EXHIBIT 10.2
[Execution Copy]
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated as of March 29, 2003, between POLYMER GROUP,
INC. (the "BORROWER"), each of the entities identified on the signature pages
hereto under the caption "GUARANTORS" (individually, a "GUARANTOR", and together
with the Borrower, the "OBLIGORS") and JPMORGAN CHASE BANK, as administrative
agent for the Lenders (in such capacity, together with its successors in such
capacity, the "ADMINISTRATIVE AGENT").
The Borrowers, the Guarantors, certain lenders (the "LENDERS") and the
Administrative Agent are party to a Third Amended, Restated and Consolidated
Credit Agreement dated as of March 5, 2003 (the "CREDIT AGREEMENT") providing
for the restructuring of the obligations of the Borrower in respect of the
Existing Loans (as defined in the Credit Agreement) and Existing Letters of
Credit (as therein defined), and providing for new revolving credit loans and
other extensions of credit in an aggregate principal or face amount of up to
U.S. $50,000,000. The Obligors wish to amend the Credit Agreement in certain
respects and, in that connection, the Administrative Agent has been granted
authority by the Majority Lenders (as defined in the Credit Agreement) to
execute and deliver this Amendment No. 1. Accordingly, the Obligors and the
Administrative Agent on behalf of the Majority Lenders hereby agree as follows:
Section 1. DEFINITIONS. Capitalized terms used but not otherwise
defined herein have the meanings given to them in the Credit Agreement.
Section 2. AMENDMENTS. Subject to the satisfaction of the conditions
precedent specified in Section 4 below, but effective as of the date hereof, the
Credit Agreement shall be amended as follows:
2.01. GENERAL. References in the Credit Agreement (including
references to the Credit Agreement as amended hereby) to "this Agreement" or
words of similar import (including indirect references to the Credit Agreement)
shall be deemed to be references to the Credit Agreement as hereby amended.
2.02. DEFINITIONS. Section 1.01 of the Credit Agreement shall be
amended by amending the following definitions (to the extent already included in
said Section 1.01) and adding the following definitions in the appropriate
alphabetical location (to the extent not already included in said Section 1.01):
"DEBT ISSUANCE" shall mean any issuance or sale of Indebtedness, other
than (i) Indebtedness expressly permitted to be incurred pursuant to
Section 9.07 hereof as in effect on the date hereof, (ii) any other
Indebtedness to which the Majority Lenders shall have consented to the
extent that each of the Lenders shall have agreed such Indebtedness shall
not constitute a "Debt Issuance" for purposes hereof and (iii) Future
Refinancing
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Debt to the extent the proceeds thereof are applied to the payment of the
principal of (and accrued interest and redemption premium, if any, on) the
New Senior Subordinated Notes or Junior Subordinated Convertible Notes. It
is understood and agreed that any issuance of New Senior Subordinated Notes
(other than any such issuance arising upon a drawing under the GOF Letter
of Credit as provided in Section 9.07(g)(i) hereof) shall constitute a
"Debt Issuance" under and for all purposes of this Agreement.
"QUALIFIED ISSUANCE PROCEEDS" shall mean Net Available Proceeds
received after the date hereof from either (i) an issuance of New Senior
Subordinated Notes (other than any such issuance arising upon a drawing
under the GOF Letter of Credit as provided in Section 9.07(g)(i) hereof) or
(ii) an Equity Issuance, or from any combination thereof.
"QUALIFIED PREPAYMENT PROCEEDS" shall mean, proceeds representing
either (i) proceeds of a drawing under the GOF Letter of Credit pursuant to
the second paragraph of Section 3.01(c) hereof or (ii) proceeds
constituting the first U.S. $10,000,000 of Qualified Issuance Proceeds
received by the Borrower after the date hereof and applied to the
prepayment of Loans, and deposit of funds into the Term Letter of Credit
Collateral Account, as required by Section 2.10(b) or 2.10(e) hereof, as
applicable.
