Exhibit 10.1
[Execution copy]
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated as of April 11, 2001, between POLYMER GROUP, INC.
("PGI"); each of the other "Borrowers" identified under the caption "BORROWERS"
on the signature pages hereto; each of the Domestic Non-Borrower Guarantors
identified under the caption "DOMESTIC NON-BORROWER GUARANTORS" on the signature
pages hereto; and THE CHASE MANHATTAN BANK, as administrative agent for the
Lenders (in such capacity, together with its successors in such capacity, the
"Administrative Agent").
PGI, the other Borrowers, the Domestic Non-Borrower Guarantors, certain
lenders (the "Lenders") and the Administrative Agent are parties to a Second
Amended, Restated and Consolidated Credit Agreement dated as of July 3, 1997 (as
heretofore amended, the "Credit Agreement"), providing for the Lenders to extend
credit (by way of revolving credit loans, term loans and letters of credit) to
the Borrowers in U.S. Dollars and in certain Alternative Currencies in an
aggregate amount at any time not exceeding U.S. $600,000,000. The parties hereto
desire to amend the Credit Agreement in certain respects and to provide for
certain undertakings by PGI and, 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. 6. Accordingly, the parties
hereto hereby agree as follows:
Section 1. Definitions. Capitalized terms used but not otherwise defined
herein have the meanings given them in the Credit Agreement.
Section 2. Amendments. Subject to the conditions specified in Section 6
hereof, the Credit Agreement shall be amended as follows:
Section 2.01.General. References in the Credit Agreement to "this
Agreement" (and indirect references such as "hereunder", "hereby", "herein" and
"hereof") shall be deemed to be references to the Credit Agreement as amended
hereby.
Section 2.02. Certain Definitions. Section 1.01 of the Credit Agreement
shall be amended by adding the following new definitions (to the extent not
already included in said Section 1.01) and inserting the same in the appropriate
alphabetical locations and amending in their entirety the following definitions
(to the extent already included in said Section 1.01), as follows:
"Amendment No. 6 Effective Date" shall mean the date on which the
conditions to the effectiveness of the amendments and waivers set forth in
Amendment No. 6 shall have been satisfied.
"Asset Dispositions" shall mean one or more dispositions of assets,
including Permitted Receivables Financings, sales and leasebacks, synthetic
lease transactions, and other asset dispositions by one or more of the
Group Members.
Amendment No. 6
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"Fixed Charges Ratio" shall mean, as at any date, the ratio of (a)
EBITDA for the period of four fiscal quarters ending on or most recently
ended prior to such date minus Capital Expenditures for such period (except
that, for any period ending during, or on the last day of, fiscal year
2001, Capital Expenditures shall be deemed to be equal to U.S. $35,000,000)
to (b) Debt Service for such period.
Section 2.03.Applicable Margin. The definition of "Applicable Margin" in
Section 1.01 of the Credit Agreement shall be amended by adding the following
new paragraphs at the end thereof to read as follows:
"Notwithstanding the foregoing (including the immediately preceding
paragraph), during the period commencing on the Amendment No. 6 Effective
Date through and including December 31, 2001, the schedule set forth above
shall read as follows:
---------------- ----------- ------------ ------------ ----------- ------------ ----------- ------------ ------------
Base Rate
Revolving
Credit Base Rate
Euro-currency Loans and Euro-currency Term B
Revolving Canadian Letter Term B and and Euro-currency Base Rate
Credit Base Rate Of Commitment Term B-1 Term B-1 Term C Term C
Period Loans Loans Credit Fees Fees Loans Loans Loans Loans
---------------- ----------- ------------ ------------ ----------- ------------ ----------- ------------ ------------
Period I 3.75% 2.75% 3.75% 0.50% 4.25% 3.25% 4.50% 3.50%
---------------- ----------- ------------ ------------ ----------- ------------ ----------- ------------ ------------
Period II 4.25% 3.25% 4.25% 0.50% 4.75% 3.75% 5.00% 4.00%
---------------- ----------- ------------ ------------ ----------- ------------ ----------- ------------ ------------
For purposes hereof, Period I shall be applicable for the period commencing
on the Amendment No. 6 Effective Date through and including December 31,
2001, provided that if on or before August 15, 2001, Net Available Proceeds
from one or more Asset Dispositions shall not have been applied to the
prepayment of Loans and reduction of Commitments hereunder pursuant to
Section 2.10 hereof in an amount at least equal to U.S. $150,000,000, then
for the period commencing on August 15, 2001 through and including the
earlier of December 31, 2001 and the date upon which such prepayment and
reduction of Commitments from Asset Dispositions in fact occur, Period II
shall be applicable.
In addition to the foregoing if, on or before August 15, 2001, the
prepayment and reduction of Commitments as described above have not
occurred, then on August 15, 2001 PGI shall pay to the Administrative Agent
for the account of each of the Lenders a fee in an amount equal to 1/2 of
1% of the sum of (x) the unutilized Commitments of such Lender, (y) the
aggregate amount of Letter of Credit Liabilities held by such Lender and
(z) the outstanding principal amount of the Loans of such Lender, in each
case determined as of such date."
Section 2.04.EBITDA. The first sentence of the definition of "EBITDA" in
Section 1.01 of the Credit Agreement shall be amended in its entirety to read as
follows:
"EBITDA" shall mean, for any period, the sum, for PGI and its
Restricted Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) operating
income (or loss) for such period, plus (b)
Amendment No. 6
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depreciation, amortization and other non-cash charges (to the extent
deducted in determining operating income) for such period minus (c)
non-cash income or gains (to the extent included in determining operating
income) for such period minus (d) non-recurring or unusual gains (to the
extent included in determining operating income) for such period plus (e)
non-cash, non-recurring or unusual losses (to the extent deducted in
determining operating income) for such period plus (f) expenses relating to
employee profit sharing arising in connection with applicable Mexican
statutory requirements plus (g) for any period ending on or before the last
day of fiscal year 2001, the first U.S. $7,500,000 of fees and expenses
relating to Amendment No. 6 hereto, or to the restructuring of PGI and its
Subsidiaries during fiscal year 2001 (to the extent deducted in determining
operating income).
Section 2.05. Certain Adjustments upon Asset Dispositions. A new Section
1.02(d) is hereby inserted into the Credit Agreement to read as follows:
"(d) Upon the occurrence of any Asset Disposition, to the extent
deemed appropriate by the Majority Lenders, appropriate adjustments shall
be made to the covenant levels specified in Section 9.10 hereof and to the
definitions used therein (including, without limitation, EBITDA, Fixed
Charges Ratio, Leverage Ratio and Senior Leverage Ratio), to give pro forma
effect (in a manner satisfactory to the Majority Lenders) so that such
covenants are no more or less restrictive than they were immediately prior
to the occurrence of such Asset Disposition."
Section 2.06.Permitted Receivables Financing. Clause (iii) of the proviso
in the definition of "Permitted Receivables Financing" in Section 1.01 of the
Credit Agreement shall be amended in its entirety to read as follows:
"(iii) the Majority Lenders shall be reasonably satisfied that the
structure of and the terms of any such transaction, including any
applicable discount at which receivables are sold to the Receivables
Financier and any termination events, shall be (in the good faith
understanding of the Majority Lenders) consistent with those prevailing in
the market for similar transactions or shall otherwise be reasonably
acceptable to the Majority Lenders."
Section 2.07. Excess Cash. A new Section 2.10(i) is hereby inserted into
the Credit Agreement to read as follows:
"(i) Excess Cash. In the event that at any time the aggregate amount
of cash and cash equivalents held by PGI and its Restricted Subsidiaries in
the United States of America shall exceed U.S. $30,000,000, or the
aggregate amount of cash and cash equivalents held by PGI and all of its
Restricted Subsidiaries throughout the world shall exceed U.S. $45,000,000
(or the equivalent thereof in foreign currencies), then, to the extent of
such excess in either of such events, PGI shall immediately prepay (without
reduction of Commitments) Revolving Credit Loans in an amount at least
equal to such excess, provided that (i) no prepayment shall be required
hereunder unless the amount thereof shall be at least equal to U.S.
$100,000 and (ii) the provisions of this paragraph (i) shall be
inapplicable after the Administrative Agent shall have commenced the
exercise
Amendment No. 6
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of remedies under the Security Documents with respect to collateral
security."
Section 0.00.Xxxxxxxxx Statements. Section 8.02 of the Credit Agreement
shall be amended in its entirety to read as follows:
"8.02 Financial Condition. PGI has prior to the Amendment No. 6
Effective Date furnished to each of the Lenders a final draft of the
consolidated balance sheets of PGI and its consolidated Subsidiaries and
the related consolidated statements of operations, shareholders' equity
(deficit) and cash flows of PGI and its consolidated Subsidiaries for the
fiscal year ended December 30, 2000. All such financial statements fairly
present the financial condition of PGI and its consolidated Subsidiaries as
at said date, and the results of operations for the fiscal year ended on
said date, all in accordance with generally accepted accounting principles
and practices applied on a consistent basis. None of PGI or any of its
Subsidiaries has on the date hereof any material contingent liabilities,
material liabilities for taxes, material unusual forward or long-term
commitments or material unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or provided for
in said balance sheet as at said date. Except as set forth in Schedule I to
Amendment No. 6 hereto, since December 30, 2000, there has been no material
adverse change in the financial condition, operation, business or prospects
of PGI and its consolidated Subsidiaries taken as a whole from that set
forth in such financial statements as at said date."
Section 2.09. Leverage Ratio. The preamble to Section 9.10(a) of the Credit
Agreement shall be amended to read in its entirety as follows:
"(a) Leverage Ratio. PGI will not permit the Leverage Ratio to exceed
the following respective ratios at any time during the following respective
periods:"
Section 2.10. Senior Leverage Ratio. Sections 9.10(b) of the Credit
Agreement shall be amended by adding a new paragraph at the end thereof to read
as follows:
"Notwithstanding the foregoing, PGI will not during fiscal year 2001,
including the last day thereof, permit the Senior Leverage Ratio to exceed
the following respective ratios at any time during the following respective
periods:
Period Ratio
------ -----
From the last day of the first fiscal
quarter in 2001 through but excluding the
last day of the second fiscal quarter in 2001 3.90 to 1
From the last day of the second fiscal
quarter in 2001 through but excluding the
last day of the third fiscal quarter in 2001 4.50 to 1
Amendment No. 6
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From the last day of the third fiscal
quarter in 2001 through and including the
last day of the fourth fiscal quarter in 2001 4.50 to 1"
Section 2.11. Fixed Charges Ratio. Sections 9.10(c) of the Credit Agreement
shall be amended by adding a new paragraph at the end thereof to read as
follows:
"Notwithstanding the foregoing, PGI will not during fiscal year 2001,
including the last day thereof, permit the Fixed Charges Ratio to be less
than the following respective ratios at the end of any fiscal quarter which
falls within the following respective periods:
Period Ratio
------ -----
From the last day of the first fiscal
quarter in 2001 through but excluding the
last day of the second fiscal quarter in 2001 0.55 to 1
From the last day of the second fiscal
quarter in 2001 through but excluding the
last day of the third fiscal quarter in 2001 0.60 to 1
From the last day of the third fiscal
quarter in 2001 through and including the
last day of the fourth fiscal quarter in 2001 0.65 to 1"
Section 2.12. Minimum EBITDA. Sections 9.10 of the Credit Agreement shall
be amended by adding a new paragraph (e) at the end thereof to read as follows:
"(e) Minimum EBITDA. PGI will not permit EBITDA for the period of four
fiscal quarters ending on the last day of any fiscal quarter set forth
below to be less than the amount set forth opposite such fiscal quarter
below:
Fiscal Quarter Amount
-------------- ------
First fiscal quarter in 2001 U.S. $130,000,000
Second fiscal quarter in 2001 U.S. $115,000,000
Third fiscal quarter in 2001 U.S. $116,000,000"
Section 2.13. Subordinated Indebtedness. A new sentence shall be added to
the end of Section 9.18 of the Credit Agreement as follows:
"Without limiting the generality of the foregoing, PGI will not, nor
will it permit any of its Subsidiaries to, pay any monies to any trustee or
paying agent in respect of any Subordinated Indebtedness to be applied to
the payment of interest on such Subordinated Indebtedness in advance of the
date upon which such interest is due and payable in respect of such
Subordinated Indebtedness."
Amendment No. 6
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Section 2.14. Consultant's Report. New Sections 9.21 and 9.22 are hereby
inserted into the Credit Agreement as follows:
"9.21 Consultant's Report. Not later than May 30, 2001, PGI shall
deliver to the Administrative Agent and the Lenders a report prepared by
the independent consulting firm referred to in Section 6.05 of Amendment
No. 6 hereto with the assistance of PGI, which report shall set forth in
scope and detail satisfactory to the Majority Lenders (i) a review of the
business of the Group Members, (ii) an assessment of the market potential
for the APEX product line and (iii) a review and assessment of the
projections for 2001 of the management of the Group Members. In addition,
not later than June 15, 2001, the Group Members will make representatives
of such independent consulting firm and members of the management team of
the Group Members available to discuss the results of such report.
PGI hereby authorizes and directs such independent consulting firm to
share with, and supply to, the Lenders and the Administrative Agent
(including any accounting or consulting firm retained by the Lenders or
their counsel as described in the next following paragraph) any and all
reports, data, projections, computer runs, analyses and other information
obtained or generated by such firm in the course of such retention by PGI
(and PGI agrees, to the extent required by such firm, to direct such firm
in writing to share such reports, data, projections, computer runs,
analysis and other information if requested by the Administrative Agent).
In addition to the foregoing, the Obligors acknowledge that the
Lenders shall have the right at any time to retain (either directly or
through counsel) an independent accounting or consulting firm to conduct a
review of the business and operations of PGI and its Subsidiaries and that
the fees and expenses of any such firm shall be reimbursed by the Obligors
pursuant to Section 12.03 hereof, provided that in the event the Lenders
shall retain such an independent accounting or consulting firm, the
Obligors shall be relieved of their obligations under the first paragraph
of this Section 9.21. The Obligors agree, and agree to cause their
Subsidiaries, to cooperate with any such firm and agree also that such firm
will constitute representatives of the Lenders and the Administrative Agent
for purposes of Section 9.03(f) of the Credit Agreement and, accordingly,
shall be permitted during normal business hours, to examine, copy and make
extracts from the books and records of the Obligors and their Subsidiaries,
to visit any of the Properties of the Obligors and their Subsidiaries, and
to discuss its business and affairs with its officers (and the independent
consulting firm retained by PGI pursuant to the first paragraph of this
Section 9.21), all to the extent reasonably requested by such firm retained
by the Lenders.
9.22 Cash Management. PGI will at all times cause to be in effect
arrangements (in form, and pursuant to documentation, satisfactory to the
Administrative Agent) with respect to PGI and each of its domestic (i.e.
U.S.) Subsidiaries under which (a) all cash receipts arising in the
ordinary course of business of PGI and such Subsidiaries are directed to a
lock box account, in the name or under the control of the Administrative
Agent, and from such lock box account into a concentration account
maintained at Chase
Amendment No. 6
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and in the name or under the control of the Administrative Agent and (b)
the aggregate amount of cash and cash equivalents held by PGI and such
Subsidiaries at any time in excess of U.S. $2,500,000 shall be maintained
in bank or securities accounts in the name or under the control of the
Administrative Agent, provided that the foregoing shall not be applicable
to amounts maintained in disbursement accounts to the extent such amounts
do not exceed the aggregate amount of checks outstanding against such
accounts and amounts necessary to meet minimum balance requirements. For
purposes hereof, it is understood that all Permitted Investments shall
constitute cash equivalents."
Section 2.15. Events of Default. Section 10(d) of the Credit Agreement is
hereby amended by inserting the words "or 9.22" after the reference to "9.18"
therein. In addition, Section 10 of the Credit Agreement shall be amended by
inserting the word "or" at the end of paragraph (o) thereof and adding a new
paragraph (p) after said paragraph (o) to read as follows:
"(p) PGI shall have failed, within three Business Days of the
Amendment No. 6 Effective Date, to deliver to the Administrative Agent
(which will promptly forward copies thereof to each Lender) the final
audited consolidated balance sheets of PGI and its consolidated
Subsidiaries and the related audited consolidated statements of operations,
shareholders' equity (deficit) and cash flows of PGI and its consolidated
Subsidiaries for the fiscal year ended December 30, 2000 (each of which
financial statements shall be identical to the corresponding draft
financial statements referred to in the first sentence of Section 8.02
hereof), with the report thereon of Ernst and Young (which report shall be
without qualification and shall be in the form of the report of Ernst &
Young delivered with respect to the corresponding financial statements for
fiscal year 1999);"
Section 3. Waiver. Subject to the conditions specified in Section 6 hereof,
the Lenders hereby waive, for the period from and including the Amendment No. 6
Effective Date through and including the last day of the fourth fiscal quarter
of 2001 (i.e. December 29, 2001, such date being herein called the "Waiver End
Date") compliance with the requirements of Section 9.10 of the Credit Agreement
as in effect immediately prior to the effectiveness of the amendments to said
Section 9.10 pursuant to Section 2 hereof (such Section 9.10, as so in effect
immediately prior to such amendments, being herein called "Original Section
9.10"), provided that, unless the requirements of Original Section 9.10 shall
have been satisfied at all times during such period, or PGI can demonstrate to
the satisfaction of the Majority Lenders on the second Business Day prior to the
Waiver End Date (i.e. December 27, 2001) that PGI will be in compliance with the
requirements of Original Section 9.10 as at the Waiver End Date, then effective
on the day immediately following the Waiver End Date (i.e. December 30, 2001),
an Event of Default shall be deemed to have occurred and be continuing under the
Credit Agreement.
In connection with the foregoing, PGI hereby agrees, concurrently with the
delivery during such period of any covenant computations described in clause
(ii) of the last sentence of Section 9.01 of the Credit Agreement, to deliver
computations necessary to determine whether the Obligors would have been in
compliance with Original Section 9.10 as at the end of the respective quarterly
fiscal period or fiscal year covered by such computations if Original Section
9.10 had been in effect during such period.
Amendment No. 6
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Section 4. Limitation Upon Certain Actions under the Credit Agreement.
Anything in the Credit Agreement to the contrary notwithstanding, except to the
extent the Majority Lenders shall consent otherwise, PGI agrees that during the
period commencing on the Amendment No. 6 Effective Date through and including
the last day of the fourth fiscal quarter in 2001, PGI will not, and will not
permit any of its Restricted Subsidiaries to take any of the following actions
(it being understood that a breach of this Section 4 shall constitute an Event
of Default under the Credit Agreement):
(a) PGI will not permit the aggregate Revolving Credit Exposure at any
time to exceed U.S. $260,000,000, as would otherwise be permitted under
Section 2.01 of the Credit Agreement, provided that such U.S. $260,000,000
shall be reduced by the aggregate amount of reductions of the Revolving
Credit Commitments pursuant to Section 2.10 of the Credit Agreement after
the date hereof;
(b) PGI will not permit the aggregate amount of Facility B Revolving
Credit Loans at any time to exceed the U.S. Dollar Equivalent in Canadian
Dollars of U.S. $15,000,000, as would otherwise be permitted under Section
2.01 of the Credit Agreement, provided that such U.S. $15,000,000 shall be
reduced by the aggregate amount of reductions of the Facility B Revolving
Credit Commitments pursuant to Section 2.10 of the Credit Agreement after
the date hereof;
(c) PGI will not designate any Restricted Subsidiary as an
Unrestricted Subsidiary, or vice versa, as would otherwise be permitted
under Section 1.04 of the Credit Agreement;
(d) PGI will not be permitted to avail itself of the reinvestment
option otherwise allowed with respect to the Net Available Proceeds of any
Disposition under the second paragraph of Section 2.10(c) of the Credit
Agreement, but shall apply the Net Available Proceeds of any Disposition to
the prepayment of the Loans (and/or to the provision of cover for Letter of
Credit Liabilities), and reduce the Commitments, as and to the extent
required under the first paragraph of said Section 2.01(c);
(e) PGI will not, and will not permit any of its Restricted
Subsidiaries, to effect any of the Acquisitions otherwise permitted under
paragraphs (iv) or (v) of Section 9.05(d) of the Credit Agreement, and will
not permit the aggregate amount of Permitted Receivables Financings
otherwise permitted under paragraph (vi) of Section 9.05(d) to exceed U.S.
$65,000,000;
(f) PGI will not, and will not permit any of its Restricted
Subsidiaries, to create, incur, assume or suffer to exist any Lien
otherwise permitted under paragraphs (i) or (j) of Section 9.06 of the
Credit Agreement (except for any such Liens incurred prior to the Amendment
No. 6 Effective Date and set forth in Schedule II hereto);
(g) PGI will not, and will not permit any of its Restricted
Subsidiaries, to create, incur or suffer to exist any Indebtedness
otherwise permitted under paragraphs (i) or (k)
Amendment No. 6
---------------
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of Section 9.07 of the Credit Agreement (except for any such Indebtedness
incurred prior to the Amendment No. 6 Effective Date and set forth in
Schedule I hereto);
(h) PGI will not, and will not permit any of its Restricted
Subsidiaries, to make or permit to remain outstanding any Investments
otherwise permitted under paragraphs (k) or (l) of Section 9.08 of the
Credit Agreement (except for any such Investments outstanding prior to the
Amendment No. 6 Effective Date and set forth in Schedule I hereto);
(i) PGI will not, and will not permit any of its Restricted
Subsidiaries, to make any Restricted Payment otherwise permitted under the
first paragraph of Section 9.09 of the Credit Agreement (it being
understood that, without limiting the generality of the foregoing, the
restriction set forth in this clause (h) shall have the effect of limiting
the payment of dividends under PGI's currently stated dividend policy); and
(j) PGI will not, and will not permit the aggregate amount of Capital
Expenditures otherwise permitted under Section 9.20 of the Credit Agreement
to exceed U.S. $35,000,000 during fiscal year 2001.
Section 5. Representations and Warranties. Each Obligor represents and
warrants to the Lenders and the Administrative Agent that 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
and as if each reference in said Section 8 to "this Agreement" include reference
to this Amendment No. 6 and to the Credit Agreement as amended hereby.
Section 6. Conditions. The amendments set forth in Section 2 hereof, and
the waiver set forth in Section 3 hereof, shall become effective as of March 31,
2001 upon the satisfaction on or before April 15, 2001, of each of the following
conditions precedent to effectiveness (each document referred to below to be in
form and substance satisfactory to the Administrative Agent):
6.01 Execution. This Amendment No. 6 shall have been executed and
delivered by each Obligor, by Lenders constituting the Majority Lenders
under the Credit Agreement and by the Administrative Agent.
6.02 Corporate Documents. The Administrative Agent shall have received
certified copies of the charter and by-laws (or equivalent documents) of
each Group Member obligated in respect of any of the Basic Documents (or a
certification by PGI that said documents have not been modified or amended
since the same were last certified to the Administrative Agent) and of all
documents evidencing corporate authority for each such Group Member
(including, without limitation, resolutions of their respective Boards of
Directors and evidence of the incumbency of officers) with respect to the
execution, delivery and performance of this Amendment and the Credit
Agreement as amended hereby.
Amendment No. 6
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6.03 Opinion of Counsel to the Group Members. The Administrative Agent
shall have received an opinion, dated the Effective Date, of Xxxxxxxx &
Xxxxx, special New York counsel to the Group Members, covering such matters
relating hereto as the Administrative Agent may require (and each Obligor
hereby instructs such counsel to deliver such opinion to the Lenders and to
the Administrative Agent).
6.04 Fees and Expenses. The Administrative Agent shall have received,
(i) for the account of each Lender that authorizes the Administrative Agent
to execute and deliver this Amendment No. 6 not later than 5 p.m. New York
City time on April 11, 2001, an amendment fee in an amount equal to 1/2 of
1% of the sum of (x) the unutilized Commitments of such Lender, (y) the
aggregate amount of Letter of Credit Liabilities held by such Lender and
(z) the outstanding principal amount of the Loans of such Lender, in each
case determined as of such time and (ii) to the extent invoiced,
reimbursement or payment of all reasonable out-of-pocket expenses incurred
by the Administrative Agent in connection with this Amendment No. 6.
6.05 Retention of Consultants. PGI shall have retained an independent
consulting firm, satisfactory to the Majority Lenders, to assist PGI and
its Subsidiaries in preparing the reports, reviews and assessments
described in Section 9.21 of the Credit Agreement (as inserted into the
Credit Agreement pursuant to Section 2 hereof), and shall have delivered
evidence thereof to the Administrative Agent, including a copy of an
engagement letter executed between PGI and such firm, which engagement
letter shall include an acknowledgement by such consulting firm that, as
contemplated by said Section 9.21, it is authorized and directed to share
with, and supply to, the Lenders and the Administrative Agent (including
any accounting or consulting firm retained by the Lenders or their counsel)
any and all reports, data, projections, computer runs, analyses and other
information obtained or generated by such firm in the course of such
retention by PGI, if requested by the Administrative Agent.
6.06 Collateral Security. PGI shall have taken such action as the
Administrative Agent shall have requested to grant to the Administrative
Agent for the benefit of the Lenders Guarantees from, and first priority
Liens and security interests in such additional Property as is owned by,
the Group Members that may be taken without resulting in material adverse
tax consequences in the judgment of PGI (and concurred with by the
Administrative Agent).
Section 7. Information Updates. PGI agrees, commencing with the second
fiscal quarter in 2001, to arrange a telephone conference calls (to take place
in the first two weeks of July and October, 2001, and the last two weeks of
December, 2001, on a Business Day selected by PGI and notified to each of the
Lenders not later than three Business Days prior to the occurrence thereof) in
which it shall provide to the Lenders an overview of, and an opportunity to ask
any questions reasonably related to, the business and operations of PGI and its
Subsidiaries. In addition, PGI agrees, during such period, to supply the
Administrative Agent and the Lenders with monthly reports setting out in summary
form, consolidated balance sheets, and statements of income and cash flows, for
the Group Members, such reports to be presented for any month within 30 days
after the end of the relevant monthly fiscal period. This Section 7
Amendment No. 6
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shall supersede in its entirety the provisions of Section 6 of Amendment No. 5
to the Credit Agreement.
Section 8. Statement of Intention. PGI hereby affirms its intention,
through one or more Asset Dispositions (as defined in Section 2.02 hereof), to
prepay not less than U.S. $150,000,000 of the Loans under the Credit Agreement,
and reduce the Commitments thereunder, pursuant to Section 2.10 of the Credit
Agreement on or before August 15, 2001, it being understood that failure to
effect any one or more of such transactions, or to make such prepayment and
reductions of Commitments, shall not result in an Event of Default under the
Credit Agreement.
Section 9. Miscellaneous. Except as herein provided, the Credit Agreement
shall remain unchanged and in full force and effect. This Amendment No. 6 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. 6 by signing any such counterpart. This Amendment
No. 6 shall be governed by, and construed in accordance with, the law of the
State of New York.
Amendment No. 6
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 6 to
be duly executed and delivered as of the day and year first above written.
THE BORROWERS
-------------
POLYMER GROUP, INC. PGI NONWOVENS B.V.
By: By:
------------------------------ ------------------------------------
Title: President Title: President
CHICOPEE HOLDINGS B.V. FABRENE INC.
By: By:
------------------------------ ------------------------------------
Title: President Title: President
DOMESTIC NON-BORROWER GUARANTORS
--------------------------------
FIBERTECH GROUP, INC. CHICOPEE, INC.
By: By:
------------------------------ ------------------------------------
Title: Title:
PGI POLYMER, INC. PGI EUROPE, INC.
By: By:
------------------------------ ------------------------------------
Title: Title: Chairman, President and CEO
TECHNETICS GROUP, INC. FABRENE GROUP, L.L.C.
By: By:
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Title: Title:
Amendment No. 6
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FABRENE CORP. FIBERGOL CORPORATION
By: By:
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Title: Title:
FABRENE GROUP, INC. PNA CORP.
By: By:
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Title: President Title: President
FNA POLYMER CORP. FABPRO ORIENTED POLYMERS, INC.
By: By:
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Title: President Title: President
POLY-BOND, INC. DOMINION TEXTILE (USA), INC.
By: By:
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Title: President Title: President
ADMINISTRATIVE AGENT
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THE CHASE MANHATTAN BANK
By:
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Title: Vice President
Amendment No. 6
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SCHEDULE I
[Material Adverse Effect]
[See Section 2.08]
PGI's operations have been negatively impacted throughout fiscal year 2000 and
continuing into fiscal 2001 by (i) reduced demand for certain high margin
consumer products, (ii) slower ramp-up as compared to forecasts for sales of
products utilizing APEX technology, (iii) increased raw material costs for
polypropylene and polyethylene resins which have not been passed through to
customers, (iv) over capacity in the market for spun-melt products which has
reduced margins on sales of those products, (v) reduced orders from certain
major consumer products customers and (vi) increased debt level and resulting
interest expense arising from capital expenditures to construct new APEX lines.
Schedule I to Amendment No. 6
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