ex. 4.txt
EXHIBIT 4.1
INDENTURE
===============================
CONSOLTEX GROUP INC.
CONSOLTEX (USA) INC.
CONSOLTEX INC.
THE BALSON-HERCULES GROUP, LTD.
LINQ INDUSTRIAL FABRICS, INC.
US$120,000,000
11% SERIES A SENIOR SUBORDINATED NOTES DUE 2003
11% SERIES B SENIOR SUBORDINATED NOTES DUE 2003
INDENTURE
Dated as of September 30, 1993
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
CROSS-REFERENCE TABLE*
TRUST INDENTURE INDENTURE SECTION
ACT SECTION
310 (a)(1)........................7.10
(a)(2)........................7.10
(a)(3)........................N.A.
(a)(4)........................N.A.
(a)(5)........................7.10
(b)...........................7.10
(c)...........................N.A.
311 (a)...........................7.11
(b)...........................7.11
(c)............................N.A.
312 (a)...........................2.05
(b)..........................11.03
(c)..........................11.03
313 (a)...........................7.06
(b)(1)........................N.A.
(b)(2)........................7.06
(c).....................7.06;11.02
(d)...........................7.06
314 (a).....................4.03;11.02
(b)...........................N.A.
(c)(1).......................11.04
(c)(2) ..................... 11.04
(c)(3)........................N.A.
(d).......................... N.A.
(e)........................ 11.05
(f)......................... N.A.
315 (a)......................... 7.01
(b) ....................7.05,11.02
(c)...........................7.01
(d).......................... 7.01
(e)...........................6.11
316 (a)(last sentence)........... N.A.
(a)(1)(A).................... 6.05
(a)(1)(B).................... 6.04
(a)(2)....................... N.A.
(b).......................... 6.07
(c).......................... 2.13
317 (a)(1) ..................... 6.08
(a)(2)...................... 6.09
(b) ......................... 2.04
318 (a).......................... 11.01
(b)......................... N.A.
(c)......................... 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions................................. l
Section 1.02. Other Definitions........................... 12
Section 1.03. Incorporation by Reference of Trust Indenture
Act..........................................12
Section 1.04. Rules of Construction....................... 13
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating............................. 13
Section 2.02. Execution and Authentication................ 14
Section 2.03. Registrar, Depository and Paying Agent...... 14
Section 2.04. Paying Agent to Hold Money in Trust......... 15
Section 2.05. Holder Lists................................ 15
Section 2.06. Transfer and Exchange....................... 15
Section 2.07. Replacement Notes........................... 20
Section 2.08. Outstanding Notes........................... 20
Section 2.09. Treasury Notes.............................. 21
Section 2.10. Temporary Notes............................. 21
Section 2.11. Cancellation................................ 21
Section 2.12. Defaulted Interest.......................... 21
Section 2.13. Novation.................................... 22
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.......................... 22
Section 3.02. Selection of Notes to Be Redeemed........... 22
Section 3.03. Notice of Redemption........................ 23
Section 3.04. Effect of Notice of Redemption.............. 23
Section 3.05. Deposit of Redemption Price................. 23
Section 3.06. Notes Redeemed in Part...................... 24
Section 3.07. Optional Redemption......................... 24
Section 3.08. Mandatory Redemption........................ 25
Section 3.09. Offer to Purchase by Application of Excess
Proceeds.....................................25
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes........................... 27
Section 4.02. Maintenance of Office or Agency............ 27
Section 4.03. Reports.................................... 27
Section 4.04. Compliance Certificate..................... 28
Section 4.05. Taxes...................................... 29
Section 4.06. Stay, Extension and Usury Laws............. 29
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PAGE
Section 4.07. Restricted Payments 29
Section 4.08. Dividend and Other Payment Restrictions
Affecting Subsidiaries........................31
Section 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock...............................31
Section 4.10. Asset Sales.................................. 32
Section 4.11. Transactions with Affiliates................. 33
Section 4.12. Liens........................................ 34
Section 4.13. Additional Guarantees........................ 34
Section 4.14. Corporate Existence.......................... 35
Section 4.15. Offer to Repurchase Upon Change of Control... 35
Section 4.16. Senior Subordinated Debt..................... 36
Section 4.17. Additional Amounts........................... 36
Section 4.18. Agent for Service; Submission to Jurisdiction;
Waiver of Immunities ........................ 37
Section 4.19. Conversion of Currency....................... 37
ARTICLE 5
SUCCESSORS
Section 5.01. Amalgamation, Merger, Consolidation, or Sale of
Assets........................................38
Section 5.02. Successor Corporation Substituted............ 38
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default............................ 39
Section 6.02. Acceleration................................. 40
Section 6.03. Other Remedies............................... 41
Section 6.04. Waiver of Past Defaults...................... 41
Section 6.05. Control by Majority.......................... 41
Section 6.06. Limitation on Suits.......................... 41
Section 6.07. Rights of Holders of Notes to Receive Payment.42
Section 6.08. Collection Suit by Trustee................... 42
Section 6.09. Trustee May File Proofs of Claim............. 42
Section 6.10. Priorities................................... 42
Section 6.11. Undertaking for Costs........................ 43
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee............................ 43
Section 7.02. Rights of Trustee............................ 44
Section 7.03. Individual Rights of Trustee................. 45
Section 7.04. Trustee's Disclaimer......................... 45
Section 7.05. Notice of Defaults........................... 45
Section 7.06. Reports by Trustee to Holders of the Notes... 45
Section 7.07. Compensation and Indemnity................... 46
Section 7.08. Replacement of Trustee .......................46
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PAGE
Section 7.09. Successor Trustee by Merger, etc. ..........47
Section 7.10. Eligibility; Disqualification ...............47
Section 7.11. Preferential Collection of Claims Against
Issuers......................................48
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE AND
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance....................................48
Section 8.02. Legal Defeasance and Discharge ...............48
Section 8.03. Covenant Defeasance ..........................48
Section 8.04. Conditions to Legal or Covenant Defeasance... 49
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions.50
Section 8.06. Repayment to Issuers......................... 51
Section 8.07. Reinstatement................................ 51
Section 8.08. Satisfaction and Discharge of Indenture...... 51
Section 8.09. Application of Trust Money................... 52
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.......... 52
Section 9.02. With Consent of Holders of Notes............. 53
Section 9.03. Compliance with Trust Indenture Act.......... 54
Section 9.04. Revocation and Effect of Consents............ 54
Section 9.05. Notation on or Exchange of Notes............. 55
Section 9.06. Trustee to Sign Amendments, etc.............. 55
ARTICLE 10
GUARANTEE
Section 10.01. Guarantee.................................. 55
Section 10.02. Execution and Delivery of Guarantee ........56
Section 10.03. Guarantors May Consolidate, etc., on Certain
Terms.......................................56
Section 10.04. Releases Following Sale of Assets.......... 57
Section 10.05. Trustee to Include Paying Agent............ 57
Section 10.06. Subordination of Guarantee................. 57
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls................57
Section 11.02. Notices.................................... 57
Section 11.03. Communication by Holders of Notes with Other
Holders of Notes...................................59
Section 11.04. Certificate and Opinion as to Conditions
Precedent...................................59
Section 11.05. Statements Required in Certificate or Opinion
...........................................59
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PAGE
Section 11.06. Rules by Trustee and Agents................ 59
Section 11.07. No Personal Liability of Directors, Officers,
Employees and Stockholders..................60
Section 11.08. Governing Law.............................. 60
Section 11.09. No Adverse Interpretation of Other Agreements
............................................60
Section 11.10. Successors................................. 60
Section 11.11. Severability................................60
Section 11.12. Counterpart Originals...................... 60
Section 11.13. Table of Contents, Headings, etc........... 60
ARTICLE 12
SUBORDINATION
Section 12.01. Agreement to Subordinate................... 61
Section 12.02. Certain Definitions........................ 61
Section 12.03. Liquidation; Dissolution; Bankruptcy....... 61
Section 12.04. Default on Designated Senior Debt.......... 61
Section 12.05. Acceleration of Notes...................... 62
Section 12.06. When Distribution Must Be Paid Over........ 62
Section 12.07. Notice by Issuers.......................... 63
Section 12.08. Subrogation ................................63
Section 12.09. Relative Rights............................ 63
Section 12.10. Subordination May Not Be Impaired by Issuers.63
Section 12.11. Payment, Distribution or Notice to
Representative...............................64
Section 12.12. Rights of Trustee and Paying Agent.......... 64
Section 12.13. Authorization to Effect Subordination....... 64
Section 12.14. Amendments.................................. 65
EXHIBITS
Exhibit A Form of Note
Exhibit B Certificate of Transferor
Canada Business Corporation
Form 7
RESTATED ARTICLES OF INCORPORATION
(SECTION 180)
1- Name of Corporation: CONSOLTEX GROUP INC.
Corporation No.: 285292-6
2- The place in Canada where the registered office is situated:
TERRITORY OF THE MONTREAL URBAN COMMUNITY, IN THE PROVINCE
OF QUEBEC
3- The classes and any maximum number of shares that the corporation
is authorized to issue:
THE ANNEXEC SCHEDULE 1 IS INCORPORATED IN THIS FORM
4- Restrictions if any on share transfers
NOT APPLICABLE
5- Number (or minimum and maximum number) of directors:
MINIMUM 2 - MAXIMUM 20 - the number to be determined by the
directors from time to time
Restictions if any on business the corporation may carry on:
NOT APPLICABLE
Other provisions if any:
NOT APPLICABLE
The foregoing restated articles of incorporation correctly set
out, without substantive change, the corresponding provisions of
the articles of incorporation as amended and supercede the original
articles of incorporation
Signature: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Dated: December 17, 1992
Description of office: Director
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INDENTURE dated as of September 30, 1993 among Consoltex Group Inc., a
Canadian corporation ("Consoltex Group"), Consoltex (USA) Inc., a New York
corporation ("Consoltex USA" and, together with Consoltex Group, the
"Issuers"), Consoltex Inc., a Quebec corporation, The Balson-Hercules
Group, Ltd., a Rhode Island corporation ("Balson-Hercules"), LINQ
Industrial Fabrics, Inc., a Delaware corporation ("LINQ" and, together with
Consoltex Inc. and Balson-Hercules, the "Guarantors") and First Trust
National Association, as trustee (the "Trustee").
Consoltex Group and Consoltex USA, jointly and severally, each
Guarantor, jointly and severally, and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders
of the 11 % Series A Senior Subordinated Notes due 2003 (the "Series A
Notes") and the 11 % Series B Senior Subordinated Notes due 2003 (the
"Series B Notes" and, together with the Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person
merged with or into or became a Subsidiary of such specified Person,
including Indebtedness incurred in connection with, or in contemplation of,
such other Person merging with or into or becoming a Subsidiary of such
specified Person.
"ACQUISITION NOTES" means notes of Consoltex USA in an aggregate
principal amount of US$4 trillion issued to Rom ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ in connection with the acquisition of LINQ.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to
any Person, shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise; PROVIDED, HOWEVER, that beneficial ownership of 20% or more of
the voting securities of a Person shall be deemed to be control.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"APPLICABLE MAKE-WHOLE PREMIUM" means, with respect to a Note, the
greater of (i) 1.0% of the then outstanding principal amount of such Note
and (ii) the excess of (A) the present value of the required interest and
principal payments due on such Note, computed using a discount rate equal
to the Treasury Rate plus 50 basis points, over (B) the then outstanding
principal amount of such Note.
"ASSET SALE" means, any sale, issuance, conveyance, transfer or lease,
directly or indirectly (including by way of a sale-leaseback transaction, a
secured financing transaction or Receivables Financings), of (i) any
properties or assets of the Issuers and their respective Subsidiaries other
than sales of inventory in the ordinary course of business or (ii) equity
securities (other than preferred stock) of any Subsidiary of either Issuer,
in each case, whether in a single transaction or a series of related
transactions, (a) that have a fair market value in excess of 10% of the
book value (determined in accordance with GAAP) of the Tangible Assets of
Consoltex Group as of the end of Consoltex Group's most recently
2
ended full fiscal quarter for which financial statements are available or
(b) for net proceeds in excess of 10% of the book value (determined in
accordance with GAAP) of the Tangible Assets of Consoltex Group as of the
end of Consoltex Group's most recently ended full fiscal quarter for which
financial statements are available. Notwithstanding the foregoing, the term
"Asset Sale" shall not include (i) any sale, conveyance, transfer or lease
that is governed by Section 5.01 hereof, (ii) any sale, conveyance,
transfer or lease between or among either Issuer, a Guarantor or any of
them and (iii) the sale, conveyance, disposition or other transfer of the
Capital Stock of an Unrestricted Subsidiary.
"BANKRUPTCY LAW" means title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"BOARD OF DIRECTORS" means the Board of Directors of Consoltex Group,
Consoltex USA or any Guarantor or any authorized committee of such Board of
Directors, as the context requires.
"BORROWING BASE" means, as of any date, an amount equal to the sum of
(a) 75 % of the face amount of all accounts receivable owned by Consoltex
Group and its Subsidiaries as of such date and (b) 50% of the book value of
all inventory owned by Consoltex Group and its Subsidiaries as of such
date, all calculated on a consolidated basis and in accordance with GAAP.
To the extent that information is not available as to the amount of
accounts receivable or inventory as of a specific date, Consoltex Group may
utilize the most recent available information for purposes of calculating
the Borrowing Base.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be so required to be capitalized on the
balance sheet in accordance with GAAP.
"CAPITAL STOCK" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock or
partnership interests.
"CASH EQUIVALENTS" means (i) United States dollars, (ii) Canadian
dollars, (iii) securities issued or directly and fully guaranteed or
insured by the United States or Canadian government or any agency or
instrumentality thereof having maturities of not more than six months from
the date of acquisition, (iv) certificates of deposit and eurodollar time
deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any United States or
Canadian commercial bank having capital and surplus in excess of $500
million, (v) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (iii) and (iv)
entered into with any financial institution meeting the qualifications
specified in clause (iv) above and (vi) commercial paper rated A-I or
higher or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. or
Standard & Poor's Corporation, or equivalent ratings from Dominion Bond
Rating Services Limited or Canadian Bond Rating Services Inc., and in each
case maturing within six months after the date of acquisition.
"CHANGE OF CONTROL" meats the occurrence of any of the following: (i)
the sale, lease or transfer, in one or a series of related transactions, of
all or substantially all of the assets of Consoltex Group to any person or
group (as such term is used in Section 13 (d) (3) of the Exchange Act)
(other than the Principals or their Related Parties), (ii) the adoption of
a plan relating to the liquidation or dissolution of Consoltex Group, (iii)
the acquisition by any person or group (as such term is used in Section 13
(d) (3) of the Exchange Act) (other than the Principals and their Related
Parties) of direct or indirect majority
3
in interest (more than 50%) of the voting power of the voting stock of
Consoltex Group by way of amalgamation, merger or consolidation or
otherwise; PROVIDED, HOWEVER, that the acquisition by a person or group (as
such term is used in Section 13 (d) (3) of the Exchange Act) (other than
the Principals and their Related Parties) of all or substantially all of
the assets of Les Gantiers Holding B.V. or a direct or indirect majority in
interest (more than 50%) of the voting power of the voting stock of Les
Gantiers Holding B.V. by way of amalgamation, merger or consolidation or
otherwise, shall be deemed to be a Change of Control.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, on a consolidated basis, determined in accordance with
GAAP; PROVIDED that (i) the Net Income of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid to the referent Person or a Subsidiary thereof that is a
Guarantor or a Subsidiary that is not subject to a Dividend Restriction (as
defined below), (ii) the Net Income of any Subsidiary that is a Guarantor
shall be included; (iii) the Net Income of any Subsidiary that is not
restricted from declaring or paying dividends or other distributions,
directly or indirectly, by operation of the terms of its charter or any
applicable agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation or otherwise (each of the foregoing, a "Dividend
Restriction") shall be included, (iv) the Net Income of any Subsidiary that
is not a Guarantor and is subject to a Dividend Restriction shall be
included only to the extent of the amount of dividends or distributions
paid to the referent Person or a Subsidiary that is a Guarantor or a
Subsidiary that is not subject to a Dividend Restriction, (v) the Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded, and (vi)
the cumulative effect of a change in accounting principles shall be
excluded; PROVIDED, HOWEVER, that for purposes of clause (c) of Section
4.07 hereof, Net Income shall include gains and losses, together with any
related provision for taxes, realized in connection with any Asset Sale,
and any extraordinary gains or losses, together with any related provision
for taxes on such extraordinary gains or losses.
"CONSOLIDATED NET Worth" means, with respect to any Person, the sum of
(i) the consolidated equity of the common stockholders of such Person and
its consolidated Subsidiaries plus (ii) the respective amounts reported on
such Person's most recent balance sheet with respect to any series of
preferred stock (other than Disqualified Stock) that by its terms is not
entitled to the payment of dividends unless such dividends may be declared
and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by
such Person upon issuance of such preferred stock, less (x) all write-ups
(other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12
months after the acquisition of such business) subsequent to the date of
this Indenture in the book value of any asset owned by such Person or a
consolidated Subsidiary of such Person, (y) all investments in
unconsolidated Subsidiaries and in Persons that are not Subsidiaries
(except, in each case, investments in marketable securities), and (z) all
unamortized debt discount and expense and unamortized deferred charges, all
of the foregoing determined in accordance with GAAP.
"CONTRIBUTIONS" means any loans, cash advances, capital contributions,
investments or other transfers of assets, in each case, for less than fair
value, in each case, by Consoltex Group or any of its Subsidiaries to any
Subsidiary that is not a Guarantor or to any other Affiliate of Consoltex
Group or any of its Subsidiaries.
4
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which
the Trustee may give notice to the Issuers and the Guarantors.
"CREDIT AGREEMENT" means that certain letter agreement, dated
September 24, 1993, by and among Consoltex Inc. and a Canadian bank, as
principal and/or as agent, including any related notes, bankers'
acceptances, letters of credit, letters of guarantee, guarantees, including
the guarantee thereof by the Issuers or either of them, collateral
documents, instruments and agreements executed or to be executed in
connection therewith, including a definitive agreement, and in each case as
amended, modified, renewed, refunded, replaced or refinanced from time to
time.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DEFINITIVE NOTES" means Notes that are in the form of Exhibit A
attached hereto that do not include the information called for by footnotes
1 and 2 thereof.
"DEPOSITORY" means, with respect to the Global Notes, the Person
specified in Section 2.03 hereof as the Depository with respect to the
Notes, until a successor shall have been appointed and become such pursuant
to the applicable provision of this Indenture, and, thereafter,
"Depository" shall mean or include such successor.
"DESIGNATED SENIOR DEBT" means (i) the Credit Agreement or (ii) any
other Senior Debt permitted under this Indenture and designated as such by
the Issuers, the principal amount of which is $25 million or more.
"DISQUALIFIED STOCK" means any Capital Stock which, by its terms (or
by the terms of any security into which it is convertible or for which it
is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof, in whole or in part,
on or prior to the date on which the Notes mature.
"EBDAIT" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus (a) an amount
equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing
Consolidated Net Income), plus (b) provision for taxes based on income or
profits to the extent such provision for taxes was included in computing
Consolidated Net Income, plus (c) consolidated interest expense of such
Person for such period, whether paid or accrued (including amortization of
original issue discount, non-cash interest payments and the interest
component of Capital Lease Obligations), to the extent such expense was
deducted in computing Consolidated Net Income, plus (d) depreciation and
amortization (including amortization of goodwill and other intangibles and
deferred financing expenses) of such Person for such period to the extent
such depreciation and amortization were deducted in computing Consolidated
Net Income, in each case, on a consolidated basis and determined in
accordance with GAAP.
5
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934, as
amended.
"EXCHANGE OFFER" shall have the meaning ascribed to it in the
Registration Rights Agreement.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of EBDAIT of such Person for such period to the Fixed
Charges of such Person for such period. In the event that Consoltex Group
or any of its Subsidiaries incurs, assumes, guarantees, refinances, redeems
or repurchases any Indebtedness (other than revolving credit borrowings) or
issues or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the event for which the calculation of the Fixed Charge Coverage
Ratio is made, then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee,
refinancing, redemption or repurchase of Indebtedness, or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning
of the applicable four-quarter period.
"FIXED CHARGES" means, with respect to any Person for any period, the
sum of (a) consolidated interest expense of such Person for such period,
whether paid or accrued, to the extent such expense was deducted in
computing Consolidated Net Income (including amortization of original issue
discount, non-cash interest payments, the interest component of capital
leases and net payments (if any) pursuant to Hedging Obligations but
excluding amortization of deferred financing fees) and (b) the product of
(i) all cash dividend payments (and non-cash dividend payments in the case
of a Person that is a Subsidiary) on any series of preferred stock of such
Person, times (ii) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state,
local and foreign statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"FOREIGN SUBSIDIARY" means any Subsidiary organized under the laws of
a jurisdiction outside of the United States (other than Consoltex Inc.)
that has no outstanding Indebtedness on the date of its acquisition except
for such Indebtedness permitted to be incurred pursuant to clause (g) of
Section 4.09 hereof and that is thereafter prohibited from incurring
Indebtedness except for such Indebtedness permitted to be incurred pursuant
to such clause (g).
"GAAP" means generally accepted accounting principles, consistently
applied, which are in effect from time to time in Canada.
"GLOBAL NOTE" means a Note that is in the form of Exhibit A attached
hereto that contains the paragraph referred to in footnote 1 and the
additional schedule referred to in footnote 2 thereto.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"GUARANTEE" means the joint and several and unconditional guarantee by
the Guarantors of the Issuers' obligations on the Notes on a senior
subordinated basis.
6
"GUARANTORS" means the Persons from time to time named as Guarantors in
this Indenture or that become a Guarantor hereunder, and each of their
respective successors, PROVIDED, HOWEVER, that in the event a Guarantor is
released from its Guarantee in accordance with the terms of this Indenture,
such Guarantor shall without any further action no longer be a Guarantor
for any purpose of this Indenture or the Notes. On the date of this
Indenture, the Guarantors are Consoltex Inc., Balson-Hercules and LINQ.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate or currency swap
agreements, interest rate cap agreements and interest rate collar
agreements and (ii) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates or currencies.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means, with respect to any Person, (without
duplication) any indebtedness at any time outstanding of such Person,
whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or bankers' acceptances,
letters of guarantee or letters of credit (or reimbursement agreements in
respect thereof) or representing the balance deferred and unpaid of the
purchase price of any property (including Capital Lease Obligations) or
representing any Hedging Obligations, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any
of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, and also includes, to the extent
not otherwise included, the guarantee of items which would be included
within this definition. For purposes of this definition, the term
"Indebtedness" shall not include sale-leaseback transactions, secured
financing transactions or Receivables Financings to the extent any such
transaction constitutes an Asset Sale or would otherwise constitute an
Asset Sale except for the fair market value of such asset or the aggregate
amount of the net proceeds received in connection with the sale of such
asset. In addition, for purposes of this definition, each borrowing under a
revolving credit facility which increases the amount of Indebtedness
outstanding thereunder shall be deemed to be an incurrence of Indebtedness.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INVESTMENT GRADE DEBT" means, for any Person, Indebtedness of such
Person that has a rating of "Baa" or better by ▇▇▇▇▇'▇ Investors Service,
Inc. and "BBB" or better by Standard & Poor's Corporation.
"INVESTMENT" means any direct or indirect advance, loan or other
extension of credit or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services
for the account or use of others), or any purchase or acquisition of Equity
Interests, bonds, notes, debentures or other securities issued by, any
Unrestricted Subsidiary. For the purposes of Section 4.07 hereof (i) the
term "Investment" shall include the fair market value of the net assets of
any Subsidiary at the time that such Subsidiary is designated an
Unrestricted Subsidiary, (ii) any property transferred to any Unrestricted
Subsidiary shall be valued at fair market value at the time of such
transfer, in each case as determined by the Board of Directors of Consoltex
Group in good faith and (iii) any Investment constituting an advance, loan,
extension of credit or capital contribution shall be deemed to be incurred
only to the extent that it is not repaid in cash or Cash Equivalents,
PROVIDED that the amount credited for such repayment shall not exceed the
amount deducted as a result of such Investment.
7
"ISSUERS" means Consoltex Group and Consoltex USA, as joint and several
obligors under the Notes, unless a successor replaces either or both of
Consoltex Group or Consoltex USA in accordance with Article 5 hereof, and
thereafter includes such successor.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the City of Montreal or at a place of
payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement
to sell or give a security interest in and any filing of or agreement to
give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant
to the Registration Rights Agreement. Whenever in this Indenture there is
mentioned, in any context, the payment of principal (and premium, if any),
redemption price, Change of Control Payment, Offered Price, interest or any
other amount payable under or with respect to any Note, such mention shall
be deemed to include mention of the payment of Liquidated Damages to the
extent that in such context Liquidated Damages are, were or would be
payable in respect thereof.
"NET INCOME" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction
in respect of preferred stock dividends, excluding, however, any gain (but
not loss), together with any related provision for taxes on such gain (but
not loss), realized in connection with any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions), and
excluding any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
Notwithstanding the foregoing, the non-recurring charges related to (i) the
write-off of deferred financing expenses following the repayment of certain
Indebtedness of Consoltex Group and its Subsidiaries and (ii) the interest
penalty on the prepayment of the Senior Fixed Rate Loan, in each case with
the proceeds of the Offering and as reflected in Consoltex Group's income
statement for the period in which such transactions are consummated, shall
not be included in the computation of Net Income.
"NET PROCEEDS" means the aggregate cash proceeds received by the
Issuers or any of their respective Subsidiaries in respect of any Asset
Sale, net of the direct costs relating to such Asset Sale (including,
without limitation, legal, accounting and investment banking fees, and
sales commissions) and any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets the subject of such
Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets.
"NOTE CUSTODIAN" means the Trustee, as custodian with respect to the
Global Notes, or any successor entity thereto.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness.
8
"OFFERING" means the offering and sale by the Issuers of the Series A
Notes.
"OFFERING MEMORANDUM" means the Offering Memorandum dated September
23, 1993 relating to the Offering.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary or any Vice-President of such
Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers,
one of whom must be the principal executive officer, the principal
financial officer, the treasurer or the principal accounting officer of
Consoltex Group, Consoltex USA or any Guarantor, as the case may be, that
meets the requirements of Section 11.05 hereof.
"OPINION OF COUNSEL" meats an opinion from legal counsel that meets
the requirements of Section 11.05 hereof. The counsel may be an employee of
or counsel to Consoltex Group, Consoltex USA, any Guarantor, the Trustee or
any Holder.
"PERMITTED ASSET SALE CONSIDERATION" means, at any one time
outstanding, (i) Cash Equivalents, (ii) any notes or other obligations
received by the Issuers or any Subsidiary from the transferee in connection
with an Asset Sale that are immediately converted into cash (to the extent
of the cash received) and (iii) up to an aggregate of $10 million in fair
market value of Investment Grade Debt issued by a transferee of assets in
connection with Asset Sales effected subsequent to the date of this
Indenture. The fair market value of any Permitted Asset Sale Consideration
received by the Issuers or its Subsidiaries in connection with an Asset
Sale shall be determined by Consoltex Group's Board of Directors and shall
cease to be counted towards the aggregate limitations referred to in clause
(iii) to the extent such consideration is reduced to cash. In no event
shall the amount of outstanding Permitted Asset Sale Consideration be
reduced by the value of any security or other instrument that has been
written off by Consoltex Group or its Subsidiaries.
"PERMITTED JUNIOR SECURITIES" means equity securities or subordinated
securities of either Issuer, any Guarantor or any successor to either
Issuer or any Guarantor, as the case may be, with respect to Senior Debt of
such Issuer or Guarantor (or such successor) that, in the case of any such
subordinated securities, are subordinated in right of payment to all Senior
Debt of such Issuer or Guarantor (or such successor) that may be
outstanding to substantially the same extent as, or to a greater extent
than, the Notes are so subordinated.
"PERMITTED LIENS" means (a) Liens securing Senior Debt of the Issuers
or any Guarantor so long as such Senior Debt is permitted by this Indenture
to be incurred; (b) Liens in favor of the Issuers or any Guarantor; (c)
Liens on property of a Person existing at the time such Person is
amalgamated, merged into or consolidated with Consoltex Group or any of its
Subsidiaries; PROVIDED that such Liens were in existence prior to the
contemplation of such amalgamation, merger or consolidation; (d) Liens on
property existing at the time of acquisition thereof by Consoltex Group or
any of its Subsidiaries; PROVIDED that such Liens were in existence prior
to the contemplation of such acquisition; (e) Liens to secure the
performance of statutory obligations, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course
of business; (f) Liens existing on the date of this Indenture; (g) Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded; PROVIDED that any
reserve or other appropriate provision as shall be required in conformity
with GAAP
9
shall have been made therefor; and (h) Liens incurred in the ordinary
course of business of Consoltex Group or any of its Subsidiaries with
respect to obligations that do not exceed $10 million at any one time
outstanding and that (i) are not incurred in connection with the borrowing
of money or the obtaining of advances or credit (other than trade credit in
the ordinary course of business) and (ii) do not in the aggregate
materially detract from the value of the property or materially impair the
use thereof in the operation of business by Consoltex Group or any of its
Subsidiaries.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust or unincorporated
organization (including any subdivision or ongoing business of any such
entity or substantially all of the assets of any such entity, subdivision
or business).
"PRINCIPALS" means Les Gantiers Holding B.V. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"RECEIVABLE" means any right of a Person to payment for goods sold or
leased or for services rendered no matter how evidenced, including, but not
limited to, chattel paper, instruments, accounts receivable, contract
rights, notes, drafts, acceptances, and other forms of obligations and
receivables, together with all interest of such Person or entity in any and
all goods, the sale or lease of which shall have given or shall give rise
to, and in any and all guarantees and other property securing the payment
of or performance under, any such right to payment and all proceeds of any
of the foregoing.
"RECEIVABLES FINANCING" means (i) the sale or other disposition of
Receivables arising in the ordinary course of business, but only in
connection with the compromise or collection thereof or (ii) the sale or
other disposition of Receivables arising in the ordinary course of business
to a Receivables Subsidiary followed by a financing transaction in
connection with such sale or disposition of such Receivables.
"RECEIVABLES SUBSIDIARY" means a direct or indirect Subsidiary of
Consoltex Group exclusively engaged in Receivables Financings and
activities reasonably related thereto.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the
Issuers, the Guarantors and the other parties named on the signature pages
thereof, relating to the Notes, as such agreement may be amended, modified
or supplemented from time to time.
"RELATED PARRY" with respect to any Principal means (A) any
controlling stockholder, 80 % (or more) owned Subsidiary, or spouse or
immediate family member (in the case of an individual) of such Principal or
(B) trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or
more controlling interest of which consist of such Principal and/or such
other Persons referred to in the immediately preceding clause (A).
"REPRESENTATIVE" means the indenture trustee or other trustee, agent
or representative for any Senior Debt, if any.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means
any officer within the Corporate Trust Division of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
10
"RESTRICTED GUARANTOR" means a direct Wholly Owned Subsidiary of either
Issuer or any Guarantor organized under the laws of a jurisdiction within
the United States that (i) is created solely for the purpose of acquiring
and owning a direct Foreign Subsidiary and (ii) is prohibited from (A)
engaging in any business other than the holding of the capital stock of
such Foreign Subsidiary and ancillary activities related thereto or (B)
granting a security interest to any Person in any capital stock of such
Foreign Subsidiary.
"SEC" means the U.S. Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR DEBT" means (i) the Obligations in respect of the Credit
Agreement and (ii) any other Indebtedness permitted to be incurred by the
Issuers or a Guarantor, as the case may be, under the terms of this
Indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinate in right of
payment to the Notes. Notwithstanding anything to the contrary in the
foregoing, Senior Debt shall not include (v) the Acquisition Notes, (w) any
liability for federal, state, local or other taxes owed or owing by the
Issuers or a Guarantor, as the case may be, (x) any Indebtedness of the
Issuers or a Guarantor, as the case may be, to any of their respective
Subsidiaries or other Affiliates, (y) any trade payables, other than trade
payables of Balson-Hercules or any other converter designated as such by
the Issuers up to an aggregate amount of $15 million at any one time
outstanding, or (z) any Indebtedness that is incurred in violation of this
Indenture.
"SENIOR FIXED RATE LOAN" means that certain loan agreement dated as of
June 27, 1991 among Consoltex Inc., various financial institutions and
Glovesell Investment Company Ltd., as amended on February 26, 1993 and
March 31, 1993.
"SHELF REGISTRATION" shall have the meaning ascribed to it in the
Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act, as such Regulation is in
effect on the date hereof.
"SUBSIDIARY" of any person means any corporation, association or other
business entity of which more than 50% of the total voting power of shares
of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person or a
combination thereof. Unrestricted Subsidiaries shall not be included in the
definition of Subsidiaries for any purposes of this Indenture (except, as
the context may otherwise require, for purposes of the definition of
"Unrestricted Subsidiary").
"TANGIBLE ASSETS" with respect to any Person means the consolidated
assets of such Person determined in accordance with GAAP, except that there
shall be deducted therefrom all intangible assets (including goodwill and
any other intangibles determined in accordance with GAAP).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
as in effect from time to time.
"TRANSFER RESTRICTED SECURITIES" shall have the meaning ascribed to it
in the Registration Rights Agreement.
11
"TREASURY RATE" means the yield to maturity at the time of computation of
United States Treasury securities (as compiled and published in the most
recent Federal Reserve Statistical Release H.15(519) which has become
publicly available at least two business days prior to the date fixed for
redemption of the Notes following a Change of Control or, if such
Statistical Release is no longer published, any publicly available source
of similar market data) with a constant maturity most nearly equal to the
then remaining Weighted Average Life to Maturity of the Notes; PROVIDED,
HOWEVER, that if the Weighted Average Life to Maturity of the Notes is not
equal to the constant maturity of a United States Treasury security for
which a weekly average yield is given, the Treasury Rate shall be obtained
by linear interpolation (calculated to the nearest one-twelfth of a year)
from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the Weighted Average Life to
Maturity of the Notes is less than one year, the weekly average yield on
actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder.
"UNRESTRICTED SUBSIDIARY" means (1) any Subsidiary of Consoltex Group
(a) which at the time of determination shall be an Unrestricted Subsidiary
(as designated by the Board of Directors of Consoltex Group as provided
below) and (b) all the Indebtedness of which shall be non-recourse to
Consoltex Group and its Subsidiaries other than its Unrestricted
Subsidiaries and (2) any Subsidiary of an Unrestricted Subsidiary;
PROVIDED, that notwithstanding clause (1)(b) above, Consoltex Group or a
Subsidiary of Consoltex Group may guarantee, endorse, agree to provide
funds for the payment or maintenance of, or otherwise become directly or
indirectly liable with respect to, Indebtedness of an Unrestricted
Subsidiary but only to the extent that Consoltex Group or such Subsidiary
could make an Investment in such Unrestricted Subsidiary pursuant to
Section 4.07 hereof and any such guarantee, endorsement or agreement shall
be deemed an incurrence of Indebtedness by Consoltex Group for purposes of
Section 4.09 hereof. The Board of Directors of Consoltex Group may
designate any newly acquired or newly formed Subsidiary (but not any other
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns
any Capital Stock of, or owns or holds any Lien on any property of, any
other Subsidiary of Consoltex Group which is not an Unrestricted
Subsidiary. The Board of Directors of Consoltex Group may designate any
Unrestricted Subsidiary to be a Subsidiary of the Issuers; PROVIDED,
HOWEVER, that immediately after giving effect to such designation (x) the
Issuers could incur $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in Section 4.09 hereof after giving
pro forma effect to such Unrestricted Subsidiary's Indebtedness as if it
had been incurred at the beginning of the applicable four-quarter period
and (y) no Default shall have occurred and be continuing. Any such
designation by the Board of Directors of Consoltex Group shall be evidenced
to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Issuers giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the
then outstanding principal amount of such Indebtedness into (b) the sum of
the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y)
the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment.
"WHOLLY OWNED SUBSIDIARY" OF any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares)
12
shall at the time be owned by such Person or by one or more Wholly Owned
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Term Defined in
Section
"Additional Amounts" 4.17
"Affiliate Transaction" 4.11
"Asset Sale Offer" 3.09
"Change of Control Offer" 4.15
"Change of Control Payment " 4.15
"Change of Control Payment Date" 4.15
"Covenant Defeasance" 8.03
"Deficiency" 4.10
"Event of Default" 6.01
"Excess Proceeds" 4.10
"Excluded Holder" 4.17
"Fifth Anniversary" 4.10
"incur" 4.09
"Legal Defeasance" 8.02
"Offer Amount" 3.09
"Offered Price" 4.10
"Offer Period" 3.09
"Paying Agent" 2.03
"Payment Blockage Notice" 12.04
"Permitted Refinancing" 4.09
"Purchase Date" 3.09
"Refinancing Indebtedness" 4.09
"Representative" 12.02
"Registrar" 2.03
"Restricted Payments" 4.07
"Taxes" 4.17
"25 % Excess Proceeds" 4.10
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
13
"OBLIGOR" on the Notes means either of the Issuers, any successor obligor
upon the Notes and any Guarantor.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time; and
(7) all dollar amounts are in Canadian dollars.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of US$1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Issuers, the
Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound
thereby.
