EXECUTION COPY
CMM PLEDGE AGREEMENT
(BORROWER)
THIS PLEDGE AGREEMENT (this "CMM Pledge Agreement") is made and entered
into as of January 28, 2000 by CONE MILLS CORPORATION, a North Carolina
corporation (the "Pledgor"), in favor of WILMINGTON TRUST COMPANY as General
Collateral Agent (in such capacity, the "General Collateral Agent") under that
certain General Collateral Agency Agreement of even date herewith among The
Prudential Life Insurance Company of America, as holder of the Senior Notes (the
"Senior Note Holder"), SunTrust Bank, Atlanta and Atlantic Financial Group,
Ltd., as creditors of the Senior Lease Obligations (collectively, the "Senior
Lease Creditor"), Morgan Guaranty Trust Company of New York, as counterparty of
the Morgan Swap Agreement ("Morgan") and Bank of America, N.A., as Agent (in
such capacity, the "Revolving Credit Agent") for each of the Lenders now or
hereafter party to the Credit Agreement (as defined in the Intercreditor
Agreement (as defined below)), pursuant to which the General Collateral Agent
serves as collateral agent for the benefit of the Senior Note Holder, the Senior
Lease Creditor, the Revolving Credit Agent, the Lenders, Morgan, the Bond
Trustee for the benefit of the Debenture Holders and all other Senior Creditors
at any time existing and agreed to by BANK OF AMERICA, N.A. as Designated
Collateral Subagent (in such capacity the "Designated Collateral Subagent". The
General Collateral Agent and all the Senior Creditors are collectively referred
to herein as the "General Secured Parties." All capitalized terms used but not
otherwise defined herein shall have the respective meanings assigned thereto in
the Intercreditor Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Pledgor is indebted to certain of the Senior Creditors
pursuant to the Loan Documents, the Senior Debentures, the Senior Notes, the
Morgan Swap Agreement and the Senior Lease Documents, as applicable; and
WHEREAS, as collateral security for the payment and performance of all
General Senior Obligations, the Pledgor is willing to pledge and grant to the
General Collateral Agent for the benefit of the General Secured Parties a
security interest in 65% of the Voting Securities and 100% of the non-voting
Subsidiary Securities (the "CMM Shares")of Cone Mills (Mexico), S.A. de C.V.
("CMM"); and
WHEREAS, each of the Senior Note Holder, the Senior Lease Creditor,
Morgan, the Priority General Collateral Agent, the General Collateral Agent, the
Designated Collateral Subagent and the Revolving Credit Agent for itself and on
behalf of the Lenders have entered into the Intercreditor Agreement dated as of
the date hereof for their mutual benefit and the benefit of those Persons for
whom they respectively serve as agent, as applicable and the benefit of the
holders of the Senior Debentures, which Intercreditor Agreement provides, among
other terms, as to the allocation of proceeds derived from any remedial actions
undertaken pursuant to the terms of this CMM Pledge Agreement; and
WHEREAS, pursuant to the General Collateral Agency Agreement, the
General Collateral Agent is authorized to delegate certain actions it would
otherwise undertake and certain responsibilities and obligations thereof
pursuant to the terms of this CMM Pledge Agreement to any Senior Creditor party
to the General Collateral Agency Agreement and the General Collateral Agent has
so authorized and appointed the "Designated Collateral Subagent" and the
Designated Collateral Subagent, by its execution and delivery of this CMM Pledge
Agreement, accepts such authorization and appointment as to those express
matters herein for which it is responsible;
NOW, THEREFORE, in order to induce the Lenders to enter into the Loan
Documents and to induce the other General Secured Parties and to make and
maintain the extensions of credit evidenced by the Senior Notes, the Senior
Debentures and the Senior Lease Documents, and in consideration of the premises
and the mutual covenants contained herein, the parties hereto agree as follows:
1. PLEDGE OF PLEDGED INTERESTS; OTHER COLLATERAL.
(a) As collateral security for the payment and performance by
the Pledgor of all now or hereafter existing General Senior Obligations
(the "Secured Obligations"), the Pledgor hereby pledges to the General
Collateral Agent for the benefit of the General Secured Parties, in
terms of articles 334 to 345 of the General Law of Negotiable
Instruments and Credit Transactions, a first priority security interest
in all of the following items of property in which it now has or may at
any time hereafter acquire an interest, and wheresoever located:
(i) the CMM Shares; and
(ii) all cash, securities, dividends, options, rights,
and other property at any time and from time to time (x)
declared or distributed in respect of or in exchange for or on
conversion of the CMM Shares, or (y) by its or their terms
exchangeable or exercisable for or convertible into any CMM
Shares; and
All such CMM Shares, certificates, instruments, cash, securities,
interests, dividends, rights and other property referred to in clauses
(i) through (i1) of this Section 1 are herein collectively referred to
as the "Collateral."
