IPG HOLDINGS LP
__________________________________________________________
AMENDMENT NO. 1 TO
AMENDED AND RESTATED NOTE AGREEMENT
__________________________________________________________
Dated as of December 20, 2002
U.S. $25,000,000 SENIOR SECURED NOTES, SERIES A DUE 2005
U.S. $112,000,000 SENIOR SECURED NOTES, SERIES B DUE 2009
IPG HOLDINGS LP
U.S. $25,000,000 SENIOR SECURED NOTES, SERIES A DUE 2005
U.S. $112,000,000 SENIOR SECURED NOTES, SERIES B DUE 2009
AMENDMENT NO. 1 TO AMENDED AND RESTATED NOTE AGREEMENT
As of December 20, 2002
To each of the Persons
Named in Annex 1 hereto (collectively, the "Current Noteholders"):
Ladies and Gentlemen:
IPG HOLDINGS LP, a limited partnership formed under the laws of that State
of Delaware (the "Issuer"), INTERTAPE POLYMER INC., a Canadian corporation and
general partner of the Issuer (the "General Partner"), and INTERTAPE POLYMER
GROUP INC., a Canadian corporation (the "Parent" and, together with the Issuer
and the General Partner herein referred to, collectively, as the "Obligors"
and, individually, as an "Obligor") hereby, jointly and severally, agree with
each of the Current Noteholders as follows:
1. PRIOR ISSUANCE OF NOTES, ETC.
Pursuant to that certain Amended and Restated Note Agreement, dated as of
December 20, 2001 (as in effect immediately prior to giving effect to the
amendments provided by this Agreement, the "Existing Note Agreement" and, as
amended pursuant to this Agreement and as may be further amended, restated or
otherwise modified from time to time, the "Note Agreement"), the Obligors and
the Current Noteholders agreed to amend and restate the terms of those certain
separate Note Agreements, each dated as of June 1, 1999, by and among the
Obligors and each of the purchasers named in Schedule I thereto, pursuant to
which the Issuer issued U.S. $25,000,000 in aggregate principal amount of its
7.66% Senior Guaranteed Notes, Series A due May 31, 2005 (the "Series A Notes")
and U.S. $112,000,000 in aggregate principal amount of its 7.81% Senior
Guaranteed Notes, Series B due May 31, 2009 (the "Series B Notes", the Series
A Notes and the Series B Notes, each as amended and restated pursuant to the
terms of the Existing Note Agreement, herein collectively referred to as the
"Notes"). The register kept by the Company for the registration and transfer
of the Notes indicates that each of the Current Noteholders is currently a
holder of the Notes indicated on Annex 1.
2. REQUEST FOR CONSENT TO AMENDMENTS
The Obligors request that each of the Current Noteholders agree to the
amendments (the "Amendments") to the Existing Note Agreement provided for by
this Agreement.
3. WARRANTIES AND REPRESENTATIONS
To induce the Current Noteholders to enter into this Agreement and to
agree to the Amendments, the Obligors represent and warrant as follows:
3.1 Organization and Authority.
Each of the Obligors:
(a) is a corporation, partnership, or other entity, duly organized
or formed, validly existing and (to the extent applicable) in good
standing under the laws of its jurisdiction of incorporation or
organization; and
(b) has all requisite power and authority to enter into and perform
its obligations under this Agreement and the Note Agreement.
3.2 Transactions are Legal and Authorized.
Each of the execution and delivery of this Agreement by the Obligors, the
consummation of each of the transactions contemplated thereby and compliance
by the Obligors with all of the provisions of this Agreement and the Note
Agreement (a) will not violate any law or any order, judgment, decree or
ruling of any court or governmental authority or agency applicable to the
Obligors and (b) will not conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a default under, the
constitutive documents of any Obligor or any indenture or other material
agreement or instrument to which any Obligor is a party or by which it may be
bound or result in the imposition of any Liens or encumbrances on any material
property of any Obligor. The execution and delivery of this Agreement has
been duly authorized by proper action on the part of each of the Obligors.
Each of this Agreement and the Note Agreement constitutes the legal, valid and
binding obligation of each of the Obligors, enforceable in accordance with its
respective terms, except as enforceability thereof may be subject to the
effect of any applicable bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally.
3.3 No Material Adverse Change.
Since the date of the most recent audited consolidated financial state-
ments of the Parent provided to each of the Current Noteholders, there has
been no event or circumstance which has resulted in or could reasonably be
expected to result in a Material Adverse Change.
3.4 Renewal Request.
The Facility A Borrowers (as such term is defined in the Credit Agreement)
have taken all necessary and appropriate action in accordance with section 2.4
of the Credit Agreement to request the extension of the Conversion Date (as
such term is defined in the Credit Agreement) for an additional period of 364
days. Bank Facility A is in full force and effect as of the date hereof and
the Facility A Borrowers thereunder have the right to borrow and reborrow not
less than an aggregate of $50,000,000 thereunder until at least December 20,
2004.
3.5 Full Disclosure.
Neither the financial statements and other certificates previously
provided to the Current Noteholders pursuant to the provisions of the Existing
Note Agreement nor the statements made in this Agreement nor any other written
statements in final form furnished by or on behalf of the Obligors to any
Current Noteholder in connection with the proposal and negotiation of the
Amendments, taken as a whole, contain any untrue statement of a material fact
or omit a material fact necessary to make the statements taken as a whole
contained therein and herein not misleading. There is no fact relating to any
event or circumstance that has occurred or arisen since December 20, 2001 that
the Obligors have not disclosed to each of the Current Noteholders in writing
that has resulted in or could reasonably be expected to result in a Material
Adverse Change.
3.6 Other Agreements.
Upon (a) the execution and delivery hereof and the effectiveness of the
Amendments as provided herein and (b) execution and delivery of the Bank
Amendment (as defined below) and the amendment to the 1998 Note Agreement and
the effectiveness of said amendments as provided therein, neither any Obligor
nor any Restricted Subsidiary is in violation in any respect of any term in
any agreement, or other instrument to which it is a party or by which it or
any of its property may be bound except for such violations that, in the
aggregate for all such violations or defaults, could not reasonably be
expected to result in a Material Adverse Change.
3.7 No Defaults.
No event has occurred and no condition exists that, upon the execution
and delivery of this Agreement and the effectiveness of the Amendments
provided herein, would constitute a Default or an Event of Default.
4. AMENDMENTS
4.1 Amendments to Existing Note Agreement.
Subject to Section 4.2 below, the Existing Note Agreement is hereby
amended in the manner specified in Exhibit A to this Agreement.
4.2 Effectiveness of Amendments.
The Amendments contemplated by Section 4.1 above and Exhibit A shall
become effective (the "Effective Date"), if at all, upon the date of the
satisfaction in full of the following conditions precedent (unless waived in
writing by the holders of at least 66 2/3% in aggregate principal amount of
the outstanding Notes):
(a) a counterpart of this Agreement shall have been executed and
delivered by each of the Obligors and the Current Noteholders;
(b) the representations and warranties set forth in Section 3
hereof shall be true and correct on such date;
(c) the Obligors shall have paid the reasonable fees and expenses
of Xxxxxxx XxXxxxxxx LLP, special counsel to the Current Noteholders, as
provided in Section 6 hereof;
(d) the Obligors shall have paid to each Current Noteholder an
amendment fee in an amount equal to one tenth of one percent (0.10%) of
the outstanding principal balance of the Notes held by such Current
Noteholder on the Effective Date;
(e) the Obligors shall have entered into an amendment to the 1998
Note Agreement, in form and substance reasonably satisfactory to the
Current Noteholders, providing for amendments to the provisions thereof
which are substantially the same as those reflected in the Amendments;
and
(f) the Obligors and the applicable Restricted Subsidiaries shall
have entered into an amendment to the Credit Agreement, in form and
substance reasonably satisfactory to the Current Noteholders (the "Bank
Amendment"), providing for amendments to the provisions thereof which are
substantially the same as those reflected in the Amendments, and all
conditions to the effectiveness of the Bank Amendment shall have been
satisfied.
4.3 No Other Amendments; Confirmation.
Except as expressly provided herein, (a) no terms or provisions of any
agreement are modified or changed by this Agreement, (b) the terms of this
Agreement shall not operate as a waiver by any Current Noteholder of, or
otherwise prejudice any Current Noteholder's rights, remedies or powers under,
the Existing Note Agreement or any other Financing Document or under any
applicable law, and (c) the terms and provisions of the Existing Note
Agreement and each other Financing Document shall continue in full force and
effect, without modification or amendment.
4.4 Additional Covenants.
The Company hereby undertakes to do the following by no later than
January 31, 2003:
(a) To execute all such documents, instruments and agreements as
may be reasonably required by the holders of the Notes to designate IPG
Financial Services Inc. as a Restricted Subsidiary under the Note
Agreement and the other Financing Documents, as applicable;
(b) To provide the opinion of its counsel, in form and substance
acceptable to the holders of at least 66 2/3% in aggregate principal
amount of the outstanding Notes with respect to (i) the power, capacity,
and authority of each member of the Restricted Group to enter into this
Agreement and to perform its obligations hereunder, as well as with
respect to the enforceability of this Agreement, and (ii) the designation
of IPG Financial Services Inc. as a Restricted Subsidiary under the Note
Agreement and the other applicable Financing Documents and the effect
thereof on the enforceability of the Collateral; and
(c) To comply with the provisions of the post-closing undertaking
described in Section 4.6(e) of the Existing Note Agreement.
5. DEFINED TERMS
Capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed to them in the Existing Note Agreement or in Exhibit A
hereto.
6. EXPENSES
Whether or not the Amendments set forth herein or contemplated hereby
become effective, the Obligors jointly and severally agree to pay on the
Effective Date (or if an invoice is delivered subsequent to the Effective
Date or if the Amendments provided for herein do not become effective,
promptly and in any event within thirty (30) days of receiving any statement
or invoice therefor) all fees, expenses and costs relating to this Agreement,
including, but not limited to, the reasonable fees of the Current Noteholders'
special counsel, Xxxxxxx XxXxxxxxx LLP, incurred in connection with the
preparation, negotiation and delivery of this Agreement and any other
documents related hereto. Nothing in this Section shall limit the Obligors'
obligations pursuant to Section 9.4 of the Existing Note Agreement.
7. MISCELLANEOUS
7.1 Part of Note Agreement, Future References, etc.
This Agreement shall be construed in connection with and as a part of the
Existing Note Agreement and, except as expressly amended by this Agreement,
all terms, conditions and covenants contained in the Existing Note Agreement
and the other Financing Documents are hereby ratified and shall be and remain
in full force and effect. Any and all notices, requests, certificates and
other instruments executed and delivered after the execution and delivery of
this Agreement may refer to the Note Agreement without making specific
reference to this Agreement, but nevertheless all such references shall
include this Agreement unless the context otherwise requires.
7.2 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCLUDING CHOICE
OF LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION
OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
7.3 Duplicate Originals, Execution in Counterpart.
Two (2) or more duplicate originals hereof may be signed by the parties,
each of which shall be an original but all of which together shall constitute
one and the same instrument. This Agreement may be executed in one or more
counterparts and each set of counterparts that, collectively, show execution
by each Obligor and each consenting Current Noteholder shall constitute one
duplicate original.
7.4 Binding Effect.
This Agreement shall be binding upon and shall inure to the benefit of
each of the Obligors and the Current Noteholders and their respective
successors and assigns.
[Remainder of page intentionally left blank; next page is signature page.]
If each Current Noteholder is in agreement with the foregoing, please so
indicate by signing the applicable acceptance on a counterpart hereof and
returning such counterpart to the Company, whereupon this Agreement shall
become binding among each of the Obligors and the Current Noteholders in
accordance with its terms.
Very truly yours,
INTERTAPE POLYMER GROUP INC.
LE GROUPE INTERTAPE POLYMER INC.
By: /s/Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Chief Financial Officer, Secretary, Treasurer
Vice President Administration
IPG HOLDINGS LP
By: Intertape Polymer Inc., its General Partner
By: /s/Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Chief Financial Officer
INTERTAPE POLYMER INC.
By: /s/ Xxxxxxxxx Xxxxxx
Name: Xxxxxxxxx Xxxxxx
Title: Assistant Secretary
ACCEPTED AND AGREED:
PRINCIPAL LIFE INSURANCE COMPANY
By: Principal Capital Management, LLC,
a Delaware limited liability company,
its authorized signatory
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx Xxx
Title: Counsel
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Counsel
PRINCIPAL LIFE INSURANCE COMPANY,
ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
By: Principal Capital Management, LLC,
a Delaware limited liability company,
its authorized signatory
By: /s/Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx Xxx
Title: Counsel
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Counsel
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY,
a Wisconsin corporation
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Its Authorized Representative
NEW YORK LIFE INSURANCE COMPANY
By: /s/A. Post Xxxxxxx
Name: A. Post Xxxxxxx
Title: Investment Vice President
J. ROMEO & CO.
By: /s/Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Vice President
HARE & CO.
By: /s/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Authorized IM Representative
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By: /s/Xxxxxx X. Xxxxxx, XX
Name: Xxxxxx X. Xxxxxx, XX
Title: Vice President
C.M. LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc. as Investment Sub-Adviser
By: /s/Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc. as Investment Adviser
By: /s/Xxxxx X. Onukugha
Name: Xxxxx Xxxxxxxxx
Title: Managing Director
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc. (authorized agent)
By: /s/Xxxxx X. Height
Name: Xxxxx X. Height
Title: Managing Director
RELIASTAR LIFE INSURANCE COMPANY,
f/k/a NORTHERN LIFE INSURANCE COMPANY
By: ING Investment Management LLC, as agent
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
RELIASTAR LIFE INSURANCE COMPANY
By: ING Investment Management LLC, as Agent
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
By: ING Investment Management LLC, as Agent
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
SECURITY-CONNECTICUT LIFE INSURANCE COMPANY
By: ING Investment Management LLC, as Agent
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
ANNEX 1
CURRENT NOTEHOLDERS AND ORIGINAL PRINCIPAL AMOUNTS
Name of Current Noteholder Original Principal Original Principal
Amount of Series A Amount of Series B
Notes Held Notes Held
Principal Life Insurance Company $10,000,000 --
Principal Life Insurance Company,
on behalf of one or more separate
accounts $15,000,000 --
The Northwestern Mutual Life Insurance
Company -- $25,000,000
New York Life Insurance Company -- $20,000,000
J. Romeo & Co. -- $11,600,000
$ 7,600,000
Hare & Co. -- $ 800,000
Jefferson-Pilot Life Insurance Company -- $20,000,000
Massachusetts Mutual Life Insurance Company -- $ 8,200,000
C.M. Life Insurance Company -- $ 1,800,000
Connecticut General Life Insurance
Company -- $ 5,900,000
$ 4,100,000
Northern Life Insurance Company -- $ 3,000,000
ReliaStar Life Insurance Company -- $ 1,000,000
ReliaStar Life Insurance Company of New York -- $ 2,000,000
Security-Connecticut Life Insurance Company -- $ 1,000,000
EXHIBIT A
AMENDMENTS TO EXISTING NOTE AGREEMENT
1. Section 5.7(a) of the Existing Note Agreement is hereby amended and
restated to read in its entirety as follows:
"(a) Fixed Charge Coverage. The Parent will keep and maintain the
ratio (determined as of the end of each fiscal quarter of the Parent) of Net
Income Available for Fixed Charges to Fixed Charges in each case for the
immediately preceding period of four consecutive fiscal quarters including
the fiscal quarter ending on the calculation date (taken as a single
accounting period) at not less than the amount set forth for the applicable
quarter end in the table below:
If such fiscal quarter ends: Minimum Ratio
On or prior to December 31, 2002 1.75:1
From January 1, 2003 to June 30, 2003 1.85:1
From July 1, 2003 to December 31, 2003 2.00:1
From January 1, 2004 to December 31, 2004 2.50:1
From January 1, 2005 and thereafter 3.00:1"
2. Section 5.8 of the Existing Note Agreement is hereby amended and
restated to read in its entirety as follows:
"5.8 Leverage Ratios.
(a) Total Debt to Consolidated Total Capitalization. The Parent
will not at any time permit the ratio of Total Debt to Consolidated Total
Capitalization to exceed the ratio applicable to such time in the table set
forth below:
If such time is: The applicable
ratio is:
On or prior to March 30, 2002 0.59:1
From March 31, 2002 to June 29, 2002 0.585:1
From June 30, 2002 to September 29, 2002 0.58:1
From September 30, 2002 to December 30, 2002 0.575:1
From December 31, 2002 to June 29, 2003 0.55:1
From June 30, 2003 to December 30, 2003 0.525:1
On December 31, 2003 and at any time thereafter 0.50:1
(b) Total Debt to EBITDA. The Parent will not permit the ratio
of Total Debt as at the end of each fiscal quarter of the Parent to EBITDA
for the period of the four fiscal quarters of the Parent ended on such date
(taken as a single accounting period) to exceed for each such date prior to
June 30, 2002, the ratio applicable to such date in the table set forth
below, and if such date is on or after June 30, 2002, the lesser of (i) the
Experience-Based Ratio at such date and (ii) the ratio applicable to such date
in the table set forth below:
If such date is: The applicable
ratio is:
On December 31, 2001 6.00:1
On March 31, 2002 5.75:1
On June 30, 2002 5.50:1
On September 30, 2002, December 31, 2002
and March 31, 2003 5.25:1
On June 30, 2003 5.00:1
On September 30, 2003 4.75:1
On December 31, 2003 4.50:1
On March 31, 2004 4.25:1
On June 30, 2004 4.00:1
On September 30, 2004, December 31, 2004,
March 31, 2005 and June 30, 2005 3.50:1
On September 30, 2005 and at any time
thereafter 3.25:1
As used in this Section 5.8(b), the term "Experience-Based Ratio" means, as
at the last day of any fiscal quarter of the Parent, the greater of
(a) 3.25:1 and (b) the sum of (i) 0.25 plus (ii) the actual ratio of Total
Debt as at the end of the fiscal quarter of the Parent ended on such date to
EBITDA for the period of the four fiscal quarters of the Parent most recently
ended on the last day of such fiscal quarter (taken as a single accounting
period)."
3. Section 5.18(k) of the Existing Note Agreement is hereby amended and
restated in its entirety to read as follows:
"(k) Additional Undertakings. (i) Prior to June 30, 2002, at the
expense of the Parent, an accounts receivable and inventory audit of its
Restricted Subsidiaries, which audit shall have been performed by an
independent third party acceptable to the Banks, and (ii) in the event the
ratio of Total Debt as at June 30, 2002 to EBITDA for the period of four
fiscal quarters of the Parent ended on such date is not less than or equal
to 5.0:1, at the request of the Majority Noteholders at any time after
June 30, 2002, an appraisal of the Restricted Subsidiaries' equipment and
inventory, such appraisal to be performed by an independent third party
acceptable to the Majority Noteholders; and"