The Notes will initially be issued in global form, substantially in
the form of Exhibit A attached hereto (including footnotes 1 and 2
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent
the aggregate amount of outstanding Notes from time to time endorsed
thereon and that the aggregate amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee or the Note
14
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers of each of Consoltex Group and Consoltex USA shall sign
the Notes for Consoltex Group and Consoltex USA, respectively. Each of the
Issuers' seals shall be reproduced on the Notes and may be in facsimile
form.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note
has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Issuers signed by two
Officers of each of Consoltex Group and Consoltex USA, authenticate Series
A Notes for original issue up to US$120 million in aggregate principal
amount at any one time outstanding and authenticate Series B Notes for
original issue up to US$120 million in aggregate principal amount at any
one time outstanding as contemplated by this Indenture and the Registration
Rights Agreement; PROVIDED, HOWEVER, that there shall not be more than
US$120 million in aggregate principal amount of Notes outstanding at any
one time, except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the
Issuers or an Affiliate of the Issuers.
SECTION 2.03. REGISTRAR, DEPOSITORY AND PAYING AGENT.
The Issuers shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Issuers may appoint one or more co-Registrars and one or more
additional paying agents. The term "Registrar" includes any co-Registrar
and the term "Paying Agent" includes any additional paying agent. The
Issuers may change any Paying Agent or Registrar without notice to any
Holder. The Issuers shall notify the Trustee in writing of the same and
address of any Agent not a party to this Indenture. If the Issuers fail to
appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. Consoltex Group or any of its Subsidiaries may
act as Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company to act as
Depository with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar and
Paying Agent and to act as the Note Custodian with respect to the Global
Notes and also appoint Montreal Trust Company at its principal office in
the City of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, as co-Registrar.
15
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit
of Holders or the Trustee all money held by the Paying Agent for the
payment of principal or interest on the Notes, and will notify the Trustee
of any default by the Issuers or any Guarantor in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to
pay all money held by it to the Trustee. The Issuers at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than Consoltex
Group or a Subsidiary) shall have no further liability for the money. If
Consoltex Group or a Subsidiary acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money
held by it as Paying Agent.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of all Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not a Registrar, the Issuers and the Guarantors shall furnish to
the Trustee at least seven Business Days before each interest payment date,
and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the
names and addresses of the Holders of Notes and the Issuers and the
Guarantors shall otherwise comply with TIA 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When Definitive Notes
are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal amount
of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested
if its requirements for such transactions are met; PROVIDED, HOWEVER, that
the Definitive Notes presented or surrendered for register of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar
duly executed by such Holder or by his attorney, duly
authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer
Restricted Security, such request shall be accompanied by the
following additional information and documents, as applicable:
(A) if such Transfer Restricted Security is being delivered to
the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification to that
effect from such Holder (in substantially the form of
Exhibit B hereto); or
16
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) in accordance with
Rule 144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rule 904
under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a
certification to that effect from such Holder (in
substantially the form of Exhibit B hereto); or
(C) if such Transfer Restricted Security is being transferred
pursuant to an exemption from registration in accordance
with Rule 144 under the Securities Act or in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect from such
Holder (in substantially the form of Exhibit B hereto) and,
at the request of either Issuer, an Opinion of Counsel from
such Holder or the transferee reasonably acceptable to the
Issuers and to the Registrar to the effect that such
transfer is in compliance with the Securities Act.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE NOTE FOR A BENEFICIAL
INTEREST IN A GLOBAL NOTE. A Definitive Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a
Definitive Note, duly endorsed or accompanied by appropriate instruments
of transfer, in form satisfactory to the Trustee, together with:
(i) if such Definitive Note is a Transfer Restricted Security, a
certification from the Holder thereof (in substantially the
form of Exhibit B hereto) to the effect that such Definitive
Note is being transferred by such Holder to a "qualified
institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the
Securities Act; and
(ii) whether or not such Definitive Note is a Transfer Restricted
Security, written instructions from the Holder thereof
directing the Trustee to make, or to direct the Note Custodian
to make, an endorsement on the Global Note to reflect an
increase in the aggregate principal amount of the Notes
represented by the Global Note,
the Trustee shall cancel such Definitive Note and cause, or direct the Note
Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Note Custodian, the
aggregate principal amount of Notes represented by the Global Note to be
increased accordingly. If no Global Notes are then outstanding, the Issuers
shall issue and the Trustee shall authenticate a new Global Note in the
appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL NOTES. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture including the
restrictions on transfer set forth herein and the procedures of the
Depository therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL NOTE FOR A
DEFINITIVE NOTE.
(i) Any Person having a beneficial interest in a Global Note may
upon request exchange such beneficial interest for a
Definitive Note. Upon receipt by the
17
Trustee of written instructions or such other form of
instructions as is customary for the Depository, from the
Depository or its nominee on behalf of any Person having a
beneficial interest in a Global Note and upon receipt by the
Trustee of a written order of such other form of instructions
as is customary for the Depository or the person designated as
the Depositary as having such a beneficial interest containing
registration instructions and, in the case of a Transfer
Restricted Security only, the following additional information
and documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial
owner, a certification to that effect from such Person (in
substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under
the Securities Act or pursuant to an exemption from
registration in accordance with Rule 904 under the
Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to that
effect from the transferor (in substantially the form of
Exhibit B hereto); or
(C) if such beneficial interest is being transferred pursuant
to an exemption from registration in accordance with Rule
144 under the Securities Act or in reliance on another
exemption from the registration requirements of the
Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit B hereto)
and, at the request of either Issuer, an Opinion of Counsel
from the transferee or transferor reasonably acceptable to
the Issuers and to the Registrar to the effect that such
transfer is in compliance with the Securities Act,
the Trustee or the Note Custodian, at the direction of the
Trustee, shall cause, in accordance with the standing
instructions and procedures existing between the Depository
and the Note Custodian, the aggregate principal amount of
Global Notes to be reduced accordingly and, following such
reduction, the Issuers shall execute and the Trustee shall
authenticate and deliver to the transferee a Definitive Note
in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.06(d)
shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions from
its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are
so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTES.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.06), a Global
Note may not be transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such
successor Depository.
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(f) AUTHENTICATION OF DEFINITIVE NOTES IN ABSENCE OF DEPOSITORY. If at
any time:
(i) the Depository for the Notes notifies the Issuers that the
Depository is unwilling or unable to continue as Depository
for the Global Notes and a successor Depository for the Global
Notes is not appointed by the Issuers within 90 days after
delivery of such notice; or
(ii) the Issuers at their sole discretion, notify the Trustee in
writing that they elect to cause the issuance of Definitive
Notes under this Indenture,
then the Issuers shall execute, and the Trustee, upon receipt of an
Officers' Certificate requesting the authentication and delivery of
Definitive Notes, shall authenticate and deliver, Definitive Notes in an
aggregate principal amount equal to the principal amount of the Global
Notes, in exchange for such Global Notes.
(g) LEGENDS.
(i) Except as permitted by the following paragraph (ii), each
Note certificate evidencing Global Notes and Definitive Notes
(and all Notes issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following
form:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇
▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933 (THE "SECURITIES
ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE NOTE
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1) (W) TO A PERSON WHO THE SELLER REASONABLY BELIEVES 1S
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (X) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144, UNDER THE SECURITIES ACT, (Y) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (Z) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND, WITH RESPECT TO
CLAUSES (X) AND (Z), BASED UPON AN OPINION OF COUNSEL IF
EITHER ISSUER SO REQUESTS), (2) TO EITHER ISSUER OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE."
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(ii) Upon any sale, transfer or exchange of a Transfer
Restricted Security (including any Transfer Restricted
Security represented by a Global Note) and receipt of the
Opinion of Counsel, if any, required in (i) above pursuant to
Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act or 40 days
after any such sale or transfer pursuant to Rule 904 under the
Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a
Definitive Note that does not bear the legend set forth in
(i) above and rescind any restriction on the transfer of
such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted
Security shall not be subject to the provisions set forth in
(i) above and shall only be subject to the provisions of
Section 2.06(d) hereof; PROVIDED, HOWEVER, that with respect
to any request for an exchange of a Transfer Restricted
Security that is represented by a Global Note for a
Definitive Note that does not bear a legend, which request
is made in reliance upon Rule 144 or 904, the Holder thereof
shall certify in writing to the Registrar that such request
is being made pursuant to Rule 144 or 904 (such
certification to be substantially in the form of Exhibit B
hereto).
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as
all beneficial interests in Global Notes have either been exchanged for
Definitive Notes, redeemed, repurchased or cancelled, all Global Notes
shall be returned to or retained and cancelled by the Trustee. At any
time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or
cancelled, the principal amount of Notes represented by such Global Note
shall be reduced accordingly and an endorsement shall be made on such
Global Note, by the Trustee or the Note Custodian, at the direction of
the Trustee, to reflect such reduction.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Issuers shall execute and the Trustee shall authenticate
Definitive Notes and Global Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Issuers may
require payment of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental
charge payable upon exchange or transfer pursuant to Sections
3.07, 4.10, 4.15 and 9.05 hereto).
(iii) The Registrar shall not be required:
(A) to register the transfer or exchange of any Note selected
for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part; or
20
(B) to register the transfer of or to exchange Notes during
a period beginning at the opening of 15 days before the day
of any selection of Notes for redemption under Section 3.02
hereof and ending at the close of business on the day of the
selection.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or
Global Notes shall be the valid obligations of the Issuers,
evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Definitive Notes or Global Notes
surrendered upon such registration of transfer or exchange.
(v) The Issuers shall not be required to issue, to register the
transfer of or to exchange Notes during a period beginning at
the opening of 15 days before the day of any selection of
Notes for redemption under Section 3.02 hereof and ending at
the close of business on the day of selection.
(vi) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent, the Issuers and the
Guarantors may deem and treat the Person in whose name any
Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on
such Note, and neither the Trustee, any Agent, the Issuers nor
the Guarantors shall be affected by notice to the contrary.
(vii)The Trustee shall authenticate Definitive Notes and Global
Notes upon receipt of an Officers' Certificate instructing it
to do so.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Issuers
and the Trustee receive evidence to their satisfaction of the destruction,
loss or theft of any Note, the Issuers shall issue and the Trustee, upon
the written order of the Issuers signed by two Officers of each of
Consoltex Group and Consoltex USA, shall authenticate a replacement Note if
the Trustee's requirements are met. If required by the Trustee or the
Issuers, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee or the Issuers to protect the
Issuers, the Trustee, any Agent and any authenticating agent from any loss
that any of them may suffer if a Note is replaced. The Issuers may charge
for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuers and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by
the Trustee in accordance with the provisions hereof, and those described
in this Section as not outstanding. Except as set forth in Section 2.09
hereof, a Note does not cease to be outstanding because either Issuer or an
Affiliate of either Issuer holds the Note.
21
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than Consoltex Group or its Subsidiaries)
holds, on a redemption date or maturity date, money sufficient to pay Notes
payable on that date, then on and after that date such Notes shall be
deemed to be no longer outstanding and shall cease to accrue interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by
either Issuer, any Guarantor or any Person directly or indirectly
controlling or controlled by or under direct or indirect common control
with either Issuer or any Guarantor shall be considered as though not
outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes that a Trustee knows are so owned shall be so
disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes representing Definitive Notes or Global Notes
are ready for delivery, Consoltex Group and Consoltex USA may prepare and
the Trustee shall authenticate temporary securities upon a written order of
Consoltex Group and Consoltex USA signed by two Officers of each of
Consoltex Group and Consoltex USA. Temporary Notes shall be substantially
in the form of definitive Notes but may have variations that the Issuers
consider appropriate for temporary Notes. Without unreasonable delay, the
Issuers shall prepare and the Trustee shall authenticate definitive Notes
in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation
and shall destroy cancelled Notes (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
cancelled Notes shall be delivered to the Issuers unless by a written
order, signed by one Officer of each of the Issuers, the Issuers shall
direct that cancelled Notes be returned to them. The Issuers may not issue
new Notes to replace Notes that it has paid or that have been delivered to
the Trustee for cancellation other than Series B Notes issued in exchange
for Series A Notes.
SECTION 2.12. DEFAULTED INTEREST.
If the Issuers default in a payment of interest on the Notes, they
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01 hereof. The Issuers shall, with
the consent of the Trustee, fix each such special record
22
date and payment date. At least 15 days before the special record date, the
Issuers (or the Trustee, in the name of and at the expense of the Issuers)
shall mail to Holders a notice that states the special record date, the
related payment date and the amount of such interest to be paid.
SECTION 2.13. NOVATION.
As a result of the Exchange Offer contemplated by the Registration
Rights Agreement, a Holder of Transfer Restricted Securities shall receive
a new evidence of Indebtedness; however, the respective rights and
obligations of the Holder, the Issuers and the Guarantors shall remain
unchanged. Such exchange shall not constitute a novation.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, they shall furnish to the
Trustee, at least 45 days (unless a shorter period is acceptable to the
Trustee) but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the section of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Notes to be redeemed and (iv) the redemption price.
If the Issuers are required to make an offer to redeem Notes pursuant
to the provisions of Section 4.10 or 4.15 hereof, they shall furnish to the
Trustee at least 30 days (unless a shorter period is acceptable to the
Trustee) but not more than 60 days before a redemption date, an Officers'
Certificate setting forth, (i) the section of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Notes to be redeemed, (iv) the redemption price and (v)
a statement to the effect that (a) the Issuers or one of their respective
Subsidiaries has effected an Asset Sale and the conditions set forth in
Section 4.10 have been satisfied or (b) a Change of Control has occurred
and the conditions set forth in Section 4.15 have been satisfied, as
applicable.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the
Notes in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed, or, if the
Notes are not listed, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate, PROVIDED that no Notes of US$1,000
or less shall be redeemed in part. In the event of partial redemption, the
particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously
called for redemption.
The Trustee shall promptly notify the Issuers in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions
of Notes selected shall be in amounts of US$ 1,000 or whole multiples of
US$1,000; except that if all of the Notes of a Holder are to be redeemed,
the entire outstanding amount of Notes held by such Holder, even if not a
multiple of US$1,000, shall be redeemed. Except as provided in the
23
preceding sentence, provisions of this Indenture that apply to Notes called
for redemption also apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Issuers shall mail or
cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Issuers default in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or section of this Indenture
pursuant to which the Notes called for redemption are being redeemed;
and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Issuers' request, the Trustee shall give the notice of
redemption in the names of the Issuers and at their expense; PROVIDED,
HOWEVER, that the Issuers shall have delivered to the Trustee, at least 45
days prior to the redemption date (unless a shorter period is acceptable to
the Trustee), an Officers' Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice
as provided in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not
be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to the redemption date, the Issuers shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption
price of, premium, if any, and accrued interest on all Notes
24
to be redeemed on the redemption date. The Trustee or the Paying Agent
shall promptly return to the Issuers any money deposited with the Trustee
or the Paying Agent by the Issuers in excess of the amounts necessary to
pay the redemption price of, and accrued interest on, all Notes to be
redeemed.
If the Issuers comply with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the
Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Note was registered at the close of business on
such record date, and no additional interest shall be payable to Holders
whose Notes are called for redemption. If any Note called for redemption
shall not be so paid upon surrender for redemption because of the failure
of the Issuers to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the redemption date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section
4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Issuers shall
issue and the Trustee shall authenticate for the Holder at the expense of
the Issuers a new Note equal in principal amount to the unredeemed portion
of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as provided in paragraphs (b), (c) and (d) of this Section
3.07, the Issuers shall not have the option to redeem the Notes prior to
October 1, 1998. Thereafter, the Issuers shall have the option to redeem
the Notes, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest
thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on October 1 of the years indicated below:
YEAR PERCENTAGE
1998 ...........................105.50%
.............1999 ...........................103.67%
.............2000 ...........................101.83%
.............2001 and thereafter.............100.00%
(b) At any time on or before October 1, 1996, the Issuers may also
redeem up to 33-1/3% of the aggregate principal amount of Notes
originally issued hereunder with the net proceeds of a public offering
of Capital Stock (other than Disqualified Stock and a public offering
pursuant to a registration statement on Form S-8) of Consoltex USA
within 90 days of such public offering at a redemption price equal to
110% of the principal amount of such Notes, plus accrued and unpaid
interest to the redemption date; PROVIDED that at least US$80 million in
aggregate principal amount of Notes remain outstanding immediately after
giving effect to such redemption.
(c) In addition, prior to October 1, 1998, the Issuers may, at their
option, redeem the Notes, in whole or in part, at any time within 180
days after a Change of Control, upon not less than 30 nor more than 60
days' notice to each holder of Notes, at a redemption price equal to the
sum of (i) the
25
principal amount thereof plus (ii) accrued and unpaid interest to the date
of redemption plus (iii) the Applicable Make-Whole Premium.
(d) The Issuers also may, at their option, redeem the Notes, as a
whole but not in part, at a redemption price equal to 100% of the
principal amount of the Notes, together with accrued and unpaid interest
to the redemption date, if the Issuers have become or would become
obligated in accordance with Section 4.17 hereof to pay, on the next
date on which any amount would be payable under or with respect to the
Notes, any Additional Amounts as a result of any change in or amendment
to the laws (or any regulations promulgated thereunder) of Canada (or
any political subdivision or taxing authority thereof or therein), or
any change in or amendment to any official position regarding the
application or interpretation of such laws or regulations, which change
or amendment is announced or becomes effective on or after the date of
the Offering Memorandum.
(e) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15, the Issuers are not
required to make mandatory redemption or sinking fund payments with respect
to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Issuers shall
be required to commence an offer to all Holders to purchase Notes (an
"ASSET SALE OFFER"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement, and up to an additional five Business Days
if extended by the Issuers, except to the extent that a longer period is
required by applicable law (the "OFFER PERIOD"). No later than five
Business Days after the termination of the Offer Period (the "PURCHASE
DATE"), the Issuers shall purchase the principal amount of Notes required
to be purchased pursuant to Section 4.10 hereof (the "OFFER AMOUNT") or, if
less than the Offer Amount has been tendered, all Notes tendered in
response to the Asset Sale Offer.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a Note is registered at the close
of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Issuers shall send,
by first class mail, a notice to the Trustee and each of the Holders. The
notice shall contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset
Sale Offer shall be made to all Holders. The notice, which shall govern the
terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
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(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrue interest;
(d) that any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest on and after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and
may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the
Note, or a similar form acceptable to the Trustee, completed, to the
Issuers, a depository, if appointed by the Issuers, or a Paying Agent at
the address specified in the notice at least three days before the
Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Issuers, the depository or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Trustee shall select the Notes to
be purchased on a PRO RATA basis (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in denominations of
US$1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered.
On or before the Purchase Date, the Issuers shall, to the extent
lawful, accept for payment, on a PRO RATA basis to the extent necessary,
the Offer Amount of Notes tendered pursuant to the Asset Sale Offer, or if
less than the Offer Amount has been tendered, all Notes tendered, and shall
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Issuers in accordance
with the terms of this Section 3.09. The Issuers, the depository or the
Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering
Holder an amount equal to the purchase price of the Notes tendered by such
Holder and accepted by the Issuers for purchase, and the Issuers shall
promptly issue a new Note, and the Trustee shall authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Issuers to the Holder thereof. The
Issuers shall publicly announce the results of the Asset Sale Offer on the
Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
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ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES
The Issuers shall pay or cause to be paid the principal of, premium,
if any, and interest on the Notes on the dates and in the manner provided
in the Notes, and shall pay Liquidated Damages, if any, on the dates and in
the manner provided in the Registration Rights Agreement. Principal,
premium, if any, and interest shall be considered paid on the date due if
the Paying Agent, if other than Consoltex Group or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Issuers in immediately available funds and designated for and sufficient to
pay all principal, premium, if any, and interest then due. The Issuers
shall pay all Liquidated Damages, if any, in the same manner on the dates
and in the amounts set forth in the Registration Rights Agreement.
The Issuers shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to 1 % per annum in excess of the then applicable interest rate on
the Notes to the extent lawful; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace
period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuers shall maintain an office or agency (which may be an office
of the Trustee or an Affiliate of the Trustee, Registrar or co-Registrar)
where Notes may be surrendered for registration of transfer or for exchange
and where notices and demands to or upon the Issuers in respect of the
Notes and this Indenture may be served. The Issuers shall give prompt
written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Issuers shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Issuers may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any
manner relieve the Issuers of their obligation to maintain an office or
agency for such purposes. The Issuers shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee
as one such office or agency of the Issuers in accordance with Section
2.03.
SECTION 4.03. REPORTS.
(a) Prior to the Issuers becoming subject to Section 13 or 15(d) of
the Exchange Act, the Issuers shall provide to Holders of the Notes and,
whether or not required by the rules and regulations of the SEC, file
with the SEC for public availability (if accepted) (i) as soon as
reasonably available and in any event within 90 days after the end of
each fiscal year, annual consolidated financial statements for Consoltex
Group for such fiscal year prepared in accordance with GAAP, together
with a report thereon by an independent accountant of established
national reputation, (ii) as soon as reasonably available and
28
in any event within 45 days after the end of each fiscal quarter,
unaudited consolidated financial statements of Consoltex Group for such
quarterly period, certified by a principal financial officer of
Consoltex Group, prepared in accordance with GAAP and (iii) all other
reports and communications that are generally provided to the holders of
Consoltex Group's Subordinate Voting Shares pursuant to the rules of the
Montreal and Toronto Stock Exchanges and applicable Canadian securities
legislation.
(b) Upon becoming subject to Section 13 or 15(d) of the Exchange Act,
the Issuers and each Guarantor shall file with the Trustee, and mail
copies to the Holders at their addresses appearing in the register of
Notes maintained by the Registrar, within 15 days after filing with the
SEC, copies of all quarterly and annual financial reports and of the
information, documents and other reports (or copies of such portions of
any of the foregoing that the SEC may by rules and regulations
prescribe) which the Issuers and each Guarantor are required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If
thereafter, the Issuers cease to be subject to Section 13 or 15(d) of
the Exchange Act, the Issuers and each Guarantor shall nevertheless
continue to cause the annual and quarterly financial statements,
including any notes thereto (and, with respect to annual reports, an
auditors' report by an accounting firm of established national
reputation) and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," comparable to that which would
have been required to appear in annual or quarterly reports filed under
Section 13 or 15(d) of the Exchange Act to be so filed with the SEC for
public availability (if accepted) and the Trustee and mailed to the
Holders within 90 days after the end of the Issuers' fiscal years and
within 45 days after the end of each of the first three quarters of each
such fiscal year. The Issuers and any Guarantor shall also comply with
the provisions of TIA 314(a).
(c) For so long as any Transfer Restricted Securities remain
outstanding, the Issuers and the Guarantors shall furnish to all Holders
and prospective purchasers of the Notes designated by the Holders of
Transfer Restricted Securities, promptly upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act.
(d) The Issuers shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information that the
Trustee may be required to deliver to the Holders of Notes under this
Section 4.03. The delivery of such reports, documents and information
shall be at the sole expense of the Issuers.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Issuers shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review
of the activities of the Issuers and their respective Subsidiaries
during the preceding fiscal year has been made under the supervision of
the signing Officers with a view to determining whether the Issuers have
kept, observed, performed and fulfilled their obligations under this
Indenture (including with respect to any Restricted Payments made during
such year, the basis upon which the calculations required by Section
4.07 were computed (which calculations may be based upon Consoltex
Group's latest available financial statements)), and further stating, as
to each such Officer signing such certificate, that to the best of his
or her knowledge the Issuers have kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and are
not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default or Event
of Default shall have occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge and what action the
Issuers are taking or propose to take with respect thereto) and that to
the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is
29
prohibited or if such event has occurred, a description of the event and
what action the Issuers are taking or propose to take with respect
thereto.
(b) The Issuers shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any
Default or Event of Default an Officers' Certificate specifying such
Default or Event of Default and what action the Issuers are taking or
propose to take with respect thereto.
SECTION 4.05. TAXES.
The Issuers shall pay, and shall cause each of their respective
Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
Each of the Issuers and each of the Guarantors covenants (to the
extent that they may lawfully do so) that they shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension or usury law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and each of the Issuers and each of the
Guarantors (to the extent that they may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that they
shall not, by resort to any such law, hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Issuers shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend on
or make any distribution on account of either Issuer's or any of their
respective Subsidiaries' Equity Interests (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock)
of such Issuer or such Subsidiary or dividends or distributions payable to
either Issuer or a Guarantor); (ii) purchase, redeem or otherwise acquire
or retire for value any Equity Interests of either Issuer or any Subsidiary
or other Affiliate of such Issuer (other than any such Equity Interests
owned by either Issuer or a Guarantor); (iii) purchase, redeem or otherwise
acquire or retire for value any Indebtedness that is subordinated to the
Notes, except in accordance with the mandatory redemption or repayment
provisions set forth in the original documentation governing such
Indebtedness; (iv) make any Investment in any Unrestricted Subsidiary or
(v) make any Contributions (all such payments and other actions set forth
in clauses (i) through (v) above being collectively referred to as
"Restricted Payments"), unless, at the time of such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) Consoltex Group would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section
4.09 hereof; and
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(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Issuers and their respective
Subsidiaries after the date of this Indenture, is less than the sum of
(w) 50% of the Consolidated Net Income of Consoltex Group (determined by
excluding cash dividends received by Consoltex Group or its Subsidiaries
from an Unrestricted Subsidiary referred to in clause (x)) for the
period (taken as one accounting period) from the first day of the
quarter in which the Offering is consummated to the end of Consoltex
Group's most recently ended full fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, 100% of such deficit), plus (x) the amount of all cash
dividends received by Consoltex Group or its Subsidiaries from an
Unrestricted Subsidiary subsequent to the first day of the quarter in
which the Offering is consummated, plus (y) 100% of the aggregate net
cash proceeds (unless such proceeds are used pursuant to clause (ii) of
the next succeeding paragraph to redeem, repurchase, retire or otherwise
acquire other Equity Interests) received by Consoltex Group or any of
its Subsidiaries from the issue or sale since the date of this Indenture
of Equity Interests of either Issuer or of debt securities of either
Issuer that have been converted into such Equity Interests (other than
Equity Interests (or convertible debt securities) sold to Consoltex
Group or any of its Subsidiaries and other than Disqualified Stock or
debt securities that have been converted into Disqualified Stock), plus
(z) if any Unrestricted Subsidiary is redesignated as a Subsidiary, the
lesser of (i) the Consolidated Net Worth of such Unrestricted Subsidiary
as of the date it is redesignated and (ii) the aggregate amount of the
Issuers' and their respective Subsidiaries' Investments in such
Unrestricted Subsidiary.
The foregoing provisions shall not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof if at said
date of declaration such payment would have complied with the provisions of
this Indenture; (ii) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of Consoltex Group in exchange for, or
out of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of Consoltex Group) of other Equity Interests of Consoltex Group
(other than any Disqualified Stock); (iii) the repurchase of Equity
Interests of Consoltex Group from employees of Consoltex Group or its
Subsidiaries pursuant to an employee compensation or incentive plan in an
aggregate amount not to exceed $1 million per annum; (iv) if (1) no Default
or Event of Default shall have occurred and be continuing or would occur as
a consequence thereof and (2) Consoltex Group would, at the time of a
Restricted Payment pursuant to this clause (iv) and after giving pro forma
effect thereto as if such Restricted Payment had been made at the beginning
of the applicable four-quarter period, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09 hereof, Investments in
Unrestricted Subsidiaries in an aggregate amount not to exceed $10 million
dollars since the date of this Indenture; (v) the purchase, redemption or
other acquisition prior to the stated maturity thereof of Indebtedness that
is subordinated to the Notes in exchange for or out of the net cash
proceeds of a substantially concurrent issue and sale (other than to either
Issuer or their respective Subsidiaries) of new Indebtedness; PROVIDED that
(1) the principal amount of such new Indebtedness shall not exceed the
principal amount of Indebtedness so refinanced (plus the amount of
reasonable expenses incurred in connection therewith), (2) such new
Indebtedness shall have a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of the Indebtedness
being refinanced, and (3) the new Indebtedness shall be pari passu with or
subordinate in right of payment to the Indebtedness being refinanced; (vi)
Contributions to a Subsidiary if such Subsidiary (1) executes and delivers
to the Trustee a supplemental indenture in form and substance reasonably
satisfactory to the Trustee pursuant to which such Subsidiary shall
guarantee all of the obligations of the Issuers with respect to the Notes
on a senior subordinated basis and (2) delivers to the Trustee an Opinion
of Counsel reasonably satisfactory to the Trustee to the effect that
31
such supplemental indenture has been duly executed and delivered by such
Subsidiary and is in compliance with the terms of this Indenture; and (vii)
if no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof, additional Restricted Payments in an
aggregate amount not to exceed $2 million since the date of this Indenture.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Issuers shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (a) (i) pay dividends or make any other
distributions to Consoltex Group or any of its Subsidiaries (A) on its
Capital Stock or (B) with respect to any other interest or participation
in, or measured by, its profits, or (ii) pay any indebtedness owed to
Consoltex Group or any of its Subsidiaries, (b) make loans or advances to
Consoltex Group or any of its Subsidiaries or (c) transfer any of its
properties or assets to Consoltex Group or any of its Subsidiaries, except
for such encumbrances or restrictions existing under or by reason of (i)
agreements governing Senior Debt of the Issuers or any Guarantor, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, (ii) any encumbrance or
restriction applicable to any Guarantor pursuant to an agreement in effect
on the date of this Indenture, (iii) this Indenture and the Notes, (iv)
applicable law, (v) any instrument governing Indebtedness or Capital Stock
of a Person acquired by Consoltex Group or any of its Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired, PROVIDED that, unless such Person is
a Guarantor, EBDAIT of such Person is not taken into account in determining
whether such acquisition was permitted by the terms of this Indenture, (vi)
by reason of customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices, (vii)
with respect to clause (c) above, purchase money obligations for property
acquired in the ordinary course of business, or (viii) permitted
Refinancing Indebtedness, PROVIDED that the restrictions contained in the
agreements governing such Refinancing Indebtedness are no more restrictive
than those contained in the agreements governing the Indebtedness being
refinanced.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Issuers shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guaranty or otherwise become directly or indirectly liable with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) and the
Issuers shall not issue any Disqualified Stock and shall not permit any of
their respective Subsidiaries to issue any shares of preferred stock;
PROVIDED, HOWEVER, that the Issuers or any Guarantor may incur Indebtedness
or issue shares of preferred stock if the Fixed Charge Coverage Ratio of
Consoltex Group for the most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such preferred
stock is issued would have been at least 2.0 to 1, determined on a pro
forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred, or the
preferred stock had been issued, as the case may be, at the beginning of
such four-quarter period: PROVIDED FURTHER that no guarantee may be
incurred pursuant to the provisions of this paragraph, unless the
guaranteed Indebtedness is also incurred pursuant to this paragraph.
The foregoing limitations shall not apply to (a) the incurrence by
either Issuer or any Guarantor of Indebtedness pursuant to the Credit
Agreement or otherwise in an aggregate principal amount not to
32
exceed the Borrowing Base, (b) Indebtedness, not covered by any other
clause of this paragraph, outstanding on the date of this Indenture, (c)
Indebtedness arising out of letters of credit, performance bonds, surety
bonds and bankers' acceptances incurred in the ordinary course of business;
PROVIDED that if any unpaid reimbursement obligation under any such
instrument is outstanding for more than 10 consecutive business days, such
obligation shall not be permitted to be incurred under this clause (c), (d)
Indebtedness consisting of guarantees (other than guarantees relating to
money borrowed), indemnities or obligations in respect of purchase price
adjustments, in each case, in connection with the acquisition of assets
permitted under this Indenture, (e) additional Indebtedness of up to $10
million in aggregate principal amount at any one time outstanding, (f) the
incurrence by the Issuers and the Guarantors of Indebtedness represented by
the Notes, (g) Indebtedness of a Foreign Subsidiary existing at the time it
is acquired (1) that is not incurred in contemplation of the acquisition of
such Foreign Subsidiary and (2) that is non-recourse to the Issuers and
their respective Subsidiaries except to the assets of such Foreign
Subsidiary (for purposes of this clause (g), Indebtedness of a Foreign
Subsidiary existing at the time it is acquired includes Indebtedness
incurred pursuant to credit facilities in existence upon the acquisition of
such Foreign Subsidiary; PROVIDED that such Indebtedness meets the
requirements of clauses (1) and (2) of this clause (g)), (h) the incurrence
by the Issuers and their respective Subsidiaries of Indebtedness issued in
exchange for, or the proceeds of which are used to extend, refinance,
renew, replace or refund Indebtedness referred to in clauses (b), (f) and
(g) above (the "Refinancing Indebtedness"); PROVIDED, HOWEVER, that (1) the
principal amount of such Refinancing Indebtedness shall not exceed the
principal amount of Indebtedness so extended, refinanced, renewed,
replaced, substituted, or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (2) the Refinancing Indebtedness shall
have a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of the Indebtedness being extended,
refinanced, renewed, replaced or refunded; and (3) the Refinancing
Indebtedness shall be pari passu with or subordinate in right of payment to
the Indebtedness being extended, refinanced, renewed, replaced or refunded,
(i) intercompany Indebtedness between or among either Issuer and/or any of
their respective Subsidiaries or any of them, (j) Hedging Obligations that
are incurred for the purpose of fixing or hedging currency risks, or
interest rates with respect to any floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding. The foregoing
clauses (a) through (j) are independent exceptions to the covenant set
forth in the preceding paragraph and are additive in nature. Limitations
set forth in any one of such clauses (a) through (j) or in the definitions
used therein shall not be applicable to any other such clauses or any other
such definitions. The Indebtedness permitted to be incurred pursuant to the
foregoing clauses (a) through (j) may be incurred pursuant to one agreement
or several agreements with one lender or several lenders.
SECTION 4.10. ASSET SALES.
The Issuers shall not, and shall not permit any of their respective
Subsidiaries to, engage in any Asset Sale, unless (x) the Issuers or such
Subsidiary receives consideration at the time of such Asset Sale at least
equal to the fair market value (evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Trustee)
of the assets sold or otherwise disposed of and (y) at least 75% of the
consideration therefor received by the Issuers or such Subsidiary is in the
form of cash; PROVIDED, HOWEVER, that the amount of (A) any liabilities (as
shown on the Issuers' or such Subsidiary's most recent balance sheet or in
the notes thereto) of the Issuers or any of their respective Subsidiaries
(other than liabilities that are by their terms subordinated to the Notes
or any guarantee thereof) that are assumed by the transferee of any such
assets and (B) Permitted Asset Sale Consideration received by the Issuers
or such Subsidiary in any such Asset Sale shall be deemed to be cash for
purposes of this provision.
33
The Issuers may (a) apply the Net Proceeds from such Asset Sale to
permanently reduce Senior Debt of the Issuers; PROVIDED that the Issuers
make such a reduction within 365 days after any Asset Sale or (b) invest
the Net Proceeds from such Asset Sale in the same or a similar line of
business as Consoltex Group was engaged in on the date of this Indenture or
in businesses reasonably related thereto: PROVIDED that the Issuers shall
have invested such Net Proceeds within 365 days after such Asset Sale or
shall have commenced and not completed or abandoned the project in which
the Board of Directors of Consoltex Group has determined that the Issuers
will invest such Net Proceeds and shall have segregated such Net Proceeds
from the general funds of the Issuers and their Subsidiaries for that
purpose; PROVIDED, FURTHER, that if the project in which such Board of
Directors has determined that the Issuers will invest such Net Proceeds is
thereafter abandoned, within 60 days after such project is abandoned, the
Issuers shall (i) apply the Net Proceeds from such Asset Sale to
permanently reduce Senior Debt of the Issuers or (ii) invest the Net
Proceeds from such Asset Sale in the same or a similar line of business as
Consoltex Group was engaged in on the date of this Indenture or in
businesses reasonably related thereto. Pending the final application of any
such Net Proceeds, the Issuers may temporarily reduce Senior Debt or
otherwise invest such Net Proceeds in any manner that is not prohibited by
this Indenture. Any Net Proceeds from the Asset Sale that are not applied
or invested as provided in the first sentence of this paragraph shall be
deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $10 million, the Issuers shall make an offer to all
Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds, at an
offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date fixed for the
closing of such offer (the "Offered Price"), in accordance with the
procedures set forth in this Indenture. To the extent that the aggregate
amount of Notes tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds (a "Deficiency"), the Issuers may use such Deficiency for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall
be reset at zero; PROVIDED that the amount of 25 % Excess Proceeds shall
constitute Excess Proceeds for purposes of the first offer that is made
after the fifth anniversary of the original issuance of the Notes (the
"Fifth Anniversary").