2.03. INTEREST EXPENSE DEFINITION. Section 1.01 of the Credit
Agreement shall be amended by amending in its entirety the last paragraph of the
definition of "Interest Expense" as follows:
"Notwithstanding the foregoing, (i) other than for purposes of
determining Excess Cash Flow, if during any period for which Interest
Expense is being determined the Borrower or any of its Restricted
Subsidiaries shall have consummated any Disposition then, for all purposes
of this Agreement, Interest Expense shall be determined on a pro forma
basis as if such Disposition (and any Indebtedness repaid as a result of
such Disposition) had been made or consummated (and such Indebtedness
incurred or repaid) on the first day of such period (such pro forma
determination to take into account, inter alia, any increases or decreases
in the Applicable Margin that would have occurred had such Disposition, and
related incurrence or repayment of Indebtedness, occurred on the first day
of such period), (ii) if, as at any date (a "CALCULATION DATE"), fewer than
four complete consecutive fiscal quarters have elapsed subsequent to the
Effective Date, Interest Expense shall be calculated (after giving effect
to the adjustments contemplated in the foregoing clause (i)) only for the
portion of such period commencing on the Effective Date and ending on the
calculation date and shall then be annualized by multiplying the amount of
such Interest Expense by a fraction, the numerator of which is 365 and the
denominator of which is the number of days during the period commencing on
the day immediately following the Effective Date through and including the
calculation date, (iii) if, at any time any prepayment shall be made in
respect of the Term Loans from any Qualified Prepayment Proceeds, Interest
Expense shall be determined for the relevant period on a pro forma basis as
if such prepayment (and any New Senior Subordinated Notes that are issued
as a result of any drawing under the GOF Letter of Credit) had occurred (or
been issued) at the beginning of such period and (iv) if all or any
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portion of the Junior Subordinated Convertible Notes shall be converted
into equity of the Borrower as provided in the Junior Subordinated
Convertible Notes Indenture, Interest Expense shall be determined for the
relevant period on a pro forma basis as if such conversion had occurred at
the beginning of such period."
2.04. OPTIONAL PREPAYMENTS. Section 2.09(d) of the Credit Agreement is
hereby amended to read in its entirety as follows:
"(d) prepayments of Term Loans, and deposits of funds into the Term
Letter of Credit Collateral Account, shall be applied to the payments and
deposits required to be made under Section 3.01(b) hereof in inverse order
of maturity and may not be reborrowed; PROVIDED that, if specified by the
Borrower at the time notice of such prepayment is delivered to the
Administrative Agent, up to an aggregate of U.S. $25,000,000 of the Covered
Installments (as defined in Section 3.01(c) hereof) may be prepaid in
direct order of maturity."
2.05. MANDATORY PREPAYMENTS - EQUITY ISSUANCE. Section 2.10(e) of the
Credit Agreement is hereby amended to read in its entirety as follows:
"(e) EQUITY ISSUANCE. Upon any Equity Issuance, the Borrower shall
prepay the Loans (and/or provide cover for Letter of Credit Liabilities as
specified in Sections 2.03(b)(v) and 2.03(c)(vi) hereof), and/or the
Revolving Credit Commitments shall be subject to automatic reduction, in an
aggregate amount equal to 50% of the Net Available Proceeds thereof, if
any, such prepayment and/or reduction to be effected in each case in the
manner and to the extent specified in paragraph (i) below, PROVIDED that,
notwithstanding the foregoing, in the case of any Net Available Proceeds of
an Equity Issuance received by the Borrower during the fiscal year ending
January 3, 2004, the Borrower shall be required to prepay the Loans (and/or
provide cover for Letter of Credit Liabilities) in an amount equal to 100%
of the first U.S. $10,000,000 of such Net Available Proceeds."
2.06. MANDATORY PREPAYMENTS - ALLOCATION. Section 2.10(i) of the
Credit Agreement is hereby amended by adding a new paragraph at the end thereof
to read as follows:
"In addition, notwithstanding anything herein to the contrary, the
portion of the proceeds of the first U.S. $10,000,000 of Qualified Issuance
Proceeds received by the Borrower during the fiscal year ending January 4,
2004 shall be applied to the prepayment of the installments of the Term
Loans, and cover for the Term Letter of Credit Liabilities, in direct order
of maturity."
