-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ms5S2RVpKhRbsVqGikT+21KlfqIkpUIrQeAdTWmm2h7xUZjaSlifjPtuJP1hB4kS d4V4DJTi0OThwROx821VHQ== 0000905148-03-002119.txt : 20030605 0000905148-03-002119.hdr.sgml : 20030605 20030605144207 ACCESSION NUMBER: 0000905148-03-002119 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20030605 GROUP MEMBERS: DAVID J. MATLIN GROUP MEMBERS: MARK R. PATTERSON GROUP MEMBERS: MATLIN PATTERSON LLC GROUP MEMBERS: MATLINPATTERSON ASSET MANAGEMENT LLC GROUP MEMBERS: MATLINPATTERSON GLOBAL ADVISERS LLC GROUP MEMBERS: MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS B, L.P. GROUP MEMBERS: MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS L.P. GROUP MEMBERS: MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS(BERMUNDA)L.P GROUP MEMBERS: MATLINPATTERSON GLOBAL PARTNERS LLC FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS LP CENTRAL INDEX KEY: 0001203389 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 520 MADISON AVENUE STREET 2: 9TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212 651 9500 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: POLYMER GROUP INC CENTRAL INDEX KEY: 0000927417 STANDARD INDUSTRIAL CLASSIFICATION: BROADWOVEN FABRIC MILS, MAN MADE FIBER & SILK [2221] IRS NUMBER: 571003983 STATE OF INCORPORATION: DE FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-46353 FILM NUMBER: 03733967 BUSINESS ADDRESS: STREET 1: 4838 JENKINS AVE CITY: NORTH CHARLESTON STATE: SC ZIP: 29405 BUSINESS PHONE: 8037445174 MAIL ADDRESS: STREET 1: 4838 JENKINS AVENUE CITY: NORTH CHARLESTON STATE: SC ZIP: 29405 SC 13D/A 1 efc3-0900_sch13da.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) Under the Securities Exchange Act of 1934 (Amendment No. 2) Polymer Group, Inc. ------------------- (Name of Issuer) Common Stock, par value $0.01 per share (Title of Class of Securities) 731745105 (CUSIP Number) MatlinPatterson Global Opportunities Partners L.P. MatlinPatterson Global Opportunities Partners (Bermuda) L.P. MatlinPatterson Global Opportunities Partners B, L.P. MatlinPatterson Global Advisers LLC MatlinPatterson Global Partners LLC MatlinPatterson Asset Management LLC MatlinPatterson LLC Mark R. Patterson David J. Matlin (Name of Persons Filing) Robert Weiss MatlinPatterson Global Advisers LLC 520 Madison Avenue New York, New York 10022 Telephone: (212) 651-9525 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 30, 2003 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-l(e), 13d-l(f) or 13d-l(g), check the following box [ ] Note: Schedules filed in paper format shall include a signed original and five copies of the Schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. The information required on this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Exchange Act") or otherwise subject to the liabilities of that section of the Exchange Act but shall be subject to all other provisions of the Exchange Act (however, see the Notes) (Continued on following pages) (Page 1 of 7) Introduction. This Schedule Amendment No. 2 amends and supplements the Schedule 13D Statement filed on March 17, 2003 (the "Initial Statement") as amended and supplemented by Amendment No. 1 to Schedule 13D, filed on April 14, 2003 ("Schedule Amendment No. l"). The Initial Schedule 13D, Schedule Amendment No. 1 and Schedule Amendment No. 2 and are collectively referred to herein as the "Statement". The Initial Statement was filed on behalf of (i) MatlinPatterson Global Opportunities Partners L.P., ("Matlin Partners (Delaware)") a limited partnership organized under the laws of Delaware, MatlinPatterson Global Opportunities Partners B, L.P., (the "Opt-Out Fund") a limited partnership organized under the laws of Delaware, and MatlinPatterson Global Opportunities Partners (Bermuda) L.P., ("Matlin Partners (Bermuda)"), collectively with the Opt-Out Fund and Matlin Partners Delaware, "Matlin Partners"), a limited partnership organized under the laws of Bermuda, (ii) MatlinPatterson Global Advisers LLC, ("Matlin Advisers") a limited liability company organized under the laws of Delaware, by virtue of their investment authority over securities held by Matlin Partners, (iii) MatlinPatterson Global Partners LLC, ("Matlin Global Partners") a limited liability company organized under the laws of Delaware, as general partner of Matlin Partners, (iv) MatlinPatterson Asset Management LLC, ("Matlin Asset Management") a limited liability company organized under the laws of Delaware, as the holder of all of the membership interests in Matlin Global Partners and Matlin Advisers, (v) MatlinPatterson LLC, ("MatlinPatterson") a limited liability company organized under the laws of Delaware, as the holder of all of the membership interests in Matlin Asset Management, (vi) and Mark Patterson and David Matlin each, as a holder of 50% of the membership interests in MatlinPatterson (Matlin Partners (Delaware), Matlin Partners (Bermuda), the Opt-Out Fund, Matlin Advisers, Matlin Global Partners, Matlin Asset Management, MatlinPatterson, Mark Patterson and David Matlin, collectively, the "Reporting Persons" and each a "Reporting Person"), for the purpose of disclosing the beneficial ownership of the Reporting Persons in Polymer Group, Inc. (the "Issuer") pursuant to the Debtor's Joint Second Amended and Modified Plan of Reorganization (the "Plan"), approved on January 16, 2003 by the United States Bankruptcy Court for the District of South Carolina (Case No. 02-5773(w)). Schedule Amendment No. 1 was filed for the purpose of disclosing the execution of a letter agreement on April 11, 2003 (the "Letter Agreement") between the Issuer and Matlin Partners (Delaware). Capitalized terms used and not defined in this Schedule Amendment No. 2 shall have the meanings set forth in the Statement. This Schedule Amendment No. 2 is filed on behalf of the Reporting Persons for the purpose of disclosing 1) the execution of Amendment No. 1 (the "Note Amendment"), dated as of May 30, 2003, among the Issuer, each of the entities indentified under the caption "Guarantors" on the signature pages thereto and Matlin Partners (Delaware) amending the Senior Subordinated Note Purchase Agreement dated as of March 5, 2003 and the Senior Subordinated Note and 2) the amendment of the Convertible Notes pursuant to the Supplemental (Page 2 of 7) Indenture (the "Supplemental Indenture") dated as of May 30, 2003 among the Issuer, the subsidiary guarantors named therein and Wilmington Trust Company, as trustee. Item 4 Purpose of Transaction See Item 6 of this Schedule Amendment No. 2. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer Item 6 of the Initial Statement is hereby amended and supplemented by adding the following to the end of said Item 6: As of May 30, 2003, Matlin Partners (Delaware) entered into the Note Amendment and the Issuer entered into the Supplemental Indenture so that interest that accrues on the New Senior Subordinated Note from March 6, 2003 until January 31, 2005 and interest that accrues on the Convertible Notes held by Matlin Partners (Delaware) from March 6, 2003 until January 5, 2004, will not be required to be paid by the Issuer in cash, but rather will, at the sole option of the Issuer, be payable through the issuance of an additional principal amount of New Senior Subordinated Note and Convertible Notes, respectively ("PIK Notes"), which PIK Notes shall also provide that interest is payable in additional principal amount of New Senior Subordinated Note and Convertible Notes, respectively, in full and complete satisfaction of any and all accrued and unpaid interest on such New Senior Subordinated Note and Convertible Notes. This disclosure is qualified by reference to the Note Amendment and the Supplemental Indenture which are attached hereto as Exhibit 10 and 11 respectively and which are incorporated herein by reference. Item 7 Materials to be Filed as Exhibits Item 7 of this Statement is amended and supplemented as follows: Exhibit No. Description ----------- ----------- 10 Amendment No.1, dated as of May 30, 2003 among Polymer Group, Inc., each of the entities indentified under the caption "Guarantors" on the signature pages thereto and MatlinPatterson Global Opportunities Partners L.P. 11 Supplemental Indenture dated as of May 30, 2003 among Polymer Group, Inc., the subsidiary guarantors named therein and Wilmington Trust Company, as trustee. 12 Joint Filing Agreement, dated as of June 5, 2003, by and among MatlinPatterson LLC, MatlinPatterson Asset Management LLC, MatlinPatterson Global Advisers LLC, MatlinPatterson Global Partners LLC, MatlinPatterson Global Opportunities Partners L.P., MatlinPatterson (Page 3 of 7) Global Opportunities Partners (Bermuda) L.P., MatlinPatterson Global Opportunities Partners B, L.P., Mark Patterson and David Matlin. (Page 4 of 7) SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this Statement is true, complete and correct. Dated: June 5, 2003 MATLINPATTERSON LLC By: /s/ Mark R. Patterson ------------------------------------- Name: Mark R. Patterson Title: Member MATLINPATTERSON ASSET MANAGEMENT LLC By: /s/ Mark R. Patterson ------------------------------------- Name: Mark R. Patterson Title: Member MATLINPATTERSON GLOBAL ADVISERS LLC By: /s/ Mark R. Patterson -------------------------------------- Name: Mark R. Patterson Title: Chairman MATLINPATTERSON GLOBAL PARTNERS LLC By: /s/ Mark R. Patterson -------------------------------------- Name: Mark R. Patterson Title: Director MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS L.P. By: MatlinPatterson Global Partners LLC By: /s/ Mark R. Patterson -------------------------------------- Name: Mark R. Patterson Title: Director (Page 5 of 7) MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS B, L.P. By: MatlinPatterson Global Partners LLC By: /s/ Mark R. Patterson --------------------------------------- Name: Mark R. Patterson Title: Director MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS (BERMUDA) L.P. By: MatlinPatterson Global Partners LLC By: /s/ Mark R. Patterson -------------------------------------- Name: Mark R. Patterson Title: Director DAVID J. MATLIN By: /s/ David J. Matlin -------------------------------------- Name: David J. Matlin MARK R. PATTERSON By: /s/ Mark R. Patterson -------------------------------------- Name: Mark R. Patterson (Page 6 of 7) EXHIBIT INDEX ------------- Exhibit No. Description ----------- ----------- 10 Amendment No.1, dated as of May 30, 2003 among Polymer Group, Inc., each of the entities indentified under the caption "Guarantors" on the signature pages thereto and MatlinPatterson Global Opportunities Partners L.P. 11 Supplemental Indenture dated as of May 30, 2003 among Polymer Group, Inc., the subsidiary guarantors named therein and Wilmington Trust Company, as trustee. 12 Joint Filing Agreement, dated as of June 5, 2003, by and among MatlinPatterson LLC, MatlinPatterson Asset Management LLC, MatlinPatterson Global Advisers LLC, MatlinPatterson Global Partners LLC, MatlinPatterson Global Opportunities Partners L.P., MatlinPatterson Global Opportunities Partners (Bermuda) L.P., MatlinPatterson Global Opportunities Partners B, L.P., Mark Patterson and David Matlin. (Page 7 of 7) EX-10 3 efc3-0900_exh10.txt Exhibit 10 AMENDMENT NO. 1 AMENDMENT No. 1, dated as of May 30, 2003, among POLYMER GROUP, INC., a Delaware corporation (the "Borrower"), each of the entities identified under the caption "GUARANTORS" on the signature pages hereto (individually and together with any entity that shall become a guarantor hereunder pursuant to Section 6.01(h) of the Agreement (as defined below), a "Guarantor", and, together with the Borrower, the "Obligors") and MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS L.P., a Delaware limited partnership ("GOF"). WHEREAS, in accordance with Section 9.01 of the Senior Subordinated Note Purchase Agreement, dated as of March 5, 2003, between the Borrower, the Guarantors and GOF (the "Agreement"), the Borrower and GOF have agreed to amend certain terms of the Agreement and the Senior Subordinated Note (as defined in the Agreement) relating to the method of payment of interest on the Borrowings (as defined in the Agreement). NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Certain Terms Defined in the Senior Subordinated Note Purchase Agreement. All capitalized terms used herein but not otherwise defined herein shall have the meaning ascribed thereto in the Agreement. SECTION 2. General. References in the Agreement (including references to the Agreement as amended hereby) to "this Agreement" or words of similar import (including indirect references to the Agreement) shall be deemed to be references to the Agreement as hereby amended. SECTION 3. Amendment of ARTICLE I. (a) The following new definition is hereby added to ARTICLE I, in alphabetical order: "Additional Notes" shall have the meaning set forth in Section 2.02. (b) The definition of "Indenture" is hereby amended by deleting the definition in its entirety and replacing it with the following: "Indenture" means the Indenture, dated as of March 5, 2003, as duly amended in accordance with the terms thereof, among the Borrower, Wilmington Trust Company and the other parties thereto relating to the Junior Subordinated Convertible Notes. SECTION 4. Amendment of Section 2.01. Section 2.01 is hereby amended by deleting it in its entirety and replacing it with the following: "Section 2.01. Initial Issuance of Senior Subordinated Note; Aggregate Principal Amount. Simultaneously with the execution and delivery of this Agreement, the Borrower is issuing and delivering to GOF a note in substantially the form of Exhibit A attached to Amendment No. 1 (the "Senior Subordinated Note", and, together with any Additional Notes issued pursuant to Section 2.02 or additional Senior Subordinated Notes issued pursuant to Section 9.06(d), if any, the "Senior Subordinated Notes") with a principal amount of THIRTY MILLION DOLLARS ($30,000,000.00); provided, however, that in accordance with Section 2.03 and the terms of the Senior Subordinated Note, the Borrower shall only be required to pay such amount thereof as equals the sum of each drawing under the Letter of Credit by the Administrative Agent (each such drawing being referred to herein as a "Borrowing"), plus