Notwithstanding the foregoing, in no event shall the Issuers use
Excess Proceeds to purchase more than 25 % of the original aggregate
principal amount of Notes on or prior to the Fifth Anniversary. If the
aggregate Excess Proceeds (disregarding any resetting to zero as described
above) resulting from Asset Sales occurring prior to the Fifth Anniversary,
less any Deficiencies resulting from any offers made on or prior to such
date, exceed 25 % of the original aggregate principal amount of the Notes
(such excess being the "25 % Excess Proceeds"), then the Issuers shall make
an offer at the Offered Price in accordance with the foregoing provisions
(i) promptly after the Fifth Anniversary, in the event the amount of the
25% Excess Proceeds exceeds $10 million or (ii) at such time as the amount
of the 25% Excess Proceeds together with the Excess Proceeds received after
the Fifth Anniversary exceeds $10 million, in the event the amount of the
25% Excess Proceeds is less than $10 million.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Issuers shall not, and shall not permit any of their respective
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter
into any contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless (a) such Affiliate Transaction is on terms
that are no less favorable to the relevant corporation than those that
would have been obtained in a comparable transaction by the relevant
corporation with an unrelated Person and (b)
34
the Issuers deliver to the Trustee (x) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
payments in excess of $5 million, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate
Transaction or series of related Affiliate Transactions complies with
clause (a) above and such Affiliate Transaction or series of related
Affiliate Transactions is approved by a majority of the disinterested
members of the Board of Directors and (y) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
payments in excess of $10 million, an opinion as to the fairness thereof to
the relevant corporation from a financial point of view issued by a
nationally recognized independent appraisal firm, independent public
accounting firm or investment banking firm in Canada or the United States;
PROVIDED, HOWEVER, that (i) any employment agreement entered into by
Consoltex Group or any of its Subsidiaries in the ordinary course of
business and consistent with the past practice of Consoltex Group or such
Subsidiary, (ii) transactions between or among Consoltex Group and/or its
Subsidiaries, (iii) the payment of reasonable fees to the Principals and
their Affiliates in connection with consulting, management, investment
banking or financial advisory services rendered to the Issuers or their
respective Subsidiaries in an aggregate amount not to exceed $1 million per
annum, (iv) the reimbursement of reasonable expenses of the Principals and
their Affiliates in connection with consulting, management, investment
banking or financial advisory services rendered to the Issuers or their
respective Subsidiaries, (v) the payment of reasonable and customary fees
to directors of the Issuers and their respective Subsidiaries who are not
employees of such entities, (vi) loans or other advances to officers,
directors and employees for travel, entertainment, moving, other relocation
expenses (including housing loans) and other business purposes made in the
ordinary course of business and (vii) transactions permitted by the
provisions of Section 4.07 hereof, in each case, shall not be deemed
Affiliate Transactions.
SECTION 4.12. LIENS.
The Issuers shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly create, incur, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, or any income
or profits therefrom or assign or convey any right to receive income
therefrom, except Permitted Liens, unless all payments due under this
Indenture and the Notes are secured on an equal and ratable basis with the
obligation so secured until such time as such obligation is no longer
secured by a Lien.
SECTION 4.13. ADDITIONAL GUARANTEES.
Neither Issuer nor any of their respective Subsidiaries shall acquire
or form a Significant Subsidiary, unless the Issuers (a) designate such
Significant Subsidiary as an Unrestricted Subsidiary pursuant to the terms
of this Indenture or (b) cause such Significant Subsidiary to (i) execute
and deliver to the Trustee a supplemental indenture in form and substance
reasonably satisfactory to the Trustee pursuant to which such Significant
Subsidiary shall guarantee all of the obligations of the Issuers with
respect to the Notes on a senior subordinated basis and (ii) deliver to the
Trustee an Opinion of Counsel reasonably satisfactory to the Trustee to the
effect that a supplemental indenture has been duly executed and delivered
by such Significant Subsidiary and is in compliance with the terms of this
Indenture; PROVIDED, HOWEVER, that the Issuers and any Subsidiary may
acquire or form a Foreign Subsidiary that is a Significant Subsidiary
without complying with the foregoing if such Foreign Subsidiary is owned
directly by a Restricted Guarantor (PROVIDED that any Subsidiary of such
Foreign Subsidiary need not be owned directly by a Restricted Guarantor).
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SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Issuers shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i)
their respective corporate existence, and the corporate, partnership or
other existence of each of their respective Subsidiaries, in accordance
with the respective organizational documents (as the same may be amended
from time to time) and (ii) the material rights (charter and statutory),
licenses and franchises of the Issuers and their respective Subsidiaries;
PROVIDED, HOWEVER, that the Issuers shall not be required to preserve any
such right, license or franchise, or the corporate, partnership or other
existence of any of their respective Subsidiaries if the applicable Issuer
or Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of the business of Consoltex Group and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Holders of the Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Issuers shall make
an offer (the "Change of Control Offer") to each Holder of Notes to
repurchase all or any part (equal to US$1,000 or an integral multiple
thereof) of such Holder's Notes pursuant to the offer described below at
a purchase price equal to 101 % of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, to the date of
purchase (the "Change of Control Payment"). Within 40 days following any
Change of Control, the Issuers shall mail a notice to each Holder
stating: (1) that the Change of Control Offer is being made pursuant to
the covenant entitled "Change of Control" and that all Notes tendered
will be accepted for payment; (2) the purchase price and the purchase
date, which shall be no earlier than 30 days nor later than 40 days from
the date such notice is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest; (4)
that, unless the Issuers default in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Payment Date; (5) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Notes, or similar form acceptable to the Trustee,
completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Change of Control Payment Date; (6) that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later than the
close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Notes purchased; and (7) that
Holders whose Notes are being purchased only in part will be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to US$1,000 in
principal amount or an integral multiple thereof. The Issuers shall
comply with the requirements of Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of
the Notes in connection with a Change of Control.
(b) On the Change of Control Payment Date, the Issuers shall, to the
extent lawful, (1) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all
Notes or portions thereof so tendered and (3) deliver or cause to be
delivered to the Trustee the Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof tendered to
the Issuers. The Paying Agent shall promptly mail to each Holder of
Notes so accepted payment in an amount equal to the purchase price for
such Notes, and the Trustee shall promptly authenticate and mail to each
Holder a new
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Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; PROVIDED that each such new Note shall be in a
principal amount of US$1,000 or an integral multiple thereof. Prior to
complying with the provisions of this covenant, but in any event within
90 days following a Change of Control, the Issuers shall either repay
all outstanding Indebtedness of the Issuers or the Guarantors under the
Credit Agreement (if still in effect) and all other Senior Debt of the
Issuers or obtain the requisite consents, if any, under the Credit
Agreement and all other agreements governing outstanding Senior Debt of
the Issuers to permit the repurchase of Notes required by this Section
4.15. The Issuers shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control
Payment Date.
SECTION 4.16. SENIOR SUBORDINATED DEBT.
(a) Consoltex Group and Consoltex USA shall not incur, create, issue,
assume, guarantee or otherwise become liable for any Indebtedness that
is subordinate or junior in right of payment to any Senior Debt of
Consoltex Group or Consoltex USA, respectively, and senior in any
respect in right of payment to the Notes.
(b) No Guarantor shall incur, create, issue, assume, guarantee or
otherwise become liable for any indebtedness that is subordinate or
junior in right of payment to any Senior Debt of such Guarantor and
senior in any respect in right of payment to the Guarantee by such
Guarantor of the Notes.
SECTION 4.17. ADDITIONAL AMOUNTS.
All payments made by the Issuers under or with respect to the Notes
shall be made free and clear of and without withholding or deduction for or
on account of any present or future tax, duty, levy, impost, assessment or
other governmental charge imposed or levied by or on behalf of the
Government of Canada or of any province or territory thereof or by any
authority or agency therein or thereof having power to tax (hereinafter
"Taxes"), unless the Issuers are required to withhold or deduct Taxes by
law or by the interpretation or administration thereof. If the Issuers are
so required to withhold or deduct any amount for or on account of Taxes
from any payment made under or with respect to the Notes, the Issuers shall
pay such additional amounts ("Additional Amounts") as may be necessary so
that the net amount received by each Holder (including Additional Amounts)
after such withholding or deduction will not be less than the amount the
Holder would have received if such Taxes had not been withheld or deducted;
PROVIDED that no Additional Amounts will be payable with respect to a
payment made to a Holder (an "Excluded Holder") (i) with which either
Issuer does not deal at arm's length (within the meaning of the INCOME TAX
ACT (Canada)) a the time of making such payment or (ii) which is subject to
such Taxes by reason of its being connected with Canada or any province or
territory thereof otherwise than by the mere holding of Notes or the
receipt of payments thereunder. The Issuers shall also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law. The
Issuers shall furnish to the Holders of the Notes, within 30 days after the
date the payment of any Taxes is due pursuant to applicable law, certified
copies of tax receipts evidencing such payment by the Issuers. The Issuers
shall indemnify and hold harmless each Holder (other than an Excluded
Holder) and upon written request reimburse each such Holder for the amount
of (i) any Taxes so levied or imposed and paid by such Holder as a result
of payments made under or with respect to the Notes, (ii) any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, and (iii) any present or future tax, duty, levy, impost,
assessment or other governmental charge imposed or levied with respect to
any reimbursement under clause (i) or (ii) above.
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At least 30 days prior to each date on which any payment under or with
respect to the Notes is due and payable, if the Issuers will be obligated
to pay Additional Amounts with respect to such payment, the Issuers shall
deliver to the Trustee an Officers' Certificate stating the fact that such
Additional Amounts will be payable, the amounts so payable and shall set
forth such other information necessary to enable the Trustee to pay such
Additional Amounts to Holders on the payment date. Whenever in this
Indenture there is mentioned, in any context, the payment of principal (and
premium, if any), redemption price, Change of Control Payment, Offered
Price, interest or any other amount payable under or with respect to any
Note such mention shall be deemed to include mention of the payment of
Additional Amounts provided for in this section to the extent that, in such
context, Additional Amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section 4.17 and express mention
of the payment of Additional Amounts (if applicable) in any provisions
hereof shall not be construed as excluding Additional Amounts in those
provisions hereof where such express mention is not made (if applicable).
The obligations of the Issuers under this Section 4.17 shall survive
the termination of this Indenture and the payment of all amounts under or
with respect to the Notes.
SECTION 4.18. AGENT FOR SERVICE; SUBMISSION TO JURISDICTION; WAIVER OF
IMMUNITIES.
By the execution and delivery of this Indenture, each of Consoltex
Group and Consoltex Inc. (i) acknowledges that they hereby irrevocably
designate and appoint CT Corporation System as each of Consoltex Group's
and Consoltex Inc.'s, as the case may be, authorized agent upon which
process may be served in any suit or proceeding arising out of or relating
to the Notes or this Indenture that may be instituted in any federal or
state court in the State of New York or brought under federal or state
securities laws or brought by the Trustee (whether in its individual
capacity or in its capacity as Trustee hereunder), and acknowledges that CT
Corporation System has accepted such designation, (ii) submits to the
non-exclusive jurisdiction of any such court in any such suit or
proceeding, and (iii) agrees that service of process upon CT Corporation
System and written notice of said service to Consoltex Group or Consoltex
Inc., as applicable (mailed or delivered to its Corporate Secretary at the
principal office of Consoltex Group in ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇), shall be
deemed in every respect effective service of process upon Consoltex Group
or Consoltex Inc., as applicable, in any such suit or proceeding. Each of
Consoltex Group and Consoltex Inc. further agrees to take any and all
action, including the execution and filing of any and all such documents
and instruments, as may be necessary to continue such designation and
appointment of CT Corporation System (or such other authorized agent for
service of process as each of Consoltex Group and Consoltex Inc. shall
notify the Trustee in writing) in full force and effect so long as any of
the Notes shall be outstanding.
To the extent that either Consoltex Group or Consoltex Inc. has or
hereafter may acquire any immunity from jurisdiction of any court or from
any legal process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, Consoltex Group or Consoltex Inc., as
the case may be, hereby irrevocably waives such immunity in respect of its
obligations under this Indenture and the Notes, to the extent permitted by
law.
SECTION 4.19. CONVERSION OF CURRENCY.
The Issuers covenant and agree that the following provisions shall
apply to conversion of currency in the case of the Notes and this
Indenture:
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(a) If for the purpose of obtaining judgment in, or enforcing the judgment
of, any court in any country, it becomes necessary to convert into any
other currency (the "judgment currency") an amount due in U.S. dollars,
then the conversion shall be made at the rate of exchange prevailing on the
Business Day before the day on which the judgment is given or the order of
enforcement is made, as the case may be (unless a court shall otherwise
determine).
(b) The term "rate(s) of exchange" shall mean the rate at which the
Holder or the Trustee, as the case may be, is able or would have been able
on the relevant date to purchase at Citibank, N.A. (or if Citibank, N.A. is
no longer engaged in currency exchange, such other money center bank
located in The City of New York as the Issuers and the Trustee shall agree)
U.S. dollars with the judgment currency other than U.S. dollars referred to
in subsection (a) above and includes any premiums and costs of exchange
payable.
ARTICLE 5
SUCCESSORS
SECTION 5.01. AMALGAMATION, MERGER, CONSOLIDATION, OR SALE OF ASSETS.
Neither of the Issuers shall amalgamate, consolidate or merge with or
into (whether or not such Issuer is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions to, another Person unless (i) such Issuer is the surviving
corporation or the Person formed by or surviving any such amalgamation,
consolidation or merger (if other than such Issuer) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made is a corporation organized or existing under (A) the federal laws
of Canada or any province thereof, or (B) the laws of the United States,
any state thereof or the District of Columbia; (ii) the Person formed by or
surviving any such amalgamation, consolidation or merger (if other than
such Issuer) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition will have been made assumes all the
obligations of the Issuers pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee, under the Notes and this Indenture;
(iii) immediately after such transaction no Default or Event of Default
exists; and (iv) such Issuer or any Person formed by or surviving any such
amalgamation, consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been made (A)
will have Consolidated Net Worth (immediately after the transaction but
prior to any purchase accounting adjustments resulting from the transaction
relating to goodwill) equal to or greater than the Consolidated Net Worth
of such Issuer immediately preceding the transaction and B) Consoltex Group
will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set forth in Section 4.09 hereof.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any amalgamation, consolidation or merger, or any sale, lease,
conveyance or other disposition of all or substantially all of the assets
of either Issuer in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which an Issuer is
amalgamated or merged or to which such sale, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from
and after the date of such amalgamation, consolidation, merger. sale,
lease, conveyance or other disposition, the provisions of this Indenture
referring to such Issuer shall refer instead to the successor corporation
and not to such Issuer), and may exercise every right and power of such
Issuer under this Indenture with the same effect as if such successor
Person has been named as an
39
issuer herein, and the predecessor Issuer (if not the surviving
corporation) shall be relieved from us obligations under this Indenture and
the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Issuers default in the payment when due of interest on the
Notes and the default continues for a period of 30 days (whether or not
prohibited by the provisions of Article 12 hereof);
(b) the Issuers default in the payment when due of principal of or
premium, if any, on the Notes (whether or not prohibited by the
provisions of Article 12 hereof);
(c) the Issuers fail to comply with Section 4.15 hereof;
(d) the Issuers or any of the Guarantors fail to observe or perform
any other covenant, warranty or other agreement in this Indenture or the
Notes and such failure continues for 60 days after written notice of
such failure shall have been given to the Issuers by the Trustee or to
the Issuers and the Trustee by Holders of at least 25 % in aggregate
principal amount of the Notes then outstanding;
(e) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by either Issuer or any of their
respective Subsidiaries (or the payment of which is guaranteed by either
Issuer or any of their respective Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of
this Indenture, which default results in the acceleration of such
Indebtedness prior to its express maturity or shall constitute a default
in the payment of such issue of Indebtedness at final maturity of such
issue and the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness the maturity of
which has been so accelerated or which has not been paid at maturity,
aggregates $10 million or more;
(f) Consoltex Group or any of its Subsidiaries fails to pay final
judgments aggregating in excess of $10 million, which judgments are not
satisfied or stayed for a period of 60 consecutive days;
(g) either Issuer or any of their respective Subsidiaries pursuant to
or within the meaning of Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in
an involuntary case;
40
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property; or
(iv) makes a general assignment for the benefit of its creditors;
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law, which order or decree remains in effect and unstayed
for 60 consecutive days, that:
(i) is for relief against either of the Issuers or any of their
respective Subsidiaries in an involuntary case;
(ii) appoints a Custodian of either Issuer or any of their
respective Subsidiaries or for all or substantially all of the
property of either Issuer or any of their respective
Subsidiaries; or
(iii) orders the liquidation of either Issuer or any of their
respective Subsidiaries; or
(i) except as permitted by this Indenture, any Guarantee shall be held
in a judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Guarantor, or any
Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under the Guarantee of such Guarantor and such condition
shall have continued for a period of 60 days after written notice of
such failure requiring the relevant Guarantor and the Issuers to remedy
the same shall have been given to the Issuers by the Trustee or to the
Issuers and the Trustee by Holders of at least 25 % in aggregate
principal amount of the Notes then outstanding.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof with respect to either Issuer or
any of their respective Subsidiaries) occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable
immediately; PROVIDED, that so long as any Indebtedness permitted to be
incurred pursuant to clause (a) of the second paragraph of Section 4.09
hereof shall be outstanding, such acceleration shall not be effective until
the earlier of (i) an acceleration under any such Indebtedness or (ii) five
Business Days after receipt by the Issuers and the agent (or, in the
absence of such agent, the lender) under the Credit Agreement (so long as
any Indebtedness is outstanding thereunder) of written notice of such
acceleration of the Notes. Notwithstanding the foregoing, if an Event of
Default specified in clause (g) or (h) of Section 6.01 hereof occurs with
respect to either Issuer or any of their respective Subsidiaries all
outstanding Notes shall be due and payable immediately without further
action or notice. The Holders of a majority in aggregate principal amount
of the then outstanding Notes by written notice to the Trustee may on
behalf of all of the Holders rescind an acceleration and its consequences
(including the related payment default) if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium, if any, that has
become due solely because of the acceleration) have been cured or waived.
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SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium,
if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default.
All remedies are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default
and its consequences, except a continuing Default or Event of Default in
the payment of the principal of, premium, if any, or interest on, the
Notes. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of other Holders of
Notes or that may involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25 % in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
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A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium, if any, and
interest on the Note, on or after the respective due dates expressed in the
Note or the Registration Rights Agreement, as the case may be, or to bring
suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own
name and as trustee of an express trust against the Issuers or any
Guarantor for the whole amount of principal of, premium, if any, and
interest remaining unpaid on the Notes and interest on overdue principal
and, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and the Holders of the Notes allowed in any judicial proceedings
relative to the Issuers (or any other obligor upon the Notes), its
creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable
on any such claims and any custodian in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee, and
in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
7.07 hereof out of the estate in any such proceeding, shall be denied for
any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and
other properties that the Holders of the Notes may be entitled to receive
in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holders,
or to authorize the Trustee to vote in respect of the claim of any Holder,
in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
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First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
SECOND: to the holders of Senior Debt of the Issuers or a Guarantor,
as the case may be, to the extent required by Article 12;
THIRD: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes
for principal, premium, if any, and interest, respectively; and
FOURTH: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any such
payment to Holders of Notes.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a suit
by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in aggregate principal amount
of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in
this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the
Trustee shall examine the
44
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section:
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holder, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against
any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuers. Money
held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.
The Trustee may consult with counsel and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from either Issuer or any Guarantor
shall be sufficient if signed by an Officer of such Issuer or such
Guarantor.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance with
such request or direction.
(g) Except with respect to Section 4.01, the Trustee shall have no
duty to inquire as to the performance of the Issuers' covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of
Default occurring pursuant to Sections 6.01(a) (except with respect to
interest constituting Liquidated Damages under the Registration Rights
Agreement), 6.01(b) and 4.01, or (ii) any Default or Event of Default of
which the Trustee shall have received written notification or obtained
actual knowledge.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with either Issuer or any
Affiliate of either Issuer with the same rights it would have if it were
not Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90 days, apply
to the SEC for permission to continue as trustee or resign. Any Agent may
do the same with like rights and duties. The Trustee is also subject to
Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not
be accountable for the Issuers' use of the proceeds from the Notes or any
money paid to the Issuers or upon the Issuers' direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital
herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
SECTION 7.05. NONE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice
of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the
Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to the Holders of the
Notes a brief report dated as of such reporting date that complies with TIA
313(a) (but if no event described in TIA 313(a) has
occurred within the twelve
46
months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA 313(b)(2). The Trustee shall
also transmit by mail all reports as required by TIA 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the issuers and filed with the SEC and each stock
exchange on which the Notes are listed. The Issuers shall promptly notify
the Trustee when the Notes are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Issuers shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder.
The Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Issuers shall reimburse the Trustee
promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Issuers shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with
the acceptance or administration of its duties under this Indenture without
negligence or bad faith on its part. The Trustee shall notify the Issuers
promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Issuers shall not relieve the Issuers of their
obligations hereunder. The Issuers shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and
the Issuers shall pay the reasonable fees and expenses of such counsel. The
Issuers need not pay for any settlement made without their consent, which
consent shall not be unreasonably withheld.
The obligations of the Issuers under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Issuers' payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal,
premium, if any, and interest on particular Notes. Such Lien shall survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance
of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Issuers. The Holders of a
majority in aggregate principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Issuers in writing.
The Issuers may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
47
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Issuers.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers,
or the Holders of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee,
PROVIDED all sums owing to the Trustee hereunder have been paid and subject
to the Lien provided for in Section 7.07 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 7.08, the Issuers'
obligations under Section 7.07 hereof shall continue for the benefit of the
retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America
or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of
at least $25 million as set forth in its most recent published annual
report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA 310(a)(1), (2) and (5). The Trustee is
subject to TIA 310(b).
48
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS.
The Trustee is subject to TIA 311(a), excluding any creditor
relationship listed in TIA 311(b). A Trustee who has resigned or
been removed shall be subject to TIA 311 (a) to the extent
indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE AND
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Issuers may, at the option of their Boards of Directors evidenced
by a resolution set forth in an Officers' Certificate of each of the
Issuers, at any time, elect to have either Section 8.02 or 8.03 hereof be
applied to all outstanding Notes upon compliance with the conditions set
forth below in this Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuers (as well as the Guarantors)
shall, subject to the satisfaction of the conditions set forth in Section
8.04 hereof, be deemed to have been discharged from their obligations with
respect to all outstanding Notes on the date the conditions set forth below
are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal
Defeasance means that the Issuers shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes,
which shall thereafter be deemed to be "outstanding" only for the purposes
of Section 8.05 hereof and the other Sections of this Indenture referred to
in (a) and (b) below, and to have satisfied all their other obligations
under such Notes and this Indenture (and the Trustee, on demand of and at
the expense of the Issuers, shall execute proper instruments acknowledging
the same), except for the following provisions which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in
Section 8.04 hereof, and as more fully set forth in such Section, payments
in respect of the principal of, premium, if any, and interest on such Notes
when such payments are due, (b) the Issuers' obligations with respect to
such Notes under Article Two and Section 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the
Issuers' obligations in connection therewith and (d) this Article Eight.
Subject to compliance with this Article Eight, the Issuers may exercise
their option under this Section 8.02 notwithstanding the prior exercise of
its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuers (as well as the Guarantors)
shall, subject to the satisfaction of the conditions set forth in Section
8.04 hereof, be released from their obligations under the covenants
contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16,
4.17 and Article Five hereof with respect to the outstanding Notes on and
after the date the conditions set forth below are satisfied (hereinafter,
"COVENANT DEFEASANCE"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes
49
hereunder (it being understood that such Notes shall not be deemed
outstanding for accounting purposes). For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Notes, the Issuers
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall
not constitute a Default or an Event of Default under Section 6.01 hereof,
but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Issuers' exercise
under Section 8.01 hereof of the option applicable to this Section 8.03,
subject to the satisfaction of the conditions set forth in Section 8.04
hereof, Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f) and 6.01(i) hereof
shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Issuers must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of,
premium, if any, and interest on the Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may
be, of such principal or installment of principal of, premium, if any,
or interest on the Notes;
(b) in the case of an election under Section 8.02 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the
Issuers have received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there
has been a change in the applicable federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders
of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(d) in the case of an election under Section 8.02 or 8.03 hereof, the
Issuers shall have delivered to the Trustee an Opinion of Counsel in
Canada reasonably acceptable to the Trustee confirming that Holders of
the outstanding Notes will not recognize income, gain or loss for
Canadian federal or provincial income tax purposes as a result of such
Legal Defeasance or Covenant Defeasance, as the case may be, and will be
subject to Canadian federal or provincial
50
income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance or Covenant
Defeasance, as the case may be, had not occurred;
(e) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion
of the proceeds of which will be used to defease the Notes pursuant to
this Article Eight concurrently with such incurrence) or insofar as
Sections 6.01(g) and 6.01(h) hereof are concerned, at any time in the
period ending on the 91st day after the date of such deposit;
(f) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under the Credit
Agreement (if then in effect) or any other material agreement or
instrument (other than this Indenture) to which Consoltex Group or any
of its Subsidiaries is a party or by which Consoltex Group or any of its
Subsidiaries is bound;
(g) the Issuers shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following deposit, the
trust funds shall not be subject to the effect of any Bankruptcy Law;
(h) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with
the intent of preferring the Holders over any other creditors of the
Issuers or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Issuers; and
(i) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05,
the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Issuers
or a Guarantor acting as Paying Agent) as the Trustee may determine, to the
Holders of such Notes of all sums due and to become due thereon in respect
of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Issuers shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuers from time to time upon the
Issuers' request any money or non-callable Government Securities held by it
as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized
51
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO ISSUERS.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuers, in trust for the payment of the principal of, premium, if
any, or interest on any Note and remaining unclaimed for two years after
such principal, and premium, if any, or interest has become due and payable
shall be paid to the Issuers on their request or (if then held by the
Issuers) shall be discharged from such trust: and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the
Issuers for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Issuers as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuers cause to be published once, in
THE NEW YORK TIMES and THE WALL STREET JOURNAL (national edition), notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be
repaid to the Issuers.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Issuers' obligations (as well as the
obligations of the Guarantors) under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.02 or
8.03 hereof, as the case may be; PROVIDED, HOWEVER, that, if the Issuers
make any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Issuers shall be
subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.
SECTION 8.08. SATISFACTION AND DISCHARGE OF INDENTURE.
This indenture shall, upon the receipt by the Trustee of an Officers'
Certificate, cease to be of further effect (except as to surviving rights
of registration of transfer or exchange of Notes herein expressly provided
for) and the Trustee, on demand of and at the expense of the Issuers, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(a) all Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their stated maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Issuers,
52
and the Issuers, in the case of (i), (ii) or (iii) above, have
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose (provided that (x) Article 12 does
not then prohibit the Issuers from making or causing to be made any
payments in respect of principal of or interest on the Notes and (y)
such deposit does not result in a breach or violation of, or constitute
a default under, this Indenture or any other material agreement or
instrument to which either Issuer is a party or by which it is bound) an
amount sufficient to pay and discharge the entire Indebtedness on such
Notes not theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest to the date of such deposit
(in the case of Notes which have become due and payable) or to the
stated maturity or redemption date, as the case may be;
(b) the Issuers have paid or caused to be paid all other sums payable
hereunder by the Issuers; and
(c) the Issuers have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuers to the Trustee under Section 7.07 and the
obligations of the Trustee under Section 8.09 and Section 8.06 shall
survive.
SECTION 8.09. APPLICATION OF TRUST MONEY
Subject to the provisions of Section 8.06, all money deposited with
the Trustee pursuant to Section 8.08 shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including any
Issuer acting as Paying Agent) thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee. Money so held in trust shall not be subject to the provisions of
Article 12 of this Indenture.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, Consoltex Group,
Consoltex USA, any Guarantor and the Trustee, as applicable, may amend or
supplement this Indenture or the Notes without the consent of any Holder of
a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Issuers' and the Guarantors'
obligations to the Holders of the Notes in the case of a merger or
consolidation pursuant to Article Five or Article 10 hereof;
(d) to provide for additional Guarantors or the release of Guarantors
pursuant to the terms of this Indenture;
53
(e) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect
the legal rights hereunder of any Holder; or
(f) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of Consoltex Group, Consoltex USA or any Guarantor,
as applicable, accompanied by a resolution of the Board of Directors of
Consoltex Group, Consoltex USA and each Guarantor, as the case may be,
authorizing the execution of any such amended or supplemental Indenture,
and upon receipt by the Trustee of the documents described in Section 11.04
hereof, the Trustee shall join with Consoltex Group, Consoltex USA and each
Guarantor, as the case may be, in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to
enter into any such amended or supplemental Indenture that adversely
affects its own rights, duties or immunities under this Indenture or
otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Consoltex Group, Consoltex USA, any Guarantor and the Trustee, as
applicable, may amend or supplement this Indenture (including Sections 4.10
and 4.15 hereof) and the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the
Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Notes), and, subject to Sections
6.04 and 6.07 hereof, any existing Default or Event of Default (other than
a Default or Event of Default in the payment of the principal of, premium,
if any, or interest on the Notes, except a payment default resulting from
an acceleration that has been rescinded) or compliance with any provision
of this Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange
offer for the Notes).
Upon the request of Consoltex Group, Consoltex USA or any Guarantor,
as the case may be, accompanied by a resolution of the Board of Directors
of Consoltex Group, Consoltex USA and each Guarantor, as the case may be,
authorizing the execution of any such amended or supplemental Indenture,
and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon
receipt by the Trustee of the documents described in Section 11.04 hereof,
the Trustee shall join with Consoltex Group, Consoltex USA and each
Guarantor, as the case may be, in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion, but shall
not be obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves
the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Issuers shall mail to the Holders of Notes affected thereby
a notice briefly describing the amendment, supplement or waiver. Any
failure of the Issuers to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such amended
or supplemental Indenture or waiver.
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Notwithstanding the foregoing, without the consent of each Holder affected,
an amendment or waiver may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption
of the Notes;
(c) reduce the rate of or change the time for payment of interest,
including default interest. on any Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes and a waiver of
the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or interest on the Notes;
(g) make any change in Article 12 hereof or any other provision
relating to subordination that adversely affects Holders of Notes; or
(h) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the
TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note
and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the
consent is not made on any Note. However, any such Holder of a Note or
subsequent Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds
every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Issuers in
exchange for all Notes may issue and the Trustee shall authenticate new
Notes that reflect the amendment, supplement or waiver.
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Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement
does not adversely affect the rights, duties, liabilities or immunities of
the Trustee. Neither Consoltex Group, Consoltex USA nor any Guarantor may
sign an amendment or supplemental Indenture until the Board of Directors of
Consoltex Group, Consoltex USA or such Guarantor, as applicable, approves
it.
ARTICLE 10
GUARANTEE
SECTION 10.01. GUARANTEE.
Each Guarantor, jointly and severally, hereby unconditionally
guarantees to each Holder of a Note authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, regardless of
the validity and enforceability of this Indenture, the Notes or the
obligations of the Issuers hereunder and thereunder, that: (a) the
principal of, premium, if any, and interest on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on the
Notes, if any, to the extent lawful, and all other obligations of the
Issuers to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and (b) in case of any extension of time of payment or renewal
of any Notes or any of such other Obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise. An Event of Default under this Indenture or the Notes shall
constitute an event of default under this Guarantee, and shall entitle the
Holders to accelerate the Obligations of each Guarantor hereunder in the
same manner and to the same extent as the Obligations of the Issuers. Each
Guarantor hereby agrees that its obligations hereunder shall be
unconditional, regardless of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Notes with respect to any
provisions hereof or thereof, the recovery of any judgment against the
Issuers, any action to enforce the same or any other circumstance that
might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Issuers, any right to require a proceeding first against
the Issuers, protest, notice and all demands whatsoever and covenants that
this Guarantee will not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to the Issuers or
any Guarantor, or any Custodian, Trustee, liquidator or other similar
official acting in relation to either of the Issuers or any Guarantor, any
amount paid to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall immediately be reinstated in full force and
effect. Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Obligations
guaranteed hereby until payment in full of all Obligations guaranteed
hereby. Each Guarantor further agrees that, as between the Guarantors, on
the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article Six hereof for the purposes of this Guarantee
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed
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hereby, and (y) in the event of any declaration of acceleration of such
Obligations as provided in Article Six hereof, such Obligations (whether or
not due and payable) shall forthwith become due and payable by Guarantors
for the purpose of this Guarantee. Notwithstanding the foregoing, in the
event that this Guarantee would constitute or result in a violation of any
applicable fraudulent conveyance or similar law of any relevant
jurisdiction, the liability of each Guarantor under this Guarantee shall be
reduced to the maximum amount permissible under such fraudulent conveyance
or similar law. In addition, in the event that this Guarantee would
constitute or result in a violation of any applicable corporate law, the
liability of each Guarantor under this Guarantee shall be reduced to the
maximum amount permissible under such applicable corporate law.
SECTION 10.02. EXECUTION AND DELIVERY OF GUARANTEE.
To evidence its Guarantee set forth in Section 10.01 hereof, each
Guarantor hereby agrees that this Indenture shall be executed on behalf of
each Guarantor by its President or one of its Vice Presidents and attested
to by an Officer.
SECTION 10.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) No Guarantor shall amalgamate or consolidate with or merge with or
into (whether or not such Guarantor is the surviving entity or Person),
another Person unless (i) the Person formed by or surviving any such
amalgamation, consolidation or merger (if other than such Guarantor)
assumes all the obligations of such Guarantor pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee, under the
Notes and this Indenture, (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists, and (iii) such
Guarantor, or the Person formed by or surviving any such amalgamation,
consolidation or merger, (A) shall have Consolidated Net Worth
(immediately after giving effect to such transaction but prior to any
purchase accounting adjustments from the transaction relating to good
will), not less than 90% of the Consolidated Net Worth of such Guarantor
immediately preceding the transaction and of the (B) Consoltex Group
shall be permitted to incur, immediately after giving effect to such
transaction, at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof. In case of any such amalgamation, consolidation,
merger, sale or conveyance and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Guarantee in
this Indenture and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by
the Guarantor, such successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor.
Notwithstanding the foregoing, (A) a Guarantor may amalgamate or
consolidate with or merge with or into either Issuer, PROVIDED, that the
surviving corporation (if other than either Issuer) shall expressly assume
by supplemental indenture complying with the requirements of this
Indenture, the due and punctual payment of the principal of, premium, if
any, and interest on all of the Notes, and the due and punctual performance
and observance of all the covenants and conditions of this Indenture to be
performed by the Issuers and (B) a Guarantor may amalgamate, consolidate
with or merge with or into any other Guarantor.
SECTION 10.04. RELEASES FOLLOWING SALE OF ASSETS.
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Upon a sale or other disposition of all or substantially all of the assets
of any Guarantor or all of the Capital Stock of any Guarantor to any person
that is not an Affiliate of Consoltex Group, by way of amalgamation,
merger, consolidation or otherwise, then such Guarantor (in the event of a
sale or other disposition of all of the Capital Stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor)
shall be released and relieved of its obligations under its Guarantee;
PROVIDED that (i) such sale or disposition is in compliance with Section
4.10 hereof and (ii) the Net Proceeds of any such sale or disposition are
applied in accordance with the applicable provisions of this Indenture.
Upon delivery by the Issuers to the Trustee of an Officers' Certificate to
the effect of the foregoing clauses (i) and (ii), the Trustee shall execute
any documents reasonably required in order to evidence the release of such
Guarantor from its Obligations under its Guarantee. Any Guarantor not
released from its Obligations under its Guarantee shall remain liable for
the full amount of principal of, premium, if any, and interest on the Notes
and for the other Obligations of the Issuers under this Indenture as
provided in this Article Ten.