2.07. GOF LETTER OF CREDIT. Section 3.01(c) of the Credit Agreement is
hereby amended by adding a new paragraph at the end thereof to read as follows:
"In addition to the foregoing, in the event that at the time the
Borrower delivers notice of a prepayment under Section 2.09(d) hereof it
specifies that such prepayment is to be applied to the Covered Installments
in direct order of maturity, the Borrower may also request that the
Administrative Agent obtain the required funds for such prepayment
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by drawing under the GOF Letter of Credit in an amount equal to such
requested prepayment. In such event, the Administrative Agent shall make
such drawing within five Business Days of such request, and shall apply the
proceeds thereof to such prepayment. To the extent that at any time on or
before May 15, 2004 the Borrower shall fail to be in compliance with
Section 9.10(b), 9.10(c) or 9.10(d) hereof and, after two Business Days'
notice from the Administrative Agent to the Borrower of the Administrative
Agent's intent to make a drawing on the GOF Letter of Credit, there is no
outstanding request from the Borrower to make a drawing pursuant to the
preceding two sentences, the Borrower hereby irrevocably authorizes and
directs the Administrative Agent to draw the full undrawn face amount of
the GOF Letter of Credit to be applied to the Covered Installments in
direct order of maturity as provided above (and, for these purposes, agrees
that upon such failure to comply, Terms Loans and cover for Term Letters of
Credit, in an aggregate amount equal to the full undrawn face amount of the
GOF Letter of Credit, shall be due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Borrower)."
2.08. INDEBTEDNESS COVENANT. Section 9.07(g) of the Credit Agreement
is hereby amended to read in its entirety as follows:
"(g) Indebtedness of the Borrower in respect of the New Senior
Subordinated Notes (and of any other Group Member, other than a Group
Member that does not Guarantee the obligations of the Borrower hereunder,
in respect of a Guarantee of the New Senior Subordinated Notes, so long as
any such Guarantee is subordinated to the Guarantee hereunder) issued to
GOF either (i) upon any drawing under the GOF Letter of Credit and to
evidence the reimbursement obligations of the Borrower to GOF in respect of
such drawing, in an aggregate principal amount up to but not exceeding U.S.
$25,000,000 or (ii) otherwise after the date hereof in an aggregate
additional amount up to but not exceeding U.S. $35,000,000, together with
in each case interest accrued thereon for any period added to the principal
thereof;"
2.09. CERTAIN FINANCIAL COVENANTS. New Section 9.10(e) is hereby
inserted into the Credit Agreement to read as follows:
"(e) CERTAIN CURE RIGHTS. Notwithstanding the provisions of Section 10
hereof, but without limiting the obligations of the Borrower under Section
9.10(c) or 9.10(d) hereof, a breach by the Borrower as at the last day of
any fiscal quarter of its obligations under said Section 9.10(c) or 9.10(d)
shall not constitute an Event of Default hereunder (except for purposes of
Section 7 hereof) until the date (for purposes of this paragraph (e), the
"CUT-OFF DATE") which is the earlier of the date five days after (i) the
date the financial statements for the Borrower and its Subsidiaries with
respect to such fiscal quarter are delivered pursuant to Section 9.01(b)
hereof or (ii) the latest date on which such financial statements are
required to be delivered pursuant to said Section 9.01(b), PROVIDED that,
(x) if following the last day of such fiscal quarter and prior to the
Cut-Off Date, either (A) the Borrower shall have prepaid the Term Loans,
and made deposits into the Term Letter of Credit Collateral Account, from
available cash, or (B) GOF shall have converted Junior Subordinated
Convertible Notes into equity, in the
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aggregate for clauses (A) and (B) in an amount sufficient to bring the
Borrower into compliance with said Section 9.10(c) or 9.10(d) assuming that
the Interest Coverage Ratio and the Adjusted Interest Coverage Ratio (as
the case may be), as of the last day of such fiscal quarter were calculated
on a pro forma basis as provided in the definition of "Interest Expense"
giving effect to such prepayment and conversion, then such breach or
breaches shall be deemed to have been cured and (y) breaches of Sections
9.10(c) and 9.10(d) hereof may not be deemed to be cured pursuant to this
Section 9.10(e) more than three times during the term of this Agreement."