the outstanding principal amount of any Additional Notes, plus accrued interest and any other costs and expenses due hereunder or under the Senior Subordinated Notes." SECTION 5. Amendment of Section 2.02. Section 2.02 is hereby amended by deleting it in its entirety and replacing it with the following: "Section 2.02. Interest. (a) Interest. The Borrower shall pay to GOF and its assigns interest on (i) the amount of each Borrowing from the date thereof and (ii) the outstanding amount of principal of any Additional Notes issued, semi-annually in arrears on January 1 and July 1 of each year, at a rate of 10% per annum, subject to adjustment pursuant to Section 2.02(b). From March 6, 2003 until January 31, 2005, at the option of the Borrower, such interest shall be paid (i) in cash or (ii) through the issuance of additional notes (the "Additional Notes"), which shall be in an aggregate principal amount equal to the amount of interest that would be payable with respect to the Senior Subordinated Notes on such interest payment date, in a form identical to the Senior Subordinated Note attached as Exhibit A to Amendment No. 1 with appropriate modifications to accurately reflect the principal amount thereof. After January 31, 2005, such interest shall be payable in cash. (b) Default Interest. Upon the occurrence and during the continuance of an Event of Default, the Borrower shall pay interest on the aggregate unpaid principal amount of the Borrowings and any Additional Notes issued at the rate per annum set forth in Section 2.02(a) plus 2% on demand. The Borrower shall, to the extent lawful, pay interest on overdue interest at the rate of 12% per annum. From March 6, 2003 until January 31, 2005, at the option of the Borrower, such interest shall be paid (i) in cash or (ii) through the issuance of Additional Notes. After January 31, 2005, such interest shall be payable in cash." (c) Computations. All computations of interest shall be made on the basis of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. 2 SECTION 6. Amendment of Section 2.03. Section 2.03 is hereby amended by inserting the words "and the principal amount of each Additional Note" immediately after the word "Borrowing" and "Borrowings" in subsections (a) and (b), respectively. SECTION 7. Amendment of Section 4.01(g)(i). Section 4.01(g)(i) is hereby amended by replacing "$25,000,000" with "$30,000,000". SECTION 8. Amendment of Section 6.01(c). The second paragraph of Section 6.01(c) is hereby amended by replacing "$200,000,000" with "$215,000,000" in clause (H) of the definition of Permitted Indebtedness. SECTION 9. Amendment of Section 7.01(f). Section 7.01(f) is hereby amended by replacing "$50,000,00" with "$50,000,000". SECTION 10. Amendment of Section 9.06(d). Section 9.06(d) of the Agreement is hereby amended by deleting the number "$25,000,000" in the third sentence and inserting "$30,000,000" in its place. SECTION 11. Replacement of Exhibit E to the Agreement. The Agreement is hereby amended by deleting Exhibit E thereto in its entirety and replacing it with Exhibit A to this Amendment No. 1. SECTION 12. Representations and Warranties. The Borrower and each Guarantor hereby represent and warrant to GOF that (a) after giving effect to the amendments set forth in this Amendment No. 1, no Default has occurred and is continuing, (b) since March 5, 2003 (other than the transactions contemplated hereby and the Borrower entering into the Letter Agreement, dated as of April 11, 2003, with GOF) neither the Borrower nor any Guarantor has entered into any Affiliate Transaction in breach of Section 6.01(b) of the Agreement, (c) since March 5, 2003, other than the transactions entered into as contemplated by the Plan, neither the Borrower nor any Guarantor has entered into any transaction with Jerry Zucker, any family member of Jerry Zucker or any affiliate of either Jerry Zucker or any family member of Jerry Zucker; and (d) Amendment No. 1 to the Credit Agreement, dated as of March 29, 2003, is in full force and effect as of the date hereof. SECTION 13. Governing Law. This Amendment No. 1 shall be governed by, and construed in accordance with, the laws of the State of New York. SECTION 14. Execution in Counterparts. This Amendment No. 1 may be executed in any number of counterparts and by different parties thereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. SECTION 15. Headings. The descriptive headings of the several Sections of this Amendment No. 1 are inserted for convenience only and do not constitute a part of this Amendment No. 1. 3 SECTION 16. Miscellaneous. Except as provided herein, the Agreement shall remain unchanged and in full force and effect and is hereby ratified and confirmed. For the avoidance of doubt, this Amendment No. 1 shall not constitute or be deemed, or interpreted as, a novation. 4 IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be executed by their respective officers thereunto duly authorized, as of the date first written above. THE BORROWER POLYMER GROUP, INC. By:____________________________ Name: Title: GOF MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS L.P. By: MatlinPatterson Global Opportunities Advisers LLC, its Investment Advisor By:_________________________________ Name: Title: THE GUARANTORS PGI POLYMER, INC. PGI EUROPE, INC. PNA CORP. FNA POLYMER CORP. FABRENE CORP. FABRENE GROUP, L.L.C. FIBERTECH GROUP, INC. TECHNETICS GROUP, INC. FIBERGOL CORPORATION CHICOPEE, INC. DOMINION TEXTILE (USA) INC. POLY-BOND INC. LORETEX CORPORATION FNA ACQUISITION, INC. FABPRO ORIENTED POLYMERS, INC. PGI ASSET MANAGEMENT COMPANY PGI SERVICING COMPANY PRISTINE BRANDS CORPORATION POLYIONIX SEPARATION TECHNOLOGIES, INC. BONLAM (S.C.), INC. as Guarantors By:_____________________________________ Name: Title: 2 EXHIBIT A ---------- SENIOR SUBORDINATED PROMISSORY NOTE ----------------------------------- $30,000,000.00 MARCH 5, 2003 FOR VALUE RECEIVED, POLYMER GROUP, INC., a Delaware corporation (the "Maker"), hereby promises to pay to the order of MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS L.P., a Delaware limited partnership (the "Payee"), on the terms set forth below, the sum of THIRTY MILLION UNITED STATES DOLLARS (U.S. $30,000,000.00), or such lesser amount as equals the sum of all Borrowings and the principal amount of any Additional Notes issued, together with interest on the unpaid principal balance of each Borrowing and each Additional Note, if any, from the date thereof, at 10% per annum, semi-annually on January 1 and July 1 of each year. From March 6, 2003 until January 31, 2005, at the option of the Maker, such interest on the unpaid principal balance of each Borrowing shall be payable (i) in cash or (ii) through the issuance of Additional Notes. After January 31, 2005, such interest shall be payable in cash. All capitalized terms in this Senior Subordinated Promissory Note (this "Senior Subordinated Note") shall have the same meaning as in the Senior Subordinated Note Purchase Agreement, dated as of March 5, 2003, as amended by Amendment No. 1 dated May [__], 2003, among the Maker, the Guarantors (as defined in the