SECTION 10.05. TRUSTEE TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Issuers and be then acting hereunder, the term
"Trustee" as used in this Article 10 shall in such case (unless the context
shall otherwise require) be construed as extending to and including such
Paying Agent within its meaning as fully and for all intents and purposes
as if such Paying Agent were named in this Article 10 in place of the
Trustee.
SECTION 10.06. SUBORDINATION OF GUARANTEE.
The Obligations of any Guarantor under its Guarantee pursuant to this
Article 10 shall be subordinated to any Senior Debt of such Guarantor on
the same basis as the Notes are subordinated to such Senior Debt of the
Issuers. For the purposes of the foregoing sentence, the Trustee and the
Holders shall have the right to receive and/or retain payments by any
Guarantor only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article 12
hereof.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA 318(c), the imposed duties shall
control.
SECTION 11.02. NOTICES.
Any notice or communication by the Issuers, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person
or mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next
day delivery, to the others' address:
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If to Consoltex Group, Consoltex USA or any Guarantor:
Consoltex Group Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
If to the Trustee:
First Trust National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
The Issuers, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next
day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be
so mailed to any person described in TIA 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder
or any defect in it shall not affect its sufficiency with respect to other
Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Issuers mail a notice or communication to Holders, they shall
mail a copy to the Trustee and each Agent at the same time.
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SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES.
Holders may communicate pursuant to TIA 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Issuers, the Guarantors, the Trustee, the Registrar and anyone else shall
have the protection of TIA 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by Consoltex Group, Consoltex USA
and/or any Guarantor to the Trustee to take any action under this
Indenture, Consoltex Group, Consoltex USA and/or such Guarantor, as the
case may be, shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with
the provisions of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
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SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee or shareholder of the Issuers or any
Guarantor, as such, shall have any liability for any obligations of the
Issuers or any Guarantor under the Notes, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for
issuance of the Notes.
SECTION 11.08. GOVERNING LAW.
The internal law of the State of New York shall govern and be used to
construe this Indenture and the Notes.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Issuers or any of their respective Subsidiaries or
of any other Person. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Issuers in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the retraining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and
shall in no way modify or restrict any of the terms or provisions hereof.
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ARTICLE 12
SUBORDINATION
SECTION 12.01. AGREEMENT TO SUBORDINATE.
The Issuers agree, and each Holder by accepting a Note agrees, that
the Obligations with respect to such Note are subordinated in right of
payment, to the extent and in the manner provided in this Article 12, to
the prior payment in full of all Senior Debt of the Issuers (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), and that the subordination is for the benefit of the holders
of such Senior Debt.
SECTION 12.02. CERTAIN DEFINITIONS.
For purposes of this Article 12, a distribution may consist of cash,
securities or other property, by set-off or otherwise. As used in this
Indenture and the Notes, the term "payment" of or with respect to
Obligations relating to the Notes and similar phrases include any payment
(including by issuance of additional securities of any kind), redemption,
acquisition, deposit, segregation, retirement, sinking fund payment and
defeasance of or with respect to any Obligations relating to the Notes. In
addition, the term "payment in full" meats either (i) the actual payment in
full of an Obligation or Indebtedness in cash or cash equivalents in the
currency in which the Obligation or Indebtedness is denominated or (ii) the
provision for such payment, PROVIDED that such provision shall be
satisfactory to holders of a majority in aggregate principal amount of each
issue of outstanding Senior Debt.
SECTION 12.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution to creditors of the Issuers in a
liquidation or dissolution of the Issuers or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to
the Issuers or their respective properties, an assignment for the benefit
of creditors or any marshalling of the assets and liabilities of the
Issuers:
(1) holders of Senior Debt of the Issuers shall be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt
(including interest after commencement of any such proceeding at the
rate specified in the applicable Senior Debt of the Issuers) before the
Holders shall be entitled to receive any payment or distribution with
respect to the Notes (except payments in or distributions of Permitted
Junior Securities); and
(2) until all Obligations with respect to Senior Debt of the Issuers
(as provided in subsection (1) above) are paid in full, any payment or
distribution to which Holders would be entitled but for this Article 12
shall be made to holders of Senior Debt (except payments in or
distributions of Permitted Junior Securities), as their interests may
appear.
SECTION 12.04. DEFAULT ON DESIGNATED SENIOR DEBT.
The Issuers may not make any payment or distribution to the Trustee or
any Holder upon or in respect of Obligations with respect to the Notes and
may not acquire from the Trustee or any Holder any Notes for cash,
securities or other property (other than Permitted Junior Securities),
until all principal and other Obligations with respect to the Senior Debt
have been paid in full, if:
62
(a) a default in the payment, including payments due by reason of an
acceleration, whether such acceleration resulted from a payment or
nonpayment default, of any Obligation in respect of Designated Senior
Debt occurs and is continuing beyond any applicable period of grace; or
(b) any other default occurs and is continuing with respect to
Designated Senior Debt that then permits holders of the Designated
Senior Debt as to which such default relates to accelerate its maturity
and the Trustee receives a written notice of such default (a "Payment
Blockage Notice") from the holders, or from the Representative of the
holders, of any such Designated Senior Debt. If the Trustee receives any
such notice, a subsequent notice received within 360 days thereafter
shall not be effective for purposes of this Section 12.04. No nonpayment
default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis
for a subsequent Payment Blockage Notice unless such default shall have
been cured or waived for a period of not less than 90 days; PROVIDED,
HOWEVER, that if a default arising from noncompliance with a financial
covenant contained in Designated Senior Debt exists and continues in
excess of 90 days, each 90-day period during which the default exists
and continues shall be deemed to be a separate default.
The Issuers may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(i) the date on which the default is cured or waived, or
(ii) in the case of a default referred to in clause (b) of this
Section 12.04, 179 days pass after the date on which the
applicable Payment Blockage Notice is received, unless the
maturity of any Designated Senior Debt has been accelerated,
if this Article 12 otherwise permits such payment, distribution or
acquisition at the time of such payment, distribution or acquisition.
SECTION 12.05. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
the Issuers shall promptly notify holders of Senior Debt of such
acceleration.
SECTION 12.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Notes at a time when such payment is
prohibited by this Article 12, such payment or distribution shall be held
by the Trustee or such Holder, in trust for the benefit of, and upon
written notice to the Trustee or any such Holder shall be paid forthwith
over and delivered to, the holders of Senior Debt as their interests may
appear or their Representative under the indenture or other agreement (if
any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to pay such Obligations, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 12, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into
this Indenture against the
63
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the
Issuers or any other Person money or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article 12, except if such payment
is made as a result of the willful misconduct or gross negligence of the
Trustee.
SECTION 12.07. NOTICE BY ISSUERS.
The Issuers shall promptly notify the Trustee and the Paying Agent of
any facts known to the Issuers that would cause a payment of any
Obligations with respect to the Notes to violate this Article 12, but
failure to give such notice shall not affect the subordination of the Notes
to the Senior Debt as provided in this Article 12.
SECTION 12.08. SUBROGATION.
After all Obligations with respect to Senior Debt have been paid in
full and until all Obligations with respect to the Notes have been paid in
full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders have been applied to the
payment of Senior Debt, to the extent permitted by law. A distribution made
under this Article 12 to holders of Senior Debt that otherwise would have
been made to Holders is not, as between the Issuers and Holders, a payment
by the Issuers on the Notes
SECTION 12.09. RELATIVE RIGHTS.
This Article 12 defines the relative rights of Holders and holders of
Senior Debt. Nothing in this Indenture shall:
(a) impair, as between the Issuers and Holders, the obligation of the
Issuers, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms;
(b) affect the relative rights of Holders and other creditors of the
Issuers, other than Holders' rights in relation to holders of Senior
Debt; or
(c) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders.
If the Issuers fail because of this Article 12 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event
of Default.
SECTION 12.10. SUBORDINATION MAY NOT BE IMPAIRED BY ISSUERS.
The rights and recourses of holders of Senior Debt to enforce
subordination shall remain in full force and effect without regard to and
shall not be impaired by (i) any act or failure to act on the part of a
holder of Senior Debt, unless such holder has agreed to change its rights
and recourses to enforce subordination, (ii) any extension or indulgence in
respect of any payment or prepayment, (iii) any amendment, modification or
waiver of, or addition or supplement to, or deletion from, or compromise,
release, consent or other action in respect of, any of the terms of any
Senior Debt, any agreement or
64
instrument creating or evidencing or any other agreement which may be made
relating to any Senior Debt, unless such holder has agreed to change its
rights and recourses to enforce subordination. (iv) any exercise or
non-exercise by a holder of Senior Debt of any right, power, privilege or
remedy under or in respect of any Senior Debt, or agreement or instrument
creating or evidencing any Senior Debt or any waiver in respect thereof and
(v) any merger or consolidation of any of the Issuers or any Subsidiary
thereof or any sale, lease or transfer of any or all of the assets of the
Issuers or any of their Subsidiaries to any person.
SECTION 12.11. PAYMENT, DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a payment or distribution is to be made or a notice given to
holders of any issue of Senior Debt, the payment or distribution may be
made and the notice given to the Representative, if any, for such issue.
Upon any payment or distribution of assets, securities or other
property of the Issuers referred to in this Article 12, the Trustee and the
Holders shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction or upon any certificate of such
Representative or of the liquidating trustee or agent or other Person
making any distribution to the Trustee or to the Holders for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other Indebtedness of the
Issuers, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article 12.
SECTION 12.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 12 or any other
provision of this Indenture, the Trustee shall not (a) be deemed to be a
fiduciary for any holder of Senior Debt or (b) be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent (other
than Consoltex Group and its Subsidiaries) may continue to make payments on
the Notes, without limiting the rights and remedies of holders of Senior
Debt hereunder (including, without limitation, the right to recover any
such payments from Holders), unless the Trustee shall have received at the
Corporate Trust Office of the Trustee at least five Business Days prior to
the date of such payment, written notice of facts that would cause the
payment of any Obligations with respect to the Notes to violate this
Article 12. Only the Issuers, a Representative or a holder of an issue of
Senior Debt that has no Representative may give the notice. Nothing in this
Article 12 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
SECTION 12.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may
be necessary or appropriate to effectuate the subordination as provided in
this Article 12, and appoints the Trustee the Holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to
in Section 6.09 hereof at least 30 days before the expiration of the time
to file such claim, so long as any Indebtedness is outstanding under the
Credit Agreement,
65
the agent (or, in the absence of such agent, the lender) under the Credit
Agreement is hereby authorized to file an appropriate claim for and on
behalf of the Holders of the Notes.
SECTION 12.14. AMENDMENTS.
The provisions of this Article 12 shall not be amended or modified so
as to affect adversely the rights of any holder of Senior Debt at the time
outstanding without the consent of such holders of a majority in aggregate
principal amount of each issue of outstanding Senior Debt.
[signatures on following pages]
66
SIGNATURES
Dated as of September 30, 1993 CONSOLTEX GROUP INC.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title:
Attest:
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇
Dated as of September 30, 1993 CONSOLTEX (USA) INC.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title:
Attest:
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇
Dated as of September 30, 1993 CONSOLTEX INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
Attest:
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇
Dated as of September 30, 1993 THE BALSON-HERCULES GROUP, LTD.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
Attest:
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇
67
Dated as of September 30, 1993 LINQ INDUSTRIAL FABRICS, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name:
Title:
Attest:
/s/▇▇▇▇▇ ▇▇▇▇▇▇
(SEAL)
Dated as of September 30, 1993 FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By:
Name:
Title:
Attest:
(SEAL)
Dated as of September 30, 1993 LINQ INDUSTRIAL FABRICS, INC.
By:
Name:
Title:
Attest:
(SEAL)
Dated as of September 30, 1993 FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By:/s/▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Title: Assistant Vice-President
Attest:
/s/ illegible signature (SEAL)
EXHIBIT A
(Face of Note)
11 % Series [A/B] Senior Subordinated Note due 2003
No. US$__________
CONSOLTEX GROUP INC.
CONSOLTEX (USA) INC.
promises to pay to
or registered assigns, the principal sum of
US Dollars on October 1, 2003.
Interest Payment Dates: April 1 and October 1, commencing April 1, 1994
Record Dates: March 15 and September 15, commencing March 15, 1994.
Dated: September 30, 1993
CONSOLTEX GROUP INC.
By:
Name:
Title:
By:
Name:
Title:
(SEAL)
CONSOLTEX (USA) INC.
By:
Name:
Title:
By:
Name:
Title:
(SEAL)
This is one of the Notes
referred to in the within-
mentioned Indenture:
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Signatory
(Back of Note)
11 % Series [A/B] Senior Subordinated Note due 2003
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository
or any such nominee to a successor Depository or a nominee of such
successor Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇) ("▇▇▇"), to either Issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or such other name as may be requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or
such other entity as may be requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.]{1}
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND
THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
ISSUERS THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) (W) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (X) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (Y) TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
ACT OR (Z) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND, WITH RESPECT TO CLAUSES (X)
AND (Z), BASED UPON AN OPINION OF COUNSEL IF EITHER ISSUER SO
REQUESTS), (2) TO EITHER ISSUER OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. This paragraph should be included only if the Note is issued in global
form.
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1. INTEREST; LIQUIDATED DAMAGES. Consoltex Group Inc., a Canadian
corporation ("Consoltex Group"), and Consoltex (USA) Inc., a New York
corporation ("Consoltex USA" and, together with Consoltex Group, the
"Issuers"), promise to pay interest on the principal amount of this Note at
a rate of 11 % per annum from the date this Note is issued until maturity,
which rate shall be subject to increase as specified in that certain
Registration Rights Agreement dated September 30, 1993 to which the Issuers
are party. The Issuers shall pay interest (including the additional
interest, if any, payable as Liquidated Damages pursuant to the
Registration Rights Agreement) semi-annually on April 1 and October 1 of
each year, commencing April I, 1994, or if any such day is not a Business
Day, on the next succeeding Business Day (each an "Interest Payment Date").
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance, to but not including the Interest Payment Date; PROVIDED that if
there is no existing Default in the payment of interest, and if this Note
is authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date. The Issuers shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue principal and premium, if any, from time to time on demand
at a rate that is 1% per annum in excess of the rate then in effect; they
shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest (without
regard to any applicable grace periods) at the same rate to the extent
lawful. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
2. METHOD OF PAYMENT. The Issuers shall pay interest and premium, if
any, on the Notes to the Persons who are registered Holders of Notes at the
close of business on the March 15 or September 15 next preceding the
Interest Payment Date, even if such Notes are cancelled after such record
date and on or before such Interest Payment Date, except that the Issuers
shall pay defaulted interest as provided in Section 2.12 of the Indenture.
The Notes shall be payable both as to principal and interest at the office
or agency of the Issuers maintained for such purpose or, at the option of
the Issuers, payment of interest may be made by check mailed to the Holders
at their addresses set forth in the register of Holders, except that
payment by wire transfer in same day funds may be required by the
Depository Trust Company. Such payment shall be in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, First Trust National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuers may change any Paying Agent or Registrar without
notice to any Holder. Consoltex Group or any of its Subsidiaries may act in
any such capacity.
4. INDENTURE. The Issuers issued the Notes under an Indenture dated as
of September 30, 1993 (the "Indenture") among the Issuers, the Guarantors
and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code Section
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The
Notes are unsecured obligations of the Issuers limited to US$120 million in
aggregate principal amount at any one time outstanding.
5. OPTIONAL REDEMPTION.
(a) Except as provided in paragraphs (b), (c) and (d) of this
paragraph 5, the Issuers shall not have the option to redeem the Notes
prior to October 1, 1998. Thereafter, the Issuers shall have the option to
redeem the Notes, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the
A-3
redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on October 1 of
the years indicated below:
YEAR PERCENTAGE
1998 ......................105.50%
1999 ......................103.67%
2000 ......................101.83%
2001 and thereafter........100.00%
(b) At any time on or before October 1, 1996, the Issuers may also
redeem up to 33-1/3% of the aggregate principal amount of Notes originally
issued under the Indenture with the net proceeds of a public offering of
Capital Stock (other than Disqualified Stock and a public offering pursuant
to a registration statement on Form S-8) of Consoltex USA within 90 days of
such public offering at a redemption price equal to 110% of the principal
amount of such Notes, plus accrued and unpaid interest to the redemption
date; PROVIDED that at least US$80 million in aggregate principal amount of
Notes remain outstanding immediately after giving effect to such
redemption.
(c) In addition, prior to October 1, 1998, the Issuers may, at their
option, redeem the Notes, in whole or in part, at any time within 180 days
after a Change of Control, upon not less than 30 nor more than 60 days'
notice to each Holder of Notes, at a redemption price equal to the sum of
(i) the principal amount thereof plus (ii) accrued and unpaid interest to
the date of redemption plus (iii) the Applicable Make-Whole Premium.
(d) The Issuers also may, at their option, redeem the Notes, as a
whole but not in part, at a redemption price equal to 100% of the principal
amount of the Notes, together with accrued and unpaid interest to the
redemption date, if the Issuers have become or would become obliged in
accordance with Section 4.17 of the Indenture to pay, on the next date on
which any amount would be payable under or with respect to the Notes, any
Additional Amounts as a result of any change in or amendment to the laws
(or any regulations promulgated thereunder) of Canada (or any political
subdivision or taxing authority thereof or therein), or any change in or
amendment to any official position regarding the application or
interpretation of such laws or regulations, which change or amendment is
announced or becomes effective on or after the date of the Offering
Memorandum.
6. MANDATORY REDEMPTION.
Except as set forth under paragraph 7 below, the Issuers are not
required to make mandatory redemption or sinking fund payments with respect
to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Issuers shall make
an offer (the "Change of Control Offer") to each Holder of Notes to
repurchase all or any part (equal to US$1,000 or an integral multiple
thereof) of such Holder's Notes pursuant to the offer described below at a
purchase price equal to 101 % of the aggregate principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase (the
"Change of Control Payment"). Holders of Notes that are subject to an offer
to purchase will receive a Change of Control Offer from the Issuers prior
to any related Change of Control
A-4
Payment Date and may elect to have such Notes purchased by completing the
form entitled "Option of Holder to Elect Purchase" appearing below or a
similar form acceptable to the Trustee.
(b) If the Issuers or any of their respective Subsidiaries consummate
any Asset Sales and the aggregate amount of Excess Proceeds exceeds $10
million, the Issuers shall commence an offer to all Holders of Notes (an
"Asset Sale Offer") pursuant to Sections 3.09 and 4.10 of the Indenture to
purchase the maximum principal amount of Notes that may be purchased out of
the Excess Proceeds based upon an offer price in cash in an amount equal to
100% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date fixed for the closing of such offer (the "Offered Price"),
in accordance with the procedures set forth in Section 3.09 of the
Indenture. To the extent that the aggregate principal amount of Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds
(a "Deficiency"), the Issuers (or such Subsidiary) may use such Deficiency
for general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall
be reset at zero; PROVIDED that the amount of 25 % Excess Proceeds shall
constitute Excess Proceeds for purposes of the first offer that is made
after the fifth anniversary of the original issuance of the Notes (the
"Fifth Anniversary"). Holders of Notes that are the subject of an offer to
purchase will receive an Asset Sale Offer from the Issuers prior to any
related purchase date and may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes or a similar form acceptable to the Trustee.
Notwithstanding the foregoing, in no event shall the Issuers use
Excess Proceeds to purchase more than 25 % of the original aggregate
principal amount of Notes on or prior to the Fifth Anniversary. If the
aggregate Excess Proceeds (disregarding any resetting to zero as described
above) resulting from Asset Sales occurring prior to the Fifth Anniversary,
less any Deficiencies resulting from any offers made on or prior to such
date, exceed 25 % of the original aggregate principal amount of the Notes
(such excess being the "25% Excess Proceeds"), then the Issuers shall make
an offer at the Offered Price in accordance with the foregoing provisions
(i) promptly after the Fifth Anniversary, in the event the amount of the
25% Excess Proceeds exceeds $10 million or (ii) at such time as the amount
of the 25% Excess Proceeds together with the Excess Proceeds received after
the Fifth Anniversary exceeds $10 million, in the event the amount of the
25% Excess Proceeds is less than $10 million.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in
denominations larger than US$1,000 may be redeemed in part but only in
whole multiples of US$1,000, unless all of the Notes held by a Holder are
to be redeemed. On and after the redemption date interest ceases to accrue
on Notes or portions thereof called for redemption.
9. SUBORDINATION. Each Holder by accepting a Note agrees that the
Indebtedness evidenced by each Note is subordinated in right of payment, to
the extent and in the manner provided in the Indenture, to the prior
payment in full of all Senior Debt (whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed or guaranteed), and that
the subordination is for the benefit of the holders of Senior Debt.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of US$1,000 and integral multiples of
US$1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and
A-5
the issuers may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Issuers need not exchange or register
the transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part. Also,
the Issuers need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the then
outstanding Notes, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding
Notes. Without the consent of any Holder of a Note, the Indenture or the
Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in
place of certificated Notes, to provide for the assumption of the Issuers'
or the Guarantors' obligations to Holders of the Notes in case of a merger
or consolidation pursuant to Article 5 or Article 10 of the Indenture, to
provide for additional Guarantors or the release of Guarantors pursuant to
the terms of the Indenture, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA.
13. DEFAULTS AND REMEDIES. An "Event of Default" occurs if: (i) the
Issuers default in the payment when due of interest on the Notes and the
default continues for a period of 30 days (whether or not prohibited by the
subordination provisions of the Indenture); (ii) the Issuers default in the
payment when due of principal of or premium, if any, on the Notes (whether
or not prohibited by the subordination provisions of the Indenture), (iii)
the Issuers fail to comply with Section 4.15 of the Indenture; (iv) the
Issuers or any Guarantor fail to observe or perform any other covenant,
warranty or other agreement in the Indenture or the Notes and such failure
continues for 60 days after written notice of such failure shall have been
given to the Issuers by the Trustee or to the Issuers and the Trustee by
Holders of at least 25 % in aggregate principal amount of the Notes then
outstanding; (v) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by either Issuer or any of
their respective Subsidiaries (or the payment of which is guaranteed by
either Issuer or any of their respective Subsidiaries) whether such
Indebtedness or guarantee now exists or is created after the date of the
Indenture, which default results in the acceleration of such Indebtedness
prior to its express maturity or shall constitute a default in the payment
of such issue of Indebtedness at final maturity and the principal amount of
any such Indebtedness, together with the principal amount of any other such
Indebtedness the maturity of which has been so accelerated or which has not
been paid at maturity, aggregates $10 million or more; (vi) Consoltex Group
or any of its Subsidiaries fails to pay final judgments aggregating in
excess of $10 million, which judgments are not satisfied or stayed for a
period of 60 consecutive days; (vii) certain events of bankruptcy or
insolvency occur with respect to the Issuers or any of their Subsidiaries;
or (viii) except as permitted by the Indenture, any Guarantee shall be held
in a judicial proceeding to be unenforceable or invalid or shall cease for
any reason to be in full force and effect or any Guarantor, or any Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations
under the Guarantee of such Guarantor and such condition shall have
continued for a period of 60 days after written notice of such failure
requiring the relevant Guarantor and the Issuers to remedy the same shall
have been given
A-6
to the issuers by the Trustee or to the Issuers and the Trustee by Holders
of at least 25% in aggregate principal amount of the Notes then
outstanding. If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25 % in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable
immediately: PROVIDED, that so long as any Indebtedness permitted to be
incurred pursuant to clause (a) of the second paragraph of Section 4.09 of
the Indenture shall be outstanding, such acceleration shall not be
effective until the earlier of (i) an acceleration under any such
Indebtedness or (ii) five Business Days after receipt by the Issuers and
the agent (or, in the absence of such agent, the lender) under the Credit
Agreement (so long as any Indebtedness is outstanding thereunder) of
written notice of such acceleration of the Notes. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events
of bankruptcy or insolvency with respect to the issuers or any of their
respective Subsidiaries, all outstanding Notes will become due and payable
without further action or notice. Holders may not enforce the Indenture or
the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines
that withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except
a continuing Default or Event of Default in the payment of interest on, or
the principal of, the Notes. The Issuers are required to deliver to the
Trustee annually a statement regarding compliance with the Indenture,
including with respect to any Restricted Payments made during such year,
the basis upon which the calculations required by Section 4.07 of the
Indenture were computed (which calculations may be based upon Consoltex
Group's latest financial statements), and the Issuers are required upon
becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
14. TRUSTEE DEALINGS WITH ISSUERS. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Issuers or their Affiliates, and may otherwise deal with
the Issuers or their Affiliates, as if it were not Trustee.
15. NO RECOURSE AGAINST OTHERS. No director, officer, employee or
shareholder of the Issuers or any Guarantor, as such, shall have any
liability for any obligations of the Issuers or any Guarantor under the
Notes, the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of Notes under the Indenture,
Holders of Transferred Restricted Securities shall have all the rights set
forth in the Registration Rights Agreement referred to above.
A-7
19. GUARANTEE. Payment of principal of, premium, if any, and interest on
the Notes, and interest on overdue principal and overdue interest, if
lawful, as well as all other obligations under the Notes and the Indenture,
is unconditionally guaranteed by each Guarantor on a joint and several
basis. Such guarantee is subordinated to the Senior Debt of such Guarantor
on the same basis as the Notes are subordinated to Senior Debt of the
Issuers.
20. ADDITIONAL AMOUNTS. The Issuers shall pay to Holders such
Additional Amounts as may become due and payable under Section 4.17 of the
Indenture.
21. INDENTURE AND REGISTRATION RIGHTS AGREEMENT. Each Holder, by
accepting a Note, agrees to be bound to all of the terms and provisions of
the Indenture and the Registration Rights Agreement, as the same may be
amended from time to time.
The Issuers will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Consoltex Group Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Attention: Corporate Secretary
A-8
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant
to Section 4.10 or 4.15 of the Indenture, check the box below:
( Section 4.10 ( Section 4.15
If you want to elect to have only part of the Note purchased by the
Issuers pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
principal amount you elect to have purchased: US$
Date:
(Sign exactly as your name appears on the Note)
Tax Identification No.:
Signature Guarantee.
Exhibit B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: 11% Series [A/B] Senior Subordinated Notes due 2003 of
Consoltex Group Inc. and Consoltex (USA) Inc.
This Certificate relates to US$ _______ principal amount of Notes held
in 2( __________ book-entry or * __________ definitive form by
____________________________________________ (the "Transferor").
The Transferor*:
( has requested the Trustee by written order to deliver in
exchange for its beneficial interest in the Global Note held by
the Depository a Note or Notes in definitive, registered form
of authorized denominations and in an aggregate principal
amount equal to its beneficial interest in such global Note
(or the portion thereof indicated above); or
( has requested the Trustee by written order to exchange or
register the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Notes and as provided in Section
2.06 of such Indenture, the transfer of this Note does not require
registration under the Securities Act (as defined below) because:*
( Such Note is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).
( Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act")) in reliance on Rule 144A (in satisfaction
of Section 2.06(a)(ii)(B), Section 2.06(b)(i) or Section 2.06(d)(i)(B)
of the ndenture) or pursuant to an exemption from registration in accordance
with Rule 904 under the Securities Act (in satisfaction of Section 2.06(a)(ii
(B) or Section 2.06(d)(i)(B) of the Indenture).
( Such Note is being transferred pursuant to an effective registration
statement under the Securities Act (in satisfaction of Section 2.06(a)(ii)
B)or Section 2.06(d)(i)(B) of the Indenture).
( Such Note is being transferred in accordance with Rule 144 under the
Securities Act or in reliance on and in compliance with an exemption from
the registration requirements of the Securities Act, other than Rule
144A or Rule 904 under the Securities Act. An Opinion of Counsel to the
effect that such transfer does not require registration under the
Securities Act shall be provided upon request by either Issuer
(in satisfaction of Section 2.06(s)(ii)(C) of the Indenture).
============================
[INSERT NAME OF TRANSFEROR]
By: =======================
Date: ======================
B-2
EXHIBIT 4.2
SUPPLEMENTAL INDENTURE
=======================================
CONSOLTEX GROUP INC.
CONSOLTEX (USA) INC.
CONSOLTEX INC.
THE BALSON-HERCULES GROUP, LTD.
LINQ INDUSTRIAL FABRICS, INC.
RAFYTEK, S.A. DE C. V.
CONSOLTEX MEXICO, S.A. DE C.V.
and
FIRST TRUST NATIONAL ASSOCIATION, TRUSTEE
SUPPLEMENTAL INDENTURE
Dated as of August 18, 1994
to
INDENTURE
Dated as of September 30, 1993
Supplementing and amending the Indenture dated
as of September 30, 1993, among CONSOLTEX GROUP INC., CONSOLTEX
(USA) INC., CONSOLTEX INC., THE BALSON-HERCULES GROUP, LTD.,
LINQ INDUSTRIAL FABRICS, INC. and
FIRST TRUST NATIONAL ASSOCIATION, Trustee
with respect to
11 % Series A Senior Subordinated Notes due 2003
11 % Series B Senior Subordinated Notes due 2003
2
SUPPLEMENTAL INDENTURE dated as of August 18, 1994 among Consoltex
Group Inc., a Canadian corporation ("Consoltex Group"), Consoltex
(USA) Inc., a New York corporation ("Consoltex USA" and, together
with Consoltex Group, the "Issuers"), Consoltex Inc., a Quebec
corporation, The Balson-Hercules Group, Ltd., a Rhode Island
corporation ("▇▇▇▇▇▇-▇▇▇▇▇▇▇▇"), LINQ Industrial Fabrics, Inc., a
Delaware corporation ("LINQ" and, together with Consoltex Inc. and
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, the "Original Guarantors), Consofex Mexico S.A.
de C.V., a corporation organized under the laws of Mexico
("Consoltex Mexico"), Rafytek, S.A. de C.V., a corporation
organized under the laws of Mexico ("Rafytek" and,together with
Consoltex Mexico, the "New Guarantors") and First Trust National
Association, as trustee (the "Trustee") with respect to the 11 %
Series A Senior Subordinated Notes due 2003 of the Issuers and the
11 %" Series B Senior Subordinated Notes due 2003 of the Issuers
issued in exchange therefor (collectively, the "Notes").
RECITALS
The Issuers, each of the Original Guarantors and the Trustee are
parties to an indenture dated as of September 30, 1993 (the
"Indenture"), pursuant to which the Issuers issued $120,000,000
aggregate principal amount of the Notes and the Original
Guarantors guaranteed all of the obligations of the Issuers
with respect to the Notes on a Subordinated basis.
Consoltex USA, Consoltex Mexico, ▇▇▇▇ Ma. Funtanet ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ Xacor Eljure, Jofuma, S.A. de C.V., Jordax, S.A.
de C.V., Propitecnica, S.A. de C.V. and Gruppo Marel, S.A. de
C.V. have entered into an agreement pursuant to which Consoltex
Mexico will acquire all of the equity interests of Rafytek
(the "Acquisition").
Upon consummation of the Acquisition, Consoltex Mexico and Rafytek
will be Significant Subsidiaries of Consoltex USA under the Indenture.
Section 4.13 of the Indenture provides that neither Issuer nor any
of their respective Subsidiaries shall acquire or form a Significant
Subsidiary, unless the Issuers (a) designate such Significant
Subsidiary as an Unrestricted Subsidiary pursuant to the terms of the
Indenture or (b) cause such Significant Subsidiary to execute and
deliver to the Trustee a supplemental indenture pursuant to which
such Significant Subsidiary shall guarantee all of the obligations
of the Issuers with respect to the Notes on a senior subordinated basis.
Each of the New Guarantors is duly authorized to execute and
deliver this Supplemental Indenture and to guarantee all of the
obligations of the Issuers with respect to the Notes on a senior
subordinated basis.
All the conditions and requirements necessary to make this Supplemental
Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein
expressed have been performed and fulfilled.
3
NOW, THEREFORE, for value received, it is agreed as follows:
SECTION 1.01. DEFINED TERMS. Capitalized terms used but not defined
herein shall have the respective meanings assigned to them in the
Indenture.
SECTION 1.02. ADDITIONAL GUARANTEES. Each of the New Guarantors
agrees that it shall guarantee all of the obligations of the Issuers
with respect to the Notes on a senior subordinated basis as provided
in Sections 4.13 and 10.01 of the Indenture. References in the Indenture
to the term "Guarantor" or "Guarantors" shall be deemed to include each
of the New Guarantors.
SECTION 1.03. CONSENT TO JURISDICTION. The New Guarantors each
irrevocably
(a) submits to the jurisdiction of any New York State or Federal
court sitting in New York City and any appellate court therefrom
in any action or proceeding arising out of or relating to this
Supplemental Indenture;
(b) agrees that all claims in respect of such action or proceeding
may be heard and determined in such New York State court or in such
Federal court;
(c) waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action
or proceeding;
(d) consents to the service of any and all process in any action or
proceeding by the mailing of copies of such process to such New
Guarantor, at its address maintained in the records of the Issuers;
and
(e) agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law.
Nothing in this Section 1.03 shall affect the right of any party hereto
or any Holder to serve legal process in any other manner permitted by
law or affect the right of any party hereto to bring any action or
proceeding against the Issuers or any Guarantor or their respective
property in the courts of other jurisdictions.
SECTION 1.04. CONDITION TO EFFECTIVENESS. This Supplemental Indenture
shall become effective on and as of the date counterparts hereof
shall have been executed and delivered by each of the parties hereto.
4
SECTION 1.05. RECITALS. The Trustee shall not be responsible in any
manner for the correctness of the recitals herein contained, all of
which are made by the Issuers or THE GUARANTORS. The Trustee makes no
representations as to the validity or sufficiency of this Supplemental
Indenture.
SECTION 1.06. CONFIRMATION. Except as expressly modified or amended
hereby, the Indenture continues in full force and effect and is in all
respects confirmed and preserved.
SECTION 1.07. COUNTERPARTS. This Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.
5
SECTION 1.08. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
Dated as of August 18 , 1994 CONSOLTEX GROUP INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title
Attest:
/s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dated as of August 18 , 1994 CONSOLTEX (USA) INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title
Attest:
/s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dated as of August 18 , 1994 CONSOLTEX INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title
Attest:
/s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
6
Dated as of August 18 , 1994 THE BALSON-HERCULES GROUP, LTD.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title
Attest:
/s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dated as of August 18 , 1994 LINQ INDUSTRIAL FABRICS, INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title
Attest:
/s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dated as of August 18 , 1994 RAFYTEK, S.A. DE C.V.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title
Attest:
/s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dated as of August 18 , 1994 CONSOLTEX MEXICO S.A. DE C.V.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title
Attest:
/s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
7
Dated as of August 18 , 1994 FIRST TRUST
NATIONAL ASSOCIATION, as Trustee
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Trust Officer
Attest:
__________________________
EXHIBIT 4.3
CONSENT IN RESPECT OF 11% SENIOR SUBORDINATED NOTES DUE 2003
============================================================
Execution Version
Consent
in Respect of
11% SENIOR SUBORDINATED NOTES DUE 2003
CONSENT (this "CONSENT") given, as of September 18, 2000, by Income
Series, Franklin Income Securities Fund and Franklin High Yield Fund
(together, "FRANKLIN"), collectively as the holders of a majority of the
outstanding 11% Senior Subordinated Notes due 2003 (the "NOTES") issued
pursuant to the Indenture dated September 30,1993 (the "FIRST LNDENTURE")
among Consoltex Inc., a corporation organized under the laws of New
Brunswick, Canada (formerly Consoltex Group Inc.) ("CONSOLTEX INC."),
Consoltex (USA) Inc., a New York corporation ("Consoltex USA" and together
with Consoltex Inc., the "Issuers"), The Balson-Hercules Group Ltd., a
Rhode Island corporation, LINQ Industrial Fabrics, Inc., a Delaware
corporation ("LINQ"), Rafytek, S.A. De C.V., a corporation organized under
the laws of Mexico ("RAFYTEK'), Consoltex Mexico, S.A. De C.V., a
corporation organized under the laws of Mexico ("Consoltex MEXICO" and
together with the Issuers, certain affiliates of the Issuers, LINQ and
Rafytek, the "Company"), and U.S. Bank Trust National Association
(formerly First Trust National Association), as Trustee.
WHEREAS, the Issuers, the original subsidiary guarantors (the
"ORIGINAL GUARANTORS") and the Trustee are parties to the First Indenture
pursuant to which the Issuers issued the Notes;
WHEREAS, the Issuers, the Original Guarantors, Rafytek, Consoltex
Mexico (together with the Original Guarantors and Rafytek, the
"Guarantors") and the Trustee are parties to the Supplemental Indenture,
dated August 18,1994 (together with the First Indenture, the "INDENTURE");
WHEREAS, Section 9.02 of the Indenture authorizes the Issuers, the
Guarantors and the Trustee, from time to time, with the consent of the
holders of not less than a majority in principal amount of
Notes and when authorized by appropriate action, to amend or supplement
the Indenture by supplemental indenture for the purpose therein set forth;
and
WHEREAS, Franklin holds not less than a majority in principal amount
ofNotes and hereby agrees to the amendment of ceTtain terms and
conditions of the Indenture as more fully set forth, herein.