2.10. EVENT OF DEFAULT. Section 10 of the Credit Agreement is hereby
amended by deleting the comma at the end of paragraph (n) thereof and inserting
"; or" in lieu thereof, and inserting a new paragraph (o) after said paragraph
(n) to read as follows:
"(o) The amendments to the New Senior Subordinated Notes Indenture,
and the amendments to (or exchange of) the Junior Subordinated Convertible
Notes, contemplated by Section 4(b) of Amendment No. 1 hereto shall not
have been effected in a manner in form and substance satisfactory to the
Administrative Agent on or before May 31, 2003,"
Section 3. REPRESENTATIONS AND WARRANTIES. Each Obligor hereby
represents and warrants to the Administrative Agent and the Lenders that (a)
after giving effect to the amendments set forth in Section 2 of this Amendment
No. 1, no Default has occurred and is continuing and (b) the representations and
warranties set forth in Section 8 of the Credit Agreement as amended hereby are
true and complete on the date hereof as if made on and as of the date hereof
(or, if any such representation or warranty is expressly stated to have been
made as of a specific date, as of such specific date) and as if each reference
in said Section 8 to "this Agreement" included reference to the Credit Agreement
as amended hereby.
Section 4. CONDITIONS TO EFFECTIVENESS. As provided in Section 2, the
amendments to the Credit Agreement set forth in Section 2 are subject to, and
will become effective as of the date hereof upon satisfaction of the following
conditions precedent (including, with respect to each document required below to
be delivered, that the Administrative Agent shall have received each such
document, which shall be satisfactory in form and substance to the
Administrative Agent):
(a) EXECUTION. This Amendment No. 1 shall have been duly executed by
each Obligor and the Administrative Agent (having obtained the consent of
the Majority Lenders) as provided on the signature pages hereof.
(b) SUBORDINATED DEBT DOCUMENTS. The Borrower shall have received a
commitment from GOF to (i) amend the New Senior Subordinated Notes
Indenture to provide that interest on the New Senior Subordinated Notes
accrued from the Effective Date through January 31, 2005, if any such Notes
are issued, be added to the principal of such Notes and not be payable in
cash, (ii) either (x) amend the Junior Convertible Subordinated Notes
Indenture to provide that interest on the Junior Subordinated Convertible
Notes held by GOF accrued from the Effective Date through January 5, 2004
shall be added to the principal of such Notes and not be payable in cash,
or (y) exchange
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any Junior Subordinated Convertible Notes held by GOF for a new series of
junior subordinated convertible notes with identical terms as the
outstanding Junior Subordinated Convertible Notes, other than to provide
that interest accrued from the Effective Date through January 5, 2004
(including interest on the Junior Subordinated Convertible Notes for
periods prior to such exchange) on such new junior subordinated convertible
notes be added to the principal of such new notes and not be payable in
cash and (iii) do such further acts and things as may be required to effect
the purposes of this Amendment No. 1.
The Administrative Agent hereby consents to the foregoing for purposes
of Section 9.14 of the Credit Agreement. In addition, to the extent the
outstanding Junior Subordinated Convertible Notes are exchanged as provided
above, the Obligors and the Administrative Agent agree to further amend the
Credit Agreement as shall be appropriate to provide that such new notes,
and any related indenture, shall be substituted in the Credit Agreement for
the term "Junior Subordinated Convertible Notes" and "Junior Subordinated
Convertible Notes Indenture".