Agreement) and the Payee (the "Agreement"). The unpaid principal balance of, and any and all accrued and unpaid interest on, this Senior Subordinated Note (the "Aggregate Amount") shall be payable in cash, subject to any repayment made by the Maker in accordance with Section 2.03 of the Agreement, at the Maturity Date. If the Events of Default specified in Section 7.01(e) of the Agreement or a Change of Control occurs, the unpaid principal and interest of this Senior Subordinated Note, and all other amounts due hereunder, shall, at the option of the Payee, ipso facto become and be immediately due and payable in cash without any declaration or other act on the part of the Payee. Upon the occurrence of any other Event of Default set forth in Section 7.01, the unpaid principal and interest of this Senior Subordinated Note, and all other amounts due hereunder, shall, at the option of the Payee upon notice to the Maker, become and be immediately due and payable in cash. During the period following the occurrence of an Event of Default until either (a) such Event of Default is remedied to the satisfaction of the Payee, or (b) the principal and interest of this Senior Subordinated Note is paid, default interest at a rate of 2% per annum will be payable on the principal amount in addition to the existing 10% rate. The Maker shall, to the extent lawful, pay interest on overdue interest at the rate of 12% per annum. From March 6, 2003 until January 31, 2005, at the option of the Maker, such interest on the unpaid principal balance of each Borrowing shall be payable (i) in cash or (ii) through the issuance of Additional Notes. After January 31, 2005, such interest shall be payable in cash. The Maker agrees to pay on demand all reasonable costs and expenses, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel to the Payee in connection with the enforcement, collection, protection or preservation (whether through negotiations, legal proceedings or otherwise) of any of its rights under this Senior Subordinated Note. The Maker hereby waives demand, presentment for payment, notice of extensions, nonpayment and protest, and agrees that any extensions or renewals hereof shall not affect its liability, whether has notice of such extensions or renewals or not, and waives any and all defenses and counterclaims with respect to this Senior Subordinated Note. No waiver of any right granted hereunder or amendment hereto shall be effective unless expressly waived or agreed to in writing by the party whose waiver or agreement to such amendment is alleged. This Senior Subordinated Note and the Agreement constitute the entire agreement of the parties with respect to the matters contained herein and therein. The provisions hereof shall bind and inure to the benefit of the respective successors and assigns of the Maker and the Payee. This Senior Subordinated Note shall be governed by, and interpreted under, the laws of the State of New York without giving effect to the principles of conflict of laws. IN WITNESS WHEREOF, the Maker has caused this instrument to be duly executed as of the date first written above. POLYMER GROUP, INC. By: _________________________________ Name: Title: EX-11 4 efc3-0900_exh11.txt Exhibit 11 SUPPLEMENTAL INDENTURE SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated as of May 30, 2003, among Polymer Group, Inc., a Delaware corporation (the "Company"), the subsidiary guarantors named herein (collectively, the "Guarantors") and Wilmington Trust Company, a Delaware banking corporation, as trustee (the "Trustee"). WITNESSETH: WHEREAS, in accordance with Section 10.02 of the Indenture relating to the 10% Convertible Subordinated Notes due 2007 of the Company, dated as of March 5, 2003, among the Company, the Guarantors and the Trustee (the "Indenture"), the Trustee, the Company, the Guarantors and the Holders (as defined in the Indenture) of a majority in principal amount of the outstanding Notes (as defined in the Indenture) as of the date hereof have agreed to amend certain terms of the Indenture and the Notes to provide the Company with the option of paying Interest, in certain circumstances, through the issuance of additional Notes in lieu of cash; WHEREAS, upon satisfaction of the conditions precedent set forth in Section 9, all things necessary to make this Supplemental Indenture a valid supplement to the Indenture according to its terms have been done; NOW, THEREFORE, the parties hereto agree as follows: SECTION 1.1. Certain Terms Defined in the Indenture. All capitalized terms used herein without definition herein shall have the meanings ascribed thereto in the Indenture. SECTION 1.2. Amendments of Section 1.01. (a) The following new definition is hereby added to Section 1.01 in an alphabetical order: "Additional Notes" has the meaning set forth in attached Exhibit A. (b) The definition of "Interest" is hereby amended by deleting the word "cash." (c) The definition of "Notes" is hereby amended by adding the words "on the Issue Date together with any Additional Notes issued with respect thereto" at the end. SECTION 2. Amendment of Section 2.01. Section 2.01 is hereby amended by inserting the words "increased or" immediately before the words "decreased by adjustments made on the records of the Trustee, as custodian for the Depository, as hereinafter provided" in the second sentence of the second paragraph thereof. SECTION 3. Amendment of Section 2.02. Section 2.02 is hereby amended by (a) inserting the words "and any Additional Notes or other Notes" immediately following $50,000,000" on the second line of the fourth paragraph of such section and (b) replacing the second occurrence of "$50,000,000" in the fourth paragraph thereof with "$60,000,000." SECTION 4. Amendment of Section 2.04. The fourth sentence of Section 2.04 of the Indenture is hereby amended by inserting the words "or Additional Notes" immediately after the words "entitled thereto a sum." SECTION 5. Amendments of Section 4.01. (a) Section 4.01 of the Indenture is hereby amended by deleting the second sentence of the first paragraph thereof in its entirety and replacing it with the following: "An installment of principal or interest shall be considered paid on the date due if the Trustee or Paying Agent (other than the Company, a Guarantor or any of their respective Affiliates) holds on that date money or Additional Notes designated for and sufficient to pay the installment in full and is not prohibited from paying such money or delivering such Additional Notes to the Holders of the Notes pursuant to the terms of this Indenture." (b) The second sentence of the second paragraph of Section 4.01 is hereby amended by inserting the following at the end: "; provided however, that in the event that the interest on an overdue installment of interest relates to an Interest payment with respect to which a Holder elected to receive Additional Notes in lieu of cash, the interest on such overdue installment of interest shall be paid by the issuance of Additional Notes". SECTION 6. Section 7.12. The Indenture is hereby amended by inserting the following new Section 7.12: "SECTION 7.12 Notice