NOW, THEREFORE, in consideration of the premises set forth herein,
the parties hereto agree as follows:
Section 1. CONSENT. Franklin hereby consents to the: (a) waiver (the
"Waivers") of the ISSUERS' OBLIGATIONS UNDER (I) SECTION 4.15 OF THE
INDENTURE, INCLUDING THE ISSUERS' OBLIGATION TO MAKE a change of Control
Offer (as defmed in the Indenture), (ii) Section 4.14 of the Indenture,
(iii) SECTION 4.11 of the Indenture, (iv) Section 4.10 of the Indenture
and (v) Section 4.07 of the Indenture, in each case, in connection with,
and only to the extent necessary to accomplish, the restructuring of the
COMPANY (the "RESTRUCTURING"), as shown on EXHIBIT 1 attached hereto and
(b) amendment of the Indenture, as set forth in EXHIBIT 2 attached hereto
(the "AMENDMENTS"). Franklin
agrees and acknowledges that, by the execution and delivery hereof, the
undersigned makes and provides the written Consent to the Restructuring,
the Waivers and the Amendments as permitted by Section 9.02 of the
Indenture. Franklin understands and agrees that (1) this Consent shall be
effective on, and remain in full force and effect from, the date this
Consent is accepted by the Issuers; (2) the Company will be deemed to have
accepted this Consent if, as and when this Consent is countersigned by the
Issuers; and (3) from and after the date hereof, this Consent shall be
IRREVOCABLE; PROVIDED, HOWEVER, that in no event shall this Consent be
effective unless American Industrial Partners Capital Fund lI, L.P. and
Les Gantiers Holding B.V. shall have contributed US$7,377,000 and
US$2,133,000 in cash, respectively, to Consoltex Holdings, Inc. on or
prior to September 30, 2000.
Section 2. REPRESENTATIONS AND WARRANTIES. Franklin represents and
warrants to the Company that: (a) it is the beneficial owner of the Notes
described on Exhibit 3 hereto; (b) it has the full power and authority to
give this Consent; (c) this Consent constitutes a valid and legally
binding obligation of Franklin, enforceable against Franklin in
accordance with its terms; (d) it need not give any notice to, make any
filing with or obtain any authorization, consent or approval of any
government or governmental agency in order to consummate the transactions
contemplated hereby; and (e) it has been given a reasonable opportunity
to ask questions relating to the Waivers, the Amendments and the
Restructuring and to receive answers thereto frozen the Issuers, and all
such questions have been adequately answered to the satisfaction of
Franklin. Each of the Issuers represents and warrants to Franklin that
each of them, as of the date hereof, is in compliance with the Indenture.
Section 3. LIMITED INDEMNITY. TO the extent of breaches of Section 2
hereof, Franklin shall indemnify each of the Company and the Trustee, and
their respective officers, directors, managers, shareholders, members,
partners, employees, agents and representatives (each, an "INDEMNITEE")
against any loss, liability, damage, settlement, cost, OX other expense,
including reasonable attorneys' fees in connection therewith, to which
any such Indemnitee may directly or indirectly become subj ect as a
result of any breach by Franklin of its representations or warranties set
forth in Section 2 hereof.
Section 4. MISCELLANEOUS. Franklin agrees, upon request, to execute
and deliver any additional documents deemed by the Issuers to be necessary
or desirable to perfect Franklin's Consent to the Waivers and Amendments
and to consummate the Restructuring. Every obligation of Franklin under
this Consent shall be binding upon Franklin's successors, assigns,
trustees in bankruptcy and other legal representatives. No amendment or
modification of any provision of this Consent shall be effective unless
the same shall be set forth in writing and signed by Franklin and the
Issuers. This Consent shall be construed in accordance with the laws of
the State of New York, without regard to principles of conflicts of law.
If it is determined by a court of competent jurisdiction that any
provision of this Consent is invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Consent. This Consent contains
the entire agreement among the Issuers and Franklin and supersedes all
prior arrangements or understanding with respect thereto- This Consent may
be executed in separate counterparts each of which shall be an original
and all of which taken together shall constitute one and the same
agreement.
[END OF PAGE - SIGNATURE PAGE FOLLOWS]
-2-
WITNESS WHEREOF, the parties have executed this
Consent as of the date first above written.
Franklin Custodian Funds, Inc., on
behalf of Income Series
By: /s/▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice-President
Franklin ▇▇▇▇▇▇▇▇▇ Variable Insurance
Products Trust,On behalf of Franklin
Income Securities Fund
By:/s/▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice-President
Franklin ▇▇▇▇▇▇▇▇▇ Investment Funds,
on behalf, of Franklin High Yield Fund
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇
Title: Portfolio Manager, V.P.
Accepted as of September __, 2000:
CONSOLTEX INC.
By: _____________________________
Name:
Title:
CONSOLTEX (USA) INC.
By: _____________________________
Name:
Title
WITNESS WHEREOF, the parties have
executed this Consent as of the date first above written.
Franklin Custodian Funds, Inc., on
behalf of Income Series
By:
Name:
Title:
Franklin ▇▇▇▇▇▇▇▇▇ Variable Insurance
Products Trust, On behalf of Franklin
Income Securities Fund
By:
Name:
Title:
Franklin ▇▇▇▇▇▇▇▇▇ Investment Funds,
on behalf, of Franklin High Yield Fund
By:
Name:
Title:
Accepted as of September __, 2000:
CONSOLTEX INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: V.P. Finance & CFO
CONSOLTEX (USA) INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: V.P. Finance & CFO
Corporate Structure Prior to the Restructuring
CHART OMITTED
Corporate Structure After the Restructuring
CHART OMITTED
1. AIP/CGI NB Acquisition Corp. ("NB ACQUISITION") exercises option to
purchase all of the outstanding multiple voting shares held by Les
Gantiers Holding B.V. ("LGH") for a purchase price equal to
US$12,164,529.72, which is offset against the unpaid balance of LGH
under the loan agreement with NB Acquisition in the amount of
US$9,041,53 8.51. NB Acquisition will pay US$3,122,991.22 to LGH in
the form of a demand promissory note (the "NOTE").
2. NB Acquisition will amalgamate (the "Amalgamation") with Consoltex
Inc., one of the issuers under the Indenture-Consoltex Inc., the
successor after the Amalgamation, will be a party to the Second
Supplemental Indenture, assuming all of the obligations of its
predecessor under the Indenture.
3. Consoltex Inc. will distribute all of the capital stock of Consoltex
USA to Consoltex Holdings, Inc. in a tax-free transfer.
4. Consoltex, Inc. pays LGH US$3,122,991.22 in cash in satisfaction of
the Note. LGH contributes US$2,133,000 to Consoltex Holdings, Inc.
("HOLDINGS") in exchange for a 10.5% convertible PIK debenture
maturing October 15, 2003. The capital structure of Holdings
immediately after the Restructuring, but prior to the implementation
of the management option plan of Holdings, will be as follows:
PRIOR TO RESTRUCTURING AFTER RESTRUCTUING
NO. % VOTING NO. % VOTING %
AIP 14,887,551.00 82.58% 48,67% 1,000.00 100.00% 100.00%
LGH 3,140,000.00 17.42% 51.33% - - -
TOTAL 118,027,551.00 100.00% 100.00% 1,000.00 100,00% 100.00%
5. Subsidiary mergers: (a) ▇▇▇▇ ▇▇▇, S.A. de C.V. merges with and into
Rafytek, S.A. de C.V. and (b) Marino Technologies de Mexico, S.A. de
C.V. sold to, and then merges with and into, Rafytek, S.A. de C.V.
DESCRIPTION OF NOTES
Name and Address of Registered Holder (Please include DTC Number):
Bank of New York
Mutual Funds Custody NY
▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇, ▇▇ ▇▇▇▇▇
DTC#: 0901
Held o behalf of Franklin ▇▇▇▇▇▇▇▇▇ funds nos. 309, 385 & 829
Certificate Number(s): -
Aggregate Principal Amount(s) Represented*: $67,700,000
Principal Amount(s) as to which Consents are given in the
Solicitation: $67,700,000
Total Principal amount of Notes
Aggregate Principal Amount Represented: $67,700,000
Principal Amount as to which Consent are given in the
Soliciation: $67,700,000
* Unless otherwise indicated in the column labeled "Principal
Amount(s) As to Which Consents Are Given in the Solicitation,"
you will be deemed to have delivered Consent with respect to the
entire aggregate principal amount represented by the Notes indicated
in the column labeled "Aggregate Principal Amount(s) Represented."
EXHIBIT 4.4
SECOND SUPPLEMENTAL INDENTURE
======================================
CONSOLTEX INC.
CONSOLTEX (USA) INC.
THE BALSON-HERCULES GROUP LTD.
LINQ INDUSTRIAL FABRICS, INC.
RAFYTEK, S.A. DE C.V.
CONSOLTEX MEXICO, S.A. DE C.V.
AND
U.S. BANK TRUST NATIONAL ASSOCIATION, TRUSTEE
SECOND SUPPLEMENTAL INDENTURE
DATED AS OF SEPTEMBER 29, 2000
SECOND SUPPLEMENTAL INDENTURE
This SECOND SUPPLEMENTAL INDENTURE, (the "SECOND
SUPPLEMENTAL INDENTURE"), dated as of September 29, 2000, is made
by and among Consoltex Inc., a corporation organized under the
laws of New Brunswick, Canada and successor after the
amalgamation with AIP/CGI NB Acquisition Corp.,
Consoltex (USA) Inc., a New York corporation ("CONSOLTEX USA" and
together with Consoltex Inc., the "ISSUERS"), The Balson-Hercules
Group Ltd., a Rhode Island corporation, LINQ Industrial
Fabrics, Inc., a Delaware corporation ("LINQ"), Rafytek,
S.A. de C.V., a corporation organized under the laws of
Mexico ("RAFYTEK"), Consoltex Mexico, S.A. de C.V., a
corporation organized under the laws of Mexico ("CONSOLTEX
MEXICO" and together with the Issuers, certain affiliates of
the Issuers, LINQ and Rafytek, the "COMPANY"), and U.S. Bank
Trust National Association (formerly First Trust National
Association) (the "TRUSTEE"), governing the 11% Notes due 2003
of the Issuers (the "NOTES").
WHEREAS, the Issuers, the original subsidiary
guarantors (the "ORIGINAL GUARANTORS") and the Trustee are
parties to the Indenture, dated September 30, 1993 (the "
FIRST INDENTURE"), pursuant to which the Issuers
issued the Notes;
WHEREAS, the Issuers, the Original Guarantors, Rafytek,
Consoltex Mexico (together with the Original Guarantors
and Rafytek, the "GUARANTORS") and the Trustee are parties
to the Supplemental Indenture, dated August 18, 1994 (together
with the First Indenture, the "INDENTURE");
WHEREAS, Section 9.02 of the Indenture authorizes the
Issuers, the Guarantors and the Trustee, from time to time,
with the consent of the Holders of not less than a majority
in principal amount of Notes and when authorized by appropriate
action, to amend or supplement the Indenture by supplemental
indenture for the purpose therein set forth;
WHEREAS, in accordance with Section 9.02 of the
Indenture, the Trustee, the Issuers, the Guarantors and
the Holders of not less than a majority in principal amount of
the Notes as of the date hereof have agreed to amend or
supplement certain terms and conditions of the Indenture to
permit the restructuring of the Company and Consoltex
Holdings, Inc. ("CHI") as more fully set forth herein; and
WHEREAS, the Issuers and the Guarantors, by appropriate
corporate action, have determined to amend and supplement
the provisions of the Indenture in the manner described herein
and have taken all acts necessary to duly authorize, execute
and deliver this Second Supplemental Indenture and to constitute
this Second Supplemental Indenture a legal, valid and
binding agreement of each of the Issuers and the Guarantors
enforceable against each of them in accordance with the terms
herein.
NOW, THEREFORE, in consideration of the premises set forth
herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1. GENERAL. For all purposes of this Second
Supplemental Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) capitalized terms used herein without definition
shall have the meanings specified in the Indenture;
(b) all references herein to Articles and
Sections, unless otherwise specified, refer to the corresponding
Articles and Sections of this Second Supplemental Indenture and,
where so specified, to the Articles and Sections of the
Indenture as amended and supplemented by this Second Supplemental
Indenture; and
(c) the terms "hereof," "herein," "hereby," "hereto,"
"hereunder" and "herewith" refer to this Second Supplemental
Indenture.
ARTICLE 2
AMENDMENTS TO INDENTURE
Section 1.c. AMENDMENT OF SECTION 1.01.
(a) Section 1.1 of the Indenture is hereby amended
by deleting the definition of "GAAP" and replacing it in
its entirety with the following:
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of
the accounting profession, which are in effect from time to time.
(b) Section 1.1 of the Indenture is hereby amended by
inserting immediately after the definition of
"CHANGE OF CONTROL" and immediately before the definition of
"CONSOLIDATED NET INCOME" the following:
"CHI" means Consoltex Holdings, Inc., a Delaware
corporation.
(c) Section 1.1 of the Indenture is hereby amended
by deleting the definition of "CHANGE OF CONTROL" and replacing
it in its entirety with the following:
"CHANGE OF CONTROL" means the occurrence of any
of the following:
(i) the sale, lease or transfer, in one or a
series of related transactions, of all or substantially all
of the assets of CHI to any person or group(as such term is
used in Section 13(d)(3) of the Exchange Act)(other than the
Principals or their Related Parties);
(ii) the adoption of a plan relating to the
liquidation or dissolution of CHI; or
(iii) the acquisition by any person or group
as such term is used in Section 13(d)(3) of the Exchange Act)
(other than the Principals and their Related Parties) of direct
or indirect majority in interest (more than 50%) of the voting
power of the voting stock of CHI by way of amalgamation,
merger or consolidation or otherwise.
(d) Section 1.1 of the Indenture is hereby amended
by deleting the definition of "PRINCIPALS" and replacing
it in its entirety with the following:
"PRINCIPALS" means American Industrial Partners Capital
Fund II, L.P., a Delaware limited partnership, and its Affiliates.
(e) Section 1.1 of the Indenture is hereby amended
by inserting immediately after the definition of "SIGNIFICANT
SUBSIDIARY" and immediately before the definition of
"SUBSIDIARY" the following:
"SPECIAL CONTRIBUTION" means the cash
contribution of US$11,587,000 from CHI to any of the Issuers,
US$9,464,000 of which was contributed to CHI by American
Industrial Partners Capital Fund II, L.P., and US$2,123,000
of which was contributed to CHI by Les Gantiers Holding B.V.
Section 2.e. AMENDMENT OF SECTION 4.07. Section 4.07 of the
Indenture is hereby amended by inserting in subsection
(c) thereof immediately preceding the comma ending
"CLAUSE (Y)" the following:
; PROVIDED, HOWEVER, that the Special Contribution shall
not be included in the calculation under this clause (y).
Section 3.e. AMENDMENT OF SECTION 4.11. Section 4.11 of
the Indenture is hereby amended by deleting "PROVISO
(III)" and replacing it in its entirety with the following:
(iii) the payment of reasonable fees to the
Principals and their Affiliates in connection with
consulting, management, investment banking or financial
advisory services rendered to the Issuers or their
respective Subsidiaries in an aggregate amount not to
exceed US$1.4 million per annum,
Section 4.e. AMALGAMATION OF CONSOLTEX INC. AND AIP/CGI NB
ACQUISITION CORP. Immediately upon the effectiveness of the
amalgamation of Consoltex Inc. and AIP/CGI NB Acquisition Corp.
(the "AMALGAMATION"), Consoltex Inc., the successor after the
Amalgamation, hereby assumes all of the obligations of its
predecessor hereunder and under the Indenture and the Notes.
ARTICLE 3
MISCELLANEOUS
Section 1.e. EFFECTIVENESS. This Second Supplemental
Indenture shall become effective on and as of the date the
counterparts hereto shall have been executed and delivered
by each of the parties hereto.
Section 2.e. GOVERNING LAW. This Second Supplemental
Indenture shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts
to be performed entirely in that State.
Section 3.e. COUNTERPARTS. This Second Supplemental
Indenture may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the
same instrument.
Section 4.e. SEVERABILITY. In case any provision in
this Second Supplemental Indenture shall be invalid, illegal
or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 5.e. RATIFICATION. Except as expressly
amended or supplemented hereby, each provision of the Indenture
shall remain in full force and effect and, as amended or
supplemented hereby, the Indenture is in all respects agreed
to, ratified and confirmed by each of the Issuers, the Guarantors
and the Trustee.
Section 6.e. TRUSTEE. The Trustee accepts the trusts
created by the Indenture, as supplemented by this Second
Supplemental Indenture, and agrees to perform the same upon
the terms and conditions of the Indenture, as amended and
supplemented by this Second Supplemental Indenture.
Section 7.e. RECITALS. The recitals contained herein
shall be taken as statements of the Issuers and the Guarantors,
and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or
sufficiency of this Second Supplemental Indenture.
Section 8.e. REAFFIRMATION. The parties hereto make
and reaffirm as of the date of execution of this Second
Supplemental Indenture all of their respective representations,
covenants and agreements set forth in the Indenture.
Section 9.e. ASSIGNMENT. All covenants and agreements of
the Issuers, the Guarantors and the Trustee in this Second
Supplemental Indenture shall bind each of their respective
successors and assigns, whether so expressed or not.
Section 10.e. THIRD-PARTY BENEFICIARIES. Nothing in
this Second Supplemental Indenture, express or implied, shall
give to any Person, other than the parties hereto and their
successors under the Indenture and the Holders of the Notes,
any benefit or any legal or equitable right, remedy
or claim under the Indenture.
Section 11.e. TRUST INDENTURE ACT. If any provisions
hereof limit, qualify or conflict with a provision of the Trust
Indenture Act of 1939, as may be amended from time to time
(the "TIA"), required under the TIA to be a part of and
govern this Second Supplemental Indenture, the latter
provision shall control. If any provision hereof modifies
or excludes any provision of the TIA that may be so
modified or excluded, the latter provision shall be deemed to
apply to this Second Supplemental Indenture as so modified or
excluded, as the case may be.
Section 12.e. UNITY. All provisions of this Second
Supplemental Indenture shall be deemed to be incorporated in,
and made a part of, the Indenture; and the Indenture, as
amended and supplemented by this Second Supplemental
Indenture, shall be read, taken and construed as one and the
same instrument.
[END OF PAGE]
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused
this Second Supplemental Indenture to be duly executed as
of the day and year first above written.
CONSOLTEX INC.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:V-P Finance and CFO
CONSOLTEX (USA) INC.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:V-P Finance and CFO
THE BALSON-HERCULES GROUP, LTD.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:V-P Strategic Planning
LINQ INDUSTRIAL FABRICS, INC.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:V-P, Strategic Planning
RAFYTEK, S.A. DE C.V.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Director
CONSOLTEX MEXICO, S.A. DE C.V.
By:/s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name:C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:Attorney-in-Fact
U.S. BANK TRUST NATIONAL ASSOCIATION
By:
Name:
Title:
CONSOLTEX MEXICO, S.A. DE C.V.
By:
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇
Name:▇▇▇▇ ▇. ▇▇▇▇▇
Title:Asst V-P
EXHIBIT 4.5
EXECUTION VERSION
CONSOLTEX HOLDINGS, INC.
CONSOLTEX INC.
CONSOLTEX (USA) INC.
THE BALSON-HERCULES GROUP LTD.
LINQ INDUSTRIAL FABRICS, INC.
RAFYTEK, S.A. DE C.V.
CONSOLTEX MEXICO, S.A. DE C.V.
AND
U.S. BANK TRUST NATIONAL ASSOCIATION, TRUSTEE
____________________________________
THIRD SUPPLEMENTAL INDENTURE
DATED AS OF APRIL 12, 2001
____________________________________
THIRD SUPPLEMENTAL INDENTURE
This THIRD SUPPLEMENTAL INDENTURE, (the "THIRD SUPPLEMENTAL
INDENTURE"), dated as of April 12, 2001, is made by and among Consoltex
Holdings, Inc., a Delaware corporation and the parent of the Issuers (the
"NEW GUARANTOR"), Consoltex Inc., a corporation organized under the laws
of New Brunswick, Canada and successor after the amalgamation with AIP/CGI
NB Acquisition Corp., Consoltex (USA) Inc., a New York corporation
("CONSOLTEX USA" and together with Consoltex Inc., the "ISSUERS"), The
Balson-Hercules Group Ltd., a Rhode Island corporation, LINQ Industrial
Fabrics, Inc., a Delaware corporation ("LINQ"), Rafytek, S.A. de C.V., a
corporation organized under the laws of Mexico ("RAFYTEK"), Consoltex
Mexico, S.A. de C.V., a corporation organized under the laws of Mexico
("CONSOLTEX MEXICO"), and U.S. Bank Trust National Association (formerly
First Trust National Association) (the "TRUSTEE"), governing the 11% Notes
due 2003 of the Issuers (the "NOTES").
WHEREAS, the Issuers, the original subsidiary guarantors (the
"ORIGINAL GUARANTORS") and the Trustee are parties to the Indenture, dated
September 30, 1993 (the " FIRST INDENTURE"), pursuant to which the Issuers
issued the Notes;
WHEREAS, the Issuers, the Original Guarantors, Rafytek, Consoltex
Mexico (together with the Original Guarantors and Rafytek, the
"GUARANTORS") and the Trustee are parties to the Supplemental Indenture,
dated August 18, 1994, and the Second Supplemental Indenture, dated
September 29, 2000 (together with the First Indenture, the "INDENTURE");
WHEREAS, Section 9.01(d) of the Indenture authorizes the Issuers, the
Guarantors and the Trustee, from time to time, without the consent of any
Holder, to amend or supplement the Indenture by supplemental indenture to
provide for additional Guarantors;
WHEREAS, in accordance with Section 9.01(d) of the Indenture, the
Trustee, the Issuers, and the Guarantors have agreed to add the New
Guarantor as a Guarantor under the Indenture; and
WHEREAS, the Issuers and the Guarantors, by appropriate corporate
action, have determined to amend and supplement the provisions of the
Indenture in the manner described herein and have taken all acts necessary
to duly authorize, execute and deliver this Third Supplemental Indenture
and to constitute this Third Supplemental Indenture a legal, valid and
binding agreement of each of the Issuers and the Guarantors enforceable
against each of them in accordance with the terms herein.
NOW, THEREFORE, in consideration of the premises set forth herein, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1. GENERAL. For all purposes of this Third Supplemental
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(a) capitalized terms used herein without definition shall have
the meanings specified in the Indenture;
(b) all references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections
of this Third Supplemental Indenture and, where so specified, to the
Articles and Sections of the Indenture as amended and supplemented by
this Third Supplemental Indenture; and
(c) the terms "hereof," "herein," "hereby," "hereto," "hereunder"
and "herewith" refer to this Third Supplemental Indenture.
Section 1.2. ADDITIONAL GUARANTEE. The New Guarantor agrees that it
shall guarantee all of the obligations of the Issuers with respect to the
Notes on a senior subordinated basis as provided in Section 10.01 of the
Indenture. References in the Indenture to the term "Guarantor" or
"Guarantors" shall be deemed to include the New Guarantor.
Section 1.3. CONSENT TO JURISDICTION. The New Guarantor irrevocably
(a) submits to the jurisdiction of any New York State or Federal
court sitting in New York City and any appellate court therefrom in
any action or proceeding arising out of or relating to this Third
Supplemental Indenture;
(b) agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State court or
in such Federal court;
(c) waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding;
(d) consents to the services of any and all process in any action
or proceeding by the mailing of copies of such process to the New
Guarantor, at its address maintained in the records of the Issuers;
and
(e) agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law.
Nothing in this Section 1.3 shall affect the right of any party hereto or
any Holder to serve legal process in any other manner permitted by law or
affect the right of any party hereto to bring any action or proceeding
against the Issuers or any Guarantor or their respective property in the
courts of other jurisdictions.
ARTICLE 2
MISCELLANEOUS
Section 2.1. EFFECTIVENESS. This Third Supplemental Indenture shall
become effective on and as of the date the counterparts hereto shall have
been executed and delivered by each of the parties hereto.
Section 2.2. GOVERNING LAW. This Third Supplemental Indenture shall
be governed by and construed in accordance with the laws of the State of
New York applicable to contracts to be performed entirely in that State.
Section 2.3. COUNTERPARTS. This Third Supplemental Indenture may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument.
Section 2.4. SEVERABILITY. In case any provision in this Third
Supplemental Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 2.5. RATIFICATION. Except as expressly amended or
supplemented hereby, each provision of the Indenture shall remain in full
force and effect and, as amended or supplemented hereby, the Indenture is
in all respects agreed to, ratified and confirmed by each of the Issuers,
the Guarantors and the Trustee.
Section 2.6. TRUSTEE. The Trustee accepts the trusts created by the
Indenture, as supplemented by this Third Supplemental Indenture, and agrees
to perform the same upon the terms and conditions of the Indenture, as
amended and supplemented by this Third Supplemental Indenture.
Section 2.7. RECITALS. The recitals contained herein shall be taken
as statements of the Issuers and the Guarantors, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Third Supplemental Indenture.
Section 2.8. REAFFIRMATION. The parties hereto make and reaffirm as
of the date of execution of this Third Supplemental Indenture all of their
respective representations, covenants and agreements set forth in the
Indenture.
Section 2.9. ASSIGNMENT. All covenants and agreements of the Issuers,
the Guarantors and the Trustee in this Third Supplemental Indenture shall
bind each of their respective successors and assigns, whether so expressed
or not.
Section 2.10. THIRD-PARTY BENEFICIARIES. Nothing in this Third
Supplemental Indenture, express or implied, shall give to any Person, other
than the parties hereto and their successors under the Indenture and the
Holders of the Notes, any benefit or any legal or equitable right, remedy
or claim under the Indenture.
Section 2.11. TRUST INDENTURE ACT. If any provisions hereof limit,
qualify or conflict with a provision of the Trust Indenture Act of 1939, as
may be amended from time to time (the "TIA"), required under the TIA to be
a part of and govern this Third Supplemental Indenture, the latter
provision shall control. If any provision hereof modifies or excludes any
provision of the TIA that may be so modified or excluded, the latter
provision shall be deemed to apply to this Third Supplemental Indenture as
so modified or excluded, as the case may be.
Section 2.12. UNITY. All provisions of this Third Supplemental
Indenture shall be deemed to be incorporated in, and made a part of, the
Indenture; and the Indenture, as amended and supplemented by this Third
Supplemental Indenture, shall be read, taken and construed as one and the
same instrument.
[END OF PAGE]
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed as of the day and year first
above written.
CONSOLTEX HOLDINGS, INC.
By: ____________________________________
Name:
Title:
CONSOLTEX INC.
By: ____________________________________
Name:
Title:
CONSOLTEX (USA) INC.
By: ____________________________________
Name:
Title:
THE BALSON-HERCULES GROUP LTD.
By: ____________________________________
Name:
Title:
LINQ INDUSTRIAL FABRICS, INC.
By: ____________________________________
Name:
Title:
RAFYTEK, S.A. DE C.V.
By: ____________________________________
Name:
Title:
CONSOLTEX MEXICO, S.A. DE C.V.
By: ____________________________________
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION
By: ____________________________________
Name:
Title:
EXHIBIT 4.6
STOCKHOLDERS AGREEMENT
==========================
[EXECUTION COPY]
STOCKHOLDERS AGREEMENT
dated as of September 9, 1999
among
AIP/CGI NB ACQUISITION CORP.
CONSOLTEX GROUP INC.,
LES GANTIERS HOLDING B.V.,
LES GANTIERS LIMITED,
and
THE BIG SKY TRUST
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS........................................ 1
1.1 DEFINED TERMS...................................... 1
1.2 OTHER DEFINITIONAL PROVISIONS; INTERPRETATION...... 6
SECTION 2. REPRESENTATIONS AND WARRANTIES...................... 6
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY....... 6
2.2 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS...7
2.3 REPRESENTATIONS AND WARRANTIES OF LGH AND LGL........7
SECTION 3. CORPORATE GOVERNANCE............................... 10
3.1 BOARD OF DIRECTORS................................. 10
3.2 BOARD COMMITTEES................................... 11
3.3 FINANCIAL STATEMENTS AND OTHER INFORMATION......... 11
3.4 AFFIRMATIVE COVENANTS.............................. 12
3.5 NEGATIVE COVENANTS................................. 13
3.6 ARTICLES OF INCORPORATION AND BY-LAWS.............. 15
SECTION 4. TRANSFERS RESTRICTIONS; OPTION ON LGH SECURITIES... 15
4.1 TRANSFER OR CONVERSION OF MULTIPLE VOTING SHARES... 15
4.2 EFFECT OF VOID TRANSFERS OR CONVERSIONS............ 16
4.3 LEGEND ON SECURITIES............................... 16
4.4 TRANSFERS OF INTERESTS IN LGH...................... 16
4.5 OPTION TO PURCHASE LGH SECURITIES.................. 16
SECTION 5. MISCELLANEOUS...................................... 18
5.1 EFFECTIVENESS AND TERMINATION...................... 18
5.2 ADDITIONAL SECURITIES SUBJECT TO AGREEMENT......... 18
5.3 INJUNCTIVE RELIEF.................................. 18
5.4 OTHER AGREEMENTS................................... 18
5.5 AMENDMENTS......................................... 19
5.6 SUCCESSORS......................................... 19
5.7 NOTICES............................................ 19
5.8 INTEGRATION ........................................20
5.9 SEVERABILITY....................................... 20
5.10 COUNTERPARTS...................................... 20
5.11 GOVERNING LAW..................................... 20
5.12 JURISDICTION ......................................20
THIS STOCKHOLDERS AGREEMENT (this "AGREEMENT"), is made
as of September 9, 1999 among Consoltex Group Inc., a corporation
subject to the laws of Canada (the "COMPANY"), AIP/CGI NB
Acquisition Corp., a corporation subject to the laws of New
Brunswick ("AIP"), Les Gantiers Holding B.V., a company subject
to the laws of the Netherlands ("LGH"), Les Gantiers Limited, a
company incorporated under the laws of Jersey ("LGL"), and The
Big Sky Trust, a trust established under the laws of the Island
of Jersey (the "TRUST").
W I T N E S S E T H :
WHEREAS, AIP and the Company are entering into a
certain letter agreement of even date herewith
the "OFFER AGREEMENT") pursuant to which AIP will agree,
subject to the conditions set forth therein, to make a
tender offer for all of the outstanding Subordinate Voting Shares
the "TENDER OFFER"); and
WHEREAS, AIP requires, as a condition to its execution
of the Offer Agreement that it enter into this Agreement with the
Company, LGH, LGL, and the Trust, and in light of the substantial
direct and indirect benefits that each expects to realize as a
result of the Tender Offer, such other persons desire to enter
into this Agreement with AIP.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained, the parties hereto
agree as follows:
SECTION 1.DEFINITIONS
1.1* DEFINED TERMS. As used in this Agreement, terms
defined in the headings and the recitals shall have their
respective assigned meanings, and the following capitalized
terms shall have the meanings ascribed to them below:
"AFFILIATE" means, with respect to any Person,
any Person that directly or indirectly controls, is controlled
by or is under common control with, such Person. For purposes
of the foregoing definition, "control" shall have the meaning
specified in Rule 12b-2 under the Exchange Act.
"AIP LOAN AGREEMENT" means the Loan Agreement to be
entered into between LGH and AIP, dated as of the Closing Date.
"BOARD OF DIRECTORS" means, unless the context
otherwise indicates, the Board of Directors of the Company, as
the same shall from time to time be constituted.
"CAPITAL EXPENDITURES" means all expenditures
(consistent with past practice and established Company policy)
for any capital or fixed assets or improvements, or for
replacements, substitutions or additions thereto
(including the principal portion of capitalized lease
obligations but excluding expenditures which are fully expensed
in the period incurred in accordance with GAAP consistently
applied).
"COATTAIL AGREEMENT" means the Trust Agreement made
as of March 22, 1993 among LGH, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Company and Montreal Trust Company,
as amended.
"CLAIRVEST LOAN AGREEMENT" means that certain Loan
Agreement among LGH, LGL, RHW and Clairvest Group Inc., dated
January 13, 1997, and related security agreements, as amended.
"CHANGE OF CONTROL" means (a) a "change of control"
under the Credit Agreement or (b) a "change of control" under
the Indenture; PROVIDED that for purposes of Section 4.5(e)
ii) hereof, Change of Control shall not include any event
(i) resulting from ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇ gross negligence
or willful misconduct in the performance of his duties as a
director or officer of the Company or any of its Subsidiaries or
(ii) resulting from actions taken by LGH, LGL or the Trust in
material violation of this Agreement.
"CLOSING DATE" means the date the Subordinate Voting
Shares are taken up and paid for pursuant to the Tender Offer.
"COMPANY OPTION" means the option issued by the Company,
granting AIP the right to purchase Subordinate Voting Shares of
the Company pursuant to that certain Option Agreement of even
date herewith.
"COMPANY SALE" means the consummation of a transaction,
whether in a single transaction or in a series of related and
substantially contemporaneous transactions, with a Third Party or
a group of Third Parties that are Affiliates of each other
pursuant to which such party or parties (a) acquire
(whether by merger, consolidation, or transfer or issuance of
capital stock or otherwise) capital stock of the Company (or
any surviving or resulting corporation) possessing the voting
power to elect a majority of the board of directors of the
Company (or such surviving or resulting corporation) or
(b) acquire assets constituting all or substantially all of
the assets of the Company and its Subsidiaries (as determined
on a consolidated basis).
"CREDIT AGREEMENT" means the Credit Agreement,
dated March 19, 1996 among the Company, certain of its
subsidiaries, National Bank of Canada and NationsBank,
National Association and the other lenders thereto from time
to time, as amended, restated or supplemented.
"DEFAULT" means (a) an event of default under the
Credit Agreement, (b) an event of default under the Indenture,
(c) the occurrence of a Change of Control or (d) gross negligence
or willful misconduct by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in the performance of
his duties as a director or officer of the Company or any of its
Subsidiaries which continues uncured after a period of 30 days
following written notice thereof from the Company to
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"EXCHANGE ACT" means the United States Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, as the same may be amended from
time to time.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of
the accounting profession.
"GOVERNMENTAL AUTHORITY" means any nation or
government, any state or other political subdivision thereof,
and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining
to government.
"GUARANTY AGREEMENT" means the Guaranty Agreement,
in favor of Les Gantiers Holding, B.V., dated as of the date
hereof, of American Industrial Partners Capital Fund II, L.P.
"INDEBTEDNESS" means, with respect to any Person,
(a) any indebtedness for borrowed money or issued in
substitution for or exchange of indebtedness for borrowed
money, (b) any indebtedness evidenced by any note, bond,
debenture or other debt instrument, (c) any indebtedness for
the deferred purchase price of property or services with
respect to which a Person is liable, contingently or otherwise,
as obligor or otherwise (other than current trade payables and
other current liabilities incurred in the ordinary course of
business), (d) any commitment by which a Person assures a
creditor against loss (including contingent reimbursement
obligations with respect to letters of credit),
(e) any obligations for which a Person is obligated pursuant
to a guaranty, (f) any obligations under capitalized leases with
respect to which a Person is liable, contingently or otherwise,
as obligor, guarantor or otherwise, or with respect to which
obligations a Person assures a creditor against loss,
(g) any indebtedness secured by a Lien on a Person's assets,
and (h) net obligations under hedging arrangements designed to
protect a Person against fluctuations in interest rates,
currency exchange rates or commodity prices.
"INDENTURE" means the Indenture, dated as of
September 30, 1993,among the Company, certain of its
subsidiaries and First Trust National Association, as Trustee.
"LIENS" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without
limitation, any conditional sale or other title retention
agreement or lease in the nature thereof), any sale of
receivables with recourse against the Company, any Subsidiary or
any Affiliate, any filing or agreement to file a financing
statement as debtor under the Uniform Commercial Code, personal
property legislation in Canada or any similar statute other than
to reflect ownership by a third party of property leased to the
Company or any Subsidiaries under a lease which is not in the
nature of a conditional sale or title retention agreement, or
any subordination arrangement in favor of another Person
(other than any subordination arising in the ordinary course
of business).
"LOAN PURCHASE AGREEMENT" means that certain Loan
Purchase Agreement among AIP, Clairvest Group Inc., certain
other parties and the Company, dated as of the date hereof.
