Exhibit 99.4
GUARANTEE AGREEMENT
GUARANTEE AGREEMENT dated as of April 27, 2004, among each of the
subsidiaries listed on SCHEDULE I hereto (each such subsidiary individually, a
"GUARANTOR" and collectively, the "GUARANTORS") of POLYMER GROUP, INC., a
Delaware corporation (the "BORROWER"), and CITICORP NORTH AMERICA, INC., as
First Lien Collateral Agent, Second Lien Collateral Agent and Administrative
Agent (the "AGENTS") for the Secured Parties (as defined in the Credit Agreement
referred to below).
Reference is made to the Credit Agreement dated as of April 27, 2004 (the
"CREDIT AGREEMENT"), among POLYMER GROUP, INC., a Delaware corporation (the
"BORROWER"), the guarantors from time to time a party thereto, the financial
institutions listed on SCHEDULE 2.01 thereto, as such Schedule may from time to
time be supplemented and amended (the "LENDERS"), CITICORP NORTH AMERICA, INC.,
as administrative agent (in such capacity, the "ADMINISTRATIVE AGENT") for the
Lenders, as documentation agent (in such capacity, the "DOCUMENTATION AGENT"),
as syndication agent (in such capacity, the "SYNDICATION AGENT"), as collateral
agent for the First Lien Secured Parties (in such capacity, the "FIRST LIEN
COLLATERAL AGENT"), and as collateral agent for the Second Lien Secured Parties
(in such capacity, the "SECOND LIEN COLLATERAL AGENT"), and CITIGROUP GLOBAL
MARKETS INC. ("CGMI"), as sole lead arranger and sole bookrunner (in such
capacity, the "LEAD ARRANGER"). Terms used herein without definition shall have
the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and the Issuing
Bank has agreed to issue Letters of Credit for the account of the Borrower,
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement. Each of the Guarantors is a direct or indirect wholly owned
Subsidiary of the Borrower and acknowledges that it will derive substantial
benefit from the making of the Loans by the Lenders, and the issuance of the
Letters of Credit by the Issuing Bank. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit are conditioned on,
among other things, the execution and delivery by the Guarantors of a Guarantee
Agreement in the form hereof. As consideration therefor and in order to induce
the Lenders to make Loans and the Issuing Bank to issue Letters of Credit, the
Guarantors are willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
(i) GUARANTEE. Each Guarantor unconditionally guarantees, jointly with
the other Guarantors and severally, as a primary obligor and not
merely as a surety, (a) the due and punctual payment of the
Obligations and (b) the due and punctual performance of all
covenants, agreements, obligations and liabilities of the Loan
Parties under or pursuant to the Credit Agreement and the other
Loan Documents (all the monetary and other obligations referred to
in the preceding clauses (a) and (b) being collectively called the
"GUARANTEED OBLIGATIONS"). Each Guarantor further
agrees that the Guaranteed Obligations may be extended or renewed,
in whole or in part, without notice to or further assent from it,
and that it will remain bound upon its guarantee notwithstanding
any extension or renewal of any Obligation. By execution of this
Agreement, each Guarantor agrees to be bound by the terms of the
Credit Agreement as a Subsidiary Loan Party as if it were a party
to the Credit Agreement.
(ii) GUARANTEED OBLIGATIONS NOT WAIVED. To the fullest extent permitted
by applicable law, each Guarantor waives presentment to, demand of
payment from and protest to the Loan Parties of any of the
Guaranteed Obligations, and also waives notice of acceptance of
its guarantee and notice of protest for nonpayment. To the fullest
extent permitted by applicable law, the obligations of each
Guarantor hereunder shall not be affected by (a) the failure of
the Agents or any other Secured Party to assert any claim or
demand or to enforce or exercise any right or remedy against the
Loan Parties under the provisions of the Credit Agreement, any
other Loan Document or otherwise, (b) any rescission, waiver,
amendment or modification of, or any release from any of the terms
or provisions of, this Agreement, any other Loan Document, any
Guarantee or any other agreement, including with respect to any
other Guarantor under this Agreement, or (c) the failure to
perfect any security interest in or lien on, or the release of,
any of the security held by or on behalf of the Agents or any
other Secured Party.
(iii) GUARANTEE OF PAYMENT. Each Guarantor further agrees that its
guarantee constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had
by the Agents or any other Secured Party to any of the security
held for payment of the Guaranteed Obligations or to any balance
of any deposit account or credit on the books of the Agents or any
other Secured Party in favor of the Borrower or any other Person.
(iv) NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. The obligations of each
Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than
the indefeasible payment in full in cash of the Guaranteed
Obligations), including any claim of waiver, release, surrender,
alteration or compromise of any of the Guaranteed Obligations, and
shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Guaranteed Obligations or
otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or
impaired or otherwise affected by the failure of the Agents or any
other Secured Party to assert any claim or demand or to enforce
any remedy under the Credit Agreement, any other Loan Document or
any other
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agreement, by any waiver or modification of any provision of any
thereof, by any default, failure or delay, willful or otherwise,
in the performance of the Guaranteed Obligations, or by any other
act or omission that may or might in any manner or to any extent
vary the risk of any Guarantor or that would otherwise operate as
a discharge of each Guarantor as a matter of law or equity (other
than the payment in full in cash or Cash Equivalents of all the
Guaranteed Obligations).
(v) DEFENSES OF BORROWER WAIVED. To the fullest extent permitted by
applicable law, each of the Guarantors waives any defense based on
or arising out of any defense of any Loan Party or the
unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability
of any Loan Party, other than the final payment in full in cash or
Cash Equivalents of the Guaranteed Obligations. The Agents and the
other Secured Parties may, at their election, foreclose on any
security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or adjust any part of the
Guaranteed Obligations, make any other accommodation with any Loan
Party or any other guarantor or exercise any other right or remedy
available to them against any Loan Party or any other guarantor,
without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Guaranteed
Obligations have been fully and finally paid in cash or Cash
Equivalents. Pursuant to applicable law, each of the Guarantors
waives any defense arising out of any such election even though
such election operates, pursuant to applicable law, to impair or
to extinguish any right of reimbursement or subrogation or other
right or remedy of such Guarantor against any Loan Party or any
other Guarantor or guarantor, as the case may be, or any security.
(vi) AGREEMENT TO PAY; SUBORDINATION. In furtherance of the foregoing
and not in limitation of any other right that the Agents or any
other Secured Party has at law or in equity against any Guarantor
by virtue hereof, upon the failure of any Loan Party to pay any
Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or
otherwise, each Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to the Agents or such other Secured
Party as designated thereby in cash or Cash Equivalents the amount
of such unpaid Guaranteed Obligations. Upon payment by any
Guarantor of any sums to the Agents or any Secured Party as
provided above, all rights of such Guarantor against any Loan
Party arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all
respects be subordinate and junior in right of payment to the
prior payment in full in cash or Cash Equivalents of all the
Guaranteed Obligations. In addition, any indebtedness of any Loan
Party
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now or hereafter held by any Guarantor is hereby subordinated in
right of payment to the prior payment in full in cash or Cash
Equivalents of the Guaranteed Obligations. If any amount shall
erroneously be paid to any Guarantor on account of (i) such
subrogation, contribution, reimbursement, indemnity or similar
right or (ii) any such indebtedness of any Loan Party, such amount
shall be held in trust for the benefit of the Secured Parties and
shall forthwith be paid to the Agents to be credited against the
payment of the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Loan Documents.
(vii) INFORMATION. Each of the Guarantors assumes all responsibility for
being and keeping itself informed of each other Loan Party's
financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks that such Guarantors
and incurs hereunder, and agrees that none of the Agents or the
other Secured Parties will have any duty to advise any of the
Guarantors of information known to it or any of them regarding
such circumstances or risks.
(viii) REPRESENTATIONS AND WARRANTIES. Each of the Guarantors represents
and warrants as to itself that all representations and warranties
relating to it contained in the Credit Agreement are true and
correct.
(ix) TERMINATION. (a) The Guarantees made hereunder (i) shall terminate
when all the Guaranteed Obligations (other than contingent indemnification
provisions not then claimed or due) have been paid in full in cash or Cash
Equivalents and the Lenders have no further commitment to lend under the Credit
Agreement or to issue or participate in Letters of Credit and the LC Exposure
has been reduced to zero and (ii) shall continue to be effective or be
reinstated, as the case may be, if at any time any payment in respect thereof,
of any Obligation is rescinded or must otherwise be restored by any Secured
Party or any Guarantor upon the bankruptcy or reorganization of the Borrower,
any Guarantor or otherwise. In connection with the foregoing, the Agents shall
execute and deliver to such Guarantor or Guarantor's designee, at such
Guarantor's expense, any documents or instruments which such Guarantor shall
reasonably request from time to time to evidence such termination and release.
(A) If the Equity Interests of a Guarantor are sold,
transferred or otherwise disposed of to a Person that is
not an Affiliate pursuant to a transaction permitted by
Section 6.05 of the Credit Agreement that results in such
Guarantor ceasing to be a Subsidiary, or upon the
effectiveness of any written consent pursuant to Section
9.08 of the Credit Agreement to the release of the
guarantee granted by such Guarantor hereby, such Guarantor
shall be released from its obligations under this Agreement
without further action. In connection with such release,
the Agents shall execute and deliver to such Guarantor, at
such Guarantor's expense, all documents that
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such Guarantor shall reasonably request to evidence such
termination or release. Any execution and delivery of
documents pursuant to this Section 9(b) shall be without
recourse to or warranty by the Agents.
(x) BINDING EFFECT; SEVERAL AGREEMENT; SUCCESSORS AND ASSIGNS. (b)
This Agreement shall become effective as to any Guarantor when a
counterpart hereof executed on behalf of such Guarantor shall have
been delivered to the Agents and a counterpart hereof (including a
facsimile copy) shall have been executed on behalf of the Agents,
and thereafter shall be binding upon such Guarantor and the Agents
and their respective permitted successors and assigns, and shall
inure to the benefit of such Guarantor, the Agents and the other
Secured Parties and their respective permitted successors and
assigns, except that no Guarantor shall have the right to assign
or transfer its rights or obligations hereunder or any interest
herein (and any such attempted assignment or transfer shall be
void) except as expressly permitted by each of the other Loan
Documents.
(A) Under Oregon law, most agreements, promises and commitments
made after October 3, 1989, concerning loans and other
credit extensions which are not for personal, family or
household purposes or secured solely by the borrower's
residence must be in writing, express consideration and be
signed to be enforceable.
(B) This Agreement shall be construed as a separate agreement
with respect to each Guarantor and may be amended,
modified, supplemented, waived or released with respect to
any Guarantor without the approval of any other Guarantor
and without affecting the obligations of any other
Guarantor hereunder.
(C) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Guarantor or
the Agents that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and
assigns.
(xi) WAIVERS; AMENDMENT. (c) No failure or delay of the Agents in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents hereunder and of the other
Secured Parties under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provisions of this Agreement or any other Loan Document or consent to any
departure by any Guarantor therefrom shall in any event be
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effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on any Guarantor in any case
shall entitle such Guarantor or any other Guarantor to any other or further
notice or demand in similar or other circumstances.
(A) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement
or agreements in writing entered into among the Borrower,
the Agents and the Guarantors with respect to which such
waiver, amendment or modification is to apply.
(XII) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
(xiii) NOTICES. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to any Guarantor shall be
given to it at its address or telecopy number set forth on
SCHEDULE I, with a copy to Borrower.
(xiv) SURVIVAL OF AGREEMENT; SEVERABILITY. (d) All covenants,
agreements, representations and warranties made by any Guarantor herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Agents and the other Secured Parties and shall
survive the making by the Lenders of the Loans and the Lenders' issuance of and
participations in Letters of Credit, regardless of any investigation made by the
Secured Parties or on their behalf, and shall continue in full force and effect
until this Agreement shall terminate.
(A) In the event any one or more of the provisions contained in
this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby (it
being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of
itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good faith
negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.
(xv) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all
of which when taken together shall constitute a single contract
(subject to Section
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10) and shall become effective as provided in Section 10. Delivery
of an executed signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed
counterpart hereof. It is understood and agreed among the parties
that this Agreement shall create separate guarantees in favor of
each of the Term Lenders and the Revolving Lenders, and that any
determination by any court with jurisdiction that the guarantee in
favor of either group of Lenders is invalid for any reason shall
not in and of itself invalidate the guarantee with respect to any
other beneficiary hereunder.
(xvi) RULES OF INTERPRETATION; HEADINGS. (e) The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be
applicable to this Agreement.
(A) Section headings used herein are for the purpose of
reference only, are not part of this Agreement and are not
to affect the construction of, or to be taken into
consideration in interpreting this Agreement.
(xvii) JURISDICTION; CONSENT TO SERVICE OF PROCESS. (f) Each party hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State court or, to the extent permitted by law,
in such Federal court. Each of the parties hereto 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 Agreement shall affect any right that the Agents or any
other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against any Guarantor or
its properties in the courts of any jurisdiction.
(A) Each party hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement
or the other Loan Documents in any New York State or
Federal court referred to in paragraph (c) of this Section.
Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or
proceeding in any such court.
(B) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in
Section 13. Nothing
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in this Agreement will affect the right of any party to
this Agreement to serve process in any other manner
permitted by law.
(XVIII) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND
THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 18.
(xix) RIGHT OF SETOFF. If an Event of Default or Event of Termination
shall have occurred and be continuing, each Secured Party is
hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by such Secured Party to or for the credit or the account any
Guarantor against any of and all the obligations of such
Guarantor now or hereafter existing under this Agreement and
other Loan Documents held by such Secured Party, irrespective of
whether or not such Secured Party shall have made any demand
under this Agreement or such other Loan Document and although
such obligations may be unmatured. In connection with exercising
its rights pursuant to the previous sentence, a Secured Party may
at any time use any of the such Guarantor's credit balances with
the Secured Party to purchase at the Secured Party's applicable
spot rate of exchange any other currency or currencies which the
Secured Party considers necessary to reduce or discharge any
amount due by the such Guarantor to the Secured Party, and may
apply that currency or those currencies in or towards payment of
those amounts. The rights of each Secured Party under this
Section are in addition to other rights and remedies (including
other rights of setoff) which such Secured Party may have. Each
Secured Party agrees promptly to notify such Guarantor and the
Agents after making any such setoff.
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[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
BONLAM (S.C.), INC.
CHICOPEE, INC.
DOMINION TEXTILE (USA) INC.
FABPRO ORIENTED POLYMERS, INC.
FABRENE CORP.
FABRENE GROUP L.L.C.
FIBERGOL CORPORATION
FIBERTECH GROUP, INC.
FNA ACQUISITION, INC.
FNA POLYMER CORP.
LORETEX CORPORATION
PGI EUROPE, INC.
PGI POLYMER, INC.
PNA CORP.
POLY-BOND INC.
POLYIONIX SEPARATION TECHNOLOGIES, INC.
PRISTINE BRANDS CORPORATION
TECHNETICS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx III
----------------------------------
Name: Xxxxxx X. Xxxxx III
Title: Chief Financial Officer
S-1
Guarantee Agreement
CITICORP NORTH AMERICA, INC., as
Administrative Agent
By: /s/ Xxxxx Xxxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President
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Schedule I to the
Guarantee Agreement
Guarantors
Name
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Bonlam (S.C.), Inc.
Chicopee, Inc.
Dominion Textile (USA) Inc.
FabPro Oriented Polymers, Inc.
Fabrene Corp.
Fabrene Group L.L.C.
FiberGol Corporation
FiberTech Group, Inc.
FNA Acquisition, Inc.
FNA Polymer Corp.
Loretex Corporation
PGI Europe, Inc.
PGI Polymer, Inc.
PNA Corp.
Poly-Bond Inc.
PolyIonix Separation Technologies, Inc.
Pristine Brands Corporation
Technetics Group, Inc.
Address/telecopy number for each Guarantor
------------------------------------------
c/o Polymer Group, Inc.
0000 Xxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
attention: Xxxxxx X. Xxxxx III
(telecopy: 843-329-0415)