(b) Subject to Section 8(a), the Pledgor agrees to deliver all
certificates, instruments or other documents representing any
Collateral to the General Collateral Agent or upon its request to the
Designated Collateral Subagent at such location as the General
Collateral Agent or the Designated Collateral Subagent shall from time
to time designate by written notice pursuant to Section 21 for its
custody at all times until termination of this CMM Pledge Agreement,
together with such instruments necessary to
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evidence or perfect the pledge of the Collateral as reasonably
requested by the General Collateral Agent or by the Designated
Collateral Subagent.1
(c) The Pledgor agrees to execute and deliver, or cause to be
executed and delivered by other Persons, at Pledgor's expense, all
share certificates, documents, instruments, agreements, or other
writings as the General Collateral Agent or the Designated Collateral
Subagent may reasonably request from time to time to carry out the
terms of this CMM Pledge Agreement or to protect or enforce the General
Collateral Agent's Lien and security interest in the Collateral
hereunder granted to the General Collateral Agent for the benefit of
the General Secured Parties and further agrees to do and cause to be
done upon the request of the General Collateral Agent or the Designated
Collateral Subagent, at Pledgor's expense, all things reasonably
determined by the General Collateral Agent or by the Designated
Collateral Subagent to be necessary or advisable to perfect and keep in
full force and effect the Lien in the Collateral hereunder granted to
the General Collateral Agent for the benefit of the General Secured
Parties, including the prompt payment of all out-of-pocket fees and
expenses incurred in connection with any filings made to perfect or
continue the Lien and security interest in the Collateral hereunder
granted in favor of the General Collateral Agent for the benefit of the
General Secured Parties.
(d) All filing fees, advances, charges, costs and expenses,
including reasonable attorneys' fees, incurred or paid by the General
Collateral Agent or by the Designated Collateral Subagent or any
General Secured Party in exercising any right, power or remedy
conferred by this CMM Pledge Agreement, or in the enforcement thereof,
shall become a part of the Secured Obligations secured hereunder and
shall be paid to the General Collateral Agent or to the Designated
Collateral Subagent or such General Secured Party, as applicable, by
the Pledgor immediately upon demand therefor, and any amounts not so
paid on demand (in addition to other rights and remedies resulting from
such nonpayment) shall bear interest from the date of demand until paid
in full at the Default Rate.
(e) The Pledgor agrees to register and cause to be registered
the interest of the General Collateral Agent, for the benefit of the
General Secured Parties, in the Collateral on the books of CMM.
2. STATUS OF CMM SHARES. The Pledgor hereby represents, warrants
and covenants to the General Collateral Agent for the benefit of the General
Secured Parties that:
(a) All of the CMM Shares are validly issued and outstanding,
fully paid and nonassessable and constitute 65% of the issued and
outstanding Voting Securities of CMM, and 100% of the non-voting issued
and outstanding Subsidiary Securities issued
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1 Please note that the pledge will be perfected upon delivery of duly
endorsed certificates and registration of the Pledge in the stock registry book
of CMM
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by CMM and are accurately described on Schedule I. Schedule I may be
updated by the Pledgor as necessary from time to time.
(b) It has full corporate power, legal right and lawful
authority to execute this CMM Pledge Agreement and to pledge its CMM
Shares in the manner and form hereof.
(c) The pledge to the General Collateral Agent for the benefit
of the General Secured Parties and delivery of its CMM Shares to the
General Collateral Agent or at its request to the Designated Collateral
Subagent for the benefit of the General Secured Parties pursuant to
this CMM Pledge Agreement creates or continues, as applicable, a valid
and perfected first priority security interest in such CMM Shares in
favor of the General Collateral Agent for the benefit of the General
Secured Parties, securing the payment of the Secured Obligations.
3. PRESERVATION AND PROTECTION OF COLLATERAL.
(a) Neither the General Collateral Agent nor the Designated
Collateral Subagent shall be under any duty or liability with respect
to the collection, protection or preservation of the Collateral, or
otherwise, beyond the use of reasonable care in the custody and
preservation thereof while in its possession.
(b) The Pledgor agrees (i) to pay when due all taxes, charges,
Liens and assessments against the Collateral in which it has any
interest, unless being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves
have been established in accordance with GAAP applied on a Consistent
Basis (as each capitalized term is defined in the Credit Agreement) and
evidenced to the satisfaction of the Designated Collateral Subagent and
provided that all enforcement proceedings in the nature of levy or
foreclosure are effectively stayed and (ii) to cause to be terminated
and released all Liens (other than Permitted Liens) on the Collateral.
Upon the failure of the Pledgor to so pay or contest such taxes,
charges, Liens or assessments, or upon the failure of the Pledgor to
pay any amount pursuant to Section 1(c), the Designated Collateral
Subagent at its option may pay or contest any of them (the Designated
Collateral Subagent having the sole right to determine the legality or
validity and the amount necessary to discharge such taxes, charges,
Liens or assessments) but shall not have any obligation to make any
such payment or contest. All sums so disbursed by the Designated
Collateral Subagent, including reasonable attorneys' fees, court costs,
expenses and other charges related thereto, shall be payable on demand
by the Pledgor to the Designated Collateral Subagent and shall be
additional Secured Obligations secured by the Collateral, and any
amounts not so paid on demand (in addition to other rights and remedies
resulting from such nonpayment) shall bear interest from the date of
demand until paid in full at the Default Rate.
4. DEFAULT. Upon the occurrence and during the continuance of
any Event of Default, each of the General Collateral Agent and the Designated
Collateral Subagent is given full power and authority on behalf of the General
Secured Parties, then or at any time thereafter,
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to sell, assign, deliver or collect the whole or any part of the Collateral, or
any substitute therefor or any addition thereto, in one or more sales, subject
to the following provisions:
(a) The General Collateral Agent and the Designated Collateral
Subagent shall be entitled to sell the CMM Shares either by
means of a judicial auction or in a non-judicial sale, as
provided for in Articles 340, 341 and 342 of the General Law
of Negotiable Instruments and Credit Transactions.
(b) In the event that the General Collateral Agent or the
Designated Collateral Subagent elect to carry out a
non-judicial sale, they shall give written notice to the
Pledgor upon the occurrence of any Event of Default. The
Pledgor shall have a term of 15 days to present to the General
Collateral Agent documentation evidencing that there is no
Event of Default. In the event that the Pledgor does not
present such evidence, then the sale shall be made though an
authorized public broker appointed by the General Collateral
Agent or the Designated Collateral Subagent. Any such sale may
be made either at public or private sale at the public
broker's place of business or elsewhere, either for cash
or upon credit or for future delivery.
(c) In the event General Collateral Agent or the Designated
Collateral Subagent elect to carry out a judicial sale, the
base price for the sale at the public auction of the CMM
Shares pursuant to the first bid shall be 100% of the fair
market value of the CMM Shares.
(d) In the event that any or all of the CMM Shares are not sold in
the first bid, the sale price may be reduced by intervals of
10% (ten percent), until such CMM Shares are sold.
5. PROCEEDS OF SALE. The proceeds of the sale of any of the Collateral
by the General Collateral Agent and all sums received or collected from or on
account of such Collateral by the General Collateral Agent shall be applied
ratably by the General Collateral Agent for the benefit of the General Secured
Parties in accordance with the terms of the Intercreditor Agreement.
6. REINSTATEMENT. The granting of a security interest in the Collateral
and the other provisions hereof shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Secured Obligations
is rescinded or must otherwise be returned by any General Secured Party, whether
upon the insolvency, bankruptcy or reorganization of the Pledgor or any other
Credit Party or otherwise, all as though such payment had not been made. The
provisions of this Section 6 shall survive repayment of all of the Secured
Obligations and the termination or expiration of this CMM Pledge Agreement in
any manner, including but not limited to termination upon occurrence of the
Security Termination Date.
7. WAIVER BY THE PLEDGOR. The Pledgor waives to the extent permitted by
applicable law (a) any right to require any General Secured Party, the General
Collateral Agent
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or the Designated Collateral Subagent or any other obligee of the Secured
Obligations to (x) proceed against any Person or entity, including without
limitation any Credit Party, (y) proceed against or exhaust any Collateral or
other collateral for the Secured Obligations, or (z) pursue any other remedy in
its power; (b) any right of subrogation, (c) any right to enforce any remedy
which any General Secured Party or any other obligee of the Secured Obligations
now has or may hereafter have against any other Person and any benefit of and
any right to participate in any collateral or security whatsoever now or
hereafter held by the General Collateral Agent or the Designated Collateral
Subagent for the benefit of the General Secured Parties. Either of the General
Collateral Agent or the Designated Collateral Subagent may at any time deliver
(without representation, recourse or warranty) the Collateral or any part
thereof to the Pledgor and the receipt thereof by the Pledgor shall be a
complete and full acquittance for the Collateral so delivered, and the General
Collateral Agent and the Designated Collateral Subagent, as the case may be,
shall thereafter be discharged from any liability or responsibility therefor.
8. DIVIDENDS AND VOTING RIGHTS.
(a) All dividends and other distributions with respect to any
of the CMM Shares shall be subject to the pledge hereunder, provided,
however, that cash dividends paid to the Pledgor as record owner of the
CMM Shares, to the extent permitted by each Transaction Document to be
declared and paid, may be retained by the Pledgor so long as no Event
of Default shall have occurred and be continuing, free from any Liens
hereunder.
(b) So long as no Event of Default shall have occurred and be
continuing the Pledgor shall be entitled to exercise all voting and
other rights and powers pertaining to the Collateral for all purposes
not inconsistent with the terms hereof.
(c) Upon the occurrence and during the continuance of any
Event of Default, all rights of the Pledgor to receive and retain cash
dividends and other distributions upon the Collateral pursuant to
subsection (a) above shall cease and shall thereupon be pledged to the
General Collateral Agent for the benefit of the General Secured
Parties, and the Pledgor shall, or shall cause, all such cash dividends
and other distributions with respect to the CMM Shares to be promptly
delivered to the General Collateral Agent or upon its request to the
Designated Collateral Subagent (together, if the General Collateral
Agent or the Designated Collateral Subagent shall request, with the
documents described in Sections 1(c) and 2(c) hereof or other
negotiable documents or instruments so distributed) to be held,
released or disposed of by it hereunder or, at the option of the
Designated Collateral Subagent or as directed by the Required
Enforcement General Secured Parties, to be applied to the Secured
Obligations.
(d) Upon the occurrence and during the continuance of any
Event of Default, at the option of the General Collateral Agent or the
Designated Collateral Subagent or as directed by the Required
Enforcement General Secured Parties, all rights of the Pledgor to
exercise the voting or consensual rights and powers which it is
authorized to exercise pursuant to subsection (b) above shall cease and
the General Collateral Agent may
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thereupon (but shall not be obligated to) exercise such voting or
consensual rights and powers as appertain to ownership of such
Collateral, and to that end the Pledgor hereby appoints each of the
General Collateral Agent and the Designated Collateral Subagent as its
proxy, with full power of substitution, to vote and exercise all other
rights as a shareholder with respect to such CMM Shares hereunder upon
the occurrence and during the continuance of any Event of Default and
the Pledgor hereby agrees to provide such further proxies as the
General Collateral Agent or the Designated Collateral Subagent may
request; provided, however, that each of the General Collateral Agent
and the Designated Collateral Subagent in its discretion may from time
to time refrain from exercising, and shall not be obligated to
exercise, any such voting or consensual rights or such proxy.
9. CONTINUED POWERS. Until the Security Termination Date shall have
occurred, the rights, powers and remedies granted to either or both of the
General Collateral Agent and the Designated Collateral Subagent for the benefit
of the General Secured Parties hereunder shall continue to exist and may be
exercised by each of the General Collateral Agent and by the Designated
Collateral Subagent at any time and from time to time irrespective of the fact
that any of the Secured Obligations or any part thereof may have become barred
by any statute of limitations or that any part of the liability of the Pledgor
may have ceased, to the extent any part of the Secured Obligations continues to
be due.
10. OTHER RIGHTS. The rights, powers and remedies given to each of the
General Collateral Agent and to the Designated Collateral Subagent for the
benefit of the General Secured Parties by this CMM Pledge Agreement shall be in
addition to all rights, powers and remedies given to either or both of the
General Collateral Agent and the Designated Collateral Subagent or any General
Secured Party under any Transaction Document or by virtue of any statute or rule
of law. Any forbearance or failure or delay by the General Collateral Agent or
the Designated Collateral Subagent or any General Secured Party in exercising
any right, power or remedy hereunder shall not be deemed to be a waiver of such
right, power or remedy, and any single or partial exercise of any right, power
or remedy hereunder shall not preclude the further exercise thereof; and every
right, power and remedy of the General Secured Parties shall continue in full
force and effect until such right, power or remedy is specifically waived in
accordance with the terms of the applicable Transaction Documents.
11. ANTI-MARSHALING PROVISIONS. Notwithstanding the existence of any
other security interest in the Collateral held by the General Collateral Agent
or upon its request the Designated Collateral Subagent, for the benefit of the
General Secured Parties, the Designated Collateral Subagent shall have the right
to determine the order in which any or all of the Collateral shall be subjected
to the remedies provided in this CMM Pledge Agreement. The Pledgor hereby waives
any and all right to require the marshaling of assets in connection with the
exercise of any of the remedies permitted by applicable law or provided herein
or in any Transaction Document.
12. ENTIRE AGREEMENT. This CMM Pledge Agreement, together with the
other General Security Instruments, the Intercreditor Agreement, the General
Collateral Agency
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Agreement and the Transaction Documents, constitutes and expresses the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior negotiations, agreements and understandings,
inducements, commitments or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance or usage of the trade inconsistent with any of the terms
hereof. Neither this CMM Pledge Agreement nor any portion or provision hereof
may be changed, altered, modified, supplemented, discharged, canceled,
terminated, or amended orally or in any manner other than with the prior written
consent of the Required General Secured Parties.
13. FURTHER ASSURANCES. The Pledgor agrees at its own expense to do
such further acts and things, and to execute and deliver, and cause to be
executed and delivered as may be necessary or advisable to give effect thereto,
such additional conveyances, assignments, documents, certificates, agreements
and instruments, as the Designated Collateral Subagent may at any time
reasonably request in connection with the administration or enforcement of this
CMM Pledge Agreement or related to the Collateral or any part thereof or in
order better to assure and confirm unto each of the General Collateral Agent and
the Designated Collateral Subagent their rights, powers and remedies for the
benefit of the General Secured Parties hereunder. The Pledgor hereby consents
and agrees that CMM and its Registrars, and all other Persons, shall be entitled
to accept the provisions hereof as conclusive evidence of the right of each of
the General Collateral Agent and the Designated Collateral Subagent, on behalf
of the General Secured Parties, to exercise the rights, privileges, and remedies
hereunder with respect to the Collateral, notwithstanding any other notice or
direction to the contrary heretofore or hereafter given by the Pledgor or any
other Person to CMM or Registrars or other Persons.
14. BINDING AGREEMENT; ASSIGNMENT. This CMM Pledge Agreement, and the
terms, covenants and conditions hereof, shall be binding upon and inure to the
benefit of the parties hereto, and to their respective successors and assigns,
except that the Pledgor shall not be permitted to assign this CMM Pledge
Agreement or any interest herein, or in the Collateral or any part thereof, or
otherwise, except as expressly permitted herein or in the applicable Transaction
Document, pledge, encumber or grant any option with respect to the Collateral,
or any part thereof, or any cash or property held by the General Collateral
Agent as Collateral under this CMM Pledge Agreement. All references herein to
the General Collateral Agent and the Designated Collateral Subagent and to the
General Secured Parties shall include any successor thereof or permitted
assignee, and any other obligees from time to time of the Secured Obligations.
15. SWAP AGREEMENTS. All obligations of the Pledgor under Swap
Agreements (which are not prohibited under the terms of each of the Transaction
Documents) to which any Lender or any affiliate of any Lender is a party, shall
be deemed to be Secured Obligations secured hereby, and each Lender or affiliate
of a Lender party to any such Swap Agreement shall be deemed to be a General
Secured Party hereunder with respect to such Secured Obligations; provided,
however, that such obligations shall cease to be Secured Obligations at such
time as such Person (or affiliate of such Person) shall cease to be a "Lender"
under the Credit Agreement.
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16. SEVERABILITY. The provisions of this CMM Pledge Agreement are
independent of and separable from each other. If any provision hereof shall for
any reason be held invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity or enforceability of any other provision hereof,
but this CMM Pledge Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.
17. COUNTERPARTS. This CMM Pledge Agreement may be executed in any
number of counterparts each of which when so executed and delivered shall be
deemed an original, and it shall not be necessary in making proof of this CMM
Pledge Agreement to produce or account for more than one such counterpart
executed by the Pledgor against whom enforcement is sought.
18. TERMINATION. Subject to the provisions of Section 8, this CMM
Pledge Agreement and all obligations of the Pledgor hereunder (excluding those
obligations and liabilities that expressly survive such termination) shall
terminate without delivery of any instrument or performance of any act by any
party on the Security Termination Date. Upon such termination of this CMM Pledge
Agreement, the General Collateral Agent or the Designated Collateral Subagent as
the case may be shall, at the sole expense of the Pledgor, promptly deliver to
the Pledgor the certificates evidencing its shares of CMM Shares (and any other
property received as a dividend or distribution or otherwise in respect of such
CMM Shares), together with any cash then constituting the Collateral not then
sold or otherwise disposed of in accordance with the provisions hereof, and take
such further actions at the request of the Pledgor as may be necessary to effect
the same.
19. INDEMNIFICATION. Without limitation of Section 13.9 of the Credit
Agreement or any other indemnification provision in any Transaction Document,
the Pledgor agrees to indemnify and hold harmless the General Collateral Agent,
the Designated Collateral Subagent and each General Secured Party and each of
their affiliates, and their respective officers, directors, employees, agents,
and advisors (each, an "Indemnified Party"), from and against any and all
claims, damages, losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation or proceeding or preparation of defense in
connection therewith) the Transaction Documents or General Security Instruments,
any of the transactions contemplated herein or therein or the actual or proposed
use of the proceeds of the Revolving Loans or other extension of credit under
the Transaction Documents, except to the extent such claim, damage, loss,
liability, cost, or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 19
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Pledgor or any other Credit Party,
any of their respective directors, shareholders or creditors, or an Indemnified
Party or any other Person, or any Indemnified Party is otherwise a party thereto
and whether or not the transactions contemplated hereby are consummated. The
Pledgor agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to it, any
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of its subsidiaries or affiliates, or any security holders or creditors thereof
arising out of, related to or in connection with the transactions contemplated
herein or in the other Transaction Documents or General Security Instruments,
except to the extent that such liability is found in a final non-appealable
judgment by a court of competent jurisdiction to have directly resulted from
such Indemnified Party's gross negligence or willful misconduct. The Pledgor
agrees not to assert any claim against any Indemnified Party, any of its
affiliates, or any of their respective directors, officers, employees,
attorneys, agents, or advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or otherwise
relating to any of the Transaction Documents or General Security Instruments,
any of the transactions contemplated therein or herein or the actual or proposed
use of the proceeds of the Revolving Loans or other extensions of credit under
the Transaction Documents. The agreements in this Section 19 shall survive
repayment of all of the Secured Obligations and the termination or expiration of
this CMM Pledge Agreement in any manner, including but not limited to
termination upon occurrence of the Security Termination Date.
20. ADDITIONAL INTERESTS. If the Pledgor shall at any time acquire or
hold any additional CMM Shares, which are required to be subject to a Lien
pursuant to a CMM Pledge Agreement by the terms hereof or any other provision of
the Credit Agreement or of any term of any other Transaction Document (any such
shares being referred to herein as the "Additional Interests"), the Pledgor
shall deliver to the General Collateral Agent or upon its request to the
Designated Collateral Subagent for the benefit of the General Secured Parties
(i) a revised Schedule I hereto reflecting the pledge of such Additional
Interests and (ii) a CMM Pledge Agreement Supplement in the form of Exhibit A
hereto with respect to such Additional Interests duly completed and executed by
the Pledgor and (iii) any other document required in connection with such
Additional Interests as described in Section 2(c). The Pledgor shall comply with
the requirements of this Section 20 concurrently with the acquisition of any
such Additional Interests; provided, however, that the failure to comply with
the provisions of this Section 20 shall not impair the Lien on Additional
Interests conferred hereunder.
21. NOTICES. Any notice required or permitted hereunder shall be given
(a) with respect to the Pledgor, at the address of the Pledgor indicated in
Section 13.2 of the Credit Agreement, (b) with respect to the General Collateral
Agent, to: Wilmington Trust Company, 1100 North Market Street, Wilmington,
Delaware 19890, Attn: Corporate Trust Administration, Main Phone: (302)
651-1000, Main Fax: (302) 651-8882, and (c) with respect to the Designated
Collateral Subagent, at the Revolving Credit Agent's address indicated in
Section 13.2 of the Credit Agreement. All such addresses may be modified, and
all such notices shall be given and shall be effective, as provided in Section
13.2 of the Credit Agreement.
22. RULES OF INTERPRETATION. The rules of interpretation contained in
Sections 1.2(c) through 1.2(l) of the Credit Agreement shall be applicable to
this CMM Pledge Agreement and are hereby incorporated by reference.
23. DIRECTION CONCERNING DELIVERY. Until the General Collateral Agent
provides notice otherwise, the General Collateral Agent hereby directs that all
items to be delivered to it
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pursuant to this CMM Pledge Agreement be delivered to the Designated Collateral
Subagent on its behalf.
24. GOVERNING LAW; WAIVERS.
(A) THIS CMM PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE UNITED MEXICAN STATES.
(B) THE PARTIES HEREBY EXPRESSLY AND IRREVOCABLY AGREE AND
CONSENT THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS CMM PLEDGE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN THE COMPETENT COURTS OF MEXICO, FEDERAL DISTRICT
AND, BY THE EXECUTION AND DELIVERY OF THIS CMM PLEDGE AGREEMENT, THE
PARTIES EXPRESSLY WAIVE ANY OBJECTION THAT THEY MAY HAVE NOW OR
HEREAFTER TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING,
AND IRREVOCABLY SUBMIT GENERALLY AND UNCONDITIONALLY TO THE
JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE
PLEDGOR HEREBY EXPRESSLY WAIVES ANY OBJECTION IT MAY HAVE THAT THE
COURTS TO WHOSE JURISDICTION IT HAS SUBMITTED PURSUANT TO THE TERMS
HEREOF IS AN INCONVENIENT FORUM.
[SIGNATURES ON FOLLOWING PAGES]
11
IN WITNESS WHEREOF, the parties have duly executed this CMM Pledge
Agreement on the day and year first written above.
PLEDGOR:
CONE MILLS CORPORATION
By:
------------------------------------
Name: Gary L. Smith
Title: Executive Vice President and
Chief Financial Officer
CMM PLEDGE AGREEMENT (BORROWER)
Signature Page 1 of 2
AGENT:
WILMINGTON TRUST COMPANY, as General
Collateral Agent for the General Secured
Parties
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
BANK OF AMERICA, N. A., as Designated
Collateral Subagent for the General Secured
Parties
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
CMM PLEDGE AGREEMENT (BORROWER)
Signature Page 2 of 2
SCHEDULE I
Certificate
Class or Type of Total Shares Total Shares Number (if Par Value (if Name of
Pledged Interest Outstanding Pledged applicable) applicable) Registrar
- ---------------- ----------- ----------- ----------- ----------- ---------
Class II, Series 171,331,046 111,365,180 1-B $1.00 (Mexican Alberto
B Pesos) Sepulveda Cosio
EXHIBIT A
CMM PLEDGE AGREEMENT SUPPLEMENT
THIS CMM PLEDGE AGREEMENT SUPPLEMENT (as from time to time amended,
modified or restated, this " Supplement"), dated as of ______________ ___, ____
is made by and between CONE MILLS CORPORATION, a North Carolina corporation (the
"Pledgor"), and WILMINGTON TRUST COMPANY, as General Collateral Agent under that
certain General Collateral Agency Agreement dated as of January __, 2000 among
The Prudential Life Insurance Company of America, as holder of the Senior Notes
(the "Senior Note Holder"), SunTrust Bank, Atlanta, as creditor of the Senior
Lease Obligations (the "Senior Lease Creditor"), MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as counterparty of the Morgan Swap Agreement ("Morgan"), and BANK
OF AMERICA, N. A., a national banking association, as Agent (the "Revolving
Credit Agent") for each of the Lenders (as described in the CMM Pledge Agreement
referred to below) now or hereafter party to the Credit Agreement (as defined in
the CMM Pledge Agreement referred to below) pursuant to which the General
Collateral Agent serves as General Collateral Agent for the benefit of the
Senior Note Holder, the Senior Lease Creditor, Morgan, the Revolving Credit
Agent, the Lenders, the Bond Trustee for the benefit of the Debenture Holders
and all other Senior Creditors at any time existing and agreed to by BANK OF
AMERICA, N.A. as Designated Collateral Subagent (the "Designated Collateral
Subagent"). All capitalized terms used but not otherwise defined herein shall
have the respective meanings assigned thereto in the CMM Pledge Agreement (as
defined below).
WHEREAS, the Pledgor is required under the terms of the Credit
Agreement and that certain Securities CMM Pledge Agreement dated as of January
___, 2000 by the Pledgor in favor of the General Collateral Agent for the
benefit of the General Secured Parties (as from time to time amended, modified,
supplemented or amended and restated, the "CMM Pledge Agreement"), to cause
certain CMM Shares held by it and listed on Annex A to this Supplement (the
"Additional Interests") to be specifically identified as subject to the CMM
Pledge Agreement; and
WHEREAS, the Pledgor is indebted to certain of the Senior Creditors
pursuant to the Loan Documents, the Senior Debentures, the Senior Notes, the
Morgan Swap Agreement, and the Senior Lease Documents, as applicable; and
WHEREAS, a material part of the consideration given in connection with
and as an inducement to the execution and delivery of the Credit Agreement by
the Lenders and to the maintenance of the extensions of credit evidenced by the
Senior Notes, the Senior Debentures and the Senior Lease Documents was the
obligation of the Pledgor to pledge to the General Collateral Agent for the
benefit of the General Secured Parties the Additional Interests, whether then
owned or subsequently acquired or created; and
WHEREAS, the Pledgor has acquired rights in the Additional Interests
and desires to pledge, and evidence its prior pledge, to the General Collateral
Agent for the benefit of the
A-1
General Secured Parties all of the Additional Interests in accordance with the
terms of the Credit Agreement and the CMM Pledge Agreement;
WHEREAS, each of the Senior Note Holder, the Senior Lease Creditor, the
Revolving Credit Agent for itself and on behalf the Lenders, Morgan, the
Priority Collateral Agent, the General Collateral Agent have entered into the
Intercreditor Agreement dated as of January __, 2000 for their mutual benefit
and the benefit of those Persons for whom they respectively serve as agent, as
applicable, and the benefit of the holders of the Senior Debentures, which
Intercreditor Agreement provides, among other terms, as to the allocation of
proceeds derived from any remedial actions undertaken pursuant to the terms of
the CMM Pledge Agreement; and
WHEREAS, pursuant to the General Collateral Agency Agreement, the
General Collateral Agent is authorized to delegate certain actions it would
otherwise undertake and certain responsibilities and obligations thereof
pursuant to the terms of the CMM Pledge Agreement to any Senior Creditor party
to the General Collateral Agency Agreement and the General Collateral Agent has
so authorized and appointed the Revolving Credit Agent (in such capacity, the
"Designated Collateral Subagent") and the Revolving Credit Agent, by its
execution and delivery of the CMM Pledge Agreement, accepted such authorization
and appointment as to those express matters therein for which it was
responsible;
NOW, THEREFORE, the Pledgor hereby agrees as follows with the General
Collateral Agent, for the benefit of the General Secured Parties:
The Pledgor hereby reaffirms and acknowledges the pledge to, and the
grant of security interest in, the Additional Interests contained in the CMM
Pledge Agreement and pledges to the General Collateral Agent for the benefit of
the General Secured Parties, and grants to the General Collateral Agent for the
benefit of the General Secured Parties a first priority lien and security
interest in, the Additional Interests and all of the following:
(a) all cash, securities, dividends, rights, and other
property at any time and from time to time (x) declared or distributed
in respect of or in exchange for or on conversion of any or all of the
Additional Interests or (y) by its or their terms exchangeable or
exercisable for or convertible into any Additional Interest or other
CMM Shares;
(b) all other property hereafter delivered to the General
Collateral Agent in substitution for or as an addition to any of the
foregoing, and all certificates and instruments representing or
evidencing such property, all security entitlements constituting
Additional Interests; and
(c) all proceeds of any of the foregoing.
The Pledgor hereby acknowledges, agrees and confirms by its execution of this
Supplement that the Additional Interests constitute "CMM Shares" under and are
subject to the CMM Pledge Agreement, and the items of property referred to in
clauses (a) through (c) above (the
A-2
"Additional Collateral") shall collectively constitute "Collateral" under and
are subject to the CMM Pledge Agreement. Each of the representations and
warranties with respect to CMM Shares and Collateral contained in the CMM Pledge
Agreement is hereby made by the Pledgor with respect to the Additional Interests
and the Additional Collateral, respectively. The Pledgor further represents and
warrants that a true, correct and complete revised Schedule I to the CMM Pledge
Agreement reflecting the Additional Interests and all other CMM Shares is
attached hereto and hereby incorporated by reference into the CMM Pledge
Agreement, and that all other documents required to be furnished to the General
Collateral Agent or the Designated Collateral Subagent pursuant to Section 2(c)
of the CMM Pledge Agreement in connection with the Additional Collateral have
been delivered or are being delivered simultaneously herewith to the General
Collateral Agent or the Designated Collateral Subagent.
IN WITNESS WHEREOF, the Pledgor has caused this Supplement to be duly
executed by its authorized officer as of the day and year first above written.
PLEDGOR:
CONE MILLS CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Acknowledged and accepted:
WILMINGTON TRUST COMPANY,
as General Collateral Agent for the General Secured Parties
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
BANK OF AMERICA, N.A.,
as Designated Collateral Subagent for the Secured Parties
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
A-3
ANNEX A
(to CMM Pledge Agreement Supplement of __________ dated __________)
Additional Interests
Class or Type of Certificate
Additional Total Shares Total Shares Number (if Par Value (if Name of
Interest Outstanding Pledged applicable) applicable) Registrar
- -------- ----------- ------- ----------- ----------- ---------
REVISED SCHEDULE I TO CMM PLEDGE AGREEMENT
Date: __________
Certificate
Class or Type of Total Amount Total Amount Number (if Par Value (if Name of
CMM Shares Outstanding Pledged applicable) applicable) Registrar
---------- ----------- ----------- ---------- ----------- ---------