"MANAGEMENT SERVICES AGREEMENT" means the Management
Services Agreement attached hereto as Exhibit 1 to be executed
on the Closing Date.
"LOCK-UP AGREEMENT" means the Lock-up Agreement, dated
as of the date hereof, between AIP and Clairvest Group Inc.
"MULTIPLE VOTING SHARES" means the Multiple Voting
Shares in the capital of the Company.
"OPTION AGREEMENT" means the Option Agreement, dated
the date hereof, between AIP and the Company.
"OPTION COMMENCEMENT DATE" means the first to occur of
(i) the consummation of the transactions contemplated by the
Loan Purchase Agreement and the Tender Offer and
(ii) a Triggering Event.
"OPTION EXPIRY DATE" means the earliest of: (i) 5 days
after Securities are taken up under, or the effective date of,
an Acquisition Proposal (as defined in the Offer Agreement),
(ii) the day the Offer (as defined in the Offer Agreement)
expires and the conditions thereto have not been waived or
satisfied or the day the Offer is withdrawn and (iii) 255 days
after the date of this Agreement.
"OPTION SHARES" means, prior to the Termination of
the Coattail Agreement, 3,140,000 Subordinate Voting Shares
issued upon the conversion of 3,140,000 Multiple Voting Shares
held by LGH as of the date of this Agreement, and from and
after the termination of the Coattail Agreement, means
3,140,000 Multiple Voting Shares held by LGH.
"ORGANIC CHANGE" means any recapitalization,
reorganization, reclassification, consolidation, merger,
statutory arrangement, sale of all or substantially all of
the Company's assets or other transaction, in each case which
is effected in such a way that the holders of Securities are
entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or
in exchange for such Securities.
"PERMITTED INDEBTEDNESS" means (i) outstanding and
unpaid principal and interest under the Credit Agreement and
the Indenture, (ii) Indebtedness arising from guarantees of
the Company in respect of obligations of its Subsidiaries for
the purchases of raw materials in the ordinary course of
business and (iii) other Indebtedness of the Company and
its Subsidiaries not exceeding an aggregate principal amount
of $5 million outstanding at any time on a consolidated basis.
"PERMITTED LIENS" means (a) liens securing
obligations under the Credit Agreement; (b) liens on property
of a Person existing at the time such Person is amalgamated,
merged into or consolidated with the Company or any of its
Subsidiaries; PROVIDED that such liens
were in existence prior to the contemplation of such amalgamation,
merger or consolidation; (c)liens on property existing at the time
of acquisition thereof by the Company or any of its Subsidiaries;
PROVIDED that such liens were in existence prior to the
contemplation of such acquisition; (d) liens to secure the
performance of statutory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(e) liens existing on the date of this Agreement;
(f) liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested
in good faith by appropriate proceedings promptly instituted
and diligently concluded; PROVIDED that any reserve or other
appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; and (g) liens incurred in
the ordinary course of business of the Company or any of its
Subsidiaries with respect to obligations that do not exceed $5
million at any one time outstanding and that (i) are not
incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (ii) do not in the aggregate
materially detract from the value of the property or materially
impair the use thereof in the operation of business by the
Company or any of its Subsidiaries.
"PERSON" means any individual, corporation,
partnership, trust, joint stock company, business trust,
unincorporated association, joint venture, Governmental
Authority or other entity of any nature whatsoever.
"REQUIRED HOLDERS" means holders of Voting Securities
possessing at least two-thirds (2/3) of the voting power of all
Voting Securities then outstanding.
"SECURITIES" means Subordinate Voting Shares, Multiple
Voting Shares or other capital stock or equity securities of the
Company, whether outstanding on the date hereof or hereafter
issued.
"SET-OFF AMOUNT" means C$13.4 million increasing at
a rate of 10.5% per annum from the date hereof (computed on the
basis of a 360-day year and the actual number of days elapsed
to the Option Closing Date).
"STOCKHOLDERS" means AIP and LGH.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association or other business entity
of which more than fifty percent (50%) of the total voting power
of shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof, or more than fifty
percent (50%) of the equity interest therein, is at the time
owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of such Person or a
combination thereof.
"SUBORDINATE VOTING SHARES" means the Subordinate
Voting Shares in the capital of the Company.
"THIRD PARTY" means any Person other than the Company,
the Stockholders the other parties to this Agreement and any
trustee or beneficiary of the Trust and all such Person's
Affiliates.
"TRANSACTION AGREEMENTS" means the Management Services
Agreement, the Company Option and the Guaranty.
"TRANSFER" means any transfer, sale, assignment,
distribution, exchange, mortgage, pledge, hypothecation or other
disposition of any Securities or any interest therein
(including a transfer of the voting power of such Securities by
proxy, voting agreement or otherwise).
"TRIGGERING EVENT" means the date on which AIP is
entitled to receive the Cash Compensation Amount (as defined in
the Offer Agreement).
"VOTING SECURITIES" means any Securities entitled
(without regard to the occurrence of any contingency) to vote in
the election of directors.
1.2 OTHER DEFINITIONAL PROVISIONS; INTERPRETATION.
(a) The words "hereof", "herein", and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, Subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(b) The headings in this Agreement are included for
convenience of reference only and shall not limit or otherwise
affect the meaning or interpretation of this Agreement.
(c) The meanings given to terms defined herein
shall be equally applicable to both the singular and plural
forms of such terms.
SECTION 2.REPRESENTATIONS AND WARRANTIES.
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Stockholders
that:
(a) it is a corporation duly incorporated, organized,
validly existing and in good standing under the laws of Canada,
it has full power and authority to execute, deliver and perform
this Agreement and to consummate the transactions contemplated
hereby, and the execution, delivery and performance by it of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate and stockholder action;
(b) this Agreement has been duly and validly executed
and delivered by the Company and constitutes a legal and binding
obligation of the Company,enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general principles of equity; and
(c) the execution, delivery and performance by the
Company of this Agreement and the performance by the Company
of its obligations hereunder will not, with or without the
giving of notice or lapse of time, or both (i) violate any
provision of law, statute, rule or regulation to which the
Company is subject, (ii) violate any order, judgment or decree
applicable to the Company or (iii) conflict with, or result in
a breach or default under, any term or condition of the
Company's articles of incorporation or by-laws or any agreement
or instrument to which the Company is a party or by which it is
bound.
2.2 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS.
Each Stockholder (as to itself only) represents and warrants to
the Company and the other Stockholder that:
(a) this Agreement has been duly and validly executed
and delivered by such Stockholder and this Agreement constitutes
a legal and binding obligation of such Stockholder, enforceable
against such Stockholder in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer,reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general principles of
equity; and
(b) the execution, delivery and performance by such
Stockholder of this Agreement and the performance by such
Stockholder of its obligations hereunder will not, with or
without the giving of notice or lapse of time,or both (i)
violate any provision of law, statute, rule or regulation to
which such Stockholder is subject, (ii) violate any order,
judgment or decree applicable to such Stockholder, or
(iii) conflict with, or result in a breach or default under,
any term or condition of any agreement or other instrument to
which such Stockholder is a party or by which such Stockholder
is bound.
2.3 REPRESENTATIONS AND WARRANTIES OF LGH AND LGL.
(a) LGH represents and warrants to AIP that:
(i) LGH is the legal and beneficial owner of
and has good title to 3,140,000 Multiple Voting Shares, free and
clear of any Liens(other than Liens incurred in connection with
the Loan Purchase Agreement, the Coattail Agreement and the
Clairvest Loan Agreement); and
(ii) no event has occurred prior to the date
hereof (or, as a result of actions taken prior to the date
hereof,is required to occur) that would, when given effect,
either by itself or in conjunction with the transactions
contemplated by the Offer Agreement, cause a Change of Control.
(b) LGL represents and warrants to AIP that:
(i) LGL is the legal and beneficial owner of
all of the issued and outstanding capital stock of LGH;
(ii) no event has occurred prior to the date
hereof (or, as a result of actions taken prior to the date
hereof, is required to occur) that would, when given effect,
either by itself or in conjunction with the transactions
contemplated by the Offer Agreement, cause a Change of Control;
and
(iii)the execution, delivery and performance by
LGL of this
Agreement and the performance of its obligations
hereunder will not, with or without the giving of notice or
lapse of time, or both (A) violate any provision of law,
statute, rule or regulation to which LGL is subject,
(B) violate any order, judgment or decree applicable to LGL
or (C) conflict with, or result in a breach or default under,
any term or condition of any agreement or other instrument to
which LGL is a party or by which it is bound; and
(iv)this Agreement has been duly and validly
executed and delivered by LGL, and this Agreement constitutes a
legal and binding obligation of LGL, enforceable against LGL in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors'
rights and to general principles of equity; and
(c) the Trust represents and warrants to AIP that:
(i) the Trust is the legal and beneficial owner
of all of the issued and outstanding capital stock of LGL;
(ii) the "▇▇▇▇▇▇▇ Family" (as defined in section
3.3.3(a) of the Company's restated articles of incorporation
(the "ARTICLES")) is the beneficial owner (as defined in section
3.3.3(b) of the Articles) of Multiple Voting Shares and
Subordinate Voting Shares having attached thereto 50% or more of
the votes attaching to all of the Multiple Voting Shares and
Subordinate Voting Shares outstanding as of the date hereof;
(iii) no event has occurred prior to the date
hereof (or, as a result of actions taken prior to the date
hereof, is required to occur) that would, when given effect,
either by itself or in conjunction with the transactions
contemplated by the Offer Agreement, cause a Change of Control;
and
(iv) the execution, delivery and performance by
the Trust of this Agreement and the performance of its
obligations hereunder will not, with or without the giving of
notice or lapse of time, or both (A) violate any provision of
law, statute, rule or regulation to which the Trust is subject,
(B) violate any order, judgment or decree applicable to the
Trust or (C) conflict with, or result in a breach or default
under, any term or condition of any agreement or other instrument
to which the Trust is a party or by which it is bound;
(v) this Agreement has been duly and validly
executed and delivered by the Trust, and this Agreement
constitutes a legal and binding obligation of the Trust,
enforceable against the Trust in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general principles of equity.
SECTION 3.CORPORATE GOVERNANCE.
3.1 BOARD OF DIRECTORS. (a) Subject to Sections
3.1(b) and 3.1(e), each Stockholder hereby agrees to vote all
of the Voting Securities owned or held of record by such
Stockholder and to take all other necessary stockholder action
so as to elect and to continue in office a Board of Directors
and board of directors of each of the Subsidiaries of the
Company (to the extent permitted by applicable local law)
consisting of five members, of which (i) three (3) members
shall be qualified designees of LGH and (ii) two (2) members
shall be qualified designees of AIP. LGH agrees to use its best
efforts to nominate, remove, and replace its designees to
the Board of Directors so that its designees, consistent with
their fiduciary duties, are directors who effectively and
efficiently manage the operations of the Company.
(b) Prior to the Closing Date, the Company shall
deliver to AIP(i) the resignations provided for in Section 3.1
(i) of the Lock-up Agreement and the resignations of
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
(the "RESIGNATIONS") and (ii) unanimous resolutions
(the "RESOLUTIONS") of the Board of Directors appointing
▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Pel as designees of LGH and ▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇▇ as designees of AIP; PROVIDED, HOWEVER, that the
Resignations and Resolutions shall only beeffective as of the
Closing Date. In addition, the Company shall cause one of its
Subsidiaries to execute the Management Services Agreement on the
Closing Date.
(c) Subject to Section 3.1(e), if AIP or LGH shall
notify the other Stockholders of its desire to remove, with or
without cause, any director of the Company previously designated
by it, each Stockholder shall vote all of the Voting Securities
owned or held of record by such Stockholder and to take all
other necessary stockholder action so as to cause the removal
of such director.
(d) Subject to Section 3.1(e), if any director
designated by AIP or LGH ceases to serve on the Board of
Directors (whether by reason of death, resignation, removal or
otherwise), the Stockholder who designated such director shall
be entitled to designate a successor director qualified to fill
the vacancy created thereby. Each Stockholder agrees to vote
all of the Voting Securities owned or held of record by such
Stockholder and to take all such other necessary stockholder
action so as to cause such designee to be elected or appointed
as a director.
(e) Upon the occurrence and during the continuance of
a Default, AIP may, by written notice given to LGH, require LGH
to remove any one of its designees from the Board of Directors
as AIP directs and elect any qualified person that AIP
designates as a replacement director to serve as AIP's designee
for the continuation of such Default and LGH shall vote all
of the Voting Securities owned or held of record by it and shall
take all other necessary stockholder action so as to cause the
removal of its designee from, and the election of AIP's designee
to, the Board of Directors in such circumstance.
(f) The Board of Directors shall meet (i) at any time
requested in writing by Stockholders holding a majority of the
Subordinate Voting Shares then outstanding (provided
that such notice is given at least three business days prior to the
date of the meeting proposed in such notice), and (ii) in any event
not less frequently than quarterly.
(g) The consent of at least one of the directors
designated by AIP shall be required for the Board of Directors
to take any action regarding:
(i) the approval or rejection of the annual budget or
business plan of the Company and its Subsidiaries;
(ii) the hiring, promotion, demotion, retention or
termination of any officer or senior manager of the Company or
any of its Subsidiaries; and
(iii) amendments to the Company's by-laws.
(h) No individual who is an officer, director,
partner or the holder of 5% or more of the voting equity of any
competitor of the Company or any of its Subsidiaries shall serve
as a director unless the other Stockholder consent thereto.
3.2 BOARD COMMITTEES. (a) Subject to the general
oversight and authority of the full Board of Directors, the
Board of Directors may establish, empower and maintain such
Board committees as the Board of Directors deems necessary or
desirable, and the Board of Directors shall establish and
maintain a compensation committee and an audit committee.
AIP and LGH shall be entitled to representation on each of the
committees of the Board of Directors proportionate to their
representation on the Board of Directors; PROVIDED that AIP
shall be entitled to designate a majority of the members of
the compensation committee and audit committee.
(b) No action by any committee of the Board of
Directors shall be valid unless taken at a meeting for which
three business days' prior notice has been duly given or waived
by the members of such committee. Such notice shall include a
brief description of the general nature of the business to be
transacted at the meeting. Any committee member unable to
participate in person at any meeting shall be given the
opportunity to participate by telephone. Each of the committees
established by the Board of Directors pursuant to this Section
3.2 shall establish such other rules and procedures for its
operation and governance as it shall see fit and may seek such
consultation and advice as to matters within its purview as it
shall require.
3.3 FINANCIAL STATEMENTS AND OTHER INFORMATION.
The Company shall deliver to AIP:
(a) as soon as available but in any event within
twenty-one days after the end of each monthly accounting period
in each fiscal year,unaudited consolidating and consolidated
statements of income and cash flows of the Company and its
Subsidiaries for such monthly period and for the period from
the beginning of the fiscal year to the end of such month, and
unaudited consolidating and consolidated balance sheets of the
Company and its Subsidiaries as of the end of such monthly
period, setting forth in each case comparisons to the Company's
annual budget and to the corresponding period in the preceding
fiscal year, and all such
statements shall be prepared in accordance with GAAP, consistently
applied, subject to the absence of footnote disclosures and to normal
year-end adjustments and shall be certified by the Company's chief
financial officer;
(b) within sixty days after the end of each fiscal
year, consolidating and consolidated statements of income and
cash flows of the Company and its Subsidiaries for such fiscal
year, and consolidating and consolidated balance sheets of the
Company and its Subsidiaries as of the end of such fiscal year,
setting forth in each case comparisons to the Company's annual
budget and to the preceding fiscal year, all prepared in
accordance with GAAP, consistently applied, and accompanied by
with respect to the consolidated portions of such statements,
an opinion of an independent accounting firm of recognized
national standing that is unqualified with respect to the scope
of such firm's examination and the Company's status as a going
concern;
(c) prior to the beginning of each fiscal year, an
annual budget prepared on a monthly basis for the Company and
its Subsidiaries for such fiscal year (displaying anticipated
statements of income and cash flows and balance sheets), and
promptly upon preparation thereof any other significant
forecasts prepared by the Company and any revisions of such
annual or other forecasts;
(d) promptly (but in any event within five business
days) after the discovery or receipt of notice of any default
under any material agreement to which it or any of its
Subsidiaries is a party or any other material adverse change,
event or circumstance affecting the Company or any
Subsidiary (including, without limitation, the filing of any
material litigation against the Company or any Subsidiary or
the existence of any dispute with any Person which involves a
reasonable likelihood of such litigation being commenced), an
officer's certificate specifying the nature and period of
existence thereof and what actions the Company and its
Subsidiaries have taken and propose to take with respect
thereto; and
(e) with reasonable promptness, such other
information and financial data concerning the Company and its
Subsidiaries as any Person entitled to receive information under
this Section 3.3 may reasonably request.
3.4 AFFIRMATIVE COVENANTS. (a) The Company shall
cause Consoltex (USA) Inc. to enter into the Management Services
Agreement in the form attached hereto as Exhibit 1.
(b) The Company shall, and cause each Subsidiary to:
(a) at all times cause to be done all things necessary
to maintain, preserve and renew its corporate existence and all
material licenses, authorizations and permits necessary to the
conduct of its businesses; (b) maintain and keep its material
properties in good repair, working order and condition, and from
time to time make all necessary or desirable repairs, renewals
and replacements, so that its businesses may be properly and
advantageously conducted in all material respects at all times;
(c) pay and discharge when payable all taxes,
assessments and governmental charges imposed upon its properties
or upon the income or profits therefrom (in each case before the
same becomes delinquent and before penalties accrue thereon) and
all claims for labor, materials or supplies which if unpaid would
by law become a Lien upon any of its property unless and to the
extent
that the same are being contested in good faith and by
appropriate proceedings and adequate reserves (as determined in
accordance with generally accepted accounting principles,
consistently applied) have been established on its books with
respect thereto; (d) comply with all applicable laws, rules and
regulations of all governmental authorities; (e) apply for and
continue in force with good and responsible insurance companies
adequate insurance covering risks of such types and in such
amounts as are customary for corporations of similar size engaged
in similar lines of business; and (f) maintain proper books of
record and account which present fairly in all material respects
its financial condition and results of operations and make
provisions on its financial statements for all such proper
reserves as in each case are required in accordance with
generally accepted accounting principles, consistently applied.
3.5 NEGATIVE COVENANTS. Except as otherwise required
by the terms of this Agreement, without the prior written consent
of the Required Holders, the Company shall not, and shall not
cause, permit or suffer any of its Subsidiaries to, directly or
indirectly, do any of the following:
(a) authorize, issue or sell any capital stock or
equity securities or any securities convertible into or
exercisable or exchangeable for any class or series of capital
stock, of the Company or any Subsidiary of the Company (other
than the issuance of shares of capital stock to the Company or
any Subsidiary of the Company by any Subsidiary of the Company
or the issuance of shares of capital stock pursuant to the
exercise of the Company Option or other options outstanding as of
the date hereof);
(b) declare or pay dividends or make any distributions
on, or redeem or otherwise acquire any shares of any class or
series of capital stock or equity securities of the Company
(other than pursuant to the Company Option);
(c) effect a reclassification, combination, split, or
subdivision of any of the capital stock of the Company or any
Subsidiary of the Company;
(d) amend the articles of incorporation or bylaws
(or equivalent governing documents) of the Company or any
Subsidiary of the Company, except as provided in this Agreement;
(e) adopt any plan or proposal for a complete or
partial liquidation or dissolution of the Company or any
Subsidiary of the Company or any reorganization or
recapitalization of the Company or commence any case, proceeding
or action seeking relief under any existing or future laws
relating to bankruptcy, insolvency, conservatorship or relief
of debtors with respect to the Company or any Subsidiary of
the Company;
(f) engage in, or enter into, any lines of business
other than the lines of business which the Company and its
Subsidiaries are presently engaged in;
(g) change the fiscal year of the Company or make
any material change in accounting policies or procedures of the
Company or any Subsidiary of the Company unless
required under
generally accepted accounting principles in effect in the country
in which the Company or any of its Subsidiaries is located or
change the fiscal year of the Company;
(h) create, incur, assume or suffer to exist any
Indebtedness (other than Permitted Indebtedness);
(i) create or suffer to exist any Liens (other than
Permitted Liens);
(j) adopt any stock option, restricted stock or other
equity-based compensation plan or increase any compensation or
benefits (including any salary, bonuses and other forms of
current or deferred compensation) of any director, officer or
senior manager (except as required by agreements in force as
of the date of this Agreement);
(k) enter into, amend, modify or supplement or permit
any Subsidiary to enter into, amend, modify or supplement any
agreement, transaction, commitment or arrangement with an
Affiliate (other than any Subsidiary of the Company and other
than as contemplated by the Tender Offer and the Transaction
Agreements) or any entity in which an Affiliate has an interest
as a director, officer, employee or greater than 5% stockholder
or interest through a family relationship;
(l) acquire any assets or business, other than
acquisitions of inventory inputs, fixed assets and other similar
acquisitions in the ordinary course of business;
(m) enter into any merger, consolidation, business
combination, joint venture or other material corporate
transaction;
(n) establish or acquire any Subsidiaries that are not
wholly-owned by the Company or any Subsidiaries;
(o) make or commit to make (whether in one transaction
or a series of transactions) Capital Expenditures in excess of
amounts set forth in the annual budget approved by the Board of
Directors;
(p) sell, assign, transfer, convey or otherwise
dispose of any assets, securities or businesses (other than sales
of inventory or other dispositions of assets in the ordinary
course of business);
(q) amend or modify any provision of the Credit
Agreement, the Indenture or any contract disclosed on Schedule 6
(j) of the Company Disclosure Letter (as defined in the Offer
Agreement);
(r) repay, repurchase or redeem the notes issued under
the Indenture; and
(s) enter into any agreement, commitment or
arrangement (other than the Credit Agreement or the Indenture)
that would limit the ability of the Company or any of its
Subsidiaries to make payment pursuant to the Management
Services Agreement.
3.6 ARTICLES OF INCORPORATION AND BY-LAWS.
(a) Immediately following the Closing Date, the
Stockholders shall take or cause to be taken all necessary
corporate and stockholder action to cause section 3.3.3 of the
Company's Restated Articles of Incorporation to be amended to
read as follows:
"On the date as the ▇▇▇▇▇▇▇ Family (as hereinafter defined)
cease to be the beneficial owners in the aggregate of Multiple
Voting Shares and Subordinate Voting Shares having attached
thereto 50% or more of the votes attaching to all Multiple Voting
Shares and Subordinate Voting Shares then outstanding, the
Multiple Voting Shares will automatically be converted into a
like number of Subordinate Voting Shares."
(b) The Company and the Stockholders shall take or
cause to be taken all necessary corporate and stockholder action
to ensure at all times that the Company's Articles of
Incorporation and By-Laws are not, at any time, inconsistent
with the provisions of this Agreement and contain such
provisions as are necessary to give effect to the provisions
contained in this Section 3, including, without limitation,
taking any action to (i)obviate the requirement that the
Board of Directors be comprised of a majority of Canadian
residents (ii) ensure that the Multiple Voting Shares represent
51% of the voting power of the Voting Securities and (iii)
provide the Multiple Voting Shares with a liquidation preference
of $4.3 million.
SECTION 4.TRANSFERS RESTRICTIONS; OPTION ON LGH SECURITIES.
4.1 TRANSFER, CONVERSION OR VOTING OF MULTIPLE VOTING SHARES.
(a) LGH, LGL and the Trust each hereby agree, subject
to the rights of Clairvest Group Inc. under the Clairvest Loan
Agreement, that each of them will not, without the prior written
consent of AIP, which AIP may grant or withhold in its sole
discretion, except as required by the terms of this Agreement,
(i) directly or indirectly Transfer, or permit the Transfer of,
as the case may be, any Securities, (ii) except as required
hereunder and by the Articles of Incorporation of the Company,
convert, or permit the conversion of, as the case may be, any of
the Multiple Voting Shares LGH owns into Subordinate Voting
Shares or (iii) until AIP has taken up Subordinate Voting Shares
under the Offer (as defined in the Offer Agreement) or withdrawn
the Offer, exercise the voting rights of the Multiple Voting
Shares in respect of any amalgamation, merger, sale of the
Company's assets, take-over bid, plan of arrangement,
reorganization, recapitalization, shareholder rights plan,
liquidation or winding up of, or reverse take-over or other
business combination or similar transactions involving the
Company or any of its Subsidiaries.
(b) LGH, LGL and the Trust each agree that
immediately prior to the Option Closing (as defined below)
LGH, LGL and the Trust each will, at the written request of
AIP, convert or cause LGH to convert, as the case may be, all
of the Multiple Voting Shares LGH holds at such time into
Subordinate Voting Shares.
4.2 EFFECT OF VOID TRANSFERS OR CONVERSIONS. In the
event of any purported Transfer of any Securities, or
purported conversion of Multiple Voting Shares into Subordinate
Voting Shares, in violation of the provisions of this
Agreement, such purported Transfer or conversion shall be void
and of no effect and the Company shall not give effect to such
Transfer or conversion.
4.3 LEGEND ON SECURITIES. Each certificate
representing Securities issued to any Stockholder shall bear
the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A STOCKHOLDERS AGREEMENT AMONG CONSOLTEX GROUP INC.
(THE "COMPANY") AND CERTAIN OTHER PARTIES. A COPY OF WHICH IS
ON FILE WITH THE SECRETARY OF THE COMPANY. NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT
IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS
AGREEMENT. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE
OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS
OF SUCH STOCKHOLDERS AGREEMENT, INCLUDING RESTRICTIONS RELATING
TO THE TRANSFERABILITY OF, AND THE EXERCISE OF ANY VOTING RIGHTS
GRANTED BY, THE SECURITIES."
4.4 TRANSFERS OF INTERESTS IN LGH. LGL and the Trust
each agree, subject to the rights of Clairvest Group Inc. under
the Clairvest Loan Agreement and except for a transfer pursuant
to the provisions of this Agreement, that without the prior
written consent of AIP, which AIP may grant or withhold in its
sole discretion, neither LGL nor the Trust shall Transfer, or
permit the Transfer of, as the case may be, any interest in or
any asset of LGH, or except as required hereunder, take any
action, or cause LGL or the Trust to take any action, that
would, by itself or in conjunction with the transactions
contemplated by the Offer Agreement, cause a Change of Control.
4.5 OPTION TO PURCHASE LGH SECURITIES.
(a) LGH hereby grants to AIP an irrevocable option
(the "OPTION") to purchase during the period beginning on the
Option Commencement Date and ending on October 1, 2003
(the "EXERCISE PERIOD"), subject to the terms of this Agreement,
all, but not less than all, of the Option Shares at a price per
share in cash equal to C$5.60 (or such greater amount offered
for the Subordinate Voting Shares by AIP), increasing in an
amount equal to 10.5% per annum (computed on the basis of a
360-day year and the actual number of days elapsed from the date
hereof to the Option Closing Date) (the "OPTION PRICE"), subject
to adjustment as provided below; provided that, prior to the
Closing Date, AIP can only exercise the Option in connection
with the consummation of an Acquisition Proposal (as defined in
the Offer Agreement) that includes the purchase of the Clairvest
Loan Agreement on the terms set forth therein and the purchase by
the Person making such Acquisition Proposal of the Subordinate
Voting Shares held by Clairvest Group Inc. and its direct or
indirect subsidiaries. In no event will the Option be exercisable
unless at the Option Closing AIP purchases the Subordinate Voting
Shares of
Clairvest Group Inc. and its subsidiaries and purchases
the Clairvest Loan Agreement pursuant to the terms of the Loan
Purchase Agreement.
(b) Any time during the Exercise Period, AIP may
exercise the Option by delivering an irrevocable written notice
(the date of which is referred to in this Agreement as the
"NOTICE DATE"), (i) stating that AIP will acquire the Option
Shares from LGH at the Option Price and subject to the other
terms and conditions set forth in this Agreement and (ii)
specifying a place and date (the "OPTION CLOSING DATE") not
earlier than three business days nor later than 20 business days
from the Notice Date for the consummation of such purchase
(the "OPTION CLOSING"); PROVIDED that the Option Closing Date
may be deferred at the election of AIP so that AIP may obtain
any regulatory approvals necessary for its acquisition of the
Option Shares.
(c) At the Option Closing, (i) AIP shall pay to LGH
the aggregate purchase price for the Option Shares purchased
pursuant to the exercise of the Option LESS the Set-off Amount
in immediately available funds by a wire transfer to a bank
account designated by LGH, and (ii) LGH shall sell, assign and
transfer the Option Shares to AIP free of all claims, liens,
encumbrances, security interests and adverse claims and shall
deliver to AIP, if not previously delivered, a certificate or
certificates representing the Option Shares purchased by AIP
endorsed in blank or accompanied by stock powers executed in
blank with signature guarantees, all in form and substance
satisfactory to AIP.
(d) If the Company at any time after the date of this
Agreement subdivides (by any stock split, stock dividend,
recapitalization or otherwise) its outstanding Multiple Voting
Shares into a greater number of shares, the Option Price in
effect immediately prior to such subdivision shall be
proportionately reduced and the number of Option Shares
obtainable upon exercise of the Option shall be proportionately
increased. If the Company at any time after the date of this
Agreement combines (by reverse stock split or otherwise) its
outstanding shares of Multiple Voting Shares into a smaller
number of shares, the Option Price in effect immediately
prior to such combination shall be proportionately increased and
the number of Option Shares obtainable upon exercise of the
Option shall be proportionately decreased. Prior to the
consummation of any Organic Change after the date of this
Agreement, the Company shall make appropriate provision
(in form and substance satisfactory to AIP) to insure that AIP
shall thereafter have the right to acquire and receive, in lieu
of or addition to (as the case may be) the Option Shares
immediately theretofore acquirable and receivable upon the
exercise of the Option, such shares of stock, securities or
assets as may be issued or payable with respect to or in
exchange for the number of Option Shares immediately theretofore
acquirable and receivable upon exercise of the Option had such
Organic Change not taken place. In any such case, the Company
shall make appropriate provision (in form and substance
satisfactory to AIP) with respect to such holders' rights and
interests to insure that the provisions of this Section 4.5
(d) shall thereafter be applicable to the Option (including,
in the case of any such consolidation, merger or sale in which
the successor entity or purchasing entity is other than the
Company, an immediate adjustment of the Option Price to the
value for the Securities reflected by the terms of such
consolidation, merger or sale, and a corresponding immediate
adjustment in the number of Option Shares acquirable and
receivable upon exercise of the Option, if the value so
reflected is less than the Option Price in effect immediately
prior to such consolidation, merger or sale).
(e) Any time after the Closing Date, upon
(i) the consummation of a Company Sale, (ii) a Change of Control
or (iii) the repayment, repurchase or redemption of the notes
issued under the Indenture, AIP agrees to exercise the Option
immediately prior to the consummation of the transactions
described in clause (i) and (iii) of this Section 4.5(e) and
immediately upon a Change of Control.
SECTION 5.MISCELLANEOUS
5.1 EFFECTIVENESS AND TERMINATION. Except for
Sections 2, 3.1(b), 4.1(a) and 4.4, all of which shall come
into effect and be effective from the date hereof and
Section 4.5 which shall come into effect on the Option
Commencement Date, all rights and obligations under this
Agreement shall come into effect on the Closing Date.
If the Option Commencement Date has not occurred and there is no
Closing Date within 10 days after Expiry Time (as defined in the
Offer Agreement), then this Agreement shall terminate on the
tenth day after the Expiry Time. If the Option Commencement
Date occurs prior to the Expiry Time and there is no Closing
Date prior to the Option Expiry Date, then this Agreement shall
terminate on the Option Expiry Date. If a Closing Date occurs,
this Agreement shall terminate on the first to occur of
(a) October 1, 2003 and (b) the date on which AIP exercises its
rights to purchase the Option Shares pursuant to Section
4.5. No termination shall relieve any party hereto from
(i) liability for any breach of this Agreement and (ii) any
obligation arising pursuant to Section 4.5 of this Agreement.
5.2 ADDITIONAL SECURITIES SUBJECT TO AGREEMENT.
Each Stockholder agrees that any other Securities which it shall
hereafter acquire by means of a stock split, stock dividend,
distribution, exercise of stock options, or otherwise shall be
subject to the provisions of this Agreement to the same extent
as if held on the date hereof.
5.3 INJUNCTIVE RELIEF. The Stockholders acknowledge
and agree that a violation of any of the terms of this Agreement
will cause the Stockholders irreparable injury for which
adequate remedy at law is not available. Accordingly, it is
agreed that each Stockholder shall be entitled to an injunction,
restraining order or other equitable relief to prevent breaches
of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any court of
competent jurisdiction in the United States or any state thereof,
in addition to any other remedy to which they may be entitled
at law or in equity.
5.4 OTHER AGREEMENTS. During the term of this
Agreement, none of the Company or any of the Stockholders
shall enter into any stockholder agreement or other arrangement
of any kind with any Person with respect to any Securities which
is inconsistent with the provisions of this Agreement or which
may impair its ability to comply with this Agreement.
5.5 AMENDMENTS. This Agreement may be amended only
by a written instrument signed by the Company and each of the
Stockholders.
5.6 SUCCESSORS. The provisions of this Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, each of which
shall
agree, in a writing in form and substance satisfactory to
the Company and the Stockholders, to become a party hereto and
be bound to the same extent as its transferor hereby.
5.7 NOTICES. All notices, requests and demands to
or upon the respective parties hereto to be effective shall be
in writing (including by telecopy), and, unless otherwise
expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or when delivered by a
recognized courier or, in the case of telecopy notice, when
transmitted (provided that an appropriate confirmation is
received), addressed as follows to the parties hereto, or to
such other address as may be hereafter notified by the
respective parties hereto:
if to AIP, to:
AIP/CGI NB Acquisition Corp.
c/o American Industrial Partners
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
12{th} Floor
Washington, D.C. 20005
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company, to:
Consoltex Group Inc.
c/o Consoltex (USA) Inc.
1040 Avenue of the Americas
6{th} ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Osler, ▇▇▇▇▇▇ & Harcourt
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and, prior to the Closing Date, with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇{▇▇} ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
5.8 INTEGRATION. This Agreement, the Offer Agreement
and the documents referred to herein or delivered pursuant
hereto contain the entire understanding of the parties with
respect to the subject matter hereof and thereof. There are no
greements, representations, warranties, covenants or
undertakings with respect to the subject matter hereof and
thereof other than those expressly set forth herein and therein.
This Agreement and the Offer Agreement supersede all prior
agreements and understandings between the parties with respect
to such subject matter.
5.9 SEVERABILITY. If one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained
herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason,
the validity, legality and enforceability of any such provision,
paragraph, word, clause, phrase or sentence in every other
respect and of the remaining provisions, paragraphs, words,
clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and
privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law.
5.10 COUNTERPARTS. This Agreement may be executed in
two or more counterparts, and by different parties on separate
counterparts each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
5.11 GOVERNING LAW. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the
Province of Ontario and the laws of Canada.
5.12 JURISDICTION. Any action to enforce, which
arises out of or in any way relates to, any of the provisions
of this Agreement may be brought and prosecuted in such court
or courts located within the State of New York as provided by
law; and the parties consent to the jurisdiction of such court
or courts located within the State of New York and to service
of process by registered mail, return receipt requested, or by
any other manner provided by New York law.
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each of the undersigned has
executed this Agreement or caused this Agreement to be executed
on its behalf as of the date first written above.
AIP/CGI NB ACQUISITION CORP.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
CONSOLTEX GROUP INC.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
LES GANTIERS HOLDING B.V.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
LES GANTIERS LIMITED
By:
Name:
Title:
By:
Name:
as Trustee for The Big Sky Trust
IN WITNESS WHEREOF, each of the undersigned has
executed this Agreement or caused this Agreement to be executed
on its behalf as of the date first written above.
AIP/CGI NB ACQUISITION CORP.
By:
Name:
Title:
CONSOLTEX GROUP INC.
By:
Name:
LES GANTIERS HOLDING B.V.
By:
Name:
LES GANTIERS LIMITED
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇ Cubitt Sowden
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇ Cubitt Sowden
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
as Trustee for The Big Sky Trust
EXHIBIT 4.7
AMENDED AND RESTATED LOAN AGREEMENT
=============================================================
THIS AGREEMENT is made as of the 20th day of October, 1999.
BETWEEN:
LES GANTIERS HOLDINGS B.V., a corporation
governed by the laws of the Netherlands
(the "Borrower")
-and-
LES GANTIERS LIMITED, a
corporation governed by the laws of Jersey
("Holdco")
and -
AIP/CGI NB ACQUISITION CORP., a corporation
governed by the laws of New Brunswick (the
"Lender")
RECITALS:
A. Pursuant to a loan agreement dated January 13, 1997 among C
Clairvest, the Borrower, Holdco and ▇▇▇▇▇▇▇ (the "Clairvest
Loan Agreement"), Clairvest made a loan facility available
to the Borrower under which a single, one-time advance was
made in the amount of US$8,800,000.
B. Pursuant to a loan purchase agreement dated September 9,
1999 among Clairvest, the Lender, the Borrower, Holdco, ▇▇▇▇▇▇▇
and Consoltex (the "Loan Purchase Agreement"), the Lender, among
other things, agreed. to purchase the Clairvest Loan Agreement and
the Security from Clairvest and release ▇▇▇▇▇▇▇ from certain
guarantee and security obligations relating thereto and from any
obligation relating to ▇▇▇▇▇▇▇ being a party to the Clairvest Loan
Agreement.
C. The parties hereto wish to amend, restate and replace the Clairvest
Loan Agreement in its entirety by entering into this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of
the mutual covenants and agreements herein contained and for other
good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged), the parties hereto covenant and agree as
follows:
ARTICLE 1.
` -2-
INTERPRETATION
1.1. Definitions. Whenever used in this Agreement, unless the context
otherwise specifies or requires the following words and terms shall have
the meanings set out below:
"Agreement" means this Loan Agreement and all schedules, exhibits and all
instruments supplementing or confirming or amending this Agreement and
references to "Article", "Section" and "Schedule" mean and refer to the
specified article, section and schedule of this Agreement.
"Amounts Owing" means, at any time, the principal amount of the Loan
outstanding at such time, any interest accrued and unpaid hereunder at
such time, and any other amounts owing by the Borrower to the Lender
hereunder or under any of the other Security at such time.
"Applicable Law" means, with respect to any person, property, transaction
or event all present or future applicable laws (including common law and
civil law), statutes, regulations, treaties, judgments and decrees and
(whether or not having the force of law) all applicable official
directives, rules, consents, approvals, authorizations, guidelines,
orders and policies issued by any Governmental Authority or other persons
having authority over any of the parties hereto.
"Borrower" means Les Gantiers Holding B.V., a corporation governed by the
laws of the Netherlands, and its successors and assigns.
"Borrower Shares" means 1,900 issued and outstanding shares in the
capital of the Borrower, representing all of the Borrower's issued and
outstanding shares.
"Clairvest" means Clairvest Group Inc., a corporation governed by the
laws of Ontario.
"Closing Time" means the time on October 20, 1999 at which the Lender
first takes up and pays for Subordinate Voting Shares under the take-over
bid to be made pursuant to the Offer Agreement.
"Coattail Agreement" means the trust agreement dated as of March 22, 1993
between the Borrower, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Consoltex and
Montreal Trust Company, as amended.
"Consoltex" means Consoltex Group Inc., a corporation governed by the
laws of Canada, and its successors and assigns.
"Default" means any event which is or which, with the passage of time,
the giving of notice or both, would be an Event of Default.
"Event of Default" means any one of the events set forth in section 7.1.
"Exercise Period" has the meaning ascribed thereto in the Stockholders
Agreement.
"Governmental Authority" means any government, regulatory authority,
governmental department, agency, commission, board, tribunal, crown
corporation, central bank or court or
-3-
other law, rule, or regulation-making entity having or purporting to
have jurisdiction on behalf of any nation, or province or state or other
subdivision thereof or any municipality, district or other subdivision
thereof.
"Holdco" means Les Gantiers Limited, a corporation incorporated under the
laws of Jersey, and its successors and assigns.
"Holdco Pledge" means the pledge by Holdco of its shares in the Borrower
dated October 20, 1999 between Clairvest, Holdco and the Borrower.
"INDEBTEDNESS" means, at any time, the principal amount of the Loan
outstanding at such time, any interest accrued and unpaid hereunder at
such time, and any other amounts owing by the Borrower to the Lender
hereunder or under any of the other Security Documents at such time.
"Interest Rate" has the meaning ascribed thereto in Section 2.2.
"Lender" means AIP/CGI NB Acquisition Corp., a corporation governed
by the laws of New Brunswick, and its successors and assigns.
"Liens" means any mortgage, pledge, hypothec, security interest,
encumbrances, lien, charge, escrow or deposit arrangement or
any other arrangement or condition that in substance secures payment
or performance of an obligation and shall include the interest of
a vendor or lessor under any conditional sale agreement, capitalized
lease or other title retention agreement.
"LINCOLNSHIRE CLAIM" means the claim of Lincolnshire Management,
Inc. described in its letter dated August 11, 1999 to the Borrower,
Holdco, ▇▇▇▇▇▇▇, Consoltex and American Industrial Partners and the
Summons with Notice filed October 8, 1999 with Supreme Court of the
State of New York, County of New York in connection with
the actions of Lincolnshire Management, Inc. against the Borrower,
Holdco, Consoltex, American Industrial Partners, American Industrial
Partners Capital Fund II, L.P., the Lender and ▇▇▇▇▇▇▇.
"Loan" means the aggregate principal amount contemplated by section
2.1 hereof, all capitalized interest thereon and all fees or other
amounts that are from time to time added to such principal amount, as
is outstanding from time to time.
"LOAN PURCHASE AGREEMENT" shall have the meaning ascribed thereto in
Recital B.
"Maturity Date" means date on which, following the exercise of the
Option, the Lender pays to the Borrower the aggregate purchase price
of the Option Shares purchased pursuant to the exercise of the Option.
"MV Share Pledge" means the hypothec of shares dated as of March 7,
1997 in respect of the MV Shares by and between the Borrower, Clairvest
and Montreal Trust Company and assigned by Clairvest to the Lender
pursuant to the Loan Purchase Agreement.
"MV Shares" means, collectively, the 3,140,000 multiple voting
shares of Consoltex owned by the Borrower on the date hereof.
"Offer Agreement" means the letter agreement dated September 9,
1999 executed by the Lender and Consoltex.
"Option" means the option granted by the Borrower to the Lender to
acquire all but not less than all of the MV Shares as set forth in
section 4.5 of the Stockholders Agreement.
"Option Closing" has the meaning ascribed to such term in the
Stockholders Agreement.
"Option Shares" has the meaning ascribed to such term in the
Stockholders Agreement.
"Person" means any individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate, limited liability company, limited
liability partnership, Governmental Authority, or a natural person in
such person's capacity as trustee, executor, administrator or other
legal representative.
"Security" means this Agreement, the MV Share Pledge, the Holdco Pledge
and the Supplementary Pledge Agreement, as each such agreement may from
time to time be amended, restated or supplemented and any and
every deed, document or instrument which is supplementary or ancillary
hereto or thereto or is in implementation hereof and thereof.
"Stockholders Agreement" means the stockholders agreement dated
September 9, 1999 among the Lender, the Borrower, Holdco, The Big
Sky Trust and Consoltex governing the relationship of the shareholders
of Consoltex, as amended.
"Subordinate Voting Shares" means subordinate voting shares in the
capital of Consoltex.
"SUPPLEMENTARY PLEDGE AGREEMENT" means the agreement dated January
13, 1997 concerning the MV Share Pledge and other matters, by and
between the Borrower, ▇▇▇▇▇▇▇, Holdco, Consoltex, Clairvest and Montreal
Trust Company.
"Taxes" means all taxes of any kind or nature whatsoever including,
without limitation, income taxes, sales or value-added taxes, levies,
stamp taxes, royalties, duties, and all fees, deductions, compulsory
loans and withholdings imposed, levied, collected, withheld or assessed
as of the date hereof or at any time in the future, by. any Governmental
Authority of or within Canada or any other jurisdiction whatsoever having
power to tax, together with penalties, fines, additions to tax and interest
thereon.
"▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual resident in the State
of Montana.
-5-
1.2. Applicable Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the Province of Ontario
and the laws of Canada applicable therein.
1.3. Currency. Unless otherwise specified, all references to money amounts
are to lawful currency of Canada.
1.4. Reference. The words "hereto", "hereunder" and similar expressions
refer to this Agreement. Unless otherwise specifically provided, words
importing the singular include the plural and vice versa and words
importing gender include all genders. Headings in this Agreement have
been inserted for convenience only and do not form part of the
agreement between the parties.
1.5. Accounting Terms. All accounting terms not otherwise defined in
this Agreement and shall have the meanings assigned to them in
accordance with Canadian generally accepted accounting principles
applied on a consistent basis.
1.6. CONFLICT WITH SECURITY. In the event there is a conflict or
inconsistency between any provision of the Security and this
Agreement, this Agreement shall prevail.
ARTICLE 2.
LOAN
2.1. Loan. The Borrower unconditionally promises to pay on the
Maturity Date to the Lender or to its order, at its offices at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, the
amount of Cdn.$13,381,477.18 (the "Principal Amount") together
with interest on the Principal Amount as provided for herein.
2.2. Interest. Interest on the Principal Amount shall accrue
at a rate equal to 10 1/2% per annum computed on the basis
of a 360-day year and the actual number of days elapsed from
the date hereof to the Maturity Date, (the "Interest Rate").
Interest on the Principal Amount shall not be currently
payable nor shall it be capitalized or compounded annually.
2.3. Equivalency Clause. For the purposes of disclosure pursuant
to the INTEREST ACT (Canada), the annual rate of interest which
is equivalent to the rate of interest provided for in this
Agreement, which is to be calculated on any basis other than a
full calendar year, may be determined by multiplying such rate
of interest (expressed as a percentage) by a fraction, the
numerator of which is the number of days in the calendar year
and the denominator of which is the number of days comprising
such other basis.
2.4. Security. The Borrower and Holdco acknowledge and confirm
that the MV Share Pledge and the Supplementary Pledge Agreement
are in full force and effect unamended and constitute continuing
security for the payment and performance of the obligations of the
Borrower under this Agreement. The Borrower and Holdco agree to
execute the Holdco Pledge at the Closing Time. For greater certainty,
the Borrower and Holdco confirm that the terms "Obligations" under
the MV Share Pledge and "Guaranteed Obligations" under the Holdco Pledge
include the obligations of the Borrower under this Agreement.
-6-
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties. During the Exercise Period, each
of the Borrower and Holdco hereby jointly and severally represents
and warrants to the Lender as at the date hereof and on each date
that financial information is delivered pursuant to section 4.1 (f)
as follows, and acknowledges and confirms that the Lender is relying
upon such representations and warranties in executing this Agreement
and in extending credit hereunder:
(a) Status and Power. Each of the Borrower and Holdco is a corporation
duly incorporated and organized and validly subsisting under the laws
of its jurisdiction of incorporation and is duly qualified, registered
or licensed in all jurisdictions where such qualification, registration
or licensing is required to the extent that it is material. Each of the
Borrower and Holdco has all requisite corporate capacity, power and
authority to own, hold under licence or lease its properties, to carry
on its business as now conducted and to enter into and carry out the
transactions contemplated by this Agreement and the Security.
(b) AUTHORIZATION AND ENFORCEMENT OF AGREEMENT AND SECURITY. All
necessary action, corporate or otherwise, has been taken to authorize
the execution, delivery and performance of this Agreement and the
Security by the Borrower and Holdco and each of the Borrower and Holdco
has duly executed and delivered this Agreement, the MV Share Pledge
and the Holdco Pledge, as applicable. Each of this Agreement, the MV
Share Pledge and the Holdco Pledge is a legal, valid and binding
obligation of each of the Borrower and Holdco, to the extent it is
a party thereto, enforceable against the Borrower and Holdco, as
applicable, by the Lender in accordance with its terms.
(c) COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein do not and will not conflict with, result in any
breach or violation of, or constitute a default under or under which
a Lien would be created, the terms, conditions or provisions of the
charter documents or by-laws of the Borrower or Holdco or of any
Applicable Law, or of any material agreement, lease, licence, permit
or other instrument to which either the Borrower or Holdco is a party
or is otherwise bound or by which either the Borrower or Holdco
benefits, or to which any of its property is subject, and do not
require the consent or approval of, or filing with or notice to,
any other party or any Governmental Authority.
(d) Litigation. Other than the Lincolnshire Claim, there are no
actions, suits, inquiries, claims or proceedings (whether or not
purportedly on behalf of the Borrower or Holdco) pending or threatened
against or affecting the Borrower or Holdco before any Governmental
Authority or before any private arbitrator, mediator or referee
which in any case or in the aggregate may result in any material
adverse change in the business, operations, assets, financial
condition or
_7_
prospects of the Borrower or Holdco or in the ability of the Borrower
or Holdco to perform its obligations under this Agreement.
(e) Title to MV Shares. The Borrower is the sole beneficial and
registered owner of the MV Shares, with good and marketable title,
free from any Liens of any kind, other than the Option and the
Coattail Agreement.
(f) Title to Borrower Shares. The Borrower Shares represent all of
the issued and outstanding shares in the capital stock of the Holdco.
Holdco is the sole beneficial and registered owner of the Borrower
Shares, with good and marketable title, free from any Liens of any
kind.
(g) Compliance with Laws. Each of the Borrower and Holdco is not in
violation of any Applicable LAW relating in any way to the Borrower,
Holdco, the MV Shares, the Borrower Shares, the operation of its
respective business or its respective property or assets (including,
without limitation, the MV Shares or the Borrower Shares, as
applicable).
(h) No Default. No Default or Event of Default has occurred and is
continuing. No condition, event or act has occurred which constitutes
or which with giving of notice, lapse of time or both would constitute
a default under or in respect of any material agreement, undertaking
or instrument to which the Borrower or Holdco is party or to which
any of its respective properties or assets (including, without
limitation, the MV Shares or the Borrower Shares, as applicable) may
be subject.
(i) All Material Information Supplied. Each of the Borrower and Holdco
has provided to the Lender all material information relating to the
financial condition, business and prospects of the Borrower and all
such information is true, accurate and complete in all material
respects and omits no material fact necessary to make such information
not misleading.
3.2. Survival of Representations and Warranties. All of the
representations and warranties of the Borrower and Holdco contained
in Section 3.1 shall survive the execution and delivery of this
Agreement notwithstanding any investigation made at any time by or on
behalf of the Lender.
ARTICLE 4.
AFFIRMATIVE COVENANTS
4.1. Affirmative Covenants. The Borrower hereby covenants and agrees
with the Lender that, until the expiry of the Option, so long as there
is any Indebtedness outstanding hereunder, unless the Lender otherwise
expressly consents in writing:
(a) Perform Obligations. The Borrower shall fully perform its
obligations under the Security Documents at the time and place and
in the manner provided herein or
_8_
herein, and shall otherwise comply with the terms and provisions
hereof and thereof.
(b) Payment When Due. The Borrower shall pay all sums of money
when due by it to the Lender under this Agreement.
(c) Corporate Existence. The Borrower shall maintain its corporate
existence in good standing, maintain and preserve its rights,
franchises, licences and shall not take part in any dissolution,
reorganization, amalgamation, merger, arrangement or any similar
proceeding.
(d) Conduct of Business. The Borrower shall conduct its business
in such a manner so as to comply in all material respects with all
Applicable Laws.
(e) Material Adverse Change. The Borrower shall promptly notify the
Lender of any material adverse change in the financial condition,
business, operations, prospects or assets of the Borrower or in its
ability to satisfy its obligations under this Agreement.
(f) Financial Reporting. The Borrower shall furnish the Lender with
the following statements, reports and certificates:
(i) within 120 days after the end of each fiscal year of the
Borrower, a copy of the Borrower's audited financial
statements with respect thereto and the auditor's report
thereon;
(ii) within 45 days after the end of each fiscal quarter of
the Borrower, and with [ 10] days after the end of each
month, a copy of the Borrower's unaudited quarterly or
monthly financial statements, as applicable with respect
thereto; and
(iii) such other statements, reports and information as
the Lender may reasonably request from time to time.
(g) Notice of Default. The Borrower shall promptly notify the
Lender of the occurrence of any Default or Event of Default and
shall concurrently deliver to the Lender a detailed statement
of a senior officer of the Borrower of the steps, if any,
being taken to cure or remedy such Default or Event of Default.
(h) Change of Name or Location of Borrower. If the Borrower
changes its corporate name or changes its location, it shall
promptly notify the Lender in writing of the details of same.
(i) Disposition of Shares. The Borrower shall not dispose of, and
shall not grant to any person the right to acquire, any of the
Borrower's right, title, or interest in and to the MV Shares
except in accordance with the Option.
-9-
ARTICLE 5.
NEGATIVE COVENANTS
5.1. NEGATIVE COVENANTS. Until the expiry of the Option, so long
as any Indebtedness under this Agreement remains unpaid, each of the
Borrower and Holdco covenants and agrees that it shall not, unless
approved by the Lender in writing (such approval not to be unreasonably
withheld or delayed):
(a) Permit the Borrower to incur indebtedness or other liabilities for
borrowed money in excess of $100,000 in the aggregate or have any
liabilities or indebtedness which are overdue and in respect of
which a demand for payment has been made, except, in any such
case, for indebtedness and liabilities owing to Holdco and its
affiliates which have been fully postponed and subordinated (in a
manner satisfactory to the Lender) to the payment in full of all
Indebtedness or indebtedness the payment of which is being contested
by the Borrower diligently and in good faith.
(b) Permit any modification, amendment or deletion to the articles
of the Borrower.
(c) Permit any subdivision, consolidation, conversion, reclassification
or modification of any kind of the outstanding shares of the Borrower.
(d) Permit any reorganization, amalgamation, statutory arrangement,
merger or joint venture of the Borrower with any other party.
(e) Permit any issuance or distribution of any shares or other security
of the Borrower or the granting of any right or option in respect
thereto.
(f) Permit the winding-up, liquidation or voluntary dissolution of
the Borrower.
(g) Permit any revocation, modification or adoption of any by-laws
of the Borrower.
(h) Permit any sale, lease, exchange or other disposition (or granting
of an option to such effect) to any third party by the Borrower or any
of the property of the Borrower having a value in excess of Cdn.$5
million, with the exception of the sale of products in the ordinary
course of business of the Borrower or any such subsidiary, as the
case may be.
(i) Permit any change in the nature of the business conducted by
the Borrower.
(j) Permit any declaration of dividends, distribution of assets or
money on any class of shares of the Borrower.
(k) Permit the sale, transfer,. assignment or disposition of, or
the creation of any Lien in or right to acquire, any of the MV Shares
or the Borrower Shares, except in accordance with the Option.
-10-
ARTICLE 6.
RIGHT OF SET-OFF
6.1. RIGHT OF SET-OFF. Notwithstanding any other provision hereof,
if the Lender exercises its Option pursuant to provisions set out in
section 4.5(c) of the Stockholders Agreement, then, upon the making
of the required payment and deliveries at the Option Closing and the
satisfaction of all of the other provisions of section 4.5 of the
Stockholders Agreement, the Indebtedness shall be considered repaid
in full for all purposes. Neither the Borrower nor Holdco shall have
any further obligations to the Lender hereunder shall release all
of its right, title and interest in the Security, other than the
Subordinate Voting Shares acquired pursuant to the Option.
ARTICLE 7.
DEFAULT AND REMEDIES
7.1. EVENTS OF DEFAULT. During the Exercise Period, upon the
occurrence of any one or more of the following events:
(a) the non-payment of any Indebtedness by the Borrower, whether
on account of principal, interest thereon or otherwise;
(b) default by the Borrower or Holdco in the performance or observance
of any covenant, condition or obligation contained in this Agreement
or any Security that does not require the payment of money by the Borrower
to the Lender;
(c) any representation or warranty made by the Borrower or Holdco herein
or in any officers' certificate or other document delivered to the Lender
pursuant hereto or in connection with any Security is found to be false
or incorrect in any way so as to make it materially misleading when made
or deemed to have been made;
(d) the Borrower or Holdco fails to pay to any Person any indebtedness
(other than Indebtedness) in excess of $100,000 in aggregate when due
(whether at scheduled maturity or by required payment, acceleration,
demand or otherwise) and such failure continues after any applicable
grace period.
(e) the Borrower or Holdco admits its inability to pay its debts
generally as they become due or otherwise acknowledges its insolvency;
(f) the Borrower or Holdco institutes any proceeding or takes any
corporate action or executes any agreement to authorize its
participation in or commencement of any proceeding:
(i) seeking to adjudicate it a bankrupt or insolvent, or
(ii) seeking liquidation, dissolution, winding up, reorganization,
arrangement, protection, relief or composition of it or any
of its property or debt or making a proposal with respect to
it under any law relating to bankruptcy,
-11-
insolvency, reorganization or compromise of debts or
other similar laws unless the such party is contesting
such action in good faith;
(g) any proceeding is commenced against or affecting the
Borrower or Holdco:
(i) seeking to adjudicate it a bankrupt or insolvent;
(ii) seeking liquidation, dissolution, winding up,
reorganization, arrangement, protection, relief
or composition of it or any of its property or debt
or making a proposal with respect to it under any law
relating to bankruptcy, insolvency, reorganization or
compromise of debts or other similar laws (including,
without limitation, any reorganization, arrangements or
compromise of debt under the BANKRUPTCY AND INSOLVENCY
ACT (Canada) or the laws of its jurisdiction of
incorporation); or
(iii) seeking appointment of a receiver, trustee, agent,
custodian or other similar official for it or for any
substantial part of its properties and assets, including
the MV Shares or the shares of the Borrower or any part
thereof;
(h) any creditor of the Borrower or Holdco, or any other Person,
shall privately appoint a receive, trustee or similar official for
any part of the properties and assets of the Borrower or Holdco,
including the MW Shares or the shares of the Borrower or any part
thereof;
(i) if any execution, distress or other enforcement process,
whether by court order or otherwise, becomes enforceable
against any property of the Borrower or Holdco;
(j) if any event or proceeding is taken with respect to any part
of the MV Shares or the shares of the Borrower in any jurisdiction
outside Canada which has an effect equivalent or similar to any
of the events described in subsections (f),(g),(h) or (i);
(k) if, at any time after execution and delivery thereof, any
Security ceases to be in full force and effect (unless within five
days of notice of the same being given by the Lender to the
Borrower such Security again has full force and effect as if
it had always had full force and EFFECT) OR if any Security
is declared by a court or tribunal of competent jurisdiction
to be null and void or the validity or enforceability thereof
is contested by the Borrower or Holdco, or the Borrower or
Holdco denies in writing that it has any or further liability
or obligations under any Security;
(1) the audited financial statements of the Borrower in respect
of any fiscal year are qualified in any material respect by the
Borrower's auditors;
(m) if members of ▇▇▇▇▇▇▇'▇ immediate family (or trusts for
their bought cease to own (directly or indirectly) one hundred
percent of the issued and outstanding shares of Holdco free
and clear of all Liens (other than in favour of the Lender);
and
-12-
(n) the Borrower transfers any of its MV Shares other than in
accordance with the Option and the Stockholders Agreement,
the Lender may, by notice to the Borrower, declare all indebtedness
of the Borrower to the Lender pursuant to this Agreement to be
immediately due and payable whereupon all such indebtedness shall
immediately become and be due and payable and any collateral
security, including the Security, for such indebtedness shall
immediately become enforceable without further demand or other
notice of any kind, all of which are expressly waived by the
Borrower.
7.2. Interest Ceasing to Accrue. Upon the expiry of the Option,
interest shall cease to accrue on the Principal Amount and no
accrued interest shall be payable in respect of the Loan.
7.3. EXTENSION OF MATURITY. Upon the expiry of the Option, the Loan
shall mature, and the Indebtedness hereunder shall become due and
payable, only upon delivery of a written notice by the Borrower
to the Lender specifying a date on which the Loan shall mature and
the Indebtedness shall be due and payable and the Loan shall be
deemed to mature and the Indebtedness shall be deemed to be due
and payable on such date.
7.4. REDUCTION OF INDEBTEDNESS. Upon the expiry of the Option, the
Borrower may upon delivery of a written notice to the Lender
permanently and irrevocably reduce the amount of the Loan and
the amount of the Indebtedness to the amount specified in such notice.
7.5. Purchase of Loan. Upon the expiry of the Option, Holdco may, upon
delivery of a written notice to the Lender, purchase for the aggregate
purchase price of $1.00, all of the Lender's right, title and interest
in and to the Loan, this Agreement, the Security, and any other document,
instrument, registration or security delivered or made pursuant to or
in CONNECTION with the Loan, this Agreement or the Security. The sale
of the Loan shall take place within the time period provided for in the
notice referred to in the foregoing sentence and the Lender shall
take such action and execute and deliver to Holdco such agreements,
conveyances, registrations, deeds and other documents and instruments
as Holdco may request to give effect to the provisions of this section.
ARTICLE 8.
MISCELLANEOUS
8.1. WAIVERS AND AMENDMENTS. No failure or delay by the Lender in
exercising any right hereunder shall operate as a waiver of such right
nor shall any single or partial exercise of any power or right
hereunder preclude its further exercise or the exercise of any
other power or right. Any waiver by the Lender of the strict observance,
performance or compliance with any term, covenant or condition of this
Agreement is not a waiver of any subsequent default and any
indulgence by the Lender with respect to any failure to strictly observe,
perform or comply with any term, COVENANT OR condition of this Agreement
is not a waiver of the entire term, covenant or condition or any
subsequent default. Any term, covenant, agreement or condition
of this Agreement may only be amended with the consent of the Borrower
and the Lender in writing or
-13-
compliance therewith may only be waived (either generally or in a
particular instance and either retroactively or prospectively) by
the Lender in writing.
8.2. Notices. All notices and other communications which may or are
required to be given pursuant to any provision of this Agreement
shall be given or made in writing and shall be deemed to be
validly given if served personally or by telecopy, in each case
addressed to the particular party at:
(a) If to the Borrower:
Les Gantiers Holding B.V.
Olympic Plaza
Frederik ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇-▇▇-▇▇▇-▇▇▇▇
Attention: Ton ▇▇▇▇▇▇▇
With a copy to:
Osler, ▇▇▇▇▇▇ & Harcourt
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(b) If to the Lender:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇, Managing Director
With a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇".' ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-14-
or at such other-a3dress of which any party may, from time to time,
advise the other parties by notice in writing given in accordance
with the foregoing. The date of receipt of any such notice shall
be deemed to be the date of delivery or telecopying thereof.
8.3.SUCCESSORS AND ASSIGNS. This Agreement shall enure to the
benefit of and shall be bindingupon the parties hereto and their
respective successors and permitted assigns.
8.4. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect any
other provision herein and, subject to the provisions of the
following paragraph, this Agreement shall be construed as if
the invalid or unenforceable provision had been omitted.
8.5. FURTHER ASSURANCES. The Borrower shall take such action
and execute and deliver to the Lender such agreements,
conveyances, deeds and other documents and instruments
as the Lender shall request, and register, file or record
the same (or a notice of financing statement in respect
thereof) in all offices where such registration; filing or
recording is, in the opinion of the Lender or the Lender's
counsel, necessary or advisable to constitute, perfect and
maintain the Security in all jurisdictions reasonably
required by the Lender, in each case within a reasonable
time after the request therefor by the Lender, and in each
case in form and substance satisfactory to the Lender
and the Lender's counsel. Whether before or after the
happening of an Event of Default, the Borrower shall at
its own expense do, make, execute or deliver, or cause to be
done, made, executed or delivered, all such further acts,
documents and things in connection with the Loan, this
Agreement and the Security as the Lender may reasonably require
from time to time for the purpose of giving effect to the
Loan, this Agreement and the Security including, without
limitation, for the purpose of facilitating the enforcement
of the Security, all immediately upon the request of the Lender.
8.6. Time. Time shall be of the essence of this Agreement.
8.7. ENTIRE AGREEMENT. This Agreement and the documents
referred to herein and delivered pursuant hereto constitute
the entire agreement between the parties hereto and supersede any
prior agreements, undertakings, declarations, representations and
understandings, both written and verbal, in respect of the subject
matter hereof and, without limiting the generality of the
foregoing, the parties hereto acknowledge and agree that
the Clairvest Loan Agreement is hereby amended, restated and
replaced in its entirety by this Agreement.
8.8. COUNTERPARTS. This Agreement may be executed by the parties
in separate counterparts and by facsimile transmission, each of
which when so executed and delivered shall be an original, but
all such counterparts shall together constitute one and the same
instrument.
8.9. Assignment. None of the parties shall be entitled to assign
or transfer the benefit of this Agreement or any advance made or
to be made hereunder or any of its rights or obligations
hereunder without the prior written consent of the other parties,
any such transfer or assignment without consent being null and
void save AND EXCEPT that the Lender shall be entitled to assign or
transfer the benefit of this Agreement and the other Security to any
of its affiliates (as such term
-15-
is defined in THE-SECURITIES ACT (Ontario). Upon notice thereof by
the Lender, the assignee shall have the same rights and benefits as
if it were the Lender hereunder.
8.10. RIGHT AND REMEDIES CUMULATIVE AND NOT ALTERNATIVE. The rights
and remedies provided to the Lender under this Agreement and under the
other Security Documents are cumulative and not alternative and are in
addition to and not in substitution for any other rights and remedies
which they may have hereunder or thereunder or under the laws of
Ontario or any other jurisdiction and the exercise by them or any of
them of any right or remedy arising from a default or breach of any
agreement, covenant or obligation contained in this Agreement or in
any of the other Security Documents shall not be deemed to be a waiver
of or to alter, affect or prejudice any other right or remedy to which
they may be lawfully entitled for the same default or breach.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date first written above.
LES GANTIERS HOLDING B.V.
By:
Name:
Title:
LES GANTIERS LIMITED
By:
Name:
Title:
AIP/CGI NB ACQUISITION CORP.
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CFO
-15-
is defined in THE-SECURITIES ACT (Ontario). Upon notice thereof by
the Lender, the assignee shall have the same rights and benefits as
if it were the Lender hereunder.
8.10. RIGHT AND REMEDIES CUMULATIVE AND NOT ALTERNATIVE. The rights
and remedies provided to the Lender under this Agreement and under the
other Security Documents are cumulative and not alternative and are in
addition to and not in substitution for any other rights and remedies
which they may have hereunder or thereunder or under the laws of
Ontario or any other jurisdiction and the exercise by them or any of
them of any right or remedy arising from a default or breach of any
agreement, covenant or obligation contained in this Agreement or in
any of the other Security Documents shall not be deemed to be a waiver
of or to alter, affect or prejudice any other right or remedy to which
they may be lawfully entitled for the same default or breach.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date first written above.
LES GANTIERS HOLDING B.V.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
LES GANTIERS LIMITED
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
AIP/CGI NB ACQUISITION CORP.
By:
Name:
Title:
EXHIBIT 4.8
AMENDMENT NO. 1 TO THE AMENDED AND RESTATED LOAN AGREEMENT
=============================================================
THIS AMENDMENT NO. 1 TO THE AMENDED AND RESTATED LOAN
AGREEMENT (the "AMENDMENT") among Les Gantiers Holding B.V., a
corporation governed by the laws of the Netherlands (the
"BORROWER"), Les Gantiers Limited, a corporation governed
by the laws of Jersey ("LGL"), and AIP/CGI NB Acquisition
Corp., a corporation governed by the laws of New Brunswick (the
"LENDER") is made as of October 21, 1999 (the "EFFECTIVE
DATE"). All capitalized terms used but not defined herein shall
have the meanings given such terms in the Amended and Restated
Loan Agreement, dated as of October 20, 1999 (the "AGREEMENT").
WHEREAS, on October 20, 1999, the Borrower, LGL, and
the Lender entered into the Agreement; and
WHEREAS, the Borrower, the Lender and LGL agree to amend the
Agreement as set forth herein.
NOW THEREFORE, in consideration of the premises set forth
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the
Lender and LGL agree as follows:
1. INTEREST RATE. Section 1.1 of the Agreement is hereby
amended by deleting the following:
"INTEREST RATE" has the meaning ascribed thereto in
Section 2.2.
2. LOAN. Section 2.1 of the Agreement is hereby amended by
deleting Section 2.1 of the Agreement and replacing it in its
entirety with the following:
2.1. LOAN. The Borrower unconditionally promises to
pay on the Maturity Date to the Lender or to its order,
at the offices at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, the amount of C$13,381,477.18
(the "PRINCIPAL AMOUNT").
3. INTEREST. Section 2.2 of the Agreement is hereby
amended by deleting Section 2.2 of the Agreement and replacing it
in its entirety with the following:
2.2 INTEREST. No interest shall accrue on the Principal
Amount.
4. INTEREST CEASING TO ACCRUE. Section 7.2 of the
Agreement is hereby amended by deleting Section 7.2 in its entirety.
5. RATIFICATION. Except as expressly evidenced or
supplemented hereby, each provision of the Agreement shall remain in
full force and effect and, as amended or supplemented hereby, the
Agreement is in all respects agreed to, ratified and confirmed by each
of the parties hereto.
6. EFFECTIVE DATE. Upon the execution hereof by the Borrower,
the Lender and LGL, this Amendment shall become effective as of
October 21, 1999.
7. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the internal laws of the State of Delaware.
8. COUNTERPARTS. This Amendment may be executed in any number
of counterparts, each of which when so executed shall be deemed an
original, but all such counterparts shall constitute one and the same
instrument.
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned has executed this Amendment
to the Agreement as of the day and year first written above.
AIP/CGI NB ACQUISITION CORP.
By: /s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secretary
LES GANTIERS HOLDING B.V.
By:
Name:
Title:
LES GANTIERS LIMITED
By:
Name:
Title:
IN WITNESS WHEREOF, the undersigned has executed this Amendment
to the Agreement as of the day and year first written above.
AIP/CGI NB ACQUISITION CORP.
By:
Name:
Title:
LES GANTIERS HOLDING B.V.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
LES GANTIERS LIMITED
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
DEBENTURE PURCHASE AGREEMENT
=========================================
BETWEEN CONSOLTEX HOLDINGS, INC.
AND
LES GANTIERS HOLDING B.V.
DATED AS OF
SEPTEMBER 29, 2000
TABLE OF CONTENTS
Page
Section 1. Authorization and Closing............................1
1.1. Authorization of the Debenture.......................1
1.2. Purchase and Sale of the Debenture...................2
1.3. The Closing..........................................2
Section 2. Conditions of the Closing............................2
2.1. Conditions of Purchaser..............................2
2.2. Conditions of the Company............................2
Section 3. Representations and Warranties.......................3
3.1. Representations and Warranties of the Purchaser......3
3.2. Representations and Warranties of the Company........3
Section 4. Transfer of Restricted Securities....................4
4.1. General Provisions...................................4
4.2. Register of Securities...............................4
4.3. Loss, Theft or Destruction of Debenture..............4
Section 5. Definitions..........................................5
Section 6. Miscellaneous........................................6
6.1. Legend...............................................6
6.2. Consent to Amendments................................6
6.3. Survival of Representations and Warranties...........6
6.4. Successors and Assigns...............................6
6.5. Severability.........................................6
6.6. Counterparts.........................................6
6.7. Descriptive Headings, Interpretation.................6
6.8. Governing Law........................................6
6.9. Notices..............................................6
6.10. No Strict Construction...............................6
EXHIBITS
List of Exhibits
DEBENTURE PURCHASE AGREEMENT
THIS DEBENTURE PURCHASE AGREEMENT (this "AGREEMENT") is made as of
September 29, 2000, by and between Consoltex Holdings, Inc., a Delaware
corporation (the "COMPANY") and Les Gantiers Holding B.V., a company
subject to the laws of the Netherlands (the "PURCHASER"). Except as
otherwise indicated herein, capitalized terms used herein are defined in
Section 5 hereof.
WHEREAS, the Purchaser is a party to the Amended and Restated Loan
Agreement, made as of September 19, 1999, as amended by Amendment No. 1,
dated as of September 20, 1999 (the "LOAN AGREEMENT"), pursuant to which
the Purchaser, as of the date hereof, is obligated to pay AIP/CGI NB
Acquisition Corp. ("AIP") an amount equal to $9,041,538.51 (the "LOAN
AMOUNT");
WHEREAS, American Industrial Partners Capital Fund II, L.P. shall
contribute $7,377,000 to the capital of the Company;
WHEREAS, AIP shall have exercised its option (the "OPTION") to
purchase all of the multiple voting shares of Consoltex, Inc. (the "MVS")
for a purchase price equal to $12,164,538.51 (the "OPTION PRICE");
WHEREAS, AIP shall pay the Option Price by first setting-off against,
and in full satisfaction of, the obligations of the Purchaser under the
Loan Agreement the Loan Amount and then delivering to the Purchaser by wire
transfer to an account designated by the Purchaser the excess of the Option
Price over the Loan Amount (the "SPREAD");
WHEREAS, in consideration of the payment of the Spread, the Purchaser
shall deliver the MVS to AIP;
WHEREAS, the Purchaser desires to purchase from the Company with a
portion of the Spread, and the Company intends to issue to the Purchaser, a
10.5% Convertible Debenture in the principal amount of $2,123,000 (the
"DEBENTURE"); and
WHEREAS, AIP and Consoltex Inc., a New Brunswick (Canada) corporation,
shall be amalgamated.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
Section . AUTHORIZATION AND CLOSING.
.. AUTHORIZATION OF THE DEBENTURE. The Company shall authorize
the issuance and sale to the Purchaser of the Debenture containing the
terms and conditions and in the form set forth in EXHIBIT A attached
hereto.
.. PURCHASE AND SALE OF THE DEBENTURE. At the Closing, the Company shall
sell to the Purchaser, and subject to the terms and conditions set forth
herein, the Purchaser shall purchase from the Company the Debenture in the
aggregate principal amount of $2,123,000.00 (the "PURCHASE PRICE").
.. THE CLOSING. The closing of the purchase and sale of the
Debenture (the "CLOSING") shall take place at the office of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, ▇▇▇ ▇▇{▇▇} ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ at 10:00 a.m. on
September 29, 2000, or at such other place or on such other date as may be
mutually agreeable to the Company and the Purchaser. At the Closing, the
Company shall deliver to the Purchaser instruments evidencing the Debenture
to be purchased by the Purchaser, payable to the order of the Purchaser or
its nominee or registered in the Purchaser's or its nominee's name,
respectively, upon payment of the Purchase Price by wire transfer of
immediately available funds to an account designated by the Company.
Section . CONDITIONS TO THE CLOSING.
.. CONDITIONS OF PURCHASER. The obligation of the Purchaser to
purchase and pay for the Debenture at the Closing is subject to the
satisfaction (or waiver by the Purchaser) as of the Closing of the
following conditions:
) the representations and warranties contained in Section 3.2
hereof shall be true and correct at and as of the Closing as though then
made, except to the extent of changes caused by the transactions expressly
contemplated herein;
) the Company shall have simultaneously sold to the Purchaser
the Debenture to be purchased by the Purchaser hereunder at the Closing;
) the purchase of the Debenture by the Purchaser hereunder
shall not be prohibited by any applicable law or governmental rule or
regulation and shall not subject the Purchaser to any penalty or liability
under or pursuant to any applicable law or governmental rule or regulation,
and the purchase of the Debenture by the Purchaser hereunder shall be
permitted by laws, rules and regulations of the jurisdictions and
governmental authorities and agencies to which the Purchaser is subject;
and
) AIP shall have exercised the Option, paid the Option Price,
offset the Loan Amount against the Option Price and paid the Spread.
.. CONDITIONS OF THE COMPANY. The obligation of the Company to
issue the Debenture at the Closing is subject to the satisfaction (or
waiver by the Company) as of the Closing of the following conditions:
) the representations and warranties contained in Section 3.1
hereof shall be true and correct at and as of the Closing as though then
made, except to the extent of changes caused by the transactions expressly
contemplated herein;
) the Purchaser shall have delivered, or caused to be delivered on its
behalf, the Purchase Price to the Company in immediately available funds at
the Closing;
) the issuance of the Debenture by the Company hereunder shall
not be prohibited by any applicable law or governmental rule or regulation
and shall not subject the Company to any penalty or liability under or
pursuant to any applicable law or governmental rule or regulation, and the
issuance of the Debenture shall be permitted by laws, rules and regulations
of the jurisdictions and governmental authorities and agencies to which the
Company is subject; and
) AIP shall have exercised the Option, paid the Option Price,
offset the Loan Amount against the Option Price and paid the Spread.
Section . REPRESENTATIONS AND WARRANTIES.
.. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. As a
material inducement to the Company to enter into this Agreement and to
issue the Debenture, the Purchaser hereby represents and warrants that:
() the Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is qualified to do business in every jurisdiction in
which its ownership of property or conduct of business requires it to
so qualify. The Purchaser possesses all requisite corporate power and
authority and all material licenses, permits and authorizations
necessary to own and operate its properties, to carry on its
businesses as now conducted and presently proposed to be conducted, to
execute, deliver and perform this Agreement, and to carry out the
transactions contemplated by this Agreement;
() this Agreement has been duly and validly executed and
delivered by the Purchaser and this Agreement constitutes a legal and
binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general principles of equity;
() the execution and delivery by the Purchaser of this
Agreement and the performance by the Purchaser of its obligations
hereunder will not, with or without the giving of notice or lapse of
time, or both (i) violate any provision of law, statute, rule or
regulation to which the Purchaser is subject, (ii) violate any order,
judgment or decree applicable to the Purchaser or (iii) conflict with,
or result in a breach or default under, any term or condition of any
agreement or other instrument to which the Purchaser is a party or by
which the Purchaser is bound; and
() the Purchaser is acquiring the Restricted Securities purchased
hereunder or acquired pursuant hereto for its own account with the
present intention of holding such securities for purposes of
investment, and that it has no intention of selling such securities in
a public distribution in violation of the federal securities laws or
any applicable
state securities laws; PROVIDED that nothing contained
herein shall prevent the Purchaser and subsequent holders of
Restricted Securities from transferring such securities in compliance
with the provisions of Section 4 hereof.
.. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a
material inducement to the Purchaser to enter into this Agreement and
purchase the Debenture, the Company hereby represents and warrants that:
() the Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
is qualified to do business in every jurisdiction in which its ownership of
property or conduct of business requires it to so qualify. The Company
possesses all requisite corporate power and authority and all material
licenses, permits and authorizations necessary to own and operate its
properties, to carry on its businesses as now conducted and presently
proposed to be conducted, to execute, deliver and perform this Agreement,
and to carry out the transactions contemplated by this Agreement;
() this Agreement has been duly and validly executed and
delivered by the Company and this Agreement constitutes a legal and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general principles of
equity; and
() the execution and delivery by the Company of this
Agreement and the performance by the Company of its obligations hereunder
will not, with or without the giving of notice or lapse of time, or both
(i) violate any provision of law, statute, rule or regulation to which the
Company is subject, (ii) violate any order, judgment or decree applicable
to the Company or (iii) conflict with, or result in a breach or default
under, any term or condition of any agreement or other instrument to which
the Company is a party or by which the Company is bound.
Section . TRANSFER OF RESTRICTED SECURITIES.
.. GENERAL PROVISIONS. Other than to affiliates of the
Purchaser, the Restricted Securities shall not be transferable without the
prior written consent of the Company.
.. REGISTER OF SECURITIES. The Company or its duly appointed
agent shall maintain a register for the Debenture, in which the Company
shall register each issue and sale of the Debenture. The registered holder
of the Debenture shall be treated as the owner of the Debenture so
registered and any interest thereon for all purposes until the Company or
its duly appointed agent is required to record a transfer of the Debenture
on its register. The Company or its duly appointed agent shall be required
to record a transfer when it receives the Debenture to be transferred duly
and properly endorsed by the registered holder thereof or by its attorney
duly authorized in writing. Upon recording a transfer, the Company shall
reissue the Debenture in the name of the transferee.
.. LOSS, THEFT OR DESTRUCTION OF DEBENTURE. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of the Debenture
issued hereunder by the Company and, in the
case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such
mutilation, upon surrender and cancellation of the Debenture, the Company,
at its expense, will execute and deliver, in lieu of such lost, stolen,
destroyed or mutilated Debenture, a new Debenture of like tenor and dated
as of the date of the lost, stolen, destroyed or mutilated Debenture.
Section . DEFINITIONS.
For the purposes of this Agreement, the following terms have the
meanings set forth below:
"AGREEMENT" has the meaning set forth in the preface hereof.
"CLOSING" has the meaning set forth in Section 1.3 hereof.
"COMPANY" has the meaning set forth in the preface hereof.
"DEBENTURE" has the meaning set forth in the recitals hereto.
"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.
"PURCHASE PRICE" has the meaning set forth in Section 1.2 hereof.
"PURCHASER" has the meaning set forth in the preface hereof.
"RESTRICTED SECURITIES" means (i) the Debenture issued hereunder,
(ii) the common stock issued upon conversion of the Debenture and (iii) any
securities issued with respect to the securities referred to in clauses (i)
or (ii) above by way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or
other reorganization. As to any particular Restricted Securities, such
securities shall cease to be Restricted Securities when they have (a) been
effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (b) been
distributed to the public through a broker, dealer or market maker pursuant
to Rule 144 (or any similar provision then in force) under the Securities
Act or become eligible for sale pursuant to Rule 144(k) (or any similar
provision then in force) under the Securities Act or (c) been otherwise
transferred and new certificates for them not bearing the legend set forth
in Section 6.1 hereof have been delivered by the Company in accordance with
Section 4 hereof. Whenever any particular securities cease to be
Restricted Securities, the holder thereof shall be entitled to receive from
the Company, without expense, new securities of like tenor not bearing the
legend set forth in Section 6.1 hereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar federal law then in force.
"SUBSIDIARY" means any corporation, limited liability company, partnership
or other business entity of which the securities having a majority of the
ordinary voting power in electing the board of directors are, at the time
as of which any determination is being made, owned by the Company either
directly or through one or more Subsidiaries.
Section . MISCELLANEOUS.
.. LEGEND. Each certificate or instrument representing
Restricted Securities shall be imprinted with the following legend:
"THE SECURITY REPRESENTED BY THIS INSTRUMENT WAS ORIGINALLY
ISSUED ON SEPTEMBER 29, 2000, AND HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE TRANSFER OF SUCH
SECURITY IS SUBJECT TO THE DEBENTURE PURCHASE AGREEMENT, DATED AS
OF SEPTEMBER 29, 2000, AS AMENDED AND MODIFIED FROM TIME TO TIME,
BETWEEN THE ISSUER (THE "COMPANY") AND CERTAIN OTHER PARTIES
THERETO. UPON WRITTEN REQUEST, A COPY OF SUCH CONDITIONS SHALL BE
FURNISHED BY THE COMPANY TO THE HOLDER HEREOF WITHOUT CHARGE."
.. CONSENT TO AMENDMENTS. The provisions of this Agreement may
be amended only if the Company has obtained the written consent of the
holders of a majority of the outstanding principal amount of the Debenture.
.. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made in writing by any
party in connection herewith shall survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby.
.. SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to the
benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, and whether or not any express
assignment has been made, the provisions of this Agreement which are for
the Purchaser's benefit as a purchaser or holder of the Debenture are also
for the benefit of, and enforceable by, any subsequent holder of the
Debenture.
.. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
.. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
.. DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement. The use of the word
"including" in this Agreement shall be by way of example rather than by
limitation.
.. GOVERNING LAW. This Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with,
the laws of the State of Delaware, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.
.. NOTICES. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid) or mailed to the recipient by certified
or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications shall be sent to the Purchaser
and to the Company at the addresses indicated below or to such other
address or to the attention of such other Person as the recipient party has
specified by prior written notice to the sending party:
if to the Company:
Consoltex Holdings, Inc.
_ American Industrial Partners Capital Fund II, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
if to the Purchaser:
Les Gantiers Holding B.V.
_ Les Gantiers Limited
Olympic ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Attention: Ton ▇▇▇▇▇▇▇
with a copy to:
Osler, ▇▇▇▇▇▇ & Harcourt
P. O. Box 50
1 First Canadian Place
Toronto, Ontario M5X 1B8, Canada
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
.. NO STRICT CONSTRUCTION. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto,
and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any of the provisions of this
Agreement.
[END OF DOCUMENT]
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Debenture
Purchase Agreement on the date first written above.
CONSOLTEX HOLDINGS, INC.
By: /s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: V-P, Legal Affairs & Corp. Secy.
LES GANTIERS HOLDING B.V.
By:
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have executed this Debenture
Purchase Agreement on the date first written above.
CONSOLTEX HOLDINGS, INC.
By:
Name:
Title:
LES GANTIERS HOLDING B.V.
By: /s/Aem Diehmal
Name: Aem Diehmal
Title: Director
LIST OF EXHIBITS
Exhibit A - Form of Debenture
EXHIBIT 4.10
TRANSFER AGREEMENT
=========================
EXECUTION VERSION
TRANSFER AGREEMENT
THIS AGREEMENT (the "AGREEMENT"), dated as of September 29
2000 (the "EFFECTIVE DATE"), is by and among Les Gantiers
Holding B.V., a company subject to the laws of the Netherlands
(the "TRANSFEROR"), AIP/CGI NB Acquisition Corp., a
corporation subject to the laws of New Brunswick, Canada
(the "TRANSFEREE"), and, for purposes of paragraph 4 hereof,
Les Gantiers Limited, a company subject to the laws of
Jersey ("LGL"), Consoltex Inc. (formerly Consoltex Group Inc.),
a corporation subject to the laws of New Brunswick, Canada and
The Big Sky Trust, a trust established under the laws of
Jersey (the "TRUST").
WHEREAS, the Transferor, the Transferee and LGL are
parties to the Amended and Restated Loan Agreement, made as
of October 20, 1999, as amended by Amendment No. 1,
dated as of October 21, 1999 (the "LOAN AGREEMENT"),
pursuant to which the Transferor, as of the date hereof, is
obligated to pay the Transferee an amount equal to $9,041,538.51
(the "LOAN AMOUNT");
WHEREAS, the Transferor and the Transferee are parties to
that certain Stockholders Agreement, dated as of September
9, 1999, among the Transferee, Consoltex Group Inc. ("CGI"),
LGL, the Transferor and the Trust(the "STOCKHOLDERS AGREEMENT");
WHEREAS, pursuant to the terms of the Stockholders
Agreement, the Transferee acquired an option (the "OPTION") to
purchase 3,140,000 multiple voting shares of CGI (the "MV SHARES")
and desires to exercise the Option for a purchase price equal
to $12,164,538.51 (the "OPTION PRICE"); and
WHEREAS, in connection with the Transferee's exercise
of the Option, the Transferor desires to transfer, and the
Transferee desires to acquire, the MV Shares.
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
OPTION EXERCISE. This Agreement shall serve as the
irrevocable written notice of the Transferee to exercise the
Option and acquire the MV Shares in accordance with the
Stockholders Agreement. In consideration of the Transferee's
payment of the Option Price by (a) first reducing and
setting-off against the Option Price the Loan Amount
(the "SET-OFF") and then (b) paying to the Transferor on the
date hereof by wire transfer to accounts designated by the
Transferor the amount of $3,123,000, being the excess of the
Option Price over the Loan Amount (the "CONSIDERATION"), the
Transferor hereby transfers and assigns to the Transferee
the MV Shares, and the Transferee hereby accepts such transfer
and assignment.
REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR.
The Transferor hereby represents and warrants to the Transferee
that:
() the Transferor has full power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder, and this Agreement has been duly executed and
delivered by the Transferor;
() the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the
performance of the Transferor's obligations hereunder will not
conflict with, or result in any violation of or default under,
any provision of any governing instrument applicable to the
Transferor, or any agreement or other instrument to which the
Transferor is a party or by which the Transferor or any of
its properties are bound, or any judgement, decree, order,
statute, rule or regulation applicable to the Transferor or
the Transferor's business or properties; and
() upon the consummation of the transactions
contemplated hereby, the Transferee will receive good and valid
title to the MV Shares to be acquired by it hereunder, free and
clear of any lien, liability or encumbrance, other than any
existing liens in favor of the Transferee.
REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE.
The Transferee hereby represents and warrants to the Transferor
that:
() the Transferee has full power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder and this Agreement has been duly executed and
delivered by the Transferee; and
() the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the
performance of its obligations hereunder by the Transferee will
not materially conflict with, or result in any material
violation of or default under, any provision of any governing
instrument applicable to the Transferee, or any agreement of
other instrument to which the Transferee is a party of by which
the Transferee or any of its properties are bound, or any
decree, order, statute, rule or regulation applicable to
the Transferee or its business or properties.
TERMINATION OF CERTAIN AGREEMENTS. The parties
hereto agree that effective upon the payment of the
Consideration and without any further action being required
the following shall be terminated as of the date hereof
and shall have no further force and effect: (a) the Guaranty,
made as of September 9, 1999, by American Industrial Partners
Capital Fund II, L.P. in favor of the Transferor and
(b) the Stockholders Agreement.
PAYOFF OF LOAN AMOUNT. Each of the Transferee and the
Transferor acknowledge and agree that, effective upon the
Set-off and without any further action being required,
all liabilities, obligations and indebtedness owing by
the Transferor and LGL to the Transferee under the Loan
Agreement shall be deemed to have been satisfied in full and
the Loan Agreement shall be hereby terminated and of no
further force or effect. The Transferee shall promptly deliver
to the Transferor any and all notes or other instruments
in favor of the Transferee canceled and marked "Paid in Full."
MISCELLANEOUS. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State
of Delaware without regard to the conflicts of law principles
thereof. No amendment or waiver of this Agreement shall be
effective without the prior written
consent of the party against whom such amendment or waiver
is sought to be enforced. This Agreement may be executed in
one or more counterparts, each of which is deemed to be an
original and all of which taken together constitute on and
the same agreement. From time to time, at the request of
the other party hereto, each party hereto shall execute
and deliver such additional documents and take such further
lawful action as may be necessary or desirable to consummate
and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned have executed this
Transfer Agreement on the date first written above.
TRANSFEROR:
LES GANTIERS HOLDING B.V.
By:
Name:
Title:
TRANSFEREE:
AIP/CGI NB ACQUISITION CORP.
By:/s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: V-P, Legal Affairs and
Corporate Secretary
FOR PURPOSES OF PARAGRAPH 4:
CONSOLTEX INC.
By:/s/C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: C.▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: V-P, Legal Affairs and
Corporate Secretary
LES GANTIERS LIMITED
By:_________________________
Name:
Title:
THE BIG SKY TRUST
By:_________________________
Name:
Title:
IN WITNESS WHEREOF, the undersigned have executed this
Transfer Agreement on the date first written above.
TRANSFEROR:
LES GANTIERS HOLDING B.V.
By:/s/Aem ▇▇▇▇▇▇▇
Name: Aem ▇▇▇▇▇▇▇
Title: Director
TRANSFEREE:
AIP/CGI NB ACQUISITION CORP.
By:
Name:
Title:
FOR PURPOSES OF PARAGRAPH 4:
CONSOLTEX INC.
By:
Name:
Title:
LES GANTIERS LIMITED
By: /s/illegible signature
Name:
Title: Director
THE BIG SKY TRUST
By:/s/▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
Title:
EXHIBIT 4.11
GUARANTY
======================================
This Guaranty (this "Guaranty") is made as of September 29, 2000 by
Consoltex Inc., a corporation organized under the laws of New Brunswick,
Canada (formerly Consoltex Group Inc.) ("Consoltex Inc."), Consoltex (USA)
Inc., a New York corporation ("Consoltex USA"), The Balson-Hercules Group
Ltd., a Rhode Island corporation ("B-H"), and LINQ Industrial Fabrics,
Inc., a Delaware corporation ("LINQ"), (the "Guarantors") for the benefit
of Les Gantiers Holding B.V., a company existing under the laws of the
Netherlands ("LGH"). Reference is made to the Convertible Debenture dated
September 29, 2000 ("the Debenture") in the principal amount if $2,133,000
between Consoltex Holdings, Inc. (the "Company") and LGH.
1. In the event that the Company is obligated to make a payment to LGH
and the Company does not satisfy such payment obligation (the "Obligation")
in full at the time specified therefor (any such shortfall, the
"Deficiency"), the Guarantors guarantee payment in full to LGH upon demand
by LGH such amounts as are necessary to pay in full the amount of such
Deficiency. This Guaranty shall be discharged upon satisfaction of the
Company's Obligation or upon the Guarantors' payment in full of any
Deficiency. Notwithstanding anything to the contrary contained herein, as
between LGH and the holders of the senior subordinated notes issued under
the Indenture (as defined in the Debenture), the payment obligations of the
Guarantors hereunder shall be PARI PASSU with the payment obligations
contained in the senior subordinated notes issued under the Indenture.
2. (a) For purposes of this Section 2, the following terms shall have
the following meanings:
"CREDIT AGREEMENT" means the Amended and Restated Credit
Agreement, dated as of October 25, 1999, by and among, INTER ALIA, the
Company, Consoltex Inc., Consoltex USA, B-H and LINQ, as borrowers,
certain subsidiaries of the borrowers as guarantors, Bank of America, N.A.,
as U.S. Agent, National Bank of Canada, as Canadian Agent and the lenders
party thereto, as amended, modified, supplemented, amended and restated,
refinanced or replaced heretofore and from time to time hereafter.
"CREDIT PARTY" means each Guarantor, the Company and each other
Borrower (as defined in the Credit Agreement) or Guarantor (as defined in
the Credit Agreement) and each other party granting a security interest in
Collateral (as defined in the Credit Agreement) to secure payment of the
Senior Obligations, as each of such terms are defined in the Credit
Agreement.
"SENIOR CREDITORS" means the Agents (as defined in the Credit
Agreement), the Lenders (as defined in the Credit Agreement), and all other
future holders (or any one of them) of the Senior Obligations.
"SENIOR LOAN DOCUMENTS" means (i) the Credit Agreement,
together with the Loan Documents (as defined in the Credit Agreement) and
all other documents, instruments and agreements related thereto, and any
amendments, restatements, supplements or modifications of or with respect
to any of the foregoing, and (ii) any
other agreement, document or instrument executed by any borrower,
guarantor in connection with the Senior Obligations, including
without limitation pursuant to a refinancing, refunding or replacement
of any of the Senior Obligations.
"SENIOR OBLIGATIONS" means all debt or other obligations of any
nature, whether now existing or hereafter arising, consisting of (i) all
principal, interest (including any interest accruing after the commencement
of any bankruptcy, insolvency, receivership or similar proceedings and any
other interest that would have accrued but for the commencement of such
proceedings, whether or not allowed), fees, reimbursement obligations
arising in connection with letters of credit, indemnification obligations,
costs and expenses payable by any or all of Credit Parties under any of the
Senior Loan Documents, including without limitation all Obligations (as
defined in the Credit Agreement) now and hereafter existing, and (ii) all
indebtedness of any or all of the Credit Parties under any amendments,
modification, renewals, extensions, restatements or loan documents
evidencing refinancings, refundings or replacements of any of the
foregoing.
"STANDSTILL PERIOD" means the period of time from the date
hereof to and including the 91st day following the Facility Termination
Date (as defined in the Credit Agreement).
"SUBORDINATED CREDITORS" means, collectively, any holder or
owner from time to time of any interest in any of the Subordinated
Obligations.
"SUBORDINATED TRANSACTION DOCUMENTS" means, (i) the Debenture,
(ii) any PIK Debentures issued pursuant to the Debenture, (iii) the
Purchase Agreement, (iv) the Guaranty and (v) all other documents entered
into in connection therewith or herewith which relate to indebtedness or
liabilities, direct or indirect, absolute or conditional, of any Guarantor,
to all or any of the Subordinated Creditors, incurred thereunder and the
other obligations evidenced thereby and any amendments, restatements,
supplements or modifications of or with respect to any of the foregoing and
permitted hereunder.
"SUBORDINATED OBLIGATIONS" means the indebtedness, obligations
and liabilities of each Guarantor under any of the Subordinated Transaction
Documents.
(b) SUBORDINATION. The Subordinated Obligations are, and shall at
all relevant times remain, subordinated to the Senior Obligations to the
extent and in the manner herein provided. The Subordinated Creditors will
not at any time during the Standstill Period ask, demand, ▇▇▇ for, accept
or exercise any remedy in respect of any security for, or take or receive
from any Guarantor or any other Credit Party (whether, without limitation,
by demanding or receiving any payment of any Deficiency, scheduled payment,
or mandatory or optional prepayment, of principal, interest, fees,
expenses, reimbursements, indemnification obligations or other amounts
owing thereby, exercising liens or rights of setoff, or by any other action
or manner), the whole or any part of any amounts which may now or hereafter
be owing by any Guarantor or any successors or assigns of any Guarantor
including, without limitation, any receiver, trustee or debtor in
possession (the term "Guarantor" hereinafter shall include any such
successors or
assigns of such Guarantor), to the Subordinated Creditors
which now or hereafter constitute or otherwise were or will be incurred in
connection with the Subordinated Obligations (whether such amounts
represent payment obligations under this Guaranty, principal or interest or
other obligations which are due or not due, direct or indirect, absolute or
contingent or obligations arising from the exercise of any redemption, put
or similar right in respect of any Subordinated Obligations, or any
warrants or any stock issued in connection with the exercise thereof),
including, without limitation, the taking of any instruments evidencing
such amounts nor any security for any of the foregoing (other than the
delivery by the Guarantors, and the receipt by the Subordinated Creditors,
of this Guaranty).
(c) NO PAYMENT OR EXERCISE OF REMEDIES. The Subordinated Creditors
will not at any time during the Standstill Period, including following any
acceleration of the maturity of any amount owing on the Subordinated
Obligations, take any action to enforce or collect amounts so owing against
any Guarantor or other Credit Party or any security for any Subordinated
Obligation or act as a petitioning creditor in any bankruptcy, insolvency,
reorganization, receivership or similar proceeding (an "Insolvency
Proceeding") filed against any Guarantor or any other Credit Party.
(d) NO LIENS. During the Standstill Period no Subordinated
Creditor shall have a security interest or other rights in any assets or
property of any Guarantor or any other Credit Party as security for the
Subordinated Obligations. If any Subordinated Creditor shall foreclose or
realize on, or otherwise receive or come into possession of, any such
assets or property in violation of the terms hereof, such Subordinated
Creditor shall promptly deliver such assets or property, or the proceeds
thereof, to the Senior Creditors (such assets or property, and proceeds
thereof, being held in trust by such Subordinated Creditor for the benefit
of the Senior Creditors until such delivery). The provisions of this
paragraph 2(d) are effective irrespective of any event or circumstance
pertaining to the time or order of acquisition, attachment or perfection of
any security interest or lien of the Senior Creditors or the Subordinated
Creditors in any assets, or the time or order of filing or recording of
financing statements or any other document or instrument by the Senior
Creditors or the Subordinated Creditors.
(e) BANKRUPTCY DISTRIBUTIONS. In the event of any distribution,
division or application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all or any part of the assets of any
Guarantor or the proceeds thereof to creditors of any Guarantor upon any
indebtedness of any Guarantor, by reason of the liquidation, dissolution or
other winding up of any Guarantor or any Guarantor's business, or, in the
event of any Insolvency Proceeding, then and in any such event, any payment
or distribution of any kind or character, either in cash, securities or
other property, which shall be payable or deliverable to any Subordinated
Creditor upon or with respect to any or all the Subordinated Obligations
shall be paid or delivered directly to the Senior Creditors for application
against the Senior Obligations, whether due or not due, in a manner which
the Senior Creditors, in their sole discretion, shall determine, at all
times during the Standstill Period, and the Senior Creditors or their
representative is hereby irrevocably authorized and empowered to ask for,
demand, ▇▇▇ for, collect, and receive and receipt for every such payment or
distribution and give acquittance therefor.
(f) RECEIPTS BY SUBORDINATED CREDITORS HELD IN TRUST. Should any
payment or distribution of security or proceeds thereof be received by any
Subordinated Creditor constituting or otherwise received with respect to
the Subordinated Obligations during the Standstill Period, each
Subordinated Creditor agrees forthwith to deliver the same to the Senior
Creditors or their representative in precisely the form received (except
for the endorsement or assignment of such Subordinated Creditor where the
Senior Creditors or their representative, in its or their sole discretion,
deems same to be necessary), for application against the Senior
Obligations, whether due or not due, and until so delivered, the same shall
be held in trust by such Subordinated Creditor as property of the Senior
Creditors.
(g) CONTINUITY OF SUBORDINATION. The provisions of this Section 2
shall continue and remain in full force and effect notwithstanding the
occurrence at any time and from time to time of any modification of or
affecting the Senior Obligations or the security therefor or the Credit
Parties, without notice to the Subordinated Creditors, including by way of
example and not by limitation: (i) the sale, assignment, refinancing,
modification, amendment, rearrangement, postponement, extension, renewal,
increase, restructuring, acceleration or demand for payment of the Senior
Obligations in whole or in part and as often as the Senior Creditors may
wish; (ii) the waiver, failure to enforce, surrender, impairment,
modification or exchange of any of the Senior Creditors' rights under any
of the Senior Loan Documents; (iii) the settlement, release (by operation
of law or otherwise), compromise, collection or liquidation, in any manner,
of any of the Senior Obligations; or (iv) the release of any Credit Party,
or any of them, or any other endorser, guarantor or other person from any
liability on any of the Senior Obligations, or release of any collateral
for the Senior Obligations, all of which events the Senior Creditors may
take, in their sole discretion, at any time and from time to time during
the Standstill Period.
3. All demands made upon the Guarantors pursuant to this Guaranty
shall be in writing and delivered, couriered or mailed to the Guarantors at
the following addresses (or to such other addresses as shall be designated
by the Guarantors in a written notice to LGH prior to the delivery of any
notice hereunder):
Consoltex (USA) Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 6{th} ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
All notices hereunder shall be effective when delivered, one day after
deposit with an overnight courier service (charges prepaid) or, if mailed,
upon the fifth business day after the date deposited into the U.S. mail
(postage prepaid and return receipt requested).
4. The Guarantors hereby waive notice of acceptance of their
obligations to pay the Deficiency, notice of any obligation hereunder,
notice of protest, notice of dishonor or nonpayment of any Obligation and
any other notice to the Guarantors. The
Guarantors hereby waive and agree not to assert or take advantage of any
rights or defenses based on any rights or defenses of the Company to the
Obligation, including any failure of consideration, any statue of
limitations or any insolvency or bankruptcy of the Company. No invalidity,
irregularity or unenforceability of all or any part of the Obligation shall
affect, impair or be a defense to this Guaranty, nor shall any other
circumstance which might otherwise constitute a defense available to, or
legal or equitable discharge of, the Company in respect of any of the
Obligation affect, impair or be a defense to the Obligation under this
Guaranty. An action may be brought hereon against the Guarantor either
in the same action in which the Company is sued or in a separate action.
5. The Obligation of the Guarantors under this Guaranty shall not be
affected by (i) any change in the direct or indirect ownership or voting
interests of the Guarantor, (ii) the effect of any foreign or domestic
laws, rules, regulations or actions of a court or governmental body other
than actions taken specifically in respect of the Obligation or this
Guaranty, (iii) any change in the time, manner or place of payment of, or
in any other of, the Obligation or (iv) excepting events which constitute a
discharge as expressly provided herein, any other condition, event or
circumstance which might otherwise constitute a legal or equitable
discharge, release or defense of a surety or guarantor or otherwise, or
which might otherwise limit recourse against the Guarantors.
6. Any provision of this Guaranty which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability in any jurisdiction and
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
7. The Guarantors represent and warrant to LGH that the Guarantors
have all requisite power and authority and have taken all action necessary
in order to execute, deliver and perform their obligations under, and to
consummate the transactions contemplated by, this Guaranty. This Guaranty
has been duly and validly executed and delivered by the Guarantors in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles. This Guaranty shall be irrevocable and shall inure to
the benefit of LGH and its successors and assigns. No other person is
intended to be a third-party beneficiary of this Guaranty.
8. No provision of this Guaranty may be changed, waived, discharged or
terminated orally, except by an instrument in writing executed by LGH.
9. This Guaranty shall in all respects be governed by, and construed
in accordance with, the internal laws and judicial decisions (as opposed to
conflict of law provisions) of the State of Delaware, including all matters
of construction, validity and performance.
IN WITNESS WHEREOF, the undersigned have executed this Guaranty as of
the date first above written.
GUARANTORS:
CONSOLTEX INC.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: V.P. Finance & CFO
CONSOLTEX (USA) INC.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: V.P. Finance & CFO
THE BALSON-HERCULES GROUP LTD.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: V.P. Strategic Planning
LINQ INDUSTRIAL FABRICS, INC.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: V.P. Strategic Planning
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is made on this 20th day
of October, 2000
BY
Consoltex Holdings, Inc., a Delaware corporation, c/o American
Industrial Partners Capital Fund II, L.P. of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
"Consoltex"); and Les Gantiers Holding B.V., a limited company
subject to the laws of The Netherlands, of Frederik Roeskestraat
123,1076 EE Amsterdam, The Netherlands (the "Company")in favour of
Les Gantiers Limited, a limited company subject to the laws of
Jersey, of ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. Helier,. Jersey, Channel Islands
(the "Covenantor") and is SUPPLEMENTAL to the Debenture Purchase
Agreement dated September 29, 2000,(the "Agreement") entered into
by Consoltex and the Company (all together the "Parties", each of
them a "Party")
WHEREAS
The Agreement specifies that Consoltex has issued to the Company a
10.5% Convertible Debenture in the principal amount of
USD2,123,000 (hereinafter referred to as the "Debenture");
Article 4.1 of the Agreement specifies that Consoltex should
consent to any Assignment of the Debenture;
Article 6.4 of the Agreement specifies that any holders of the
Debenture will be a party to the provisions,terms and conditions
of the Agreement;
The Covenantor is the sole shareholder of the Company;
The Covenantor has passed a Resolution of the Company in which it
is specified that the Company will repay part of the share premium
account for the Canadian Dollar equivalent of USD3,123,000;
The Company wishes to partially settle the re-payment of the share
premium account for the Canadian Dollar equivalent of
USD 2,123,000 by assigning its rights and obligations to the
Debenture by means of entering into this Assignment and Assumption
Agreement.
Page 1 of 3
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT WITNESSES as follows:
The Covenantor hereby confirms that it has been given and read a
copy of the Agreement. A copy of the Agreement duly executed by
the Covenantor for acknowledgement and acceptance thereof is
attached hereto.
Pursuant to Clause 4.1 of the Agreement Consoltex consents to the
Assignment of the Debenture by signing this document in
acknowledgement.
Pursuant to Clause 4.1 and 6.4 of the Agreement, the Company
hereby assigns all of its rights to the Debenture to the
Covenantor. The Covenantor hereby (i)accepts all of the rights and
assumes all of the rights to the Debenture, pursuant to Clause
6.4 thereof, and (ii) covenants with each Party to perform and be
bound by all the terms of the Agreement that would be applicable
to the Company in the absence of this Assignment and Assumption
Agreement as if the Covenantor were one of the original parties
to the Agreement.
This Assumption Agreement is governed by and construed in
accordance with the laws of The Netherlands, without giving effect
to any choice of law or conflict of law rules and provisions
(whether of The Netherlands or any jurisdiction) that would
cause the application of the laws of any jurisdiction other than
The Netherlands.
IN WITNESS WHEREOF, this Assignment and Assumption Agreement has been
executed by the Covenantor and the Company and is intended to be
and is hereby delivered on the date first above written.
Les Gantiers Limited
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
==========================
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
director of Les Gantiers Limited
Page 2 of 3
Les Gantiers Holding B.V.
/s/ ▇. ▇. ▇▇▇▇▇▇▇
============================
By: ▇. ▇. ▇▇▇▇▇▇▇ - Director
For acknowledgement of and consent to the above:
Consoltex Holdings, Inc
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
=========================
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
V.P. Finance & C.F.O.
page 3 OF 3
EXHIBIT 4.13
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (the "AGREEMENT") is executed by and
between Consoltex Holdings,Inc., a Delaware corporation (the
"CORPORATION"), and American Industrial Partners Capital Fund II, L.P.,
a Delaware limited partnership ("AIP"), as of September 29, 2000.
WHEREAS, AIP is the sole shareholder of the Corporation; and
WHEREAS, in connection on with the restructuring of the
Corporation and its subsidiaries, AIP desires to contribute $7,377,000
(the "CONTRIBUTION") to the capital of the Corporation; and
WHEREAS, the undersigned hereby intends that the Contribution to
the Corporation be governed by section 351 of the Internal Revenue Code
of 1986, as amended.
NOW THEREFORE, for good and valuable consideration,the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
. AIP hereby contributes the Contribution to the Corporation,
and the Corporation hereby accepts the Contribution.
. This Agreement shall be governed by the internal laws (and not
the law of conflicts) of the State of Delaware.
. No amendment or waiver of this Agreement shall be effective
without the prior written consent of the parties hereto.
. This Agreement may be executed in counterparts, including
faxed counterparts.
. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto, their successors and assigns.
. There shall be no third party beneficiaries to this Agreement,
and no parties, other than the signatories hereto or their transferees,
successors or assigns shall have or be entitled to assert rights or
benefits hereunder.
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned has executed this Contribution
Agreement on the date first written above.
AMERICAN INDUSTRIAL PARTNERS CAPITAL
FUND II, L.P.
By: AMERICAN INDUSTRIAL PARTNERS II,
L.P., its general partner
By: AMERICAN INDUSTRIAL PARTNERS
CORPORATION, its general partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
CONSOLTEX HOLDINGS, INC.
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: V-P, Legal Affairs &
Corp. Secy.