of Option to Receive Additional Notes No later than one Business Day after each of (i) the Interest Record Dates occurring on June 15, 2003 and December 15, 2003 and (ii) the Interest Record Dates occurring thereafter if the Company provides the Trustee with written notice three Business Days prior to the applicable Interest Record Date, the Trustee shall mail, by first class mail, or send by facsimile the "Option of Holder to Elect PIK Interest Form" (substantially in the form attached to the Notes) to the Holders as of the applicable Interest Record Date pursuant to which the Holders may elect to exercise their option to receive Additional Notes in lieu of cash Interest pursuant to the terms of the Notes." SECTION 7. Amendment of Section 8.14. The first sentence of the second paragraph of Section 8.14 is hereby amended by inserting the words "or Additional Notes" immediately after each occurrence of the words "any moneys." SECTION 8. Replacement of Exhibit A to the Indenture. The Indenture is hereby amended by deleting Exhibit A thereto in its entirety and replacing it with Exhibit A to this Supplemental Indenture. SECTION 9. Effectiveness. This Supplemental Indenture shall become effective on the date on which (a) the Holders of at least a majority in principal amount of the outstanding Notes shall have consented to the amendments set forth in this Supplemental Indenture and the Trustee shall have received an Officer's Certificate certifying as to such consent, (b) the Trustee shall have received (x) an Opinion of Counsel and Officer's Certificate in compliance with Section 14.04 and Section 14.05 of the Indenture and (y) a Secretary's Certificate of the Company and the Guarantors in form and substance reasonably satisfactory to the Trustee certifying, among other things, as to the resolutions of their respective Boards of Directors required pursuant to Section 10.02 of the Indenture and (c) duly executed counterparts hereof shall have been signed by the Trustee, the Company and the Guarantors. The receipt of such Consents shall not obligate the Company to execute this Supplemental Indenture. SECTION 10. Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the law of the State of New York applicable to contracts to be performed entirely in that State, without regard to principles of conflicts of law. SECTION 11. Counterparts. This 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 12. Severability. In case any provision in this 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 13. Ratification. Except as expressly amended hereby, each provision of the Indenture shall remain in full force and effect, and, as amended hereby, the Indenture is in all respects agreed to, ratified and confirmed by each of the Company, the Guarantors and the Trustee. * * * * * * * IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written. POLYMER GROUP, INC. By:_______________________________ Name: Title: PGI POLYMER, INC. PGI EUROPE, INC. PNA CORP. FNA POLYMER CORP. FABRENE CORP. FABRENE GROUP, L.L.C. FIBERTECH GROUP, INC. TECHNETICS GROUP, INC. FIBERGOL CORPORATION CHICOPEE, INC. DOMINION TEXTILE (USA) INC. POLY-BOND INC. LORETEX CORPORATION FNA ACQUISITION, INC. FABPRO ORIENTED POLYMERS, INC. PGI ASSET MANAGEMENT COMPANY PGI SERVICING COMPANY PRISTINE BRANDS CORPORATION POLYIONIX SEPARATION TECHNOLOGIES, INC. BONLAM (S.C.), INC. As Guarantors By:_________________________________ Name: Title: WILMINGTON TRUST COMPANY, as Trustee By:________________________________ Name: Title: EXHIBIT A THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE 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) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE. [FORM OF AMENDED AND RESTATED NOTE] POLYMER GROUP, INC. Amended and Restated 10% Convertible Subordinated Note due December 31, 2007 CUSIP No.: 731745 AJ 4 No. [ ] $50,000,000 POLYMER GROUP, INC., a Delaware corporation (the "Company", which term includes any successor corporation), for value received promises to pay to [] or registered assigns, the principal sum of Fifty Million Dollars, on December 31, 2007. Interest Payment Dates: January 1 and July 1, commencing on July 1, 2003. Interest Record Dates: December 15 and June 15. This is the Amended and Restated Note referenced in the Supplemental Indenture, dated as of May 30, 2003, among the Company, the Guarantors, and the Trustee (as such terms are defined in the further provisions of this Note), which supplemental indenture amends the Indenture described in the further provisions of this Note. This Note supercedes and replaces in its entirety the Note initially executed and delivered by the Company on March 6, 2003 in connection with the Company's execution and delivery of the Indenture. Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place. IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officer. POLYMER GROUP, INC. By:____________________________ Name: Title: By:____________________________ Name: Title: Dated: [ ] [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the 10% Convertible Subordinated Notes due December 31, 2007 described in the within-mentioned Indenture. Dated: [ ] WILMINGTON TRUST COMPANY, as Trustee By: _____________________________ Authorized Signatory (REVERSE OF NOTE) POLYMER GROUP, INC. 10% Convertible Subordinated Note due December 31, 2007 1. Interest. POLYMER GROUP, INC., a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Note at the rate per annum shown above. 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 March 6, 2003. The Company will pay interest semi-annually in arrears on each Interest Payment Date, commencing July 1, 2003. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal from time to time on demand and on overdue installments of interest (without regard to any applicable grace periods) to the extent lawful from time to time on demand, in each case at the rate borne by the Notes. 2. Method of Payment. The Company shall pay interest on the Notes (except defaulted interest) to the persons who are the registered Holders at the close of business on the Interest Record Date immediately preceding the Interest Payment Date even if the Notes are canceled on registration of transfer or registration of exchange after such Interest Record Date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Company shall pay principal and interest that is payable in cash in money of the United States that at the time of payment is legal tender for payment of public and private debts ("U.S. Legal Tender"). However, the Company may pay principal and interest that is payable in cash by wire transfer of Federal funds (provided that the Paying Agent shall have received wire instructions on or prior to the relevant Interest Record Date) or interest that is payable in cash by check payable in such U.S. Legal Tender. The Company may deliver any such cash interest payment to the Paying Agent or to a Holder at the Holder's registered address. The Notes will bear interest at a rate of 10% per annum which interest may, notwithstanding anything to the contrary stated herein at the Company's sole option, be paid through the issuance of additional notes (whether or not physically issued, the "Additional Notes") to Holders who elect to receive such Additional Notes by properly completing and returning the "Option of Holder to Elect PIK Interest Form" in the form attached hereto no later than three Business Days prior to the applicable Interest Payment Date. Any such Additional Notes shall be in an aggregate principal amount equal to the amount of interest that would be payable with respect to this Note on such Interest Payment Date (less all cash payments, if any, made in respect of interest payable on such Interest Payment Date); provided however, that in the event that the amount of interest due in respect of this Note on such Interest Payment Date would require the Company to issue Additional Notes in denominations of less than $1,000, the Company shall pay such fractional amount in cash in lieu of issuing Additional Notes in denominations of less than $1,000. The Additional Notes shall be identical to the Notes originally issued. Except as expressly provided herein, the term "Notes" shall include Additional Notes that may be issued pursuant to this paragraph. 3. Paying Agent and Registrar. Initially, Wilmington Trust Company (the "Trustee") will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to the Holders. The Company or any of its Subsidiaries may, subject to certain exceptions, act as Registrar. 4. Indenture and Guarantees. The Company issued the Notes under an Indenture, dated as of March 5, 2003 (the "Indenture"), by and among the Company, the Guarantors and the Trustee. Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein. This Note is one of a duly authorized issue of Notes of the Company designated as its 10% Convertible Subordinated Notes due 2007, limited (except as otherwise provided in the Indenture) in aggregate principal amount to $60,000,000, which may be issued under the Indenture. 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 (15 U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture (except as otherwise indicated in the Indenture) until such time as the Indenture is qualified under the TIA, and thereafter as in effect on the date on which the Indenture is qualified under the TIA. Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and holders of Notes are referred to the Indenture and the TIA for a statement of them. The Notes are general unsecured obligations of the Company. The Notes are subordinated in right of payment to all Senior Indebtedness of the Company to the extent and in the manner provided in the Indenture. Each Holder of a Note, by accepting a Note, agrees to such subordination, authorizes the Trustee to give effect to such subordination and appoints the Trustee as attorney-in-fact for such purpose. Payment on the Notes is guaranteed (each, a "Guarantee"), on a subordinated junior basis, jointly and severally, by each Domestic Restricted Subsidiary of the Company existing on the Issue Date (each, a "Guarantor") pursuant to Article Eleven and Article Twelve of the Indenture. In addition, in certain circumstances subject to certain exceptions, the Indenture requires the Company to cause each Domestic Restricted Subsidiary formed, created or acquired after the Issue Date to become a party to the Indenture as a Guarantor and guarantee payment on the Notes pursuant to Article Eleven and Article Twelve of the Indenture. In certain circumstances, the Guarantees may be released. 5. Optional Redemption. The Notes will be redeemable at the option of the Company, in whole or in part, at any time, at a redemption price equal to the principal amount thereof, plus accrued and unpaid interest thereon, if any, to the Redemption Date (subject to the right of holders of record on the relevant Interest Record Date to receive interest due on the relevant Interest Payment Date) if the Quoted Price exceeds 130% of the Conversion Price per share for 20 trading days in a period of 30 consecutive trading days. 6. Notice of Redemption. Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at its registered address. The Trustee may select for redemption portions of the principal amount of Notes that have denominations equal to or larger than $1,000 principal amount. Notes and portions of them that the Trustee so selects shall be in amounts of $1,000 principal amount or integral multiples thereof. If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in a principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the Redemption Date, interest will cease to accrue on Notes or portions thereof called for redemption so long as the Company has deposited with the Paying Agent for the Notes funds in satisfaction of the redemption price pursuant to the Indenture and the Paying Agent is not prohibited from paying such funds to the Holders pursuant to the terms of the Indenture. 7. Limitation on Disposition of Assets. The Company is, subject to certain conditions and certain exceptions, obligated to make an Offer to Purchase Notes at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to the Purchase Date (subject to the right of Holders of record on the relevant Interest Record Date to receive interest due on the relevant Interest Payment Date) with the proceeds of certain asset dispositions. 8. Denominations; Transfer; Exchange. The Notes are in registered form, without coupons, in denominations of $1,000 and integral multiples of $1,000. A Holder shall register the transfer of or exchange of Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay certain transfer taxes or similar governmental charges payable in connection therewith as permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes or portions thereof selected for redemption, except the unredeemed portion of any Note being redeemed in part. 9. Conversion. Subject to the next two succeeding sentences, a Holder of a Note may convert such Note into Common Stock of the Company at any time before the close of business on December 31, 2007. If the last day on which a Note may be converted is not a Business Day in a place where the Conversion Agent is located, the Note in order to be converted must be surrendered to that Conversion Agent on or before the Business Day immediately preceding such date. If the Note is called for redemption, the Holder may convert it at any time before the close of business on the Redemption Date. A Note in respect of which a Holder has delivered a notice of exercise of the option to require the Company to purchase such Note may be converted only if the notice of exercise is withdrawn in accordance with the terms of the Indenture. The initial Conversion Rate is 137.14286 shares of Common Stock per $1,000 principal amount, subject to adjustment in certain events described in the Indenture. The Company will deliver cash or a check in lieu of any fractional share of Common Stock. To convert a Note a Holder must (1) complete and manually sign the conversion notice attached to the Note (or complete and manually sign a facsimile of such notice) and deliver such notice to the Conversion Agent, the Company and the Trustee, (2) surrender the Note to a Conversion Agent, if such Holder holds a Physical Note, (3) furnish appropriate endorsements and transfer documents if required by the Conversion Agent, the Company or the Trustee and (4) if required, pay all transfer or similar taxes. A Holder may convert a portion of a Note if the principal amount of such portion is $1,000 or an integral multiple of $1,000. No payment or adjustment will be made for dividends on the Common Stock except as provided in the Indenture. The Conversion Rate will be adjusted in accordance with Article XIII of the Indenture. The Company from time to time may voluntarily increase the Conversion Rate. If the Company is a party to a consolidation, merger or binding share exchange or a transfer of all or substantially all of its assets, or upon certain distributions described in the Indenture, the right to convert a Note into Common Stock may be changed into a right to convert it into securities, cash or other assets of the Company or another person. 10. Persons Deemed Owners. The registered Holder of a Note shall be treated as the owner of it for all purposes. 11. Unclaimed Funds. If funds for the payment of principal or interest remain unclaimed for two years, the Trustee and the Paying Agent will repay the funds to the Company at its written request. After that, all liability of the Trustee and such Paying Agent with respect to such funds shall cease. 12. Legal Defeasance and Covenant Defeasance. The Company and the Guarantors may be discharged from their obligations under the Indenture, the Notes and the Guarantees, except for certain provisions thereof, and may be discharged from obligations to comply with certain covenants contained in the Indenture, the Notes and the Guarantees, in each case upon satisfaction of certain conditions specified in the Indenture. 13. Amendment; Supplement; Waiver. Subject to certain exceptions, the Indenture, the Notes and the Guarantees may be amended or supplemented with the written consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, and any existing Default or Event of Default or compliance with any provision may be waived with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding. Without notice to or consent of any Holder, the parties thereto may amend or supplement the Indenture, the Notes and the Guarantees to, among other things, cure any ambiguity, defect or inconsistency, provide for uncertificated Notes in addition to or in place of certificated Notes or comply with any requirements of the SEC in connection with the qualification of the Indenture under the TIA, or make any other change that does not materially adversely affect the rights of any Holder of a Note. 14. Restrictive Covenants. The Indenture contains certain covenants that, among other things, limit the ability of the Company and the Restricted Subsidiaries to make restricted payments, to incur indebtedness, to create liens, to sell assets, to permit restrictions on dividends and other payments by Restricted Subsidiaries to the Company, to consolidate, merge or sell all or substantially all of its assets, to engage in transactions with affiliates or certain other related persons. The limitations are subject to a number of important qualifications and exceptions. The Company must report annually to the Trustee on compliance with such limitations. 15. Defaults and Remedies. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of Notes then outstanding may declare all the Notes to be due and payable immediately in the manner and with the effect provided in the Indenture. Holders of Notes may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. The Trustee is not obligated to enforce the Indenture, the Notes or the Guarantees unless it has received indemnity satisfactory to it. The Indenture permits, subject to certain limitations therein provided, Holders of a majority in aggregate principal amount of the Notes then outstanding to direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of Notes notice of certain continuing Defaults or Events of Default if it determines that withholding notice is in their interest. 16. Trustee Dealings with Company. The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company, its Subsidiaries or their respective Affiliates as if it were not the Trustee. 17. No Recourse Against Others. No director, officer, employee or stockholder, as such, of the Company or any of its Affiliates shall have any liability for any obligation of the Company or any of its Affiliates under the Notes, the Guarantee of such Guarantor or 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 and the Guarantees. 18. Authentication. This Note shall not be valid until the Trustee or authenticating agent signs the certificate of authentication on this Note. 19. Abbreviations and Defined Terms. Customary abbreviations may be used in the name of a Holder of a Note 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). 20. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed only on the other identification numbers printed hereon. 21. Governing Law. The laws of the State of New York shall govern the Indenture, this Note and any Guarantee thereof without regard to principles of conflicts of laws. [FORM OF NOTE GUARANTEE] CONVERTIBLE SUBORDINATED NOTE GUARANTEE The Guarantor (as defined in the Indenture referred to in the Note upon which this notation is endorsed) hereby unconditionally guarantees on a junior subordinated basis (such Guarantee by the Guarantor being referred to herein as the "Guarantee") the due and punctual payment of the principal of, premium, if any, and interest on the Notes, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal, premium and interest on the Notes, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee, all in accordance with the terms set forth in Article Eleven of the Indenture. The obligations of the Guarantor to the Holders of Notes and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth, and are expressly subordinated and subject in right of payment to the prior payment in full of all Guarantor Senior Indebtedness (as defined in the Indenture) of such Guarantor, to the extent and in the manner provided in Article Eleven and Article Twelve of the Indenture, and reference is hereby made to such Indenture for the precise terms of the Guarantee therein made. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Notes upon which this Note Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers. This Note Guarantee shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of law. This Note Guarantee is subject to release upon the terms set forth in the Indenture. PGI POLYMER, INC. PGI EUROPE, INC. PNA CORP. FNA POLYMER CORP. FABRENE CORP. FABRENE GROUP, L.L.C. FIBERTECH GROUP, INC. TECHNETICS GROUP, INC. FIBERGOL CORPORATION CHICOPEE, INC., DOMINION TEXTILE (USA) INC. POLY-BOND INC. LORETEX CORPORATION FNA ACQUISITION, INC. FABPRO ORIENTED POLYMERS, INC. PGI ASSET MANAGEMENT COMPANY PGI SERVICING COMPANY PRISTINE BRANDS CORPORATION POLYIONIX SEPARATION TECHNOLOGIES, INC. BONLAM (S.C.), INC. By:_____________________________________ Name: Title: ASSIGNMENT FORM I or we assign and transfer this Note to ______________________________________________________________________________ (Print or type name, address and zip code of assignee or transferee) ______________________________________________________________________________ (Insert Social Security or other identifying number of assignee or transferee) and irrevocably appoint ______________________________________________________ agent to transfer this Note on the books of the Company. The agent may substitute another to act for him. Dated:___________________ Signed:___________________________ (Signed exactly as name appears on the other side of this Note) Signature Guarantee:___________________________________________________________ Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee) OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 4.05 of the Indenture, check the appropriate box: Section 4.05 [ ] If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.05 of the Indenture, state the amount: $_____________ Dated:___________________ Signed:___________________________________ (Signed exactly as name appears on the other side of this Security) Signature Guarantee:___________________________________________________________ Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee) FORM OF CONVERSION NOTICE To: CONVERSION AGENT The undersigned beneficial owner of the Note hereby irrevocably exercises the option to convert this Note, or portion hereof (which is $1,000 or an integral multiple thereof) below designated, into shares of Class A Common Stock of Polymer Group, Inc. in accordance with the terms of the Indenture referred to in this Note, and directs that the shares issuable and deliverable upon the conversion, together with any check in payment in lieu of fractional shares and Notes representing any unconverted principal amount hereof, be issued and delivered to the beneficial owner hereof unless a different name has been indicated below. If shares or any portion of this Note not exchanged are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Any amount required to be paid by the undersigned on account of interest and taxes accompanies this Note.
Dated: Fill in for registration of shares if to be delivered, ________________________________ and Notes if to be issued, other than to and in the name of the beneficial owner ________________________________ (Please Print): _________________________________ Signature(s) Principal amount to be exchanged (if less than ___________________________________________ all); (Name) __________________________________ ___________________________________________ $__,000 (Street Address) ___________________________________________ __________________________________ (City, State and Zip Code) Social Security or other Taxpayer Identification Number
Signature Guarantee: ______________________________________________________ Signatures must be guaranteed by an eligible Guarantor Institution (banks, brokers, dealers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if shares are to be issued, or Notes are to be delivered, other than to and in the name of the registered holder(s). OPTION OF HOLDER TO ELECT PIK INTEREST Pursuant to paragraph 2 of the 10% Convertible Subordinated Notes due 2007 issued by Polymer Group, Inc. (the "Company") under the Indenture (the "Indenture"), dated as of March 6, 2003, as amended by the Supplemental Indenture, dated as of May 30, 2003, among the Company, the subsidiary guarantors named therein and Wilmington Trust Company, as trustee (the "Trustee"), you have the option to have the Interest due on your Notes on ______ paid to you through the issuance of Additional Notes in lieu receiving payment thereof in cash, if the Company at its sole option chooses to pay Interest through the issuance of Additional Notes. Capitalized terms used in this election form and not otherwise defined herein have the meanings set forth in the Indenture. If you want to elect to have Interest paid by the Company on _______, through the issuance of Additional Notes in lieu of cash payment, please check the box below. Election to receive Additional Notes: [ ] If you checked the box above, please indicate the aggregate principal amount of Notes you own below: Aggregate principal amount of Notes owned: $_____________ PLEASE COMPLETE THIS ELECTION FORM AND RETURN IT VIA FACSIMILE (SHOULD BE CONFIRMED BY CALLING (302) 636-6472) TO WILMINGTON TRUST COMPANY, FACSIMILE: (302) 636-4145, RODNEY SQUARE NORTH, 1100 N. MARKET STREET, WILMINGTON, DELAWARE 19890, ATTENTION: CORPORATE TRUST REORGANIZATION. IN ORDER TO RECEIVE ADDITIONAL NOTES, IF YOU SO ELECT, THIS ELECTION FORM MUST BE RECEIVED BY THE TRUSTEE NOT LATER THAN 3 BUSINESS DAYS PRIOR TO _______. Dated:___________________ Signed:________________________________ (Signed exactly as name appears on the other side of this Note) EX-12 5 efc3-0900_exh12.txt Exhibit 12 ---------- JOINT FILING AGREEMENT Dated as of June 5, 2003 In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing of MatlinPatterson LLC, MatlinPatterson Asset Management LLC, MatlinPatterson Global Advisers LLC, MatlinPatterson Global Partners LLC, MatlinPatterson Global Opportunities Partners L.P., MatlinPatterson Global Opportunities Partners (Bermuda) L.P., MatlinPatterson Global Opportunities Partners B, L.P., David J. Matlin and Mark R. Patterson, on behalf of each of them a statement on Schedule 13D (including amendments thereto) with respect to shares of common stock, par value $0.01 per share, of Polymer Group, Inc., and that this agreement be included as an Exhibit to such joint filing. This agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned hereby execute this Agreement this 5th day of June 2003. MATLINPATTERSON LLC By: /s/ Mark R. Patterson ---------------------------------- Name: Mark R. Patterson Title: Member MATLINPATTERSON ASSET MANAGEMENT LLC By: /s/ Mark R. Patterson --------------------------------- Name: Mark R. Patterson Title: Member MATLINPATTERSON GLOBAL ADVISERS LLC By: /s/ Mark R. Patterson -------------------------------- Name: Mark R. Patterson Title: Chairman (Page 1 of 3) MATLINPATTERSON GLOBAL PARTNERS LLC By: /s/ Mark R. Patterson ---------------------------------- Name: Mark R. Patterson Title: Director MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS L.P. By: MatlinPatterson Global Partners LLC By: /s/ Mark R. Patterson ---------------------------------- Name: Mark R. Patterson Title: Director MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS B, L.P. By: MatlinPatterson Global Partners LLC By: /s/ Mark R. Patterson ------------------------------------ Name: Mark R. Patterson Title: Director MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS (BERMUDA) L.P. By: MatlinPatterson Global Partners LLC By: /s/ Mark R. Patterson ----------------------------------- Name: Mark R. Patterson Title: Director (Page 2 of 3) DAVID J. MATLIN By: /s/ David J. Matlin ----------------------------------- Name: David J. Matlin MARK R. PATTERSON By: /s/ Mark R. Patterson ----------------------------------- Name: Mark R. Patterson (Page 3 of 3) -----END PRIVACY-ENHANCED MESSAGE-----