(c) CONVERSION OF JUNIOR SUBORDINATED CONVERTIBLE NOTES. The Borrower
shall have received a commitment from GOF pursuant to which GOF shall
agree, if requested at any time on or before May 15, 2004 by the Borrower,
to convert outstanding Junior Subordinated Convertible Notes (or any new
junior subordinated convertible notes issued as contemplated in paragraph
(b) above) held by GOF in an aggregate amount up to the lesser of U.S.
$38,000,000 or the amount necessary to cure or avoid any breach of the
requirements of Section 9.10(a) of the Credit Agreement existing, or
expected to exist, at the time of such request, into equity of the Borrower
(as provided in the Junior Subordinated Convertible Notes Indenture, or any
new junior subordinated convertible notes indenture contemplated in
paragraph (b) above).
(d) ADDITIONAL EQUITY OR NEW SENIOR SUBORDINATED NOTES. The
Administrative Agent shall have received an executed copy of a letter
issued by GOF to the Borrower pursuant to which, in the event that the
Borrower shall fail to be in compliance with the requirements of Section
9.10(c) of the Credit Agreement as at the last day of the third fiscal
quarter in 2003, and subject to the other conditions therein referred to,
GOF agrees to make either an equity investment in the Borrower, or to
purchase additional New Senior Subordinated Notes as contemplated in
Section 9.07(g)(ii), in an aggregate amount of up to U.S. $10,000,000.
(e) AMENDMENT FEE. The Administrative Agent shall have received, for
the account of each Lender that, not later than 5:00 p.m. New York City
time on April 10, 2003, has authorized the Administrative Agent to execute
and deliver this Amendment No. 1, an amendment fee in an amount equal to
0.10% of the sum of such Lender's Revolving Credit Exposure, Term Loans and
Uncovered Term Letter of Credit Liability on the date of such
effectiveness.
AMENDMENT NO. 1
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(f) OTHER DOCUMENTS. The Administrative Agent shall have received such
other documents as the Administrative Agent or Milbank, Tweed, Xxxxxx &
XxXxxx LLP, special New York counsel to JPMCB, may reasonably request.
Section 5. MISCELLANEOUS. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. For the avoidance
of doubt, this Amendment No. 1 shall not constitute or be deemed, or interpreted
as, a novation. This Amendment No. 1 may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
amendatory instrument and any of the parties hereto may execute this Amendment
No. 1 by signing any such counterpart. This Amendment No. 1 shall be governed
by, and construed in accordance with, the law of the State of New York.
AMENDMENT NO. 1
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 1 to be duly executed and delivered as of the day and year first above
written.
THE BORROWER
POLYMER GROUP, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO
GUARANTORS
BONLAM (S.C.), INC. CHICOPEE HOLDINGS B.V.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
CHICOPEE, INC. DOMINION TEXTILE MAURITIUS
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
DOMINION TEXTILE (USA) INC. DT ACQUISITION INC.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
AMENDMENT NO. 1
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FABPRO ORIENTED POLYMERS, INC. FABRENE CORP.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
FABRENE GROUP, INC. FABRENE GROUP, L.L.C.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
FIBERGOL CORPORATION FIBERTECH GROUP, INC.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
FNA ACQUISITION INC. FNA POLYMER CORP.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
LORETEX CORPORATION PGI ASSET MANAGEMENT COMPANY
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
AMENDMENT NO. 1
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PGI EUROPE, INC. PGI POLYMER, INC.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
PGI NEUNKIRCHEN GMBH PGI SERVICING COMPANY
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
By: /s/ Xxxxxxxxx Xxxxxx
---------------------------------
Name:
Title:
POLY-BOND INC. PNA CORP.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
POLYIONIX SEPARATION PRISTINE BRANDS CORPORATION
TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO Title: Ex. VP, Treasurer and CFO
TECHNETICS GROUP, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Ex. VP, Treasurer and CFO
AMENDMENT NO. 1
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ADMINISTRATIVE AGENT
JPMORGAN CHASE BANK, as Administrative
Agent
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
AMENDMENT NO. 1
