth below for the periods indicated (but in no event shall such
facility construction be commenced prior to the Facility Termination Date);
provided that any amount not invested during the period indicated may be carried
forward and invested in any following period.
Period Mexico Investments
---------------------------------------- ---------------------------------------
First Fiscal Quarter of 2000 $2,195,000
Second Fiscal Quarter 2000 $2,577,500
August 1, 2000 through August 7, 2000 $ 955,300
(a) other loans, advances and investments (including investments to finance the
Parras Cone Acquisition) in an aggregate principal amount at any time
outstanding which, when aggregated with the aggregate Costs of Acquisition for
all Acquisitions (other than the Parras Cone Debt in the case of the Parras Cone
Acquisition) agreed to or consummated after the Closing Date permitted under
Section 32(c)(ii)(B), does not exceed $500,000.
1. Merger or Consolidation. (A) Consolidate with or merge into any other Person,
or (B) permit any other Person to merge into it, or (C) sell, transfer or lease
or otherwise dispose of all or a substantial part of its assets (other than
Permitted Asset Dispositions); provided, however, any Subsidiary of the Lessee
may merge or transfer all or substantially all of its assets into or consolidate
with the Lessee (with the Lessee as the survivor) or any Guarantor, provided
further, that any resulting or surviving entity shall execute and deliver such
agreements and other documents, including a Facility Guaranty, and take such
other action as the Lender may require to evidence or confirm its express
assumption of the obligations and liabilities of its predecessor entities under
the Lease Documents.
1. Restricted Payments. Make any Restricted Payment or apply or set apart any of
their assets therefor or agree to do any of the foregoing.
1. Transactions with Affiliates. Other than transactions permitted under
Sections 32(c)(vii) and 32(c)(viii) or as set forth on Schedule 10.10, enter
into any transaction after the Closing Date, including, without limitation, the
purchase, sale, lease or exchange of property, real or personal, or the
rendering of any service, with any Affiliate of the Lessee, except (A) that such
Persons may render services to the Lessee or its Subsidiaries for compensation
at the same rates generally paid by Persons engaged in the same or similar
businesses for the same or similar services, (B) that the Lessee or any
Subsidiary may render services to such Persons for compensation at the same
rates generally charged by the Lessee or such Subsidiary and (C) in either case
in the ordinary course of business and pursuant to the reasonable requirements
of the Lessee's (or any Subsidiary's) business consistent with past practice of
the Lessee and its Subsidiaries and upon fair and reasonable terms no less
favorable to the Lessee (or any Subsidiary) than would be obtained in a
comparable arm's-length transaction with a Person not an Affiliate.
1. Compliance with ERISA, the Code and Foreign Benefit Laws. With respect to any
Pension Plan, Employee Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of (1) any Termination Event which would result in a
material liability on the part of the Lessee or any ERISA Affiliate to the PBGC
or to any Governmental Authority or (2) any action that violates the Lessee's
material obligations under the PBGC Agreement, except those that are waived by
the PBGC; or
(a) except for amounts defined as "Unfunded Benefit Liability" in the PBGC
Agreement, permit the present value of all accumulated benefit obligations under
all Pension Plans to exceed the current value of the assets of such Pension
Plans allocable to such benefit liabilities; or
(a) permit any accumulated funding deficiency (as defined in Section 302 of
ERISA and Section 412 of the Code) with respect to any Pension Plan, whether or
not waived, except for the "Unfunded Benefit Liability" as defined in the PBGC
Agreement; or
(a) fail to make any contribution or payment to any Multiemployer Plan which the
Lessee or any ERISA Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law pertaining thereto; or
(a) engage, or permit any Lessee or any ERISA Affiliate to engage, in any
prohibited transaction under Section 406 of ERISA or Sections 4975 of the Code
for which a civil penalty pursuant to Section 502(i) of ERISA or a tax pursuant
to Section 4975 of the Code may be imposed; or
(a) permit the establishment of any Employee Benefit Plan providing
post-retirement welfare benefits or establish or amend any Employee Benefit Plan
which establishment or amendment could result in liability to the Lessee or any
ERISA Affiliate or increase the obligation of the Lessee or any ERISA Affiliate
to a Multiemployer Plan
which annual liability or increase, individually or together with all similar
liabilities and increases, is in excess of $1,000,000; or
(a) fail, or permit the Lessee or any ERISA Affiliate to fail, to establish,
maintain and operate each Employee Benefit Plan in compliance in all material
respects with the provisions of ERISA, the Code, all applicable Foreign Benefit
Laws and all other applicable laws and the regulations and interpretations
thereof.
1. Fiscal Year. Change its Fiscal Year.
1. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a merger or
consolidation permitted pursuant to Section 32(c)(viii).
1. Limitations on Sales and Leasebacks. Other than sale and leaseback
transactions in the ordinary course of business having an aggregate value not in
excess of $250,000 in any Fiscal Year and except as set forth on Schedule 10.14,
enter into any arrangement or arrangements with any Person providing for the
leasing by the Lessee or any Subsidiary of real or personal property, whether
now owned or hereafter acquired in a single transaction or series of related
transactions, which has been or is to be sold or transferred by the Lessee or
any Subsidiary to such Person or to any other Person to whom funds have been or
are to be advanced by such Person on the security of such property or rental
obligations of the Lessee or any Subsidiary.
1. Rate Hedging Obligations. Incur any Rate Hedging Obligations or enter into
any agreements, arrangements, devices or instruments relating to Rate Hedging
Obligations, except pursuant to Swap Agreements, in an aggregate notional amount
not to exceed at any time 50% of the Total Revolving Credit Commitment, which
create Rate Hedging Obligations incurred to limit risks of currency or interest
rate fluctuations to which the Lessee and its Subsidiaries are otherwise subject
by virtue of the operations of their businesses, and not for speculative
purposes.
1. Negative Pledge Clauses. Except (1) as may exist on the Closing Date pursuant
to any Senior Credit Documents or any Securitization Transaction documents, or
(2) in connection with any refinancing of the foregoing, enter into or cause,
suffer or permit to exist any agreement with any Person other than the agent and
the lenders pursuant to the Credit Agreement or the Lessor and the Lender
pursuant to the Lease Documents, which prohibits or limits the ability of any of
the Lessee or any Subsidiary to create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, provided that the Lessee and any Subsidiary may enter into
such an agreement in connection with, and that applies only to, property
acquired with the proceeds of purchase money Indebtedness permitted hereunder.
1. Compensation; Reimbursement of Expenses.
(a) Pay any salary, fees, and other direct and indirect remuneration and
compensation to any of its directors and executive officers in an amount in
excess of those amounts paid to directors and executive officers of comparable
companies engaged in the same general type of business and in similar financial
condition;
(a) Reimburse any stockholder, officer, director, employee or agent of the
Lessee or any Subsidiary for any expenses incurred by such Person other than
reasonable expenses incurred for or on behalf of the Lessee or any Subsidiary in
the ordinary course of business.
1. Change in Accountants. Change its independent public accountants.
1. Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or make
any payment in violation of any subordination terms of, any Indebtedness (other
than the obligations under the Credit Agreement) other than in connection with
any refinancing permitted under Section 32(c)(v)(J).
1. Partnerships. Become a general partner in any general or limited partnership.
A. Definitions. As used in this Section 32, in Section 19 and in Exhibit D, the
following terms have the meanings indicated below:
"Acquisition" means the acquisition of a controlling equity
interest in another Person (including the purchase of an option,
warrant or convertible or similar type security to acquire such a
controlling interest at the time it becomes exercisable by the holder
thereof), whether by purchase of such equity interest or upon
exercise of an option or warrant for, or conversion of securities
into, such equity interest, or assets of another Person which
constitute all or substantially all of the assets of such Person or
of a line or lines of business conducted by such Person.
"Affiliate" means any Person (i) which directly or
indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with the Lessee; or (ii)
which beneficially owns or holds 10% or more of any class of the
outstanding voting stock (or in the case of a Person which is not a
corporation, 10% or more of the equity interest) of the Lessee; or
10% or more of any class of the outstanding voting stock (or in the
case of a Person which is not a corporation, 10% or more of the
equity interest) of which is beneficially owned or held by the
Lessee. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of
voting stock, by contract or otherwise.
"Approved Option Plan" means the Cone Xxxxx Amended and
Restated 1992 Stock Option Plan, as amended, the Cone Xxxxx 1983
ESOP, as amended, the Cone Xxxxx Corporation 1994 Stock Option Plan
For Non-Employee Directors, as amended, the Shareholder Rights Plan
dated October 14, 1999, and any other stock incentive plan, stock
option plan or similar stock rights plan approved by the Board of
Directors of the Lessee in the ordinary course of business.
"Asset Disposition" means any disposition, whether by sale,
lease, assignment or other transfer of (i) any of the assets of the
Lessee or its Subsidiaries, and (ii) any of the capital stock, or
securities or investments exchangeable, exercisable or convertible
for or into, or otherwise entitling the holder to receive any of the
capital stock, of any Subsidiary (other than a disposition to the
Lessee or a Guarantor).
"Authorized Representative" means any of the President or
any Vice President or the Treasurer or Controller of the Lessee or,
with respect to financial matters, the chief financial officer of the
Lessee, or any other Person expressly designated by the Board of
Directors of the Lessee (or the appropriate committee thereof) as an
Authorized Representative of the Lessee, as set forth from time to
time in a certificate delivered to the Lender.
"Capital Expenditures" means, with respect to the Lessee and
its Subsidiaries, for any period the sum of (without duplication) (i)
all expenditures (whether paid in cash or accrued as liabilities) by
the Lessee or any Subsidiary during such period for items that would
be classified as "property, plant or equipment" or comparable items
on the consolidated balance sheet of the Lessee and its Subsidiaries,
including without limitation all transactional costs incurred in
connection with such expenditures provided the same have been
capitalized, excluding, however, the amount of any Capital
Expenditures paid for with proceeds of casualty insurance as
evidenced in writing and submitted to the Lender together with any
compliance certificate delivered pursuant to Section 32(b)(i)(A) or
(B), and (ii) with respect to any Capital Lease entered into by the
Lessee or its Subsidiaries during such period, the present value of
the lease payments due under such Capital Lease over the term of such
Capital Lease applying a discount rate equal to the interest rate
provided in such lease (or in the absence of a stated interest rate,
that rate used in the preparation of the financial statements
described in Section 32(b)(i)(A)), all the foregoing in accordance
with GAAP applied on a Consistent Basis.
"Capital Leases" means all leases which have been or should
be capitalized in accordance with GAAP as in effect from time to time
including Statement Nos. 13 and 98 of the Financial Accounting
Standards Board and any successor thereof.
"Change of Control" means, at any time:
(i) any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) either (A)
becomes the "beneficial owner" (as defined in Rule 13d-3 of
the Exchange Act ), directly or indirectly, of Voting
Securities of the Lessee (or securities convertible into or
exchangeable for such Voting Securities) representing 25% or
more of the combined voting power of all Voting Securities
of the Lessee (on a fully diluted basis) or (B) otherwise
has the ability, directly or indirectly, to elect a majority
of the board of directors of the Lessee;
(ii) during any period of up to 24 consecutive months,
commencing on the Closing Date, individuals who at the
beginning of such 24-month period were directors of the
Lessee shall cease for any reason (other than the death,
disability or retirement of an officer of the Lessee that is
serving as a director at such time so long as another
officer of the Lessee replaces such Person as a director) to
constitute a majority of the board of directors of the
Lessee; or
(iii) any Person or two or more Persons acting in
concert shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation thereof, will result in its or their
acquisition of the power to exercise, directly or
indirectly, a controlling influence on the management or
policies of the Lessee.
"CIPSA" means Compania Industrial xx Xxxxxx, X.X.
"Closing Date" means the date of this Amendment.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Compliance Certificate" means a certificate of an
Authorized Representative of the Lessee demonstrating compliance with
the covenants contained in Sections 32(c)(i), (iii) and (vii)(G),
substantially in the form of Exhibit H to the Credit Agreement.
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to
are comparable in all material respects to those applied in the
preparation of the audited financial statements of the Lessee
referred to as of the Closing Date in Section 32(a)(vi)(A).
"Consolidated EBITDA" means, with respect to the Lessee and
its Subsidiaries for any period ending on the date of computation
thereof, the sum of, without duplication, (i) Consolidated Net
Income, (ii) Consolidated Interest
Expense, (iii) taxes on income, (iv) amortization, (v) depreciation,
(vi) non-cash charges otherwise deducted in calculating Consolidated
Net Income resulting from FASB No. 88 Adjustments, FASB No. 106
Adjustments, FASB No. 112 Adjustments or FASB No. 121 Adjustments and
(vii) non-cash restructuring charges, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis; provided, however, in the event that any Non-Cash
Restructuring Charges accrued in a prior period are paid in cash in
any subsequent period, the amount of such cash payment shall be
subtracted from Consolidated EBITDA for such subsequent period.
"Consolidated Indebtedness" means all Indebtedness for Money
Borrowed of the Lessee and its Subsidiaries, all determined on a
consolidated basis.
"Consolidated Interest Coverage Ratio" means for any
Four-Quarter Period ending on the date of computation thereof, the
ratio of (i) Consolidated EBITDA for such Four-Quarter Period, to
(ii) Consolidated Interest Expense for such Four-Quarter Period.
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Lessee and its Subsidiaries, including without limitation (i) the
current amortized portion of debt discounts to the extent included in
gross interest expense, (ii) the current amortized portion of all
fees (including fees payable in respect of any Rate Hedging
Obligations) payable in connection with the incurrence of
Indebtedness to the extent included in gross interest expense, (iii)
the portion of any payments made in connection with Capital Leases
allocable to interest expense, and (iv) the net cash financing costs
incurred in connection with any Securitization Transaction, all
determined on a consolidated basis in accordance with GAAP applied on
a Consistent Basis.
"Consolidated Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) Consolidated Indebtedness
(determined as at such date) to (ii) Consolidated EBITDA (for the
Four-Quarter Period ending on (or most recently ended prior to) such
date).
"Consolidated Net Income" means, for any period of
computation thereof, the gross revenues from operations of the Lessee
and its Subsidiaries, other than Parras Cone to the extent it
constitutes a Subsidiary (including payments received by the Lessee
and its Subsidiaries of (i) interest income, and (ii) dividends and
distributions made in the ordinary course of their businesses by
Persons (including Parras Cone) in which investment is permitted
pursuant to this Agreement and not related to an extraordinary
event), less all operating and non-operating expenses of the Lessee
and its Subsidiaries including taxes on income, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis; but excluding (for all purposes other than
compliance with Section 32(c)(i)(A) as income): (a) net gains or
losses on the sale, conversion or other disposition of capital
assets, (b) net gains or losses on the acquisition, retirement, sale
or other disposition of capital stock and other securities of the
Lessee or its Subsidiaries, (c) net gains on the collection of
proceeds of life insurance policies, (d) any write-up of any asset,
(e) any net gain or loss recorded as a result of FASB 133
Adjustments, and (f) any other net gain or credit of an extraordinary
nature as determined in accordance with GAAP applied on a Consistent
Basis.
"Consolidated Net Worth" means, as of any date on which the
amount thereof is to be determined, the sum of the following in
respect of the Lessee and its Subsidiaries (determined on a
consolidated basis and excluding any upward adjustment after the
Closing Date due to revaluation of assets, including without
limitation any FASB 133 Adjustment): (i) the amount of issued and
outstanding share capital, plus (ii) the amount of additional paid-in
capital and retained earnings (or, in the case of a deficit, minus
the amount of such deficit), plus (iii) the amount of any foreign
currency translation adjustment (if positive, or, if negative, minus
the amount of such translation adjustment), minus (iv) the amount of
any treasury stock, minus (v) (without duplication of deductions in
respect of items already deducted in arriving at surplus and retained
earnings) all reserves (other than contingency reserves not allocated
to any particular purpose), including without limitation reserves for
depreciation, depletion, amortization, obsolescence, deferred income
taxes, insurance and inventory valuation, all as determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis.
"Contingent Obligation" means, as to any Person, any direct
or indirect liability of that Person with respect to any
Indebtedness, lease, dividend, guaranty, letter of credit or other
obligation (each a "primary obligation") of another Person (the
"primary obligor"), whether or not contingent, (i) to purchase,
repurchase or otherwise acquire any such primary obligation or any
property constituting direct or indirect security therefor, or (ii)
to advance or provide funds (a) for the payment or discharge of any
such primary obligation, or (b) to maintain working capital or equity
capital of the primary obligor in respect of any such primary
obligation or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of such
primary obligor, or (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor thereof to
make payment of such primary obligation, or (iv) otherwise to assure
or hold harmless the owner of any such primary obligation against
loss or failure or inability to perform in respect thereof. The
amount of any Contingent Obligation, to the extent not expressly
limited, shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof.
"Cost of Acquisition" means, with respect to any
Acquisition, as at the date of entering into any agreement therefor,
the sum of the following (without duplication): (i) the value of the
capital stock, warrants or options to acquire capital stock of Lessee
or any Subsidiary to be transferred in connection therewith, (ii) the
amount of any cash and fair market value of other property (excluding
property described in clause (i) and the unpaid principal amount of
any debt instrument) given as consideration, (iii) the amount
(determined by using the face amount or the amount payable at
maturity, whichever is greater) of any Indebtedness incurred, assumed
or acquired by the Lessee or any Subsidiary in connection with such
Acquisition, (iv) all additional purchase price amounts in the form
of earnouts and other contingent obligations that should be recorded
on the financial statements of the Lessee and its Subsidiaries in
accordance with GAAP, (v) all amounts paid in respect of covenants
not to compete, consulting agreements that should be recorded on
financial statements of the Lessee and its Subsidiaries in accordance
with GAAP, and other affiliated contracts in connection with such
Acquisition, (vi) the aggregate fair market value of all other
consideration given by the Lessee or any Subsidiary in connection
with such Acquisition, and (vii) out of pocket transaction costs for
the services and expenses of attorneys, accountants and other
consultants incurred in effecting such transaction, and other similar
transaction costs so incurred. For purposes of determining the Cost
of Acquisition for any transaction, (A) the capital stock of the
Lessee shall be valued (I) in the case of capital stock that is then
listed on a national securities exchange or a national market system,
the average of the last reported bid and ask quotations or the last
prices reported thereon, and (II) with respect to any other shares of
capital stock, as determined by a committee composed of the
disinterested members of the Board of Directors of the Lessee and, if
requested by the Lender, determined to be a reasonable valuation by
the independent public accountants referred to in Section
32(b)(i)(A), (B) the capital stock of any Subsidiary shall be valued
as determined by a committee composed of the disinterested members of
the Board of Directors of such Subsidiary and, if requested by the
Lender, determined to be a reasonable valuation by the independent
public accountants referred to in Section 32(b)(i)(A), and (C) with
respect to any Acquisition accomplished pursuant to the exercise of
options or warrants or the conversion of securities, the Cost of
Acquisition shall include both the cost of acquiring such option,
warrant or convertible security as well as the cost of exercise or
conversion.
"Credit Agreement" means the Credit Agreement, dated as of
January 28, 2000, among the Lessee, Bank of America, N.A., as agent
and as lender, and the lenders party thereto from time to time, as it
may be amended, supplemented or otherwise modified from time to time.
"Credit Parties" means, collectively, the Lessee, each
Guarantor and each other Person providing Collateral pursuant to any
Security Document from time to time.
"Direct Foreign Subsidiary" means a Subsidiary other than a
Domestic Subsidiary, a majority of whose Voting Securities, or a
majority of whose Subsidiary Securities, are owned by the Lessee or a
Domestic Subsidiary.
"Domestic Subsidiary" means any Subsidiary of the Lessee
organized under the laws of the United States of America, any state
or territory thereof or the District of Columbia.
"Employee Benefit Plan" means (i) any employee benefit plan,
including any Pension Plan, within the meaning of Section 3(3) of
ERISA which (a) is maintained for employees of the Lessee or any of
its ERISA Affiliates, or any Subsidiary or is assumed by the Lessee
or any of its ERISA Affiliates, or any Subsidiary in connection with
any Acquisition or (b) has at any time been maintained for the
employees of the Lessee, any current or former ERISA Affiliate, or
any Subsidiary and (ii) any plan, arrangement, understanding or
scheme maintained by the Lessee or any Subsidiary that provides
retirement, deferred compensation, employee or retiree medical or
life insurance, severance benefits or any other benefit covering any
employee or former employee and which is administered under any
Foreign Benefit Law or regulated by any Governmental Authority other
than the United States of America.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.
"ERISA Affiliate," as applied to the Lessee, means any
Person or trade or business which is a member of a group which is
under common control with the Lessee, who together with the Lessee,
is treated as a single employer within the meaning of Section 414(b)
and (c) of the Code.
"FASB No. 88 Adjustments" means adjustments charged to
income (or loss) and a corresponding liability resulting from
"settlements and curtailments of pension plans" (as defined in the
Statement of Financial Accounting Standards No. 88) and for related
termination benefits.
"FASB No. 106 Adjustments" means adjustments to income (or
loss) less actual cash payments resulting from "retirement benefits
other than pensions" (as defined in the Statement of Financial
Accounting Standards No. 106).
"FASB No. 112 Adjustments" means adjustments to income (or
loss) less actual cash payments resulting from "post-employment
benefits" (as defined in the Statement of Financial Accounting
Standards No. 112).
"FASB No. 121 Adjustments" means adjustments charged to income
(or loss) resulting from impairment of long-lived assets (as defined in
the Statement of Financial Accounting Standards No. 121).
"FASB 133 Adjustments" means entries on or adjustments to
any balance sheet or statement of income in respect of derivatives or
hedging instruments as required or permitted by Statement of
Financial Accounting Standards No. 133 other than adjustments
relating to transactions in cotton derivatives in the ordinary course
of business.
"Fiscal Quarter" means each of the three month fiscal
periods of the Lessee and its Subsidiaries ending on January 2, 2000,
April 2, 2000, July 2, 2000, October 1, 2000 and December 31, 2000.
"Fiscal Year" means, with respect to fiscal year 1999, the
fiscal period of the Lessee and its Subsidiaries ending on January 2,
2000 and, with respect to fiscal year 2000, the fiscal period ending
December 31, 2000.
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan.
"Four-Quarter Period" means a period of four full
consecutive Fiscal Quarters of the Lessee and its Subsidiaries, taken
together as one accounting period.
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board, the American Institute of Certified Public
Accountants, or which have other substantial authoritative support
and are applicable in the circumstances as of the date of a report.
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on which are
fully and unconditionally guaranteed by, the United States of America
or any agency thereof.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Indebtedness" means as to any Person, without duplication,
(i) all Indebtedness for Money Borrowed of such Person, (ii) all Rate
Hedging Obligations of such Person, (iii) all indebtedness secured by
any Lien on any property or asset owned or held by such Person
regardless or whether the indebtedness secured thereby shall have
been assumed by such Person or is non-recourse to the credit of such
Person, and (iv) all Contingent Obligations of such Person.
"Indebtedness for Money Borrowed" means with respect to any
Person, without duplication, all indebtedness in respect of money
borrowed, including without limitation, all obligations under Capital
Leases, all Synthetic Lease Indebtedness, all Securitization
Outstandings, the deferred purchase price of any property or
services, the aggregate face amount of all surety bonds, letters of
credit, and bankers' acceptances, and (without duplication) all
payment and reimbursement obligations in respect thereof whether or
not matured, evidenced by a promissory note, bond, debenture or
similar written obligation for the payment of money (including
reimbursement agreements and conditional sales or similar title
retention agreements), other than trade payables, documentary letters
of credit and accrued expenses incurred in the ordinary course of
business.
"Lease Documents" means this Lease, all agreements executed
and delivered by the Lessee in connection with this Lease and the
Security Documents (as defined in the Credit Agreement).
"Lien" means any interest in property securing any
obligation owed to, or a claim by, a Person other than the owner of
the property, whether such interest is based on the common law,
statute or contract, and including but not limited to the lien or
security interest arising from a mortgage, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. For the purposes of
this Lease, the Lessee and any Subsidiary shall be deemed to be the
owner of any property which it has acquired or holds subject to a
conditional sale agreement, financing lease, or other arrangement
pursuant to which title to the property has been retained by or
vested in some other Person for security purposes.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, operations, prospects or condition,
financial or otherwise, of the Lessee and its Subsidiaries, taken as
a whole, (ii) the ability of any Credit Party to pay or perform its
respective obligations, liabilities and indebtedness under the Lease
Documents as such payment or performance becomes due in accordance
with the terms thereof, or (iii) the rights, powers and remedies of
the Lessor or Lender under any Lease Document or the validity,
legality or enforceability thereof.
"Material Subsidiary" means any direct or indirect Domestic
Subsidiary of the Lessee which (i) has total assets equal to or
greater than 2% of consolidated total assets of the Lessee and its
Domestic Subsidiaries (calculated as of the most recent fiscal period
with respect to which the Lender shall have received financial
statements required to be delivered pursuant to Section 32(b)(i)(A)
or (B) (or if prior to delivery of any financial statements pursuant
to such Sections, then calculated with respect to the Fiscal Year end
financial statements referenced in Section 32(a)(vi) (the "Required
Financial Information")) or (ii) has revenue equal to or greater than
2% of consolidated total revenue of the Lessee and its Domestic
Subsidiaries (calculated for the most recent period for which the
Lender has received the Required Financial Information); provided,
however, that notwithstanding the foregoing, the term "Material
Subsidiary" shall mean each of those Domestic Subsidiaries that
together with the Lessee and each other Material Subsidiary have
assets equal to not less than 98% of consolidated total assets of the
Lessee and its Domestic Subsidiaries (calculated as described above)
and revenue of not less than 98% of consolidated total revenue of the
Lessee and its Domestic Subsidiaries (calculated as described above);
provided further that if more than one combination of Domestic
Subsidiaries satisfies both such thresholds, then those Domestic
Subsidiaries so determined to be "Material Subsidiaries" shall be
specified by the Lessee, and which include as of the Closing Date the
Subsidiaries identified on Schedule 1.2 to the Credit Agreement.
"Material Supply Agreement" means, collectively, (i) the
exclusive Supply Agreement dated as of March 30, 1992 between the
Lessee and Levi Xxxxxxx & Co., as amended or replaced from time to
time, and (ii) any other contract or agreement with any retail or
wholesale customer of the Lessee or any Subsidiary the cancellation,
termination, or non-renewal of which would reasonably be likely to
have a Material Adverse Effect.
"Mexican Capital Expenditures" means all Capital
Expenditures made with respect to property, plant or equipment
located in Mexico other than Parras Cone Capital Expenditures.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Lessee or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
"Non-Cash Restructuring Charges" means those expenses and
charges against earnings incurred in determination of Consolidated
Net Income related to the Lessee's comprehensive corporate downsizing
and reorganization program and which do not result in any cash
payment by the Lessee or any Subsidiary, all as determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis.
"Operating Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, the bylaws, operating agreement, partnership
agreement, limited partnership agreement or other applicable
documents relating to the operation, governance or management of such
entity.
"Organizational Action" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally
authorized incorporated or unincorporated entity, any corporate,
organizational or partnership action (including any required
shareholder, member or partner action), or other similar official
action, as applicable, taken by such entity.
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally
authorized incorporated or unincorporated entity, the articles of
incorporation, certificate of incorporation, articles of
organization, certificate of limited partnership or other applicable
organizational or charter documents relating to the creation of such
entity.
"Parras Cone" means Parras Cone de Mexico, S. A., a joint
venture of the Lessee and CIPSA.
"Parras Cone Acquisition" means the purchase of (i)
substantially all of the assets of, or (ii) a controlling equity
interest in, Parras Cone, in each case, pursuant to a transaction
financed exclusively with Parras Cone Debt and investments permitted
under Section 32(c)(vii)(H).
"Parras Cone Capital Expenditures" means all Capital
Expenditures made by Parras Cone financed exclusively from internally
generated revenue and/or the Parras Cone Debt.
"Parras Cone Debt" means Indebtedness (other than Advances
under the Revolving Credit Facility) incurred to finance the Parras
Cone Acquisition (which may include refinancing the existing
Indebtedness of Parras Cone) which Indebtedness is non-recourse to
the Lessee and its Subsidiaries.
"PBGC" means the Pension Benefit Guaranty Corporation and any
succes sor thereto.
"PBGC Agreement" means (i) initially, the Memorandum of
Understanding dated January 3, 2000 between the Lessee and the PBGC
concerning certain of the Lessee's Pension Plans and (ii) from and
after the execution of definitive documentation thereafter entered
into between the Lessee
on substantially the same terms as set forth in such Memorandum of
Understanding, such definitive documentation.
"Pension Plan" means any employee pension benefit plan
within the meaning of Section 3(2) of ERISA, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of
ERISA or Section 412 of the Code and which (i) is maintained for
employees of the Lessee or any of its ERISA Affiliates or is assumed
by the Lessee or any of its ERISA Affiliates in connection with any
Acquisition or (ii) has at any time been maintained for the employees
of the Lessee or any current or former ERISA Affiliate.
"Permitted Asset Dispositions" means Asset Dispositions
consisting of (i) dispositions of inventory in the ordinary course of
business, (ii) dispositions of items of equipment which, in the
aggregate during any Fiscal Year, have a fair market value or book
value, whichever is greater, of $2,000,000 or less, (iii)
dispositions of property that is substantially worn, damaged,
obsolete or, in the judgment of the Lessee, no longer best used or
useful in its business or that of any Subsidiary which in the
aggregate during any Fiscal Year has a fair market value or book
value, whichever is greater, of $1,000,000 or less, (iv) transfers of
assets necessary to give effect to merger or consolidation
transactions permitted by Section 32(c)(viii), (v) the disposition of
cash or Eligible Securities in the ordinary course of management of
the investment portfolio of the Lessee and its Subsidiaries, (vi)
securitization of accounts receivable and related rights pursuant to
the Securitization Transaction, (vii) the sale or discount without
recourse of accounts receivable or notes receivable, or the
conversion or exchange of accounts receivable into or for notes
receivable in connection with the compromise or collection thereof,
each in the ordinary course of business, (viii) dispositions of
assets with an aggregate book value or fair market value, whichever
is greater, of up to $2,000,000 during any Fiscal Year of the Lessee
or any Subsidiary the proceeds of which are reinvested within 180
days of such disposition by the Lessee or a such Subsidiary in
replacement assets of substantially the same or greater such value
and utility as the assets so disposed of (or such replacement asset
is otherwise purchased by the Lessee or such Subsidiary within 180
days prior to such disposition), (ix) dispositions of assets
described on Schedule 1.2 to the Credit Agreement and (x) sale and
leaseback transactions permitted under Section 32(c)(xiv).
"Person" means an individual, partnership, corporation,
limited liability company, limited liability partnership, trust,
unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof.
"Rate Hedging Obligations" means, without duplication, any
and all obligations of the Lessee or any Subsidiary, whether absolute
or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under
(i) any and all agreements, devices or arrangements designed to
protect at least one of the parties thereto from the fluctuations of
interest rates, exchange rates or forward rates applicable to such
party's assets, liabilities or exchange transactions, including, but
not limited to, Dollar-denominated or cross-currency interest rate
exchange agreements, forward currency exchange agreements, interest
rate cap or collar protection agreements, forward rate currency or
interest rate options, puts, warrants and those commonly known as
interest rate "swap" agreements; (ii) all other "derivative
instruments" as defined in FASB 133 and which are subject to the
reporting requirements of FASB 133; and (iii) any and all
cancellations, buybacks, reversals, terminations or assignments of
any of the foregoing; provided, however, under no circumstances shall
obligations for cotton hedging in the ordinary course of business be
considered Rate Hedging Obligations.
"Receivables Purchase Agreement" means that certain
Receivables Purchase and Servicing Agreement dated September 1, 1999
by and among Cone Receivables II LLC, as Seller, Redwood Receivables
Corporation, as Purchaser, Cone Xxxxx Corporation, as Servicer, and
General Electric Capital Corporation, as Operating Agent and
Collateral Agent, as amended by the First Amendment and Waiver to
Securitization Agreements dated as of November 16, 1999 and the
Second Amendment to Securitization Agreements dated as of the Closing
Date and as amended, supplemented or restated from time to time.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of stock of Lessee or any Subsidiary Securities of its
Subsidiaries (other than those payable or distributable solely to the
Lessee) now or hereafter outstanding, except a dividend payable
solely in shares of a class of stock to the holders of that class;
(ii) any redemption, conversion, exchange, put, call, retirement or
similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock of Lessee or any of its
Subsidiaries (other than those payable or distributable solely to the
Lessee) now or hereafter outstanding; (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of
Lessee or any Subsidiary Securities of its Subsidiaries now or
hereafter outstanding; and (iv) any issuance and sale of Subsidiary
Securities (other than director qualifying shares) of any Subsidiary
of the Lessee (or any option, warrant or right to acquire such stock)
other than to the Lessee; excluding in all instances however all
payments which would otherwise be considered "Restricted Payments"
made in accordance with the terms of an Approved Option Plan.
"Securitization Outstandings" means, at any time, the
Capital Investment (as defined in the Receivables Purchase Agreement)
under the Receivables Purchase Agreement, in an aggregate amount not
in excess of $60,000,000 at any time.
"Securitization Transaction" means any transaction pursuant
to which the Lessee or any Subsidiary, through Cone Receivables II
LLC, sells, disposes of or otherwise transfers any interest,
including any security interest, in accounts receivable and related
rights pursuant to the Receivables Purchase Agreement.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(a) the fair value of its assets (both at fair valuation and
at present fair saleable value on an orderly basis) is in excess of
the total amount of its liabilities, including Contingent
Obligations; and
(b) it is then able and expects to be able to pay its
debts as they mature; and
(c) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"Synthetic Lease" means a leveraged leasing arrangement
under which the lease of property is treated as an operating lease
under GAAP but is treated as a financing lease arrangement for legal
and tax purposes and in which a special purpose entity incurs
Indebtedness to acquire such property and leases such property to the
Lessee.
"Synthetic Lease Indebtedness" means, with respect to a
Person that is a lessee under a Synthetic Lease, at any time an
amount equal to (i) the aggregate purchase price of any property that
the lessor under such synthetic lease acquired, through one or a
series of related transactions, and thereafter leased to such Person
pursuant to such Synthetic Lease less (ii) the aggregate amount of
all payments made on or prior to such time of fixed rent or other
rent payments which reduced such Person's obligation under such
Synthetic Lease and which are not the financial equivalent of
interest. Synthetic Lease Indebtedness of a Person shall also
include, without duplication, the amount of Synthetic Lease
Indebtedness of others to the extent guarantied by such Person.
"Termination Event" means: (i) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued
thereunder (unless the notice requirement has been waived by
applicable regulation) other than any reportable event that is the
subject of the PBGC Agreement; or (ii) the withdrawal of the Lessee
or any ERISA Affiliate from a Pension Plan during a plan year in
which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or was deemed such under Section 4062(e) of
ERISA; or (iii) the termination of a Pension Plan, the filing of a
notice of intent to terminate a Pension Plan or the treatment of a
Pension Plan amendment as a termination under Section 4041 of ERISA;
or (iv) the institution of proceedings to terminate a Pension Plan by
the PBGC other than those actions by the PBGC that are the subject of
the PBGC
Agreement; or (v) any other event or condition which would constitute
grounds under Section 4042(a) of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan other than
those actions by the PBGC that are the subject of the PBGC Agreement;
or (vi) the partial or complete withdrawal of the Lessee or any ERISA
Affiliate from a Multiemployer Plan; or (vii) the imposition of a
Lien pursuant to Section 412 of the Code or Section 302 of ERISA
other than those actions by the PBGC that are the subject of the PBGC
Agreement; or (viii) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Section
4241 or Section 4245 of ERISA, respectively; or (ix) any event or
condition which results in the termination of a Multiemployer Plan
under Section 4041A of ERISA or the institution by the PBGC of
proceedings to terminate a Multiemployer Plan under Section 4042 of
ERISA; or (x) any event or condition with respect to any Employee
Benefit Plan which is regulated by any Foreign Benefit Law that
results in the termination of such Employee Benefit Plan or the
revocation of such Employee Benefit Plan's authority to operate under
the applicable Foreign Benefit Law.
"Twelve-Month Period" means a period of twelve consecutive
calendar months taken together as one accounting period.
"U.S. Capital Expenditures" means all Capital Expenditures
other than Mexican Capital Expenditures and Parras Cone Capital
Expenditures.
"Voting Securities" means shares of capital stock issued by
a corporation, or equivalent interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons performing
similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.
"Year 2000 Compliant" means all computer applications
(including those affected by information received from its suppliers
and vendors) that are material to the Lessee's or any of its
Subsidiaries' business and operations will be able to perform
properly date-sensitive functions involving all dates on and after
January 1, 2000.
"Year 2000 Problem" means that computer applications used by
the Lessee or any of its Subsidiaries (including those affected by
information received from its suppliers and vendors) are unable to
recognize correctly and perform properly date-sensitive functions
involving certain dates on and after January 1, 2000.
All capitalized terms used in this Section 32 and not otherwise defined herein
shall have the meanings assigned thereto in the Credit Agreement (whether or not
the Credit Agreement is then in effect).
SECTION 3. Events of Default. Section 19(a)(viii) of the Lease is
hereby deleted in its entirety, and the following shall be substituted therefor:
(viii) if there shall occur (A) a default, which is not
waived, in the payment of any principal, interest, premium or other
amount with respect to any Indebtedness or Rate Hedging Obligation of
the Lessee or any Subsidiary in an amount not less than $500,000 in
the aggregate outstanding, or (B) a default, which is not waived, in
the performance, observance or fulfillment of any term or covenant
contained in any agreement or instrument under or pursuant to which
any such Indebtedness or Rate Hedging Obligation may have been
issued, created, assumed, guaranteed or secured by the Lessee or any
Subsidiary, or (C) any other event of default as specified in any
agreement or instrument under or pursuant to which any such
Indebtedness or Rate Hedging Obligation may have been issued,
created, assumed, guaranteed or secured by the Lessee or any
Subsidiary, and such default or event of default referred to in
clauses (A), (B) and (C) above shall continue for more than the
period of grace, if any, therein specified, or such default or event
of default shall permit the holder of any such Indebtedness (or any
agent or trustee acting on behalf of one or more holders) to
accelerate the maturity thereof ; or to commence any remedy in
respect thereof ; or
Sections 19(a)(ix) and (x) of the Lease are hereby deleted in their
entirety, and the following shall be substituted therefor:
(ix) if the Lessee or any Subsidiary or other Credit Party
shall be unable to pay its debts generally as they become due; file a
petition to take advantage of any insolvency statute; make an
assignment for the benefit of its creditors; commence a proceeding
for the appointment of a receiver, trustee, liquidator or conservator
of itself or of the whole or any substantial part of its property;
file a petition or answer seeking liquidation, reorganization or
arrangement or similar relief under the federal bankruptcy laws or
any other applicable law or statute; or
(x) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Lessee or any Subsidiary or other
Credit Party or of the whole or any substantial part of its
properties and such order, judgment or decree continues unstayed and
in effect for a period of sixty (60) days, or approve a petition
filed against the Lessee or any Subsidiary seeking liquidation,
reorganization or arrangement or similar relief under the federal
bankruptcy laws or any other applicable law or statute of the United
States of America or any state, which petition is not dismissed
within sixty (60) days; or if, under the provisions of any other law
for the relief or aid of debtors, a court of competent jurisdiction
shall assume custody or control of the Lessee or any Subsidiary or
other Credit Party or of the whole or any substantial part of its
properties, which control is not relinquished within sixty (60) days;
or if there is commenced against the Lessee or any Subsidiary or
other Credit Party any proceeding or petition seeking
reorganization, arrangement or similar relief under the federal
bankruptcy laws or any other applicable law or statute of the United
States of America or any state which proceeding or petition remains
undismissed for a period of sixty (60) days; or if the Lessee or any
Subsidiary or other Credit Party takes any action to indicate its
consent to or approval of any such proceeding or petition; or
Section 19(a)(xii) of the Lease is hereby deleted in its entirety,
and the following shall be substituted therefor:
(xii) if (A) one or more judgments or orders where the
amount not covered by insurance (or the amount as to which the
insurer denies liability) is in excess of $2,500,000 is rendered
against the Lessee or any Subsidiary, or (B) there is any attachment,
injunction or execution against any of the Lessee's or Subsidiaries'
properties for any amount in excess of $5,000,000 in the aggregate;
and such judgment, attachment, injunction or execution remains
unpaid, unstayed, undischarged, unbonded or undismissed for a period
of thirty (30) days; or
(xiii) if the Lessee or any Subsidiary shall, other than in
the ordinary course of business (as determined by past practices),
suspend all or any part of its operations material to the conduct of
the business of the Lessee or such Subsidiary for a period of more
than 60 days; or
(xiv) if the Lessee or any Subsidiary shall breach any of
the material terms or conditions of any agreement under which any
Rate Hedging Obligations permitted hereby is created and such breach
shall continue beyond any grace period, if any, relating thereto
pursuant to the terms of such agreement, or if the Lessee or any
Subsidiary shall disaffirm or seek to disaffirm any such agreement or
any of its obligations thereunder; or
(xv) if any Material Supply Agreement shall be terminated,
canceled or not renewed, or any notice of the foregoing shall be
given by any other party thereto, or a default shall occur under such
agreement and continue beyond the grace or cure period, if any,
applicable thereto; or
(xvi) if there shall occur any Change in Control; or
(xvii) if there shall occur any Termination Event as
defined in the Receivables Purchase Agreement; or
(xviii) if there shall occur any Event of Default as
defined in the Senior Note Agreement.
SECTION 4. Net Rent. Exhibit D to the Lease is hereby amended by
deleting the definition of "Applicable Rate" that appears in paragraph D thereof
in its entirety and substituting therefor the following:
"Applicable Rate" means, for any Interest Period with
respect to both the Lessor's Investment and the Loans, the sum of (i)
the LIBO Rate for such Interest Period, plus (ii) the Applicable
Margin then in effect.
"Applicable Margin" means 4.25%, except that during the
continuance of any Event of Default, the Applicable Margin shall be
6.25%.
SECTION 5. Conditions Precedent. This Amendment shall become
effective upon (i) receipt by the Lender of a fully executed copy of this
Amendment and (ii) receipt by the Lender of evidence satisfactory to the Lender
of the satisfaction of the conditions precedent set forth in Section 7.1 of the
Credit Agreement, including without limitation, executed copies of all of the
Security Documents. As promptly as practicable, but in any event no later than
February 4, 2000, the Lessee shall deliver to Lessor and Lender an opinion of
counsel, addressed to Lessor and Lender, in form and substance reasonably
satisfactory to Lessor and Lender, with respect to the enforceability of this
Amendment and such other matters as Lessor or Lender shall reasonably request.
SECTION 6. Representations of Lessee. Lessee hereby represents and
warrants that, after giving effect to this Amendment (i) the representations and
warranties set forth in Section 32(a) of the Lease are true and correct as of
the date hereof, and shall be deemed to have been made such representations and
warranties as of the date hereof and (ii) no Event of Default, Environmental
Event, Casualty, Condemnation or Default has occurred and is continuing.
SECTION 7. Miscellaneous. The Lease as amended hereby, remains in
full force and effect. Any reference to the Lease after the date hereof shall be
deemed to refer to the Lease as amended hereby, unless otherwise expressly
stated. This Amendment shall be governed by, and construed in accordance, with
the laws of the State of North Carolina. This Amendment may be executed by the
different parties hereto on separate counterparts, each of which shall
constitute an original, and all of which together shall constitute one and the
same agreement. The Lessee shall promptly pay, or reimburse the Lender for, all
costs and expenses, including without limitation, legal fees and expenses,
incurred by the Lender or the Lessor in connection with this Amendment and the
other Lease Documents.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective duly authorized officers as of the date first
above written.
ATLANTIC FINANCIAL GROUP, LTD.
By: Atlantic Financial Managers, its
General Partner
By:______________________________________
Name Printed: Xxxxxxx Xxxxxxxxxx
Title: President
CONE XXXXX CORPORATION
By
Name Printed:
Title:
CONSENT
SUNTRUST BANK hereby consents to the terms of the foregoing Tenth
Amendment to Master Lease.
SUNTRUST BANK
By:
Name Printed:
Title:
