Exhibit 2.3.11

           ELEVENTH AMENDMENT AND WAIVER TO SECURITIZATION AGREEMENTS

         THIS ELEVENTH  AMENDMENT AND WAIVER TO SECURITIZATION  AGREEMENTS (this
"Amendment"),  made and entered into as of September  23, 2003 by and among CONE
RECEIVABLES II LLC, a North Carolina limited liability company  ("CRLLC"),  CONE
MILLS CORPORATION,  a North Carolina  corporation  ("Cone Mills");  CONE FOREIGN
TRADING LLC, a North Carolina limited liability  company ("CFT";  each of CRLLC,
Cone Mills and CFT being herein  referred to as a "Company" and  collectively as
the  "Companies"),   and  GENERAL  ELECTRIC  CAPITAL  CORPORATION,   a  Delaware
corporation ("GECC"),  acting in its capacities as the Purchaser,  the Operating
Agent and the  Collateral  Agent  (as such  terms are  defined  in the  Purchase
Agreement referenced below).

                               W I T N E S E T H:

         WHEREAS, Cone Mills and CRLLC (collectively, the "Originators") entered
into that certain Receivables Transfer Agreement,  dated as of September 1, 1999
(as amended to the date hereof, the "Transfer Agreement"; capitalized terms used
herein and not otherwise defined herein shall have the meanings given such terms
in Annex X to the Transfer Agreement as amended through this Amendment), whereby
Cone Mills agreed (and each Subsidiary of Cone Mills which thereafter becomes an
Originator will agree) to sell,  contribute or otherwise  transfer to CRLLC, and
CRLLC agreed to purchase or otherwise acquire from such Originators,  all of the
right, title and interest of such Originators in the Receivables; and

         WHEREAS, CRLLC, as Seller, Redwood Receivables Corporation ("Redwood"),
as  Purchaser,  Cone Mills,  as Servicer,  and GECC,  as Operating  Agent and as
Collateral Agent, entered into that certain Receivables Purchasing and Servicing
Agreement,  dated as of September  1, 1999 (as amended to the date  hereof,  the
"Purchase  Agreement";  the Transfer  Agreement  and the Purchase  Agreement are
herein  collectively  referred to as the "Securitization  Agreements"),  whereby
Purchaser  agreed,  among other things, to purchase from CRLLC from time to time
the Receivables sold or contributed to CRLLC pursuant to the Transfer Agreement;
and

         WHEREAS,   Redwood  and  GECC  entered  into  that  certain  Assignment
Agreement,  dated as of April 23, 2001 (the "Redwood  Assignment"),  under which
Redwood  assigned  and  delegated  to  GECC,  pursuant  to  Section  2.05 of the
Liquidity Loan Agreement,  all of Redwood's rights,  titles and interests in and
to, and all of Redwood's obligations under, the Purchase Agreement and the other
Related Documents; and

         WHEREAS,  the  Securitization  Agreements were amended pursuant to that
certain First  Amendment and Waiver to  Securitization  Agreements,  dated as of
November 16, 1999, among the parties hereto, that certain Second Amendment to


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Securitization  Agreements,  dated as of January  28,  2000,  among the  parties
thereto, that certain Third Amendment to Securitization Agreements,  dated as of
March 31, 2000,  among the parties  thereto,  that certain  Fourth  Amendment to
Securitization Agreements and Additional Originator Joinder Agreement,  dated as
of April  24,  2000,  among  such  parties,  that  certain  Fifth  Amendment  to
Securitization  Agreements,  dated as of June 30, 2000, among such parties, that
certain Sixth Amendment to Securitization  Agreements,  dated as of December 11,
2000,  among such  parties,  that certain  Seventh  Amendment to  Securitization
Agreements,  dated as of April 23, 2001, among such parties, that certain Eighth
Amendment to  Securitization  Agreements,  dated as of July 10, 2001; among such
parties, that certain Ninth Amendment to Securitization Agreements,  dated as of
November 9, 2001,  among such  parties,  and that  certain  Tenth  Amendment  to
Securitization  Agreements,  dated as of September  5, 2003,  among such parties
(collectively, the "Prior Amendments"), and

         WHEREAS,  it is  contemplated  that on or about the Eleventh  Amendment
Effective Date, the Originators and certain of their Subsidiaries (collectively,
together  with  the  Originators,   the  "Debtors")  will  commence  Chapter  11
bankruptcy  cases by the filing of voluntary  petitions for relief under Chapter
11 of the Bankruptcy Code  (collectively,  the "Chapter 11 Cases") in the United
States  Bankruptcy Court for the District of Delaware (the  "Bankruptcy  Court")
and  that  thereafter  each of the  Originators  will  continue  to  manage  its
properties  and  operates  its  business  as a debtor and  debtor in  possession
pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code; and

         WHEREAS,  the Companies  have  requested  that any  Termination  Event,
Incipient Termination Event, Event of Servicer Termination or Incipient Servicer
Termination  Event that may occur as a result of the commencement of the Chapter
11 Cases be waived and that the Securitization  Agreements be further amended in
certain  respects as set forth in this Amendment,  all so that the Purchases and
other transactions contemplated by the Securitization Agreements may continue to
occur after the  commencement  and during the  pendency of the Chapter 11 Cases;
and

         WHEREAS,  GECC is willing to grant such waiver and the  parties  hereto
are willing to agree to such  amendments,  all in accordance with and subject to
the terms and conditions of this Amendment.

         NOW THEREFORE,  in  consideration  of the premises and mutual covenants
contained  herein,  and other good and valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:

         1. Certain Waiver and Reservations of Rights.  Subject to the terms and
conditions of this Amendment,  including  without  limitation the fulfillment of
the applicable  conditions  precedent specified in Section 7 below, GECC (in its
capacity as the Purchaser and the Operating Agent) hereby waives any Termination
Event,  Incipient  Termination Event, Event of Servicer Termination or Incipient
Servicer Termination



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Event that may occur  under (i)  Section  9.01(d)  or  9.02(e)  of the  Purchase
Agreement (as such agreement is in effect immediately prior to the effectiveness
of this  Amendment)  solely as a result of the  commencement  of the  Chapter 11
Cases or (ii)  Sections  9.01(s) or 9.02(c) of the Purchase  Agreement  (as such
agreement is in effect immediately prior to the effectiveness of this Amendment)
solely as a result of the  Receivables  Collection  Turnover as of July 27, 2003
being greater than the maximum permitted as of such date under paragraph (c)(iv)
of Annex G to the Purchase Agreement (as such agreement is in effect immediately
prior to the effectiveness of this Amendment).

         2. Amendments of  Securitization  Agreements.  Subject to the terms and
conditions of this Amendment,  including  without  limitation the fulfillment of
the  conditions  precedent  specified  in  Section 7 below,  the  Securitization
Agreements  shall be  amended  as  follows,  in each  case  effective  as of the
Eleventh Amendment Effective Date:

         (A) Section  2.02(c) of the Purchase  Agreement shall be deleted in its
entirety.

         (B) Section  2.07(a) of the Purchase  Agreement shall be deleted in its
entirety and the following  new Section  2.07(a)  shall be  substituted  in lieu
thereof. .

                  (a)(i)  The  Seller  shall  pay to  the  Purchaser  an  unused
         facility fee (the "Unused  Facility Fee") equal to  five-eighths of one
         percent (0.625%) per annum calculated daily from the Eleventh Amendment
         Effective Date until the Facility  Termination Date and payable on each
         Business Day,  commencing on the Eleventh Amendment  Effective Date, on
         the  amount by which the  Maximum  Purchase  Limit as in effect on such
         date exceeds the Capital  Investment  on such date,  which fee shall be
         fully earned when payable and shall be non-refundable.

                  (ii) On the  Eleventh  Amendment  Effective  Date  and on each
         anniversary  thereof that occurs  prior to the  Termination  Date,  the
         Seller  shall  pay to the  Operating  Agent,  for its own  account,  an
         administration  fee in the amount of $50,000,  which fee shall be fully
         earned when payable and shall be non-refundable.

                  (iii) The  provisions  of this Section  2.07(a)  supersede and
         replace the Fee Letter.

         (C)  Section  4. 02 of the  Purchase  Agreement  shall  be  amended  by
adding the following new sentence at the end thereof:


         Notwithstanding  anything  to the  contrary  set forth in this  Section
         4.02,  it  is  expressly   understood  and  agreed  that  each  of  the
         representations  and  warranties  made in this Section 4.02 by each DIP
         Servicer is and shall be (i) subject to (x) compliance by such Servicer
         with any applicable provisions of the Bankruptcy Code and (y) the entry
         of the  Interim  Order and the Final  Order (as  applicable),  and (ii)
         qualified to exclude any noncompliance resulting solely from the filing
         of the Chapter 11 Cases (but not excluding noncompliance resulting from
         any



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         subsequent  event,  whether  or not  related to  or  derivative  of the
         filing of the Chapter 11 Cases).

         (D) Section 5.03 of the Purchase  Agreement  shall be amended by adding
the following new paragraph (n) at the end thereof:

                  (n ) Amendments  to Interim  Order or Final Order.  The Seller
         shall not, without the prior written consent of the Operating Agent and
         the  Purchaser,   consent  to  any   amendment,   supplement  or  other
         modification  of  any of the  terms  or  provisions  contained  in,  or
         applicable to, (a) the Interim Order or (b) the Final Order.

         (E)  Section  9.01 of the  Purchase  Agreement  shall be deleted in its
entirety  and the  following  new  Section  9.01  shall be  substituted  in lieu
thereof:

                           SECTION  9.01  Termination  Events.  If  any  of  the
         following events (each, a "Termination  Event") shall occur (regardless
         of the reason therefor):

                           (a) the Seller  shall (i) fail to make any payment of
         any Seller Secured  Obligation  when due and payable and the same shall
         remain unremedied for one Business Day or more, or (ii) fail or neglect
         to perform,  keep or observe any other  provision of this  Agreement or
         the other Related  Documents  (other than any provision  embodied in or
         covered by any other  clause of this  Section  9.01) and the same shall
         remain  unremedied for three Business Days or more after written notice
         thereof shall have been given by the Operating  Agent or the Collateral
         Agent to the Seller;

                           (b)  except  for  defaults  occasioned  solely by the
         filing of the  Chapter  11 Cases,  defaults  arising  from  Debts  with
         respect to which the  Bankruptcy  Code  prohibits any  Originator  from
         complying or permits any  Originator  not to comply,  and defaults with
         respect to Debt where the  holder  thereof is stayed by the  Bankruptcy
         code or the Bankruptcy  court from  exercising  remedies as a result of
         such  default,  (i) a default  or breach  shall  occur  under any other
         agreement,   document  or  instrument  to  which  any  Originator,  any
         Originator's  Subsidiary,  the Seller or the  Servicer is a party or by
         which any such  Person  or its  property  is bound  that  involves  the
         failure to make any payment when due in respect of any Debt (other than
         the  Seller  Secured  Obligations)  of any such  Person  in  excess  of
         $1,000,000 in the aggregate,  or (ii) any other default or breach shall
         occur  with  respect  to any such Debt in excess of  $1,000,000  in the
         aggregate and such default or breach  causes,  or permits any holder of
         such  Debt or a  trustee  or agent to  cause,  such  Debt or a  portion
         thereof  to become  due prior to its  stated  maturity  or prior to its
         regularly  scheduled  dates of  payment,  regardless  of  whether  such
         default is waived, or such right is exercised,  by such holder, trustee
         or agent,  and such default or breach remains  uncured and unwaived for
         15 days;


<PAGE>


                           (c) a case or  proceeding  (other than the Chapter 11
         Cases) shall have been commenced against any Originator,  the Seller or
         the  Servicer  seeking a decree or order in respect of any such  Person
         (i) under the Bankruptcy Code or any other applicable federal, state or
         foreign  bankruptcy or other similar law, (ii)  appointing a custodian,
         receiver,  liquidator,  assignee,  trustee or sequestrator  (or similar
         official)  for any  such  Person  or for any  substantial  part of such
         Person's assets, or (iii) ordering the winding-up or liquidation of the
         affairs of any such Person;

                           (d) except  for the  filing of the  Chapter 11 Cases,
         any  Originator,  the Seller or the Servicer  shall (i) file a petition
         seeking  relief  under  the  Bankruptcy  Code or any  other  applicable
         federal, state or foreign bankruptcy or other similar law, (ii) consent
         or fail to object in a timely and appropriate manner to the institution
         of  proceedings  thereunder or to the filing of any such petition or to
         the  appointment  of or taking  possession  by a  custodian,  receiver,
         liquidator, assignee, trustee or sequestrator (or similar official) for
         any such Person or for any  substantial  part of such Person's  assets,
         (iii) make an assignment for the benefit of creditors, or (iv) take any
         corporate action in furtherance of any of the foregoing;

                           (e) the  Seller  or the  Servicer  (other  than a DIP
         Servicer) is not Solvent or admits in writing its  inability  to, or is
         generally unable to, pay its Debts as such Debts become due;

                           (f) a  final  judgment  or  judgments  in  excess  of
         $5,000,000  (less the  amount,  if any, of any such  judgment  which is
         covered by insurance as to which the insurer has confirmed  coverage in
         writing) in the  aggregate  at any time  outstanding  shall be rendered
         against any  Originator or the Servicer and the same shall not,  within
         60 days after the entry  thereof,  have been  discharged  or  execution
         thereof  stayed  or  bonded  pending  appeal,  or shall  not have  been
         discharged prior to the expiration of any such stay;

                           (g) a final  judgment  shall be rendered  against the
         Seller;

                           (h) any information  contained in any Investment Base
         Certificate is untrue or incorrect in any respect or any representation
         or  warranty  of any  Originator  or the Seller  herein or in any other
         Related  Document  or  in  any  written  statement,  report,  financial
         statement or certificate  (other than an Investment  Base  Certificate)
         made or delivered by any Originator or the Seller to any Affected Party
         is untrue or incorrect in any material respect as of the date when made
         or deemed made;

                           (i) any Governmental  Authority (including the IRS or
         the PBGC)  shall file notice of a Lien with regard to any assets of any
         Originator  (other than a Lien (i) limited by its terms to assets other
         than Receivables and


<PAGE>

         (ii) not materially adversely affecting the financial condition of such
         Originator or Cone Mills' ability to perform as Servicer hereunder);

                           (j) any Governmental  Authority (including the IRS or
         the PBGC)  shall file notice of a Lien with regard to any of the assets
         of the Seller;

                           (k) the Operating Agent or the Collateral Agent shall
         have determined  that any event or condition  (other than the filing of
         the Chapter 11 Cases) that has had or could  reasonably  be expected to
         have or result in a Material Adverse Effect has occurred;

                           (l) (i) a default  or breach  shall  occur  under any
         provision  of  Sections  4.02(o),  4.04,  5.01 or 8.14 of the  Transfer
         Agreement and the same shall remain  unremedied for one Business Day or
         more after the occurrence thereof, (ii) a default or breach shall occur
         under any other provision of the Transfer  Agreement and the same shall
         remain  unremedied  for five Business Days or more after written notice
         thereof shall have been given by the Operating  Agent or the Collateral
         Agent to the  Seller  or (iii)  the  Transfer  Agreement  shall for any
         reason  cease to evidence  the  transfer to the Seller of the legal and
         equitable title to, and ownership of, the Transferred Receivables;

                           (m) except as otherwise  expressly  provided  herein,
         any  Lockbox  Agreement  or the  Transfer  Agreement  shall  have  been
         modified,  amended or terminated  without the prior written  consent of
         the Purchaser, the Operating Agent and the Collateral Agent;

                           (n) an  Event  of  Servicer  Termination  shall  have
         occurred;

                           (o) [intentionally omitted.]

                           (p) (i) with respect to the Transferred  Receivables,
         (A) prior to their  Purchase  hereunder,  (1) the Seller shall cease to
         hold  valid  and  properly  perfected  title  to and  sole  record  and
         beneficial  ownership  in  such  Transferred  Receivables  or  (2)  the
         Purchaser shall cease to hold a first priority,  perfected Lien in such
         Transferred Receivables or (B) after their Purchase hereunder,  (1) the
         Purchaser  shall cease to hold either (a) valid and properly  perfected
         title to and sole record and beneficial  ownership in such  Transferred
         Receivables or (b) a first priority, perfected Lien in such Transferred
         Receivables; or (ii) the Purchaser and the Collateral Agent shall cease
         to hold a first priority, perfected Lien in the Seller Collateral;

                           (q) a default or breach of any of the  covenants  set
         forth in Annex G shall have occurred;

                           (r) the Purchase Discount Rate shall be less than 50%
         for two consecutive Settlement Periods;


<PAGE>

                           (s)  the  Seller   shall   amend  its   articles   of
         organization or operating  agreement  without the express prior written
         consent of the Purchaser, the Operating Agent and the Collateral Agent;

                           (t) CRLLC  shall have  received  an  Election  Notice
         pursuant to Section 2.01(d) of the Transfer Agreement;

                           (u) a Change of Control shall have occurred;

                           (v) a material  adverse  change shall occur after the
         Closing Date in the financial condition or operation of any Originator,
         the Seller or the  Servicer  (excluding  the  filing of the  Chapter 11
         Cases  in  the  case  of any  Originator  or  the  Servicer)  or in the
         collectibility of the Transferred Receivables;

                           (w) any  Originator  or any other Person shall obtain
         the entry of an order  authorizing  any other action or actions adverse
         to  the  Seller,  the  Operating  Agent  or  the  Purchaser,  or  their
         respective  rights and  remedies  hereunder  or their  interests in the
         Transferred Receivables,  that would, individually or in the aggregate,
         have a Material Adverse Effect  (excluding the filing of the Chapter 11
         Cases);

                           (x) the  entry  by the  Bankruptcy  Court of an order
         authorizing the  appointment of an interim or permanent  trustee in the
         Chapter 11 Cases or the  appointment  of an  examiner in the Chapter 11
         Cases with expanded powers to operate or manage the financial  affairs,
         business, or reorganization of any or all of the Originators;

                           (y)  any or all of the  Chapter  11  Cases  shall  be
         dismissed or converted from one under Chapter 11 to one under Chapter 7
         of the Bankruptcy Code;

                           (z) the  entry of an order  by the  Bankruptcy  Court
         granting  relief from or modifying the automatic stay of Section 362 of
         the Bankruptcy Code (i) to allow any creditor (other than the Operating
         Agent on behalf of itself and the Purchaser) to execute upon or enforce
         a Lien on any of the Transferred  Receivables,  or (ii) with respect to
         any Lien of, or the granting of any Lien on any Transferred Receivables
         to, any state or local environmental or regulatory agency or authority;

                           (aa) the  Interim  Order or the Final  Order shall be
         amended,   modified,   supplemented,   revoked,   vacated,   stayed  or
         supplemented  without the Operating  Agent's and the Purchaser's  prior
         written consent in each such instance;

                           (bb)  the  Final   Order   (in  form  and   substance
         acceptable  to the  Operating  Agent and the  Purchaser) is not entered
         immediately following the expiration of the Interim Order;


<PAGE>

                           (cc) the sale without the  Operating  Agent's and the
         Purchaser's  written consent of all or substantially  all of the assets
         of any or all of the Originators or the other Debtors,  either though a
         sale under Section 363 of the Bankruptcy Code, through a confirmed plan
         of  reorganization or liquidation in the Chapter 11 Cases or otherwise;
         or

                           (dd)  the  Credit   Facility   shall  be  refinanced,
         replaced or refunded after the filing of the Chapter 11 Cases or any or
         all of the Debtors obtain a debtor in possession credit facility in the
         Chapter 11 Cases  (other  than  under the  Purchase  Agreement  and the
         Transfer Agreement).

         then, and in any such event,  the Operating Agent shall, at the request
         of, or may, with the consent of, the Purchaser or the Collateral Agent,
         by notice to the Seller,  declare the Facility Termination Date to have
         occurred without demand,  protest or further notice of any kind, all of
         which are hereby  expressly  waived by the Seller;  provided,  that the
         Facility  Termination  Date  shall  automatically  occur  (i)  upon the
         occurrence  of any of the  Termination  Events  described  in  Sections
         9.01(c),  (d), (e) or (t) or (ii) four days after the occurrence of the
         Termination Event described in Section 9.01(a)(i) if the same shall not
         have been remedied by such time, in each case without  demand,  protest
         or any notice of any kind, all of which are hereby  expressly waived by
         the Seller.

         (F) Section  9.02(d) of the Purchase  Agreement shall be deleted in its
entirety and the following  new Section  9.02(d)  shall be  substituted  in lieu
thereof:

                  (d) the  Operating  Agent or the  Collateral  Agent shall have
         determined  that any event or  condition  (other than the filing of the
         Chapter 11 Cases) that materially  adversely affects the ability of the
         Servicer to collect the Transferred Receivables or to otherwise perform
         hereunder has occurred;

         (G) Section 2.02 of  the Transfer  Agreement shall be amended by adding
the following new sentence at the end thereof:


                  The priority of such Lien shall be as set forth in the Orders.

         (H) Section 4.01 of the Transfer  Agreement  shall be amended by adding
the following new sentence at the end of the introductory paragraph thereof:

         Notwithstanding  anything to the contrary set forth in this Article IV,
         it is expressly  understood and agreed that each of the representations
         and  warranties  made in this Article IV is and shall be (i) subject to
         (x) compliance by the Originators with any applicable provisions of the
         Bankruptcy  Code and (y) the entry of the  Interim  Order and the Final
         Order (as applicable) and compliance by the Originators  with the same,
         and (ii) qualified to exclude any  noncompliance  resulting solely from
         the filing of the Chapter 11 Cases (but not excluding


<PAGE>

         noncompliance  resulting  from any  subsequent  event,  whether  or not
         related to or derivative of the filing of the Chapter 11 Cases).

         (I) Section  4.01(e) of the Transfer  Agreement shall be deleted in its
entirety.

         (J) Section  4.02(p) of the Transfer  Agreement shall be deleted in its
entirety and the following  new Section  4.02(p)  shall be  substituted  in lieu
thereof:

                  (p) Special Notice List. Each of the Originators shall include
         counsel to the  Operating  Agent on any "Special  Notice List" or other
         similar  list of parties to be served with  pleadings or notices in the
         Chapter 11 Cases.

         (K) Section 4.03 of the Transfer  Agreement  shall be amended by adding
the following new paragraphs (m) and (n) at the end thereof:

                  (m) Amendments to Interim Order or Final Order.  No Originator
         shall consent to any amendment, supplement or other modification of any
         of the terms or  provisions  contained  in, or  applicable  to, (a) the
         Interim Order or (b) the Final Order.

                  (n) Filing of Motions and  Applications.  No Originator  shall
         apply to the Bankruptcy Court for authority to (i) take any action that
         is  prohibited  by the terms of any of the Related  Documents,  or (ii)
         refrain  from  taking any action  that is  required  to be taken by the
         terms of any of the Related Documents or the Orders.

         (L) The  Transfer  Agreement  shall be  further  amended  by adding the
following new Section 8.15 at the end thereof:


                  8.15 Parties Including Trustees; Bankruptcy Court Proceedings.
         This Agreement, the other Related Documents, and all Transfers made and
         Liens created hereby or pursuant to any other Related Document shall be
         binding upon each Originator,  the estate of each  Originator,  and any
         trustee  or  successor  in  interest  of any  Originator  in any of the
         Chapter 11 Cases or any subsequent  case  commenced  under Chapter 7 of
         the  Bankruptcy  Code,  and shall not be subject to Section  365 of the
         Bankruptcy  Code. This Agreement and the other Related  Documents shall
         be binding upon, and inure to the benefit of, the respective successors
         and  assigns of  Operating  Agent and the  Purchaser  and each of their
         respective  assigns,  transferees and endorsees.  Each of the Transfers
         made and the Liens  created  by this  Agreement  and the other  Related
         Documents  shall be and remain valid and  perfected in the event of the
         commencement of the Chapter 11 Cases, the substantive  consolidation of
         the  Chapter  11 Cases or  conversion  of any or all of the  Chapter 11
         Cases or any other  bankruptcy  case of any  Originator to a case under
         Chapter 7 of the Bankruptcy Code or in the event of dismissal of any or
         all of the Chapter 11 Cases , in each case without the  necessity  that
         the  Operating  Agent or the  Purchaser  file  financing  statements or
         otherwise perfect


<PAGE>

         their respective ownership interests, security interests or Liens under
applicable law.

         (M) Annex G to the Purchase  Agreement shall be deleted in its entirety
and the  revised  Annex G  attached  to this  Amendment  as  Exhibit  A shall be
substituted in lieu thereof.

         (N) Annex X to the Purchase  Agreement and the Transfer Agreement shall
be  amended by  deleting  therefrom  the  definitions  of the terms  "Applicable
Margin",   Concentration   Discount  Amount",   "Excess  Liquidity",   "Facility
Termination  Date," "Final Purchase Date",  "Maximum Purchase Limit",  "Purchase
Discount  Rate  Cap",  "Receivables   Availability",   "Related  Documents"  and
"Reserves"  and "Unused  Facility Fee" and by  substituting  in lieu thereof the
following new respective definitions of such terms:

                  "Applicable Margin" shall mean 2.75%.

                  "Concentration  Discount  Amount"  means,  with respect to (i)
         Levi  Strauss,  Levi  Strauss  Canada,  Levi  Strauss  Europe  and  the
         Affiliates thereof (collectively, the "Levi Strauss Obligors"), 40% and
         (ii) any Obligor that is not a Levi Strauss Obligor, and as of any date
         of determination  thereof, the percentage of the aggregate  Outstanding
         Balance at such time of all Eligible Receivables set forth in the table
         below based upon the Senior  Unsecured  Short-Term  Debt Rating (or, in
         the absence of such rating,  the equivalent Senior Unsecured  Long-Term
         Debt  Rating)  assigned to such Obligor at such time by S&P and Moody's
         (and, if such Obligor is rated by both agencies and has a split rating,
         the applicable rating will be the lower of the two):

         ---------------------- ----------------------- ----------------------
         MINIMUM S&P RATING     MINIMUM MOODY'S RATING  APPLICABLE  PERCENTAGE
         ---------------------- ----------------------- ----------------------
         A-1+ or AA-            P-1 or Aa3              15.0%
         ---------------------- ----------------------- ----------------------
         A-1 or A+              P-1 or A1               15.0%
         ---------------------- ----------------------- ----------------------
         Below A-1 or A+        Below P-2 or Baa1       10.0%
         or not rated by        or not rated either
         either S&P or Moody's  either S&P or Moody's
         ---------------------- ----------------------- ----------------------

                  If an Obligor has neither a Senior  Unsecured  Short-Term Debt
         Rating or a Senior  Unsecured  Long-Term  Debt  Rating by either S&P or
         Moody's,  then such  Obligor's  Concentration  Discount  Amount will be
         10.0% of the aggregate Outstanding Balance at such time of all Eligible
         Receivables.  The  percentages  referenced  above may be  changed  with
         respect to any or all  Obligors at any time at the sole  discretion  of
         the Operating Agent.


<PAGE>

                  "Excess Liquidity" shall mean, as at any time of determination
         thereof,   the  sum  (without   duplication)   of  (a)  the   aggregate
         unrestricted  cash of Cone  Mills  and its  Subsidiaries  at such  time
         (excluding any such cash that serves as cash  collateral for letters of
         credit or other indebtedness of Cone Mills or any other Person),  minus
         (b) all checks drawn by Cone Mills or any of its Subsidiaries  that are
         paid on such date, plus (c) the Receivables Availability at such time.

                  "Facility Termination Date" shall mean the earliest of (a) the
         date so designated  pursuant to Section 9.01 of the Purchase Agreement,
         (b) 90 days prior to the Final  Purchase Date, (c) 90 days prior to the
         date of termination of the Maximum Purchase Limit specified in a notice
         from  the  Seller  to  the  Purchaser  delivered  pursuant  to  and  in
         accordance with Section 2.02(b) of the Purchase Agreement,  and (c) two
         (2) Business Days prior to the date any plan or plans of reorganization
         or  liquidation  for any or all of the  Originators  in the  Chapter 11
         Cases becomes effective.

                  "Final Purchase Date" shall mean May 29, 2004.

                  "Maximum Purchase Limit" shall mean $35,000,000.

                  "Purchase  Discount  Rate  Cap"  shall  mean a rate  equal  to
         eighty-five   percent  (85%)  with  respect  to  that  portion  of  the
         Investment Base which consists of Eligible Receivables;  provided, that
         the Purchase  Discount  Rate Cap may be changed at any time at the sole
         discretion of the Operating Agent,  exercised in good faith (other than
         solely as a result of the filing of the Chapter 11 Cases).

                  "Receivables  Availability"  shall  mean,  as at any  time  of
         determination  thereof, the sum (without duplication) of the amount (if
         any) by  which  the  Availability  at such  time  exceeds  the  Capital
         Investment  at  such  time,   and  for  purposes  of  this   definition
         Availability  shall be determined  by the  Operating  Agent in its good
         faith credit judgment based on the most recently  submitted  Investment
         Base Certificate and such other  information as may be available to the
         Operating  Agent  and  with  trade  payables  and  other  expenses  and
         liabilities  of Cone  Mills  and  its  Subsidiaries  being  paid in the
         ordinary  course  of  business  and  without  acceleration  of sales of
         inventory by Cone Mills and its  Subsidiaries,  and such  determination
         shall  be  binding  and  conclusive  on all  parties  to  the  Purchase
         Agreement in the absence of manifest error.

                  "Related  Documents"  shall mean each Lockbox  Agreement,  the
         Transfer   Agreement,   the  Purchase   Agreement,   each   Receivables
         Assignment,  the Purchase Assignment,  Parent Agreement,  the Insurance
         Policy, the Insurance Agreement,  the Orders, and all other agreements,
         instruments,  documents and certificates  identified in the Schedule of
         Documents  and  including  all  other  pledges,   powers  of  attorney,
         consents, assignments, contracts, notices, and all other written matter
         whether  heretofore,  now or hereafter  executed by or on behalf of any
         Person, or any employee of any Person, and delivered in connection with
         the Transfer


<PAGE>

         Agreement,  the  Purchase  Agreement or the  transactions  contemplated
         thereby.  Any  reference  in  the  Transfer  Agreement,   the  Purchase
         Agreement or any other  Related  Document to a Related  Document  shall
         include  all  Appendices  thereto,  and all  amendments,  restatements,
         supplements  or other  modifications  thereto,  and shall refer to such
         Related Document as the same may be in effect at any and all times such
         reference becomes operative.

                  "Reserves" shall mean (i) the aggregate Concentration Discount
         Amount for all Obligors of  Transferred  Receivables,  (ii) the Special
         Reserve,  (iii) the Extended Term Reserve, and (iv) such other reserves
         as the  Operating  Agent  may  establish  from time to time in its sole
         discretion.

                  "Unused Facility Fee" shall have the meaning assigned to it in
         the Section 2.07(a)(i) of the Purchase Agreement.


         (O) Annex X to the Purchase  Agreement and the Transfer Agreement shall
be further amended by deleting clauses (f) and (m) of the definition  therein of
the term "Eligible Receivable" and by substituting in lieu thereof the following
new clauses (f) and (m), respectively:

                  (f) that does not  represent  "billed but not yet  shipped" or
         "bill and hold" goods or merchandise,  unperformed services,  consigned
         goods or "sale  or  return"  goods  and  does not  represent  "progress
         billed" goods or merchandise or arise from a transaction  for which any
         additional  performance by the Originator  thereof, or acceptance by or
         other act of the  Obligor  thereunder,  remains  to be  performed  as a
         condition to any payments on such Receivable;

                  (m) with respect to which the Originator thereof has submitted
         all necessary  documentation for payment to the Obligor  thereunder and
         such  Originator has fulfilled all of its other  obligations in respect
         thereof;

         (P) Annex X to the Purchase  Agreement and the Transfer Agreement shall
be  further   amended  by  adding  thereto  the  following  new  definitions  in
appropriate alphabetical order:

                  "Adjusted  Default  Ratio"  shall  mean,  as of  any  date  of
         determination, the ratio (expressed as a percentage) of:

                           (a) (i) the  average  of the  respective  Outstanding
         Balances of all  Transferred  Receivables  (other than any  Transferred
         Receivable  that is a liability  of Azteca)  with  respect to which any
         payment,  or part thereof,  remained  unpaid for more than 90 days past
         their  respective  Maturity  Dates  as of the  last  day  of the  three
         Settlement  Periods  immediately  preceding  such date,  plus  (without
         duplication)  (ii) the  aggregate  Outstanding  Balance of  Transferred
         Receivables

<PAGE>

         (other than any  Transferred  Receivable that is a liability of Azteca)
         that were written off as uncollectible during such Settlement Periods

                  to

                           (b)  the  average  of  the   respective   Outstanding
         Balances of all  Transferred  Receivables  (other than any  Transferred
         Receivable  that is a  liability  of  Azteca) as of the last day of the
         three Settlement Periods immediately preceding such date.

                  "Azteca" shall  mean Azteca Production International, Inc. and
         its Affiliates.

                  "Bankruptcy  Court" shall have the meaning  given such term in
         the Eleventh Amendment.

                  "Bankruptcy  Rules" shall mean the Federal Rules of Bankruptcy
         Procedure,  as the  same  may  from  time  to  time  be in  effect  and
         applicable to the Chapter 11 Cases.

                  "Chapter 11 Cases"  shall have the meaning  given such term in
         the Eleventh Amendment.

                  "Debtors"  shall  have  the  meaning  given  such  term in the
         Eleventh Amendment.

                  "DIP  Servicer"  shall mean each Servicer that is a debtor and
         debtor in possession in the Chapter 11 Cases.

                  "Eleventh Amendment" means that certain Eleventh Amendment and
         Waiver to  Securitization  Agreements dated as of September 23, 2003 by
         and among the Seller, the Originators, the Servicer, the Purchaser, the
         Operating Agent and the Collateral Agent.

                  "Eleventh  Amendment  Effective  Date" means the date on which
         all of the conditions  precedent to the  effectiveness  of the Eleventh
         Amendment   specified  in  Section  7  thereof  are  fulfilled  to  the
         satisfaction of the Operating Agent and the Purchaser.

                  "Final  Order"  shall mean the order of the  Bankruptcy  Court
         entered  in the  Chapter 11 Cases  after a final  hearing  pursuant  to
         Sections 363 and 364 of the Bankruptcy  Code and Bankruptcy  Rule 4001,
         satisfactory  in form and  substance to the Purchaser and the Operating
         Agent,  and from which no appeal has been  timely  filed,  or if timely
         filed,  no stay pending  appeal shall have been granted,  together with
         all extensions,  modifications and amendments thereto, authorizing each
         of the Originators to enter into the Eleventh  Amendment and to perform
         under the Related  Documents to which it is or will be a party, to sell
         or contribute


<PAGE>

         Receivables  to  Seller  under  the  Sale   Agreement,   and  to  incur
         indebtedness  and grant  Liens under the Sale  Agreement  and the other
         Related Documents, all as set forth in such order.

                  "Interim Order" shall mean the interim order of the Bankruptcy
         Court  entered  in the  Chapter  11  Cases  after  an  interim  hearing
         (assuming  satisfaction of the standards prescribed in Sections 363 and
         364  of  the  Bankruptcy  Code  and  Bankruptcy  Rule  4001  and  other
         applicable  law),  together  with  all  extensions,  modifications  and
         amendments  thereto,  satisfactory  in form  and  substance  to  Agent,
         authorizing, on an interim basis, each of the Originators to enter into
         the Eleventh  Amendment and to perform  under the Related  Documents to
         which it is or will be a party,  to sell or contribute  Receivables  to
         Seller under the Sale Agreement,  and to incur  indebtedness  and grant
         Liens under the Sale Agreement and the other Related Documents,  all as
         set forth in such order.

                  "Orders" shall mean the Interim Order and the Final Order.

                  "Special Reserve" shall mean $2,500,000.

                  "Tenth  Amendment"  means  that  certain  Tenth  Amendment  to
         Securitization  Agreements  dated as of September 5, 2003, by and among
         the Seller,  the  Originators,  the Servicer,  the  Purchaser,  and the
         Operating Agent.

         (Q) Each of the  Securitization  Agreements shall be further amended so
that each and every reference therein to Cone Mills or CFT shall be deemed, from
and after the Eleventh  Amendment  Effective  Date, to refer to such Person as a
debtor and debtor in possession in the Chapter 11 Cases.

         3.  No  Other  Waivers  or  Amendments.  Except  for  the  waivers  and
amendments expressly set forth and referred to in Section 1 and Section 2 above,
respectively,  the Securitization  Agreements shall remain unchanged and in full
force and effect.  The waivers set forth in Section 1 above relate solely to the
specific  events  described in such  section,  and nothing in this  Amendment is
intended (or shall be  construed) as a waiver of any other  Termination  Events,
Incipient  Termination  Events,  Events of  Servicer  Termination  or  Incipient
Servicer  Termination  Events  that may arise from the  occurrence  of any other
event or events.

         4.  Representations and Warranties.  Each Company hereby represents and
warrants to GECC (in its capacity as Purchaser and the Operating Agent) that (i)
subject  to the entry of the  Interim  Order in the case of Cone  Mills and CFT,
this Amendment has been duly authorized, executed and delivered by each Company,
(ii) after giving effect to this  Amendment,  no  Termination  Event,  Incipient
Termination  Event,   Event  of  Servicer   Termination  or  Incipient  Servicer
Termination  Event  has  occurred  and is  continuing  as of the  date  of  this
Amendment,  and (iii) all of the  representations  and  warranties  made by each
Company in the  Securitization  Agreements  are true and correct in all material
respects on and as of the date of, and after  giving  effect to, this  Amendment
(except to the


<PAGE>

extent  that any such  representations  or  warranties  expressly  referred to a
specific prior date).  Any breach in any material  respect by any Company of any
of its  representations  and  warranties  contained in this Section 4 shall be a
Termination  Event and an Event of Servicer  Termination for all purposes of the
Securitization Agreements.

         5.  Ratification.  Each Company hereby  ratifies and reaffirms each and
every term,  covenant and condition set forth in the  Securitization  Agreements
and all other  documents  delivered  by such  Company  in  connection  therewith
(including  without limitation the other Related Documents to which each Company
is a party),  effective as of the Eleventh  Amendment  Effective Date (and after
giving effect to this Amendment).

         6. Waiver by the  Companies.  Each of the  Companies  hereby waives any
claim, defense,  demand, action or suit of any kind or nature whatsoever against
the Purchaser,  the Operating Agent or the Collateral  Agent arising on or prior
to  the  Eleventh  Amendment  Effective  Date  in  connection  with  any  of the
Securitization Agreements or the transactions contemplated thereunder.

         7. Conditions to  Effectiveness.  This Amendment shall become effective
as of the Eleventh  Amendment  Effective Date subject to the  satisfaction on or
prior to such date of the following  conditions precedent to such effectiveness:
(i) the  receipt  by the  Operating  Agent of one or more  counterparts  of this
Amendment, duly executed,  completed and delivered by each of the Companies, the
Purchaser and the Operating  Agent,  (ii) the receipt by the Operating  Agent of
payment (for the benefit of GECC as  Purchaser) of a waiver and amendment fee in
the amount of $250,000 (which fee shall be fully earned and non-refundable  upon
payment;  provided that if (x) Cone Mills and the other Debtors hereafter become
the  subject  of the  Chapter 11 Cases,  (y) Cone  Mills and such other  Debtors
obtain a debtor in  possession  credit  facility  in the  Chapter  11 Cases that
replaces  the   securitization   facility  provided  under  the   Securitization
Agreements,  and (z) GECC is the  primary  agent  or  co-agent  for the  lenders
participating in such facility,  GECC hereby agrees that it will credit $250,000
of such  amendment fee against the payment of any  origination,  structuring  or
similar fee payable to GECC (for its own  account) at the time of the closing of
such facility;  provided further that nothing in this Amendment is intended,  or
shall be construed,  as an offer or commitment by GECC to provide,  or otherwise
participate  as an agent or lender  in,  any such  debtor in  possession  credit
facility),  (iii) the  receipt by the  Operating  Agent of payment  (for its own
account)  of the  $50,000  administration  fee  due on  the  Eleventh  Amendment
Effective Date under Section 2.07(a)(ii) of the Purchase Agreement as amended by
this Amendment,  and (iv) the receipt by the Operating Agent of written evidence
satisfactory  to it that the Chapter 11 Cases have been  commended by Cone Mills
and CFT and that the Interim Order,  in form and substance  satisfactory  to the
Operating  Agent,  has been  entered by the  Bankruptcy  Court in the Chapter 11
Cases; provided that the waiver provided in clause (i) of Section 1 hereof shall
become  effective as of the date of this Amendment upon the  satisfaction of the
condition  precedent  specified in clause (i) above only;  and provided  further
that (A) no Purchases or Transfers shall be made after the filing of the Chapter
11 Cases unless and until all of the conditions  precedent  specified in clauses
(ii), (iii) and (iv) of this Section 7 are satisfied and (B) the waiver provided
in clause (i) of Section 1


<PAGE>

hereof  shall  expire and become null and void on the third (3rd)  Business  Day
after the date of the filing of the Chapter 11 Cases  unless on or prior to such
date all of the conditions  precedent  specified in clauses (ii), (iii) and (iv)
of this Section 7 are satisfied.

         8. Reimbursement of Expenses.  Each Company hereby agrees that it shall
reimburse the Purchaser  and the  Operating  Agent on demand for all  reasonable
costs and expenses  (including  without limitation  reasonable  attorney's fees)
incurred by such parties in connection with the negotiation,  documentation  and
consummation  of this Amendment and the other  documents  executed in connection
herewith and therewith and the transactions contemplated hereby and thereby.

         9. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK FOR CONTRACTS TO BE PERFORMED
ENTIRELY WITHIN SAID STATE.

         10.  Severability of Provisions.  Any provision of this Amendment which
is  prohibited  or  unenforceable   in  any  jurisdiction   shall,  as  to  such
jurisdiction,   be   ineffective   to  the   extent  of  such   prohibition   or
unenforceability   without  invalidating  the  remaining  provisions  hereof  or
affecting  the  validity  or  enforceability  of  such  provision  in any  other
jurisdiction.  To the extent  permitted by Applicable  Law, each Company  hereby
waives any  provision of law that renders any  provision  hereof  prohibited  or
unenforceable in any respect.

         11.  Counterparts.  This  Amendment  may be  executed  in any number of
several  counterparts,  all of  which  shall be  deemed  to  constitute  but one
original and shall be binding upon all parties,  their  successors and permitted
assigns.

         12.  Entire  Agreement.  The  Securitization  Agreements as amended and
supplemented  by the Prior  Amendments  and this  Amendment  embody  the  entire
agreement  between the parties hereto  relating to the subject matter hereof and
supersede all prior  agreements,  representations  and  understandings,  if any,
relating to the subject matter hereof.

         13.  Cone Mills' and GECC's  Capacities.  Cone Mills is  executing  and
delivering  this  Amendment  both in its  capacity  as an  Originator  under the
Transfer  Agreement  and as the Servicer  under the Purchase  Agreement  and all
references  herein to "Cone  Mills"  shall be deemed to  include it in both such
capacities  unless  otherwise  expressly   indicated.   GECC  is  executing  and
delivering  this Amendment both in its capacity as the Purchaser,  the Operating
Agent, and the Collateral  Agent,  and all references  herein to "GECC" shall be
deemed  to  include  it  in  all  such  capacities  unless  otherwise  expressly
indicated.


<PAGE>



         IN WITNESS  WHEREOF,  the parties have caused this Amendment to be duly
executed by their respective officers thereunto duly authorized,  as of the date
first above written.



                            CONE RECEIVABLES II LLC


                            By /s/ Cheryl G.Hollis
                            Name: Cheryl G. Hollis
                            Title: Secretary


                            CONE MILLS CORPORATION, as an
                            Originator and as Servicer


                            By /s/ W. Scott Wenhold
                            Name: W. Scott Wenhold
                            Title: Treasurer


                            CONE FOREIGN TRADING LLC


                            By: /s/ Neil W. Koonce
                            Name: Neil W. Koonce
                            Title: Vice President


                            GENERAL ELECTRIC CAPITAL CORPORATION,
                            as Purchaser, Operating Agent and Collateral Agent


                            By: /s/ C. Mark Smith
                            Name: C. Mark Smith
                            Title: Duly Authorized Signatory

<PAGE>


                                    EXHIBIT A


                                                   Annex G to Purchase Agreement


                               Financial Covenants



         (a) Maximum Capital Expenditures.  Cone Mills and its Subsidiaries on a
consolidated  basis  shall  not make  Capital  Expenditures  during  each of the
following  periods that exceed in the aggregate  the amounts set forth  opposite
such period:

         Period:                                 Maximum Capital Expenditures:
         ------------------------                -----------------------------

         Fiscal year ending
         December 28, 2003                       $6,000,000

         Two fiscal months ending
         February 29, 2004                        2,000,000

         (b) Minimum Excess Liquidity.  The Seller and Cone Mills shall maintain
an Excess Liquidity at all times of not less than $2,000,000.

         (c) Receivable Performance  Covenants.  The Seller shall not violate or
fail to comply with any of the following covenants as of any Settlement Date:

                  (i)   Default Ratio shall be less than 8.0%;

                  (ii)  Adjusted Default Ratio shall be less than 4.0%;

                  (iii) Delinquency Ratio shall be less than 2.2%;

                  (iv)  Gross Dilution Ratio shall be less than 3.0%;

                  (v)   Receivables  Collection  Turnover  shall be less than 70
                        days; and

                  (vi)  Seller's  Net  Worth  Percentage  shall not be less than
                        5.0%.


<PAGE>


         (d) Minimum  EBITDA.  Cone Mills and its  Subsidiaries  shall have on a
consolidated basis, as of the end of each period set forth below, EBITDA for the
period then ended of not less than the amount set forth opposite such period:

                           Period:                           Minimum EBITDA:
                           ------------------------          ---------------

                           Three fiscal months ending
                           September 30, 2003                $  50,000

                           Six fiscal months ending
                           December 28, 2003                   200,000

                           Eight fiscal months ending
                           February 29, 2004                 2,500,000


         (e)  Capitalized  terms used in this Annex G and not otherwise  defined
below shall have the respective meanings ascribed to them in Annex X.

                  "Capital Expenditures" shall mean, with respect to any Person,
all  expenditures (by the expenditure of cash or the incurrence of Debt) by such
Person during any measuring  period for any fixed assets or  improvements or for
replacements,  substitutions  or additions  thereto,  that have a useful life of
more than one year and that are  required  to be  capitalized  under  GAAP,  but
excluding expenditures under Capital Leases and any expenditures financed by the
proceeds of insurance or by the incurrence of Debt other than under the Purchase
Agreement or the Credit  Facility.  If the  expenditures  cannot be specifically
identified  and linked to insurance  proceeds or the  incurrence  of Debt (other
than the  incurrence  of Debt other than under the Purchase  Agreement or Credit
Facility),  then such  exclusion  from this  definition of Capital  Expenditures
shall be  determined by and based on the judgment of the  Operating  Agent.  For
purposes of this Annex G, Capital  Expenditures shall include investments in and
advances by Cone Mills and its  Subsidiaries  to  unconsolidated  affiliates  as
determined on a consolidated basis.

                  "EBITDA"  shall  mean,  with  respect  to Cone  Mills  and its
Subsidiaries  for any fiscal  period,  an amount equal to (a)  consolidated  Net
Income for such period,  minus (b) the sum, without  duplication,  of (i) income
tax credits,  (ii) interest income, (iii) gain from extraordinary items for such
period, (iv) any aggregate net gain (but not any aggregate net loss) during such
period arising from the sale, exchange or other disposition of capital assets by
such Person  (including any fixed assets,  whether  tangible or intangible,  all
inventory  sold in  conjunction  with the  disposition  of fixed  assets and all
securities),  and  (v)  any  other  non-cash  gains  that  have  been  added  in
determining  consolidated Net Income, in each case to the extent included in the
calculation  of  consolidated  Net  Income  of such  Person  for such  period in
accordance  with  GAAP,  plus  (c)  the  sum,  without  duplication,  of (i) any
provision for income taxes, (ii) Interest Expense, (iii) loss from extraordinary
items for such period, (iv) depreciation and


<PAGE>


amortization for such period, (v) amortized debt discount for such period,  (vi)
the  amount of any  deduction  to  consolidated  Net Income as the result of any
grant to any members of the management of such Person of any Stock, in each case
to the extent  included in the  calculation of  consolidated  Net Income of such
Person for such period in accordance with GAAP, and (vii) Restructuring Charges.
For  purposes  of this  definition,  the  following  items  shall be excluded in
determining  consolidated Net Income of a Person: (A) the income (or deficit) of
any other Person  accrued  prior to the date it became a  Subsidiary  of, or was
merged or consolidated  into, such Person or any of such Person's  Subsidiaries;
(B) the income (or deficit) of any other  Person  (other than a  Subsidiary)  in
which  such  Person  has an  ownership  interest,  except to the extent any such
income has actually been  received by such Person in the form of cash  dividends
or  distributions;  (C) the  undistributed  earnings of any  Subsidiary  of such
Person to the extent that the  declaration  or payment of  dividends  or similar
distributions  by such  Subsidiary is not at the time  permitted by the terms of
any contractual  obligation or requirement of law applicable to such Subsidiary;
(D) any restoration to income of any contingency  reserve,  except to the extent
that  provision  for such  reserve  was made out of income  accrued  during such
period;  (E) any write-up of any asset;  (F) any net gain from the collection of
the  proceeds of life  insurance  policies;  (G) any net gain  arising  from the
acquisition of any securities,  or the extinguishment,  under GAAP, of any Debt,
of such Person,  (H) in the case of a successor to such Person by  consolidation
or merger or as a transferee of its assets, any earnings of such successor prior
to such consolidation, merger or transfer of assets, and (I) any deferred credit
representing  the excess of equity in any  Subsidiary of such Person at the date
of acquisition of such Subsidiary over the cost to such Person of the investment
in such Subsidiary.

                  "Excess  Liquidity"  shall have the  meaning  ascribed to such
term in Annex X.

                  "Interest  Expense" shall mean, with respect to any Person for
any fiscal period,  interest  expense  (whether cash or non-cash) of such Person
determined  on a  consolidated  basis in  accordance  with GAAP for the relevant
period ended on such date, including (a) amortization of original issue discount
on any Debt and of all fees payable in  connection  with the  incurrence of such
Debt (to the extent included in interest expense), (b) the interest component of
any Capital  Lease  Obligation,  (c) with respect to Cone Mills and Seller only,
Redwood  Yield and fees (other than  servicing  fees),  (d) with respect to Cone
Mills  only,  amounts  paid or  payable  by Cone  Mills  under the  Morgan  Swap
Agreement,  and (e) with respect to Cone Mills only,  net cash paid with respect
to  interest,  discount,  yield,  and  fees  owed  by Cone  Mills  or any of its
Subsidiaries under the Existing Receivables Purchase Facility.

                  "Net  Income"  shall mean,  with respect to Cone Mills and its
Subsidiaries  on a  consolidated  basis and for any period,  the after taxes net
income  or loss of Cone  Mills  and its  Subsidiaries  as it would  appear  on a
consolidated  statement  of income of Cone Mills and its  Subsidiaries  for such
period  prepared in  accordance  with GAAP (such net income or loss shall (a) be
net of extraordinary items and (b) include, to the extent the


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inclusion  thereof is in accordance  with GAAP,  the equity of Cone Mills or any
Subsidiary in the net income or loss of any other Person).

                  "Net  Worth   Percentage"  shall  mean,  as  of  any  date  of
determination  thereof, a fraction (expressed as a percentage) (a) the numerator
of which equals the excess of the Seller's assets over its liabilities,  in each
case as determined in accordance  with GAAP  consistently  applied,  and (b) the
denominator of which equals the aggregate Outstanding Balance of the Transferred
Receivables.

                  "Restructuring Charges" shall mean, with respect to Cone Mills
and its Subsidiaries on a consolidated basis and for any period, (i) any and all
expenses  and charges  related to such  Persons'  reconfiguration  of their U.S.
denim operations including the closing of certain facilities, the outsourcing of
certain production and administrative functions and certain personnel reductions
at the  Carlisle  and Jacquard  business  units,  (ii) any and all losses on the
write-down or sale of assets of such Persons  during the pendency of the Chapter
11 Cases,  (iii) any and all  professional  fees and  expenses of such  Persons'
attorneys  and other  professional  advisors  related to the Chapter 11 Cases as
well as professional  fees and expenses of its creditors  related to the Chapter
11  Cases,  (iv) any and all fees  and  expenses  incurred  by such  Persons  in
connection with the Tenth Amendment and the Eleventh Amendment and any debtor in
possession  credit facility obtained by the Debtors in the Chapter 11 Cases, (v)
non-cash  charges  arising  from the  termination  of any  Plans on or after the
filing of the  Chapter  11 Cases,  and (vi) any and all other  expenses  of such
Persons that would be  classified  as a  reorganization  item  pursuant to AICPA
Statement  of  Position  90-7;  provided,  however,  that for  purposes  of this
definition  the  aggregate  cash  portion of the  Restructuring  Charges for any
period shown below shall not exceed the amount shown below for such period:

                  Period:                               Minimum Cash Portion:
                  ------------------------              ---------------------

                  Three fiscal months ending
                  September 30, 2003                     6,000,000

                  Six fiscal months ending
                  December 28, 2003                     11,000,000

                  Eight fiscal months ending
                  February 29, 2004                     12,500,000

         (f)  Rules  of  Construction  Concerning  Financial  Covenants.  Unless
otherwise specifically provided therein, any accounting term used in any Related
Document shall have the meaning  customarily  given such term in accordance with
GAAP, and all financial computations  thereunder shall be computed in accordance
with  GAAP  consistently   applied.  That  certain  items  or  computations  are
explicitly  modified by the phrase "in accordance  with GAAP" shall in no way be
construed  to limit the  foregoing.  If any  Accounting  Changes  occur and such
changes result in a change in the


<PAGE>


calculation of the financial  covenants,  standards or terms used in any Related
Document,  then the parties thereto agree to enter into negotiations in order to
amend such provisions so as to equitably  reflect such  Accounting  Changes with
the desired result that the criteria for  evaluating the financial  condition of
such  Persons  and their  Subsidiaries  shall be the same after such  Accounting
Changes as if such Accounting  Changes had not been made. If the parties thereto
agree upon the required  amendments thereto,  then after appropriate  amendments
have been executed and the underlying Accounting Change with respect thereto has
been  implemented,  any reference to GAAP contained  therein shall,  only to the
extent of such  Accounting  Change,  refer to GAAP  consistently  applied  after
giving effect to the  implementation of such Accounting  Change. If such parties
cannot agree upon the required  amendments  within 30 days following the date of
implementation of any Accounting Change, then all financial statements delivered
and all  calculations  of financial  covenants and other  standards and terms in
accordance  with the Related  Documents  shall be prepared,  delivered  and made
without regard to the underlying Accounting Change.