IPG HOLDINGS LP
__________________________________________________________
AMENDMENT NO. 2 TO
AMENDED AND RESTATED NOTE AGREEMENT
__________________________________________________________
Dated as of March 28, 2003
U.S. $137,000,000 SENIOR SECURED NOTES DUE MARCH 31, 2008
IPG HOLDINGS LP
U.S. $137,000,000
SENIOR SECURED NOTES DUE MARCH 31, 2008
AMENDMENT NO. 2 TO AMENDED AND RESTATED NOTE AGREEMENT
As of March 28, 2003
To each of the Persons
Named in Annex 1 hereto (collectively, the "Current Noteholders"):
Ladies and Gentlemen:
IPG HOLDINGS LP, a limited partnership formed under the laws of that
State of Delaware (the "Issuer"), INTERTAPE POLYMER INC., a Canadian
corporation and general partner of the Issuer (the "General Partner"), and
INTERTAPE POLYMER GROUP INC., a Canadian corporation (the "Parent" and,
together with the Issuer and the General Partner herein referred to,
collectively, as the "Obligors" and, individually, as an "Obligor") hereby,
jointly and severally, agree with each of the Current Noteholders as follows:
1. PRIOR ISSUANCE OF NOTES, ETC.
Pursuant to that certain Amended and Restated Note Agreement, dated as of
December 20, 2001, as amended by that certain Amendment No. 1 to Amended and
Restated Note Agreement dated December 20, 2002 (as in effect immediately
prior to giving effect to the amendments provided by this Agreement, the
"Existing Note Agreement" and, as amended pursuant to this Agreement and as
may be further amended, restated or otherwise modified from time to time, the
"Note Agreement"), the Obligors and the Current Noteholders agreed to amend
and restate the terms of those certain separate Note Agreements, each dated
as of June 1, 1998, by and among the Obligors and each of the purchasers named
in Schedule I thereto, pursuant to which the Issuer issued U.S. $137,000,000
in aggregate principal amount of its 6.82% Senior Guaranteed Notes due March
31, 2008 (as amended and restated pursuant to the terms of the Existing Note
Agreement, the "Notes").
2. REQUEST FOR CONSENT TO AMENDMENTS
The Obligors request that each of the Current Noteholders (a) agree to the
amendments (the "Amendments") to the Existing Note Agreement provided for by
this Agreement, and (b) consent to the release of the Liens held by the
Collateral Trustees (for the benefit of the Current Noteholders and the Banks)
securing the Specified Assets (as defined below).
3. WARRANTIES AND REPRESENTATIONS
To induce the Current Noteholders to enter into this Agreement and to
agree to the Amendments, the Obligors represent and warrant as follows:
3.1 Organization and Authority.
Each of the Obligors:
(a) is a corporation, partnership, or other entity, duly organized
or formed, validly existing and (to the extent applicable) in good standing
under the laws of its jurisdiction of incorporation or organization; and
(b) has all requisite power and authority to enter into and perform
its obligations under this Agreement and the Note Agreement.
3.2 Transactions are Legal and Authorized.
Each of the execution and delivery of this Agreement by the Obligors,
the consummation of each of the transactions contemplated thereby and
compliance by the Obligors with all of the provisions of this Agreement and
the Note Agreement (a) will not violate any law or any order, judgment,
decree or ruling of any court or governmental authority or agency applicable
to the Obligors and (b) will not conflict with or result in any breach of any
of the terms, conditions or provisions of, or constitute a default under,
the constitutive documents of any Obligor or any indenture or other material
agreement or instrument to which any Obligor is a party or by which it may
be bound or result in the imposition of any Liens or encumbrances on any
material property of any Obligor. The execution and delivery of this
Agreement has been duly authorized by proper action on the part of each of
the Obligors. Each of this Agreement and the Note Agreement constitutes the
legal, valid and binding obligation of each of the Obligors, enforceable
in accordance with its respective terms, except as enforceability thereof
may be subject to the effect of any applicable bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally.
3.3 No Material Adverse Change.
Since the date of the most recent audited consolidated financial
statements of the Parent provided to each of the Current Noteholders, there
has been no event or circumstance which has resulted in or could reasonably
be expected to result in a Material Adverse Change.
3.4 Specified Assets.
The Specified Assets (as defined below) have no book value as of the
date hereof.
3.5 Full Disclosure.
Neither the financial statements and other certificates previously
provided to the Current Noteholders pursuant to the provisions of the Existing
Note Agreement nor the statements made in this Agreement nor any other
written statements in final form furnished by or on behalf of the Obligors
to any Current Noteholder in connection with the proposal and negotiation
of the Amendments, taken as a whole, contain any untrue statement of a
material fact or omit a material fact necessary to make the statements taken
as a whole contained therein and herein not misleading. There is no fact
relating to any event or circumstance that has occurred or arisen since
December 20, 2001 that the Obligors have not disclosed to each of the Current
Noteholders in writing that has resulted in or could reasonably be expected
to result in a Material Adverse Change.
3.6 Other Agreements.
Upon (a) the execution and delivery hereof and the effectiveness of the
Amendments as provided herein and (b) execution and delivery of the Bank
Amendment (as defined below) and the amendment to the 1999 Note Agreement
and the effectiveness of said amendments as provided therein, neither any
Obligor nor any Restricted Subsidiary is in violation in any respect of any
term in any agreement, or other instrument to which it is a party or by which
it or any of its property may be bound except for such violations that, in the
aggregate for all such violations or defaults, could not reasonably be
expected to result in a Material Adverse Change.
3.7 No Defaults.
No event has occurred and no condition exists that, upon the execution
and delivery of this Agreement and the effectiveness of the Amendments
provided herein, would constitute a Default or an Event of Default.
4. AMENDMENTS
4.1 Amendments to Existing Note Agreement.
Subject to Section 4.2 below, the Existing Note Agreement is hereby
amended in the manner specified in Exhibit A to this Agreement.
4.2 Effectiveness of Amendments.
The Amendments contemplated by Section 4.1 above and Exhibit A shall
become effective (the "Effective Date"), if at all, upon the date of the
satisfaction in full of the following conditions precedent (unless waived
in writing by the holders of at least 66 2/3% in aggregate principal amount
of the outstanding Notes):
(a) a counterpart of this Agreement shall have been executed and
delivered by each of the Obligors and the Current Noteholders;
(b) the representations and warranties set forth in Section 3
hereof shall be true and correct on such date;
(c) the Obligors shall have paid the reasonable fees and expenses
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, special counsel to the Current Noteholders, as
provided in Section 7 hereof;
(d) the Obligors shall have paid to each Current Noteholder an
amendment fee in an amount equal to (i) 0.10% of the outstanding principal
balance of the Notes held by such Current Noteholder on the Effective Date
if any non-cash losses attributable to the impairment of goodwill for the
fiscal year ended December 31, 2002 (the "Goodwill Writedown") is less than
or equal to $40,000,000, (ii) 0.25% of the outstanding principal balance of
the Notes held by such Current Noteholder on the Effective Date if the
Goodwill Writedown is greater than $40,000,000, but less than or equal to
$55,000,000 or (iii) 0.50% of the outstanding principal balance of the Notes
held by such Current Noteholder on the Effective Date if the Goodwill
Writedown is greater than $55,000,000, but less than or equal to $75,000,000;
(e) the Obligors shall have entered into an amendment to the 1999
Note Agreement, in form and substance reasonably satisfactory to the Current
Noteholders, providing for amendments to the provisions thereof which are
substantially the same as those reflected in the Amendments;
(f) the Obligors and the applicable Restricted Subsidiaries shall
have entered into an amendment to the Credit Agreement, in form and substance
reasonably satisfactory to the Current Noteholders (the "Bank Amendment"); and
(g) the Goodwill Writedown shall not be more than $75,000,000.
4.3 No Other Amendments; Confirmation.
Except as expressly provided herein, (a) no terms or provisions of any
agreement are modified or changed by this Agreement, (b) the terms of this
Agreement shall not operate as a waiver by any Current Noteholder of, or
otherwise prejudice any Current Noteholder's rights, remedies or powers
under, the Existing Note Agreement or any other Financing Document or under
any applicable law, and (c) the terms and provisions of the Existing Note
Agreement and each other Financing Document shall continue in full force
and effect, without modification or amendment.
5. CONSENTS
5.1 Consent to Bank Amendment.
In accordance with Section 10.5(d) of the Intercreditor Agreement, each
of the Current Noteholders hereby consents to the amendments set forth in the
Bank Amendment attached hereto as Exhibit B.
5.2 Consent to Sale of Assets.
The Issuer has advised the Current Noteholders that the General Partner
desires to enter into a transaction (the "Transaction") pursuant to which it
would sell certain of its assets as specified on Exhibit C hereto (such assets
to be sold referred to herein as the "Specified Assets") as permitted
pursuant to Section 5.12 of the Existing Note Agreement. The Specified Assets
are subject to Liens in the favor of the Collateral Trustees pursuant to the
Security Documents. In order to effect the Transaction, each of the Current
Noteholders hereby consents to the release of the Liens securing the
Specified Assets held by the Collateral Trustees (for the benefit of the
Current Noteholders and the Banks) and hereby directs the Collateral Trustees
to release such Liens.
6. DEFINED TERMS
Capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed to them in the Existing Note Agreement or in Exhibit A
hereto.
7. EXPENSES
Whether or not the Amendments set forth herein or contemplated hereby
become effective, the Obligors jointly and severally agree to pay on the
Effective Date (or if an invoice is delivered subsequent to the Effective
Date or if the Amendments provided for herein do not become effective,
promptly and in any event within thirty (30) days of receiving any statement
or invoice therefor) all fees, expenses and costs relating to this Agreement,
including, but not limited to, the reasonable fees of the Current
Noteholders' special counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, incurred in connection
with the preparation, negotiation and delivery of this Agreement and any
other documents related hereto. Nothing in this Section shall limit the
Obligors' obligations pursuant to Section 9.4 of the Existing Note Agreement.
8. MISCELLANEOUS
8.1 Part of Note Agreement, Future References, etc.
This Agreement shall be construed in connection with and as a part of
the Existing Note Agreement and, except as expressly amended by this Agreement,
all terms, conditions and covenants contained in the Existing Note Agreement
and the other Financing Documents are hereby ratified and shall be and remain
in full force and effect. Any and all notices, requests, certificates and
other instruments executed and delivered after the execution and delivery
of this Agreement may refer to the Note Agreement without making specific
reference to this Agreement, but nevertheless all such references shall
include this Agreement unless the context otherwise requires.
8.2 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCLUDING
CHOICE OF LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
8.3 Duplicate Originals, Execution in Counterpart.
Two (2) or more duplicate originals hereof may be signed by the parties,
each of which shall be an original but all of which together shall constitute
one and the same instrument. This Agreement may be executed in one or more
counterparts and each set of counterparts that, collectively, show execution
by each Obligor and each consenting Current Noteholder shall constitute one
duplicate original.
8.4 Binding Effect.
This Agreement shall be binding upon and shall inure to the benefit of
each of the Obligors and the Current Noteholders and their respective
successors and assigns.
[Remainder of page intentionally left blank; next page is signature page.]
If each Current Noteholder is in agreement with the foregoing, please
so indicate by signing the applicable acceptance on a counterpart hereof
and returning such counterpart to the Issuer, whereupon this Agreement
shall become binding among each of the Obligors and the Current Noteholders
in accordance with its terms.
Very truly yours,
INTERTAPE POLYMER GROUP INC.
LE GROUPE INTERTAPE POLYMER INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, C.A.
Title: Chief Financial Officer
IPG HOLDINGS LP
By: Intertape Polymer Inc., its General Partner
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, C.A.
Title: Chief Financial Officer
INTERTAPE POLYMER INC.
By: /s/▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
ACCEPTED AND AGREED:
NEW YORK LIFE INSURANCE COMPANY
By: /s/A. Post ▇▇▇▇▇▇▇
Name: A. Post ▇▇▇▇▇▇▇
Title: Investment Vice President
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
By: New York Life Investment Management LLC, its Investment Manager
By: /s/A. Post ▇▇▇▇▇▇▇
Name: A. Post ▇▇▇▇▇▇▇
Title: Vice President
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
INSTITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT
By: New York Life Investment Management LLC, its Investment Manager
By: /s/A. Post ▇▇▇▇▇▇▇
Name: A. Post ▇▇▇▇▇▇▇
Title: Vice President
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
U.S. PRIVATE PLACEMENT FUND
By: Prudential Private Placement Investors, L.P., Investment Advisor
By: Prudential Private Placement Investors, Inc., its General Partner
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY,
a Wisconsin corporation
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Its Authorized Representative
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company Inc. as Investment Adviser
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc. (authorized agent)
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
LIFE INSURANCE COMPANY OF NORTH AMERICA
By: CIGNA Investments, Inc. (authorized agent)
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
PRINCIPAL LIFE INSURANCE COMPANY
By: Principal Capital Management, LLC,
a Delaware limited liability company,
its authorized signatory
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
Title: Counsel
By: /s/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Counsel
PRINCIPAL LIFE INSURANCE COMPANY,
ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
By: Principal Capital Management, LLC,
a Delaware limited liability company,
its authorized signatory
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
Title: Counsel
By: /s/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Counsel
AVIVA LIFE INSURANCE COMPANY OF AMERICA, a Delaware corporation
(formerly known as Commercial Union Life Insurance Company of America)
By: Principal Capital Management, LLC,
a Delaware limited liability company,
its attorney in fact
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
Title: Counsel
By: /s/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Counsel
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
Title: Vice President
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY,
Successor by Merger to AH (MICHIGAN) LIFE INSURANCE COMPANY
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
Title: Vice President
RELIASTAR LIFE INSURANCE COMPANY,
f/k/a NORTHERN LIFE INSURANCE COMPANY
By: ING Investment Management LLC, as agent
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
RELIASTAR LIFE INSURANCE COMPANY
By: ING Investment Management LLC, as Agent
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
RELIASTAR LIFE INSURANCE COMPANY, as Successor by Merger to
RELIASTAR UNITED SERVICES LIFE INSURANCE COMPANY
By: ING Investment Management LLC, as Agent
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
MODERN WOODMEN OF AMERICA
By: /s/▇▇▇▇ ▇. Coin
Name: ▇▇▇▇ ▇. Coin
Title: Treasurer & Investment Manager
CLARICA LIFE INSURANCE COMPANY - US
By: /s/E. ▇▇▇▇ ▇▇▇▇▇▇▇
Name: E. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President, Midland Advisors Company,
as Agent for Clarica Life Insurance Company - US
EXHIBIT A
AMENDMENTS TO EXISTING NOTE AGREEMENT
1. Section 5.6 of the Existing Note Agreement is hereby amended and
restated to read in its entirety as follows:
"5.6 Consolidated Net Worth.
The Parent will, at all times, keep and maintain Consolidated Net
Worth at an amount not less than the sum of (a) US$275,000,000 plus (b) an
amount equal to the greater of (i) zero (0) and (ii) 50% of Consolidated Net
Income of the Parent and its Restricted Subsidiaries for the period from
October 1, 2001 to the end of the Parent's then most recently ended fiscal
quarter plus (c) an amount equal to the aggregate net proceeds of any issuance
after the Effective Date of equity securities by any member of the Restricted
Group to Persons not members of the Restricted Group minus, (d) solely for
purposes of determining compliance with this Section 5.6 at any time during
the period from December 31, 2002 to March 30, 2006, an amount equal to the
lesser of (x) $75,000,000 and (y) the amount of any non-cash impairment
charges taken in accordance with FAS 142 and CICA 3062 and CICA 1581 for the
Parent's fiscal year ended December 31, 2002 in conformity with GAAP."
2. Section 5.8(a) of the Existing Note Agreement is hereby amended and
restated to read in its entirety as follows:
"(a) Total Debt to Consolidated Total Capitalization. The Parent
will not at any time permit the ratio of Total Debt to Consolidated Total
Capitalization to exceed the ratio applicable to such time in the table set
forth below:
If such time is: The applicable ratio is:
On or prior to March 30, 2002 0.59:1
From March 31, 2002 to June 29, 2002 0.585:1
From June 30, 2002 to September 29, 2002 0.58:1
From September 30, 2002 to December 30, 2002 0.575:1
From December 31, 2002 to June 29, 2003 0.60:1
From June 30, 2003 to December 30, 2003 0.585:1
From December 31, 2003 to June 29, 2004 0.56:1
From June 30, 2004 to December 30, 2004 0.535:1
From December 31, 2004 to June 29, 2005 0.51:1
On June 30, 2005 and at any time thereafter 0.50:1"
3. Section 8.1 of the Existing Note Agreement is hereby amended by adding
the following new definition in the proper alphabetical order:
"CICA 1581" means Handbook Section 1581, "Business Combinations"
promulgated by the Canadian Institute of Chartered Accountants (CICA).
"CICA 3062" means Handbook Section 3062, "Goodwill and Other Intangible
Assets" promulgated by the Canadian Institute of Chartered Accountants (CICA).
"FAS 142" means SFAS No. 142 "Goodwill and Other Intangible Assets"
promulgated by the Financial Accounting Standards Board in July 2001.
EXHIBIT B
[BANK AMENDMENT]
EXHIBIT C
SPECIFIED ASSETS
1. AD-SL Bag machine, model 2341, serial 29353, manufactured by
Windmoeller & ▇▇▇▇▇▇▇▇▇ of Lengerich, West Germany (1980's) for the
manufacture of square-bottom, square-top, closed-top valve bags for
packaging polyolefin resins and other free-flowing solids.
2. Bags can be made from polyolefin 'scrim' or film. A tube-forming
section and backseam extruder is included for use with non-tubular input
material.
3. Approximate production rate: up to 100 bags / minute
4. A transformer is included to operate the machine at 600V, 3-phase;
or the machine can be operated at 480V, 3-phase without this transformer.
Power requirement is approximately 200 kW.
5. Machine includes a DC variable speed main drive c/w Reliance 'Max-Pack